UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-23124
Franklin Templeton ETF Trust
(Exact name of registrant as specified in charter)
One Franklin Parkway
San Mateo, CA 94403-1906
(Address of principal executive offices) (Zip code)
Alison Baur
One Franklin Parkway
San Mateo, CA 94403-1096
(Name and address of agent for service)
Registrant’s telephone number, including area code: 650-312-2000
Date of fiscal year end: March 31
Date of reporting period: 03/31/2023
| Item 1. | Reports to Stockholders. |
| (a) | The following is a copy of the report transmitted to shareholders pursuant to Rule30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30e-1.) |
| (b) | Not applicable. |
| 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 |
|
Visit franklintempleton.com for fund updates and documents, or to find helpful financial planning tools. |
| Not FDIC Insured | | May Lose Value | | No Bank Guarantee |
| franklintempleton.com | Annual Report | 1 | ||
Global developed and emerging market equities, as measured by the MSCI All Country World Index-NR (net of tax withholding when dividends are paid), posted a -7.44% total return for the 12 months ended March 31, 2023.1 Inflation increased substantially in most parts of the world and remained elevated despite some signs of slowing in the second half of the period. This inflationary pressure led many of the world’s central banks to tighten monetary policy, which pressured stocks and negatively impacted the outlook for economic growth. Russia’s ongoing invasion of Ukraine and related disruptions to the global economy also increased investor uncertainty and led to substantial volatility in commodity markets. In China, COVID-19-related lockdowns sharply restricted economic activity prior to the government easing controls in December 2022.
U.S. equities, as measured by the Standard & Poor’s® 500 Index, posted a -7.73% total return for the 12 months ended March 31, 2023.1 High inflation, rising interest rates and geopolitical instability contributed to a sharp decline in equity prices. Consumer spending continued to rise, but deteriorating financial conditions and investors’ expectations for slower growth pressured equity markets. U.S. gross domestic product (GDP) recovered from a slight contraction during the first half of the year, expanding in the second half of 2022 amid rising government spending and private investment. The labor market remained strong, as hiring continued at a brisk pace and unemployment reached its lowest level in over 50 years. In an effort to control inflation, the U.S. Federal Reserve (Fed) raised the federal funds target rate at each of its eight meetings during the period to end at a range of 4.75%–5.00%, a full 450 basis points higher than at the beginning of the period. Furthermore, the Fed indicated it would continue to reduce its U.S. Treasury and agency debt and mortgage-backed security holdings.
Economic growth in the eurozone was tepid during 2022, ending with zero growth in the fourth quarter. The ongoing war in Ukraine disrupted supply chains, weakened the economic outlook and contributed to record high inflation across the eurozone, as energy prices soared in the first half of the period. However, governments spent significant sums to subsidize consumers and find alternative supplies. Consequently, the price of natural gas in Europe declined notably in the period’s second half, providing a
tailwind for European stocks. The European Central Bank increased interest rates in July 2022 for the first time in 11 years to curtail growing inflation and further raised rates in five subsequent meetings. In this environment, European developed market equities, as measured by the MSCI Europe Index-NR, posted a +1.38% total return for the 12 months under review.1
Asian developed and emerging market equities, as measured by the MSCI All Country Asia Index-NR, posted a -7.61% total return for the 12-month period.1 Economic activity in Japan remained slow, alternating between positive quarterly GDP growth and contraction before stalling in 2022’s fourth quarter with zero growth. On an annual basis, China’s economic growth slowed, hindered by investor concerns about the solvency of several large property developers and a period of strict COVID-19 lockdowns.
Global emerging market stocks, as measured by the MSCI Emerging Markets Index-NR, posted a -10.70% total return for the 12 months under review.1 Central bank tightening, the threat of recession, and a U.S. dollar that strengthened relative to many emerging market currencies contributed to the downturn. While most of the commodity price increases related to the war in Ukraine moderated by period-end, this volatility disrupted some emerging market economies that are dependent on energy and food imports.
The foregoing information reflects our analysis and opinions as of March 31, 2023. 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.
| 2 | Annual Report | franklintempleton.com | ||
Franklin Emerging Market Core Dividend Tilt Index ETF
Formerly, Franklin LibertyQ Emerging Markets ETF
This annual report for Franklin Emerging Market Core Dividend Tilt Index ETF covers the fiscal year ended March 31, 2023. 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).
| Geographic Composition* | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Asia |
74.7% | |||
| Latin America & Caribbean |
10.8% | |||
| Middle East & Africa |
10.1% | |||
| North America |
2.3% | |||
| Europe |
1.6% | |||
| Other Net Assets |
0.5% | |||
*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 12-month period, the Fund posted cumulative total returns of -9.50% based on market price and -10.36% 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 March 31, 2023, the new Underlying Index posted a cumulative total return of -0.31%.2 For the 12-month period under review, the Linked 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 -9.96% cumulative total return.2
The Parent Index posted a cumulative total return of -10.09% for the 12-month period.2 The Linked 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 -10.40% cumulative total return for the same period.2 The MSCI EM Index-NR posted a -10.70% cumulative total return for the 12-month period.3 The
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 43.
| franklintempleton.com | Annual Report | 3 | ||
FRANKLIN EMERGING MARKET CORE DIVIDEND TILT INDEX ETF
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 6.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
| Top 10 Sectors/Industries | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Banks |
19.4% | |||
| Semiconductors & Semiconductor Equipment |
9.3% | |||
| Oil, Gas & Consumable Fuels |
6.8% | |||
| Technology Hardware, Storage & Peripherals |
6.2% | |||
| Chemicals |
4.6% | |||
| Insurance |
4.6% | |||
| Interactive Media & Services |
4.5% | |||
| Metals & Mining |
4.0% | |||
| Internet & Direct Marketing Retail |
3.0% | |||
| IT Services |
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 | ||||
| 3/31/23 | ||||
| Company Sector/Industry, Country |
% of Total Net Assets |
|||
| Taiwan Semiconductor Manufacturing Co. Ltd. Semiconductors & Semiconductor Equipment, Taiwan |
|
4.7% |
| |
| Tencent Holdings Ltd. Interactive Media & Services, China |
|
3.7% |
| |
| Samsung Electronics Co. Ltd. Technology Hardware, Storage & Peripherals, South Korea |
|
3.6% |
| |
| Alibaba Group Holding Ltd., Class A Internet & Direct Marketing Retail, China |
|
2.6% |
| |
| Infosys Ltd. IT Services, India |
|
1.4% |
| |
| China Construction Bank Corp., Class H Banks, China |
|
1.4% |
| |
| MediaTek, Inc. Semiconductors & Semiconductor Equipment, Taiwan |
|
1.1% |
| |
| Ping An Insurance Group Co. of China Ltd., Class H Insurance, China |
|
1.1% |
| |
| Petroleo Brasileiro SA, 43.945%, pfd. Oil, Gas & Consumable Fuels, Brazil |
|
1.1% |
| |
| Industrial & Commercial Bank of China Ltd., Class H Banks, China |
|
1.0% |
| |
| Top 10 Countries | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| China | 30.0% | |||
| Taiwan | 19.2% | |||
| India | 10.2% | |||
| South Korea | 9.2% | |||
| Brazil | 5.2% | |||
| South Africa | 5.0% | |||
| Saudi Arabia | 3.9% | |||
| Malaysia | 3.4% | |||
| Mexico | 2.5% | |||
| Hong Kong | 2.2% | |||
| 4 | Annual Report | franklintempleton.com | ||
FRANKLIN EMERGING MARKET CORE DIVIDEND TILT INDEX ETF
Manager’s Discussion
For the fiscal year ended March 31, 2023, individual holdings that hindered the Fund’s absolute return included Sibanye Stillwater, Emirates Telecommunications Group and Infosys. Individual holdings that lifted the Fund’s absolute return included Tencent Holdings, Grupo Financiero Banorte and ITC.
Prior to August 1, 2022, the Fund’s research-based selection process focused on four investment factors: value, quality, momentum and low volatility. Since then, the Fund has followed a dividend-enhanced strategy focused on emerging markets. Of the four target-style factors, low volatility contributed to the Fund’s relative performance for the reporting period and momentum contributed marginally, while value and quality detracted.
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 March 31, 2023, 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.
| franklintempleton.com | Annual Report | 5 | ||
FRANKLIN EMERGING MARKET CORE DIVIDEND TILT INDEX ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. 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 3/31/231,2
| Cumulative Total Return3 | Average Annual Total Return3 | |||||||||||||||
| Based on NAV4 |
Based on market price5 |
Based on NAV4 |
Based on market price5 |
|||||||||||||
|
1-Year |
-10.36% | -9.50% | -10.36% | -9.50% | ||||||||||||
|
3-Year |
+22.41% | +23.30% | +6.97% | +7.23% | ||||||||||||
|
5-Year |
-10.05% | -11.44% | -2.10% | -2.40% | ||||||||||||
| Since Inception (6/1/16) |
+20.51% | +20.23% | +2.77% | +2.73% | ||||||||||||
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 8 for Performance Summary footnotes.
| 6 | Annual Report | franklintempleton.com | ||
FRANKLIN EMERGING MARKET CORE DIVIDEND TILT INDEX ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
6/1/16-3/31/23
See page 8 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 7 | ||
FRANKLIN EMERGING MARKET CORE DIVIDEND TILT INDEX ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $1.419857 |
Total Annual Operating Expenses7
| 0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. The Fund is designed for the aggressive portion of a well-diversified portfolio. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the fund may vary significantly from the performance of an index, as a result of transaction costs, expenses and other factors. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
2. 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.
3. 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.
4. Assumes reinvestment of distributions based on net asset value.
5. Assumes reinvestment of distributions based on market price.
6. Source: FactSet. The Linked Morningstar® Emerging Markets Dividend Enhanced Select Index-NR measures the performance of the LibertyQ EM Index-NR from Fund inception through July 31, 2022, and the Morningstar® Emerging Markets Dividend Enhanced Select IndexSM thereafter. The LibertyQ EM Index is a systematic, rules-based proprietary index that is owned and calculated by MSCI Inc. It is based on the MSCI EM Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. The Morningstar® Emerging Markets Dividend Enhanced Select IndexSM is a systematic, rules-based proprietary index that is maintained and calculated by Morningstar, Inc. It is based on the Morningstar® Emerging Markets Target Market Exposure Index (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. The Morningstar® Emerging Markets Target Market Exposure Index-NR includes large- and mid-capitalization stocks representing the top 85% of emerging markets equity markets by float-adjusted market capitalization. The Linked Morningstar Emerging Markets Target Market Exposure Index-NR reflects the performance of the MSCI EM Index-NR from Fund inception through July 31, 2022, and Morningstar® Emerging Markets Target Market Exposure Index-NR thereafter. The MSCI EM Index-NR is a free float-adjusted, market capitalization-weighted index designed to measure the equity market performance of global emerging markets. Net Returns (NR) include income net of tax withholding when dividends are paid.
7. 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.
| 8 | Annual Report | franklintempleton.com | ||
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.
| Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
| Beginning Account Value 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,175.10 | $1.03 | $1,023.98 | $0.96 | 0.19 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
| franklintempleton.com | Annual Report | 9 | ||
Franklin International Core Dividend Tilt Index ETF
Formerly, Franklin LibertyQ International Equity Hedged ETF
This annual report for Franklin International Core Dividend Tilt Index ETF covers the fiscal year ended March 31, 2023. 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).
| Geographic Composition* | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Europe |
61.5% | |||
| Asia |
25.8% | |||
| Australia & New Zealand |
10.9% | |||
| North America |
0.7% | |||
| Middle East & Africa |
0.4% | |||
| 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 12-month period, the Fund posted cumulative total returns of +7.65% based on market price and +6.56% 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 March 31, 2023, the new Underlying Index posted a cumulative total return of +15.66%.2 For the 12-month period under review, the Linked 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 +6.82% cumulative total return.2
The Parent Index posted a cumulative total return of -1.62% for the 12-month period.2 The Linked Morningstar® Developed Markets ex-North America Target Market Exposure Index-NR, which measures the performance of the old primary benchmark, the 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, posted a +7.02% cumulative total return for the
1. The Morningstar® Developed Markets ex-North America 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 56.
| 10 | Annual Report | franklintempleton.com | ||
FRANKLIN INTERNATIONAL CORE DIVIDEND TILT INDEX ETF
same period.2 The MSCI EAFE 100% Hedged to USD Index-NR posted a +7.02% cumulative total return for the 12-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 13.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
| Top 10 Sectors/Industries | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Pharmaceuticals |
10.4% | |||
| Banks |
9.9% | |||
| Insurance |
6.4% | |||
| Metals & Mining |
5.2% | |||
| Semiconductors & Semiconductor Equipment |
4.3% | |||
| Automobiles |
4.1% | |||
| Oil, Gas & Consumable Fuels |
3.9% | |||
| Textiles, Apparel & Luxury Goods |
3.3% | |||
| Electric Utilities |
3.1% | |||
| Diversified Telecommunication 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 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 | ||||
| 3/31/23 | ||||
| Company Sector/Industry, Country |
% of Total Net Assets |
|||
| Nestle SA Food Products, Switzerland |
2.0% | |||
| ASML Holding NV Semiconductors & Semiconductor Equipment, Netherlands |
1.8% | |||
| Novartis AG Pharmaceuticals, Switzerland |
1.8% | |||
| Novo Nordisk AS, Class B Pharmaceuticals, Denmark |
1.7% | |||
| LVMH Moet Hennessy Louis Vuitton SE Textiles, Apparel & Luxury Goods, France |
1.5% | |||
| BHP Group Ltd. Metals & Mining, Australia |
1.5% | |||
| AstraZeneca PLC Pharmaceuticals, United Kingdom |
1.4% | |||
| Roche Holding AG Pharmaceuticals, Switzerland |
1.4% | |||
| Sanofi Pharmaceuticals, France |
1.1% | |||
| Allianz SE Insurance, Germany |
1.0% | |||
| Top 10 Countries | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Japan | 21.3% | |||
| United Kingdom | 12.6% | |||
| Australia | 10.7% | |||
| Switzerland | 9.9% | |||
| France | 9.6% | |||
| Germany | 8.5% | |||
| Netherlands | 5.1% | |||
| Italy | 3.9% | |||
| Hong Kong | 2.8% | |||
| Sweden | 2.5% | |||
| franklintempleton.com | Annual Report |
11 | ||||||
FRANKLIN INTERNATIONAL CORE DIVIDEND TILT INDEX ETF
Manager’s Discussion
For the fiscal year ended March 31, 2023, individual holdings that lifted the Fund’s absolute return included Novo Nordisk, LVMH Moet Hennessy Louis Vuitton and Siemens. Individual holdings that hindered the Fund’s absolute return included Anglo American, Rio Tinto and Roche Holding. The Fund’s use of currency forward contracts—designed to offset the Fund’s exposure to the component currencies and replicate the hedge impact incorporated in the calculations of the Underlying Index – also contributed to the Fund’s absolute performance. However, one cannot expect the same result in future periods.
Prior to August 1, 2022, the Fund’s research-based selection process focused on four investment factors: value, quality, momentum and low volatility. Since then, the Fund has followed a dividend-enhanced strategy focused on developed markets, excluding North America. Of the four target-style factors, value contributed to the Fund’s relative performance for the reporting period, with modest contribution from the momentum factor. Conversely, the quality and low volatility factors detracted from the Fund’s relative return.
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 March 31, 2023, 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.
| 12 | Annual Report | franklintempleton.com | ||
FRANKLIN INTERNATIONAL CORE DIVIDEND TILT INDEX ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. 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 3/31/231,2
| Cumulative Total Return3 | Average Annual Total Return3 | |||||||||||||||
| Based on NAV4 |
Based on market price5 |
Based on NAV4 |
Based on market price5 |
|||||||||||||
|
1-Year |
+6.56% | +7.65% | +6.56% | +7.65% | ||||||||||||
|
3-Year |
+51.04% | +52.23% | +14.73% | +15.04% | ||||||||||||
|
5-Year |
+51.06% | +51.36% | +8.60% | +8.64% | ||||||||||||
| Since Inception (6/1/16) |
+69.07% | +69.94% | +7.99% | +8.07% | ||||||||||||
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 15 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 13 | ||
FRANKLIN INTERNATIONAL CORE DIVIDEND TILT INDEX ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
6/1/16-3/31/23
See page 15 for Performance Summary footnotes.
| 14 | Annual Report | franklintempleton.com | ||
FRANKLIN INTERNATIONAL CORE DIVIDEND TILT INDEX ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income | Short-Term Capital Gain |
Long-Term Capital Gain |
Total | |||||||||
| $1.186654 |
$0.159987 | $0.306751 | $1.653392 | |||||||||
Total Annual Operating Expenses7
| 0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in emerging markets involve heightened risks related to the same factors. To the extent the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. The Fund will attempt to hedge the currency exposure of non-U.S. dollar denominated securities held in its portfolio by investing in foreign currency forward contracts. Foreign currency forward contracts do not eliminate movements in the value of non-U.S. currencies and securities but rather allow the Fund to establish a fixed rate of exchange for a future point in time. Investments in derivatives involve costs and create economic leverage, which may result in significant volatility and cause the Fund to participate in losses (as well as gains) that significantly exceed the Fund’s initial investment. Currency management strategies could result in losses to the Fund if currencies do not perform as the investment manager expects. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transaction costs, expenses and other factors. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
2. 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.
3. 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.
4. Assumes reinvestment of distributions based on net asset value.
5. Assumes reinvestment of distributions based on market price.
6. Source: FactSet. The Linked Morningstar® Developed Markets ex-North America Dividend Enhanced Select Index-NR measures the performance of the LibertyQ International Equity Hedged Index-NR from fund inception through July 31, 2022, and the Morningstar® Developed Markets ex-North America Dividend Enhanced Select IndexSM thereafter. The LibertyQ International Equity Hedged Index is a systematic, rules-based proprietary index that is owned and calculated by MSCI Inc. It is based on the MSCI EAFE Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. The Morningstar®Developed Markets ex-North America Dividend Enhanced Select IndexSM is a systematic, rules-based proprietary index that is maintained and calculated by Morningstar, Inc. It is based on the Morningstar® Developed Markets ex-North America Target Market Exposure Index (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. The Morningstar® Developed Markets ex-North America Target Market Exposure Index-NR includes large- and mid-capitalization stocks representing the top 85% of developed markets equity markets excluding North America by float-adjusted market capitalization. The Linked Morningstar® Developed Markets ex-North America Target Market Exposure Index-NR measures the performance of the MSCI EAFE 100% Hedged to USD Index-NR through July 31, 2022, and the Morningstar® Developed Markets ex-North America Target Market Exposure Index-NR thereafter. The MSCI EAFE 100% Hedged to USD Index-NR represents a close estimation of the performance that can be achieved by hedging the currency exposures of its parent index, the MSCI EAFE Index, to the USD, the “home” currency for the hedged index. The MSCI EAFE Index is a free float-adjusted, market capitalization-weighted index designed to measure the equity market performance of global developed markets excluding the U.S. and Canada. Net Returns (NR) include income net of tax withholding when dividends are paid.
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.
| franklintempleton.com | Annual Report | 15 | ||
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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231,2 |
Ending Account Value 3/31/23 |
Expenses Paid During 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,280.50 | $0.51 | $1,024.48 | $0.45 | 0.09 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
| 16 | Annual Report | franklintempleton.com | ||
Franklin U.S. Core Dividend Tilt Index ETF
Formerly, Franklin LibertyQ Global Dividend ETF
This annual report for Franklin U.S. Core Dividend Tilt Index ETF covers the fiscal year ended March 31, 2023. 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* | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| North America |
97.6% | |||
| Europe |
1.7% | |||
| Latin America & Caribbean |
0.4% | |||
| 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 12-month period, the Fund posted cumulative total returns of -8.00% based on market price and -8.09% based on net asset value (NAV).
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 March 31, 2023, the new Underlying Index posted a cumulative total return of +11.60%.2 For the 12-month period under review, the Linked 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 -7.98% cumulative total return.2
The Parent Index posted a cumulative total return of -8.53% for the 12-month period.2 The Linked Morningstar® The Linked 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 -9.24% cumulative total return for the same period.2 The MSCI ACWI ex REITs Index-NR posted a -7.16% cumulative total return for the 12-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 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.
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 69.
| franklintempleton.com | Annual Report |
17 | ||||||
FRANKLIN U.S. CORE DIVIDEND TILT INDEX ETF
| Top 10 Sectors/Industries | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Semiconductors & Semiconductor Equipment |
9.5% | |||
| Software |
9.3% | |||
| Technology Hardware, Storage & Peripherals |
7.3% | |||
| Pharmaceuticals |
5.5% | |||
| Oil, Gas & Consumable Fuels |
5.4% | |||
| Diversified REITs |
4.9% | |||
| Banks |
4.8% | |||
| Capital Markets |
4.0% | |||
| Interactive Media & Services |
3.9% | |||
| IT Services |
3.7% | |||
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 to provide additional opportunities to add value and better track the performance of the Fund’s Underlying Index.
| Top 10 Holdings | ||||
| 3/31/23 | ||||
| Company Sector/Industry |
% of Total Net Assets |
|||
| Apple, Inc. Information Technology |
6.5% | |||
| Microsoft Corp. Information Technology |
6.0% | |||
| Amazon.com, Inc. Consumer Discretionary |
2.5% | |||
| NVIDIA Corp. Information Technology |
1.9% | |||
| Tesla, Inc. Consumer Discretionary |
1.8% | |||
| Exxon Mobil Corp. Energy |
1.7% | |||
| Johnson & Johnson Health Care |
1.5% | |||
| Alphabet, Inc., Class A Communication Services |
1.4% | |||
| AbbVie, Inc. Health Care |
1.3% | |||
| JPMorgan Chase & Co. Financials |
1.3% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2023, individual holdings that hindered the Fund’s absolute return included Rio Tinto, Amazon.com and Tesla. Individual holdings that lifted the Fund’s absolute return included NVIDIA, Merck and Gilead Sciences.
Prior to August 1, 2022, the Fund’s research-based selection process focused on stocks with exposure to a quality investment style factor. Since then, the Fund has followed a dividend-enhanced strategy focused on the U.S. market. The quality factor had no significant impact on the Fund’s relative performance for the reporting period. Other factors, to which the Fund does not actively seek exposure, had a larger effect on relative performance than quality. The value and momentum factors contributed to the Fund’s relative return, with modest contribution from the low volatility factor.
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
| 18 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN U.S. CORE DIVIDEND TILT INDEX ETF
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 March 31, 2023, 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.
| franklintempleton.com | Annual Report | 19 | ||
FRANKLIN U.S. CORE DIVIDEND TILT INDEX ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. 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 3/31/231,2
| Cumulative Total Return3 | Average Annual Total Return3 | |||||||||||||||
| |
Based on NAV4 |
|
|
Based on market price5 |
|
|
Based on NAV4 |
|
|
Based on market price5 |
| |||||
|
1-Year |
-8.09% | -8.00% | -8.09% | -8.00% | ||||||||||||
|
3-Year |
+51.72% | +51.54% | +14.91% | +14.86% | ||||||||||||
|
5-Year |
+34.52% | +33.62% | +6.11% | +5.97% | ||||||||||||
| Since Inception (6/1/16) |
+57.91% | +57.77% | +6.92% | +6.90% | ||||||||||||
| Distribution Rate6 | |
30-Day Standardized Yield7 |
| |
| 3.10% |
2.45% | |||
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 22 for Performance Summary footnotes.
| 20 | Annual Report | franklintempleton.com | ||
FRANKLIN U.S. CORE DIVIDEND TILT INDEX ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
6/1/16-3/31/23
See page 22 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 21 | ||
FRANKLIN U.S. CORE DIVIDEND TILT INDEX ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $1.000782 |
Total Annual Operating Expenses9
| 0.06% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in emerging markets involve heightened risks related to the same factors. To the extent the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. Companies that have historically paid regular dividends to shareholders may decrease or eliminate dividend payments in the future. A decrease in dividend payments by an issuer may result in a decrease in the value of the issuer’s stock and less available income for the fund. There can be no assurance that the quality factor stock selection process and dividend screens of the underlying index will enhance performance. Exposure to investment factors and the use of dividend screens may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transaction costs, expenses and other factors. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
2. 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.
3. 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.
4. Assumes reinvestment of distributions based on net asset value.
5. Assumes reinvestment of distributions based on market price.
6. Distribution rate is based on an annualization of the March dividend and the NAV per share on 3/31/23.
7. 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.
8. Source: FactSet. The Linked Morningstar® US Dividend Enhanced Select Index, measures the performance of the LibertyQ Global Dividend Index from Fund inception through July 31, 2022, and the Morningstar® US Dividend Enhanced Select IndexSM thereafter. The LibertyQ Global Dividend Index is a systematic, rules-based proprietary index that is owned and calculated by MSCI Inc. It is based on the MSCI ACWI ex REITs Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. The Morningstar® US Dividend Enhanced Select IndexSM is a systematic, rules-based proprietary index that is maintained and calculated by Morningstar, Inc. It is based on the Morningstar® US Target Market Exposure Index (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. The Morningstar® US Target Market Exposure Index includes large- and mid-capitalization stocks representing the top 85% of the U.S. equity market by float-adjusted market capitalization. The Linked Morningstar® US Target Market Exposure Index measures the performance of the MSCI ACWI ex REITs Index-NR from Fund inception through July 31, 2022, and the Morningstar® US Target Market Exposure Index thereafter. The MSCI ACWI ex REITs Index-NR is a free float-adjusted, market capitalization-weighted index designed to measure the equity market performance of developed and emerging markets, excluding REIT securities. Net Returns (NR) include income net of tax withholding when dividends are paid.
9. 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.
| 22 | Annual Report | franklintempleton.com | ||
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 | Hypothetical | |||||||||||||||||||||
| (actual return after expenses) | (5% annual return before expenses) | |||||||||||||||||||||
| Beginning Account Value 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231,2 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,150.80 | $0.32 | $1,024.63 | $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 182/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
| franklintempleton.com | Annual Report | 23 | ||
Franklin U.S. Large Cap Multifactor Index ETF
Formerly, Franklin LibertyQ U.S. Equity ETF
This annual report for Franklin U.S. Large Cap Multifactor Index ETF covers the fiscal year ended March 31, 2023. 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 12-month period, the Fund posted cumulative total returns of -5.85% based on market price and -5.79% based on net asset value (NAV). In comparison, the LibertyQ U.S. Large Cap Equity Index posted a -5.67% cumulative total return for the same period, while the Russell 1000® Index posted a -8.39% cumulative total return.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 | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Information Technology | 36.3% | |||
| Health Care | 19.4% | |||
| Consumer Discretionary | 12.0% | |||
| Industrials | 6.8% | |||
| Communication Services | 5.4% | |||
| Financials | 5.0% | |||
| Energy | 5.0% | |||
| Consumer Staples | 4.8% | |||
| Real Estate | 2.0% | |||
| Materials | 1.9% | |||
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 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.
Manager’s Discussion
For the fiscal year ended March 31, 2023, individual holdings that hindered the Fund’s absolute return included Tesla, Amazon.com and Intel. Individual holdings that lifted the Fund’s absolute return included Merck, Exxon Mobil and Eli Lilly.
The Fund’s research-based selection process focuses on three investment factors: value, quality, and momentum. Of
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 77.
| 24 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN U.S. LARGE CAP MULTIFACTOR INDEX ETF
the three target-style factors, value and quality contributed to the Fund’s relative performance for the reporting period, while momentum was a modest detractor. The low volatility factor, to which the Fund does not actively seek exposure, had no significant impact on the Fund’s relative return.
| Top 10 Holdings | ||||
| 3/31/23 | ||||
| Company Sector/Industry |
% of Total Net Assets |
|||
| Apple, Inc. Information Technology |
7.5% | |||
| Microsoft Corp. Information Technology |
6.3% | |||
| Eli Lilly & Co. Health Care |
1.8% | |||
| Mastercard, Inc., Class A Information Technology |
1.7% | |||
| AbbVie, Inc. Health Care |
1.7% | |||
| Broadcom, Inc. Information Technology |
1.7% | |||
| Merck & Co., Inc. Health Care |
1.6% | |||
| Exxon Mobil Corp. Energy |
1.6% | |||
| Alphabet, Inc., Class A Communication Services |
1.6% | |||
| Cisco Systems, Inc. Information Technology |
1.6% | |||
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 March 31, 2023, 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.
| franklintempleton.com | Annual Report |
25 | ||||||||
FRANKLIN U.S. LARGE CAP MULTIFACTOR INDEX ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. 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 3/31/231,2
| Cumulative Total Return3 | Average Annual Total Return3 | |||||||||||||||
| Based on NAV4 |
Based on market price5 |
Based on NAV4 |
Based on market price5 |
|||||||||||||
|
1-Year |
-5.79% | -5.85% | -5.79% | -5.85% | ||||||||||||
|
3-Year |
+59.45% | +59.49% | +16.83% | +16.84% | ||||||||||||
|
5-Year |
+60.20% | +59.56% | +9.88% | +9.80% | ||||||||||||
| Since Inception (4/26/17) |
+82.37% | +82.41% | +10.67% | +10.67% | ||||||||||||
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 28 for Performance Summary footnotes.
| 26 | Annual Report | franklintempleton.com | ||
FRANKLIN U.S. LARGE CAP MULTIFACTOR INDEX ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
4/26/17-3/31/23
See page 28 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 27 | ||
FRANKLIN U.S. LARGE CAP MULTIFACTOR INDEX ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $0.834050 |
Total Annual Operating Expenses7
|
0.15% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. To the extent the Fund concentrates in a specific industry or group of industries, the Fund will carry much greater risks of adverse developments and price movements in such industries than a fund that invests in a wider variety of industries; there is also the risk that the Fund will perform poorly during a slump in demand for securities of companies in such industries. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transactions costs, expenses and other factors. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
2. 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.
3. 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.
4. Assumes reinvestment of distributions based on net asset value.
5. Assumes reinvestment of distributions based on market price.
6. Source: FactSet. The LibertyQ U.S. Large Cap Equity Index is a systematic, rules-based proprietary index maintained and calculated by FTSE Russell (Russell) based on the Russell 1000® Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. The Russell 1000® Index is market capitalization weighted and measures performance of the largest companies in the Russell 3000® Index, which represents the majority of the U.S. market’s total capitalization.
7. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.
See www.franklintempletondatasources.com for additional data provider information.
| 28 | Annual Report | franklintempleton.com | ||
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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231,2 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,143.50 | $0.80 | $1,024.18 | $0.76 | 0.15 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
| franklintempleton.com | Annual Report | 29 | ||
Franklin U.S. Mid Cap Multifactor Index ETF
Formerly, Franklin LibertyQ U.S. Mid Cap Equity ETF
This annual report for Franklin U.S. Mid Cap Multifactor Index ETF covers the fiscal year ended March 31, 2023. 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 12-month period, the Fund posted cumulative total returns of -2.48% based on market price and -2.17% based on net asset value (NAV). In comparison, the LibertyQ U.S. Mid Cap Equity Index posted a -1.94% cumulative total return for the same period, while the Russell Midcap® Index posted a -8.78% 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 32.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
| Top 10 Sectors/Industries | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Information Technology | 18.8% | |||
| Industrials | 18.7% | |||
| Consumer Discretionary | 17.0% | |||
| Financials | 8.7% | |||
| Health Care | 8.4% | |||
| Materials | 7.1% | |||
| Consumer Staples | 6.9% | |||
| Utilities | 4.5% | |||
| Energy | 4.5% | |||
| Real Estate | 3.1% | |||
Investment Strategy
The Fund, using a passive or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the 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.
Manager’s Discussion
For the fiscal year ended March 31, 2023, individual holdings that hindered the Fund’s absolute return included Paramount Global, Lumen Technologies and AvalonBay Communities. Individual holdings that lifted the Fund’s absolute return included O’Reilly Automotive, Genuine Parts and W.W. Grainger.
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 83.
| 30 | Annual Report | franklintempleton.com | ||
FRANKLIN U.S. MID CAP MULTIFACTOR INDEX ETF
The Fund’s research-based selection process focuses on four investment factors: value, quality, momentum and low volatility. Of the four target-style factors, quality contributed to the Fund’s relative performance for the reporting period, with modest contribution from the low volatility factor. In addition, the momentum and value factors contributed marginally.
| Top 10 Holdings | ||||
| 3/31/23 | ||||
| Company Sector/Industry |
% of Total Net Assets |
|||
| Fortinet, Inc. Information Technology |
1.3 | % | ||
| Cadence Design Systems, Inc. Information Technology |
1.3 | % | ||
| Arista Networks, Inc. Information Technology |
1.2 | % | ||
| IDEXX Laboratories, Inc. Health Care |
1.2 | % | ||
| WW Grainger, Inc. Industrials |
1.2 | % | ||
| Synopsys, Inc. Information Technology |
1.2 | % | ||
| Old Dominion Freight Line, Inc. Industrials |
1.1 | % | ||
| Otis Worldwide Corp. Industrials |
1.1 | % | ||
| Hershey Co. Consumer Staples |
1.1 | % | ||
| Fastenal Co. Industrials |
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 March 31, 2023, 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.
| franklintempleton.com | Annual Report | 31 | ||
FRANKLIN U.S. MID CAP MULTIFACTOR INDEX ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. 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 3/31/231,2
| Cumulative Total Return3 | Average Annual Total Return3 | |||||||||||||||
| Based on NAV4 |
Based on market price5 |
Based on NAV4 |
Based on market price5 |
|||||||||||||
| 1-Year |
-2.17% | -2.48% | -2.17% | -2.48% | ||||||||||||
| 3-Year |
+80.23% | +80.37% | +21.70% | +21.73% | ||||||||||||
| 5-Year |
+66.92% | +66.05% | +10.79% | +10.67% | ||||||||||||
| Since Inception (4/26/17) |
+83.77% | +83.59% | +10.81% | +10.79% | ||||||||||||
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 34 for Performance Summary footnotes.
| 32 | Annual Report | franklintempleton.com | ||
FRANKLIN U.S. MID CAP MULTIFACTOR INDEX ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
4/26/17-3/31/23
See page 34 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 33 | ||
FRANKLIN U.S. MID CAP MULTIFACTOR INDEX ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $0.567598 |
Total Annual Operating Expenses7
|
0.30% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Historically, mid-size company securities have been more volatile in price than larger company securities, especially over the short term. Mid-size companies may be more susceptible to particular economic events or competitive factors than are larger, more broadly diversified companies. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transactions costs, expenses and other factors. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
2. 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.
3. 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.
4. Assumes reinvestment of distributions based on net asset value.
5. Assumes reinvestment of distributions based on market price.
6. Source: FactSet. The LibertyQ U.S. Mid Cap Equity Index is a systematic, rules-based proprietary index maintained and calculated by FTSE Russell (Russell) based on the Russell Midcap® Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. Russell Midcap Index is market capitalization weighted and measures performance of the smallest companies in the Russell 1000® Index, which represents a modest amount of the Russell 1000® Index’s total market capitalization.
7. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.
See www.franklintempletondatasources.com for additional data provider information.
| 34 | Annual Report | franklintempleton.com | ||
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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During 10/1/22–3/31/231,2 |
Ending Account Value 3/31/23 |
Expenses Paid During 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,165.20 | $1.62 | $1,023.44 | $1.51 | 0.30 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
| franklintempleton.com | Annual Report | 35 | ||
Franklin U.S. Small Cap Multifactor Index ETF
Formerly, Franklin LibertyQ U.S. Small Cap Equity ETF
This annual report for Franklin U.S. Small Cap Multifactor Index ETF covers the fiscal year ended March 31, 2023. 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 12-month period, the Fund posted cumulative total returns of -4.37% based on market price and -4.21% based on net asset value (NAV). In comparison, the LibertyQ U.S. Small Cap Equity Index posted a -3.97% cumulative total return for the same period, while the Russell 2000® Index posted a -11.61% cumulative total return.2
You can find more of the Fund’s performance data in the Performance Summary beginning on page 38.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
| Top 10 Sectors/Industries | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Industrials | 22.9% | |||
| Consumer Discretionary | 19.3% | |||
| Information Technology | 12.2% | |||
| Financials | 9.9% | |||
| Health Care | 7.5% | |||
| Utilities | 7.4% | |||
| Consumer Staples | 7.0% | |||
| Real Estate | 4.5% | |||
| Materials | 4.0% | |||
| Energy | 2.8% | |||
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 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.
Manager’s Discussion
For the fiscal year ended March 31, 2023, individual holdings that hindered the Fund’s absolute return included Helen of Troy, Microstrategy and Capital Trust. Individual holdings that lifted the Fund’s absolute return included Wingstop, Texas Roadhouse and Academy Sports & Outdoors.
The Fund’s research-based selection process focuses on four investment factors: value, quality, momentum and low
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 89.
| 36 | Annual Report | franklintempleton.com | ||
FRANKLIN U.S. SMALL CAP MULTIFACTOR INDEX ETF
volatility. Of the four target-style factors, value and quality contributed to the Fund’s relative performance for the reporting period. In addition, momentum and low volatility were modest contributors.
| Top 10 Holdings | ||||
| 3/31/23 | ||||
| Company Sector/Industry |
% of Total Net Assets |
|||
| Saia, Inc. Industrials |
1.2% | |||
| Texas Roadhouse, Inc. Consumer Discretionary |
1.1% | |||
| Applied Industrial Technologies, Inc. Industrials |
0.9% | |||
| Murphy USA, Inc. Consumer Discretionary |
0.9% | |||
| Kinsale Capital Group, Inc. Financials |
0.9% | |||
| Novanta, Inc. Information Technology |
0.9% | |||
| SPS Commerce, Inc. Information Technology |
0.9% | |||
| Qualys, Inc. Information Technology |
0.8% | |||
| Wingstop, Inc. Consumer Discretionary |
0.8% | |||
| Exponent, Inc. Industrials |
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 March 31, 2023, 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.
| franklintempleton.com | Annual Report |
37 | ||||||||
FRANKLIN U.S. SMALL CAP MULTIFACTOR INDEX ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. 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 3/31/231,2
| Cumulative Total Return3 | Average Annual Total Return3 | |||||||||||||||
| Based on NAV4 |
Based on market price5 |
Based on NAV4 |
Based on market price5 |
|||||||||||||
|
1-Year |
-4.21% | -4.37% | -4.21% | -4.37% | ||||||||||||
|
3-Year |
+73.16% | +74.12% | +20.08% | +20.31% | ||||||||||||
|
5-Year |
+36.72% | +36.73% | +6.46% | +6.46% | ||||||||||||
| Since Inception (4/26/17) |
+45.39% | +45.35% | +6.52% | +6.51% | ||||||||||||
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 40 for Performance Summary footnotes.
| 38 | Annual Report | franklintempleton.com | ||
FRANKLIN U.S. SMALL CAP MULTIFACTOR INDEX ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
4/26/17-3/31/23
See page 40 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 39 | ||
FRANKLIN U.S. SMALL CAP MULTIFACTOR INDEX ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $0.503773 |
Total Annual Operating Expenses7
|
0.35% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Smaller, mid-sized and relatively new or unseasoned companies can be particularly sensitive to changing economic conditions, and their prospects for growth are less certain than those of larger, more established companies. Historically, these securities have experienced more price volatility than larger company stocks, especially over the short term. Smaller companies may be more susceptible to particular events or economic conditions, less certain growth prospects, lack of depth of management and funds for growth and development and limited or less developed product lines and markets. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transactions costs, expenses and other factors. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
2. 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.
3. 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.
4. Assumes reinvestment of distributions based on net asset value.
5. Assumes reinvestment of distributions based on market price.
6. Source: FactSet. The LibertyQ U.S. Small Cap Equity Index is a systematic, rules-based proprietary index that is maintained and calculated by FTSE Russell (Russell) based on the Russell 2000® Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. The Russell 2000® Index is market capitalization weighted and measures performance of the approximately 2,000 smallest companies in the Russell 3000® Index, which represent a small amount of the total market capitalization of the Russell 3000® Index.
7. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.
See www.franklintempletondatasources.com for additional data provider information.
| 40 | Annual 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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231,2 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,150.50 | $1.88 | $1,023.19 | $1.77 | 0.35 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
| franklintempleton.com | Annual Report | 41 | ||
FRANKLIN TEMPLETON ETF TRUST
Franklin Emerging Market Core Dividend Tilt Index ETFa
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance | ||||||||||||||||||||
| (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$28.33 | $30.78 | $22.20 | $29.70 | $33.41 | |||||||||||||||
| Income from investment operationsb: |
||||||||||||||||||||
| Net investment incomec |
1.39 | 1.32 | 0.84 | 1.24 | 1.14 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(4.42 | ) | (2.55 | ) | 8.55 | (6.96 | ) | (3.76 | ) | |||||||||||
| Total from investment operations |
(3.03 | ) | (1.23 | ) | 9.39 | (5.72 | ) | (2.62 | ) | |||||||||||
| Less distributions from net investment income |
(1.42 | ) | (1.22 | ) | (0.81 | ) | (1.78 | ) | (1.09 | ) | ||||||||||
| Net asset value, end of year |
$23.88 | $28.33 | $30.78 | $22.20 | $29.70 | |||||||||||||||
| Total returnd |
(10.36)% | (4.21)% | 42.57% | (20.55)% | (7.70)% | |||||||||||||||
| Ratios to average net assetse | ||||||||||||||||||||
| Expenses before waiver and payments by affiliates |
0.29% | 0.45% | 0.45% | 0.49% | 0.55% | |||||||||||||||
| Expenses net of waiver and payments by affiliates |
0.29% | 0.45% | 0.45% | 0.49% | 0.55% | |||||||||||||||
| Net investment income |
5.83% | 4.28% | 3.15% | 4.26% | 3.75% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$11,939 | $17,000 | $24,627 | $57,711 | $344,484 | |||||||||||||||
| Portfolio turnover ratef |
110.78%g | 34.27%g | 40.22%g | 44.11%g | 52.42% | |||||||||||||||
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.
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: | 110.78% | 34.27% | 36.91% | 41.78% | — |
| 42 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin Emerging Market Core Dividend Tilt Index ETF
| Industry | Shares | Value | ||||||||||||
| Common Stocks 96.4% | ||||||||||||||
| Brazil 3.4% | ||||||||||||||
| Alupar Investimento SA, UNIT |
Electric Utilities | 1,000 | $ | 5,302 | ||||||||||
| Ambev SA |
Beverages | 23,500 | 66,418 | |||||||||||
| Banco Bradesco SA |
Banks | 7,500 | 17,529 | |||||||||||
| Banco BTG Pactual S.A |
Capital Markets | 1,500 | 5,813 | |||||||||||
| Banco do Brasil SA |
Banks | 7,500 | 57,852 | |||||||||||
| BB Seguridade Participacoes SA |
Insurance | 3,500 | 22,442 | |||||||||||
| Caixa Seguridade Participacoes SA |
Insurance | 3,000 | 5,207 | |||||||||||
| Cia Energetica de Minas Gerais |
Electric Utilities | 1,500 | 5,065 | |||||||||||
| Cia Paranaense de Energia |
Electric Utilities | 1,500 | 10,091 | |||||||||||
| Cia Siderurgica Nacional SA |
Metals & Mining | 3,000 | 9,136 | |||||||||||
| CPFL Energia SA |
Electric Utilities | 1,000 | 6,242 | |||||||||||
| Hypera SA |
Pharmaceuticals | 500 | 3,718 | |||||||||||
| Klabin SA |
Containers & Packaging | 4,500 | 16,055 | |||||||||||
| Lojas Renner SA |
Broadline Retail | 500 | 1,634 | |||||||||||
| Neoenergia SA |
Electric Utilities | 1,000 | 2,958 | |||||||||||
| Petroleo Brasileiro SA |
Oil, Gas & Consumable Fuels | 11,500 | 60,083 | |||||||||||
| Telefonica Brasil SA |
Diversified Telecommunication Services | 2,300 | 17,537 | |||||||||||
| TIM SA |
Wireless Telecommunication Services | 4,500 | 11,165 | |||||||||||
| Transmissora Alianca de Energia Eletrica SA |
Electric Utilities | 1,000 | 6,870 | |||||||||||
| Vale SA |
Metals & Mining | 3,700 | 58,591 | |||||||||||
| Vibra Energia SA |
Specialty Retail | 6,500 | 18,473 | |||||||||||
|
|
|
|||||||||||||
| 408,181 | ||||||||||||||
|
|
|
|||||||||||||
| Chile 0.7% | ||||||||||||||
| Banco de Chile |
Banks | 228,845 | 22,346 | |||||||||||
| Banco Santander Chile |
Banks | 319,800 | 14,259 | |||||||||||
| Cencosud Shopping SA |
Real Estate Management & Development | 2,645 | 4,282 | |||||||||||
| Cia Sud Americana de Vapores SA |
Marine Transportation | 76,385 | 7,636 | |||||||||||
| Empresas CMPC SA |
Paper & Forest Products | 6,060 | 10,182 | |||||||||||
| Empresas Copec SA |
Oil, Gas & Consumable Fuels | 2,050 | 14,546 | |||||||||||
| Quinenco SA |
Industrial Conglomerates | 1,370 | 5,329 | |||||||||||
|
|
|
|||||||||||||
| 78,580 | ||||||||||||||
|
|
|
|||||||||||||
| China 30.0% | ||||||||||||||
| 37 Interactive Entertainment Network Technology Group Co. Ltd., Class A |
Entertainment | 1,000 | 4,143 | |||||||||||
| Agricultural Bank of China Ltd., Class A |
Banks | 67,500 | 30,569 | |||||||||||
| Agricultural Bank of China Ltd., Class H |
Banks | 160,000 | 59,313 | |||||||||||
| a | Alibaba Group Holding Ltd., Class A |
Internet & Direct Marketing Retail | 24,000 | 306,957 | ||||||||||
| Anhui Conch Cement Co. Ltd., Class A |
Construction Materials | 2,000 | 8,227 | |||||||||||
| Anhui Conch Cement Co. Ltd., Class H |
Construction Materials | 6,670 | 23,112 | |||||||||||
| ANTA Sports Products Ltd., Class A |
Textiles, Apparel & Luxury Goods | 1,040 | 15,103 | |||||||||||
| AVIC Industry-Finance Holdings Co. Ltd., Class A . |
Financial Services | 3,500 | 2,090 | |||||||||||
| a | Baidu, Inc., Class A |
Interactive Media & Services | 2,500 | 47,357 | ||||||||||
| Bank of Beijing Co. Ltd., Class A |
Banks | 9,000 | 5,766 | |||||||||||
| Bank of Changsha Co. Ltd., Class A |
Banks | 2,000 | 2,304 | |||||||||||
| Bank of Chengdu Co. Ltd., Class A |
Banks | 1,500 | 2,962 | |||||||||||
| Bank of China Ltd., Class A |
Banks | 23,500 | 11,566 | |||||||||||
| Bank of China Ltd., Class H |
Banks | 280,000 | 107,364 | |||||||||||
| Bank of Communications Co. Ltd., Class A |
Banks | 17,000 | 12,650 | |||||||||||
| Bank of Communications Co. Ltd., Class H |
Banks | 115,000 | 72,370 | |||||||||||
| Bank of Jiangsu Co. Ltd., Class A |
Banks | 7,000 | 7,156 | |||||||||||
| Bank of Nanjing Co. Ltd., Class A |
Banks | 4,500 | 5,871 | |||||||||||
| Bank of Shanghai Co. Ltd., Class A |
Banks | 6,000 | 5,234 | |||||||||||
| Baoshan Iron & Steel Co. Ltd., Class A |
Metals & Mining | 10,500 | 9,541 | |||||||||||
| a | BeiGene Ltd. |
Biotechnology | 500 | 8,242 | ||||||||||
| Beijing Enterprises Holdings Ltd., Class H |
Industrial Conglomerates | 2,500 | 8,997 | |||||||||||
| franklintempleton.com | Annual Report | 43 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) |
||||||||||||||
| b | Blue Moon Group Holdings Ltd. |
Household Products | 7,500 | $ | 4,787 | |||||||||
| BOC Hong Kong Holdings Ltd. |
Banks | 20,000 | 62,293 | |||||||||||
| BOE Technology Group Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 17,500 | 11,315 | |||||||||||
| BOE Technology Group Co. Ltd., Class B |
Electronic Equipment, Instruments & Components | 4,500 | 2,029 | |||||||||||
| Changjiang Securities Co. Ltd., Class A |
Capital Markets | 2,500 | 2,028 | |||||||||||
| China CITIC Bank Corp. Ltd., Class H |
Banks | 50,000 | 25,159 | |||||||||||
| China Conch Venture Holdings Ltd. |
Construction & Engineering | 9,000 | 15,707 | |||||||||||
| China Construction Bank Corp., Class A |
Banks | 2,000 | 1,730 | |||||||||||
| China Construction Bank Corp., Class H |
Banks | 265,000 | 171,829 | |||||||||||
| China Everbright Bank Co. Ltd., Class A |
Banks | 18,500 | 8,109 | |||||||||||
| China Everbright Bank Co. Ltd., Class H |
Banks | 15,000 | 4,548 | |||||||||||
| b | China Feihe Ltd. |
Food Products | 20,000 | 15,006 | ||||||||||
| China Hongqiao Group Ltd. |
Metals & Mining | 10,000 | 9,580 | |||||||||||
| China International Marine Containers Group Co. Ltd., Class A | Machinery | 1,000 | 1,108 | |||||||||||
| China International Marine Containers Group Co. Ltd., Class H | Machinery | 4,000 | 2,752 | |||||||||||
| China Lesso Group Holdings Ltd. |
Building Products | 5,000 | 4,471 | |||||||||||
| China Life Insurance Co. Ltd., Class H |
Insurance | 40,000 | 65,733 | |||||||||||
| China Medical System Holdings Ltd. |
Pharmaceuticals | 5,000 | 7,898 | |||||||||||
| China Merchants Bank Co. Ltd., Class A |
Banks | 7,000 | 34,932 | |||||||||||
| China Merchants Bank Co. Ltd., Class H | Banks | 14,000 | 71,516 | |||||||||||
| China Merchants Expressway Network & Technology Holdings Co. Ltd., Class A |
Transportation Infrastructure | 1,500 | 1,850 | |||||||||||
| China Merchants Port Holdings Co. Ltd. |
Transportation Infrastructure | 6,670 | 10,230 | |||||||||||
| China Merchants Securities Co. Ltd., Class A |
Capital Markets | 3,500 | 7,028 | |||||||||||
| b | China Merchants Securities Co. Ltd., Class H |
Capital Markets | 3,000 | 2,874 | ||||||||||
| China Minsheng Banking Corp. Ltd., Class A |
Banks | 15,500 | 7,787 | |||||||||||
| China Minsheng Banking Corp. Ltd., Class H |
Banks | 37,500 | 12,850 | |||||||||||
| China National Building Material Co. Ltd., Class H |
Construction Materials | 23,000 | 18,869 | |||||||||||
| China Overseas Land & Investment Ltd., Class A |
Real Estate Management & Development | 20,000 | 48,306 | |||||||||||
| China Pacific Insurance Group Co. Ltd., Class A |
Insurance | 1,500 | 5,662 | |||||||||||
| China Pacific Insurance Group Co. Ltd., Class H |
Insurance | 7,000 | 18,593 | |||||||||||
| China Petroleum & Chemical Corp., Class A |
Oil, Gas & Consumable Fuels | 15,000 | 12,276 | |||||||||||
| China Petroleum & Chemical Corp., Class H |
Oil, Gas & Consumable Fuels | 120,000 | 70,930 | |||||||||||
| China Resources Cement Holdings Ltd. |
Construction Materials | 10,000 | 4,905 | |||||||||||
| China Shenhua Energy Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 3,500 | 14,357 | |||||||||||
| China Shenhua Energy Co. Ltd., Class H |
Oil, Gas & Consumable Fuels | 18,000 | 56,637 | |||||||||||
| China Taiping Insurance Holdings Co. Ltd. |
Insurance | 8,000 | 8,499 | |||||||||||
| b | China Tower Corp. Ltd., Class H |
Diversified Telecommunication Services | 230,000 | 27,835 | ||||||||||
| China Vanke Co. Ltd., Class A |
Real Estate Management & Development | 4,500 | 9,986 | |||||||||||
| China Vanke Co. Ltd., Class H |
Real Estate Management & Development | 11,500 | 18,136 | |||||||||||
| China Yangtze Power Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 10,000 | 30,944 | |||||||||||
| Chongqing Rural Commercial Bank Co. Ltd., Class A |
Banks | 4,000 | 2,138 | |||||||||||
| Chongqing Rural Commercial Bank Co. Ltd., Class H |
Banks | 10,000 | 3,643 | |||||||||||
| Chow Tai Fook Jewellery Group Ltd., Class A |
Specialty Retail | 13,000 | 25,801 | |||||||||||
| CITIC Ltd., Class B |
Industrial Conglomerates | 35,000 | 40,930 | |||||||||||
| COSCO SHIPPING Holdings Co. Ltd., Class H |
Marine Transportation | 17,500 | 19,685 | |||||||||||
| Country Garden Holdings Co. Ltd. |
Real Estate Management & Development | 45,000 | 12,669 | |||||||||||
| Country Garden Services Holdings Co. Ltd. |
Commercial Services & Supplies | 4,700 | 8,131 | |||||||||||
| CSPC Pharmaceutical Group Ltd., Class A |
Pharmaceuticals | 8,000 | 7,868 | |||||||||||
| b | Dali Foods Group Co. Ltd. |
Food Products | 12,500 | 5,223 | ||||||||||
| Daqin Railway Co. Ltd., Class A |
Ground Transportation | 6,500 | 6,805 | |||||||||||
| ENN Energy Holdings Ltd. |
Gas Utilities | 800 | 10,966 | |||||||||||
| 44 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) |
||||||||||||||
| FAW Jiefang Group Co. Ltd. |
Automobiles | 1,000 | $ | 1,209 | ||||||||||
| Focus Media Information Technology Co. Ltd., Class A |
Technology Hardware, Storage & Peripherals | 7,000 | 7,003 | |||||||||||
| Fosun International Ltd. |
Industrial Conglomerates | 12,500 | 9,172 | |||||||||||
| Foxconn Industrial Internet Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 6,000 | 15,045 | |||||||||||
| b | Fuyao Glass Industry Group Co. Ltd., Class H |
Automobile Components | 400 | 1,743 | ||||||||||
| Gemdale Corp., Class A |
Real Estate Management & Development | 2,000 | 2,446 | |||||||||||
| Gree Electric Appliances, Inc. of Zhuhai, Class A . |
Household Durables | 2,500 | 13,379 | |||||||||||
| Guangdong HEC Technology Holding Co. Ltd., Class A |
Metals & Mining | 1,500 | 1,955 | |||||||||||
| Guanghui Energy Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 1,000 | 1,347 | |||||||||||
| Guangzhou Yuexiu Capital Holdings Group Co. Ltd., Class A, A |
Capital Markets | 2,000 | 1,919 | |||||||||||
| Guosen Securities Co. Ltd., Class A |
Capital Markets | 3,500 | 4,776 | |||||||||||
| Guotai Junan Securities Co. Ltd., Class A |
Capital Markets | 3,500 | 7,319 | |||||||||||
| b | Guotai Junan Securities Co. Ltd., Class H |
Capital Markets | 5,000 | 6,076 | ||||||||||
| Haitian International Holdings Ltd. |
Machinery | 3,000 | 7,758 | |||||||||||
| Henan Shuanghui Investment & Development Co. Ltd., Class A |
Food Products | 1,500 | 5,666 | |||||||||||
| Hengan International Group Co. Ltd. |
Personal Products | 3,750 | 17,341 | |||||||||||
| Hengli Petrochemical Co. Ltd., Class A |
Chemicals | 3,000 | 7,077 | |||||||||||
| Huadian Power International Corp. Ltd., Class A |
Independent Power Producers & Energy Traders | 4,000 | 3,373 | |||||||||||
| Huadian Power International Corp. Ltd., Class H |
Independent Power Producers & Energy Traders | 10,000 | 4,102 | |||||||||||
| Huaibei Mining Holdings Co. Ltd., Class A |
Metals & Mining | 1,500 | 2,962 | |||||||||||
| Huaxia Bank Co. Ltd., Class A |
Banks | 7,500 | 5,876 | |||||||||||
| Huaxin Cement Co. Ltd., Class A |
Construction Materials | 1,000 | 2,264 | |||||||||||
| Huaxin Cement Co. Ltd., Class H, H |
Construction Materials | 2,000 | 2,176 | |||||||||||
| Huayu Automotive Systems Co. Ltd., Class A |
Automobile Components | 1,500 | 3,656 | |||||||||||
| Industrial & Commercial Bank of China Ltd., Class A |
Banks | 27,000 | 17,535 | |||||||||||
| Industrial & Commercial Bank of China Ltd., Class H |
Banks | 220,000 | 117,147 | |||||||||||
| Industrial Bank Co. Ltd., Class A |
Banks | 9,500 | 23,365 | |||||||||||
| Inner Mongolia Yili Industrial Group Co. Ltd., Class A |
Food Products | 3,000 | 12,721 | |||||||||||
| a,b | JD Health International, Inc. |
Consumer Staples Distribution & Retail | 500 | 3,720 | ||||||||||
| JD.com, Inc., Class A |
Broadline Retail | 3,000 | 65,733 | |||||||||||
| Jiangsu Expressway Co. Ltd., Class A |
Transportation Infrastructure | 500 | 608 | |||||||||||
| Jiangsu Expressway Co. Ltd., Class H |
Transportation Infrastructure | 6,000 | 5,595 | |||||||||||
| Kingboard Holdings Ltd. |
Electronic Equipment, Instruments & Components | 3,340 | 10,254 | |||||||||||
| a,b | Kuaishou Technology, Class B |
Interactive Media & Services | 3,500 | 26,952 | ||||||||||
| LB Group Co. Ltd., Class A |
Chemicals | 1,000 | 2,947 | |||||||||||
| Lenovo Group Ltd. |
Technology Hardware, Storage & Peripherals | 40,000 | 43,312 | |||||||||||
| a | Li Auto, Inc., Class A |
Automobiles | 1,500 | 18,726 | ||||||||||
| Li Ning Co. Ltd. |
Textiles, Apparel & Luxury Goods | 1,000 | 7,885 | |||||||||||
| Livzon Pharmaceutical Group, Inc., Class H |
Pharmaceuticals | 1,000 | 3,529 | |||||||||||
| b | Longfor Group Holdings Ltd. |
Real Estate Management & Development | 9,920 | 27,991 | ||||||||||
| a,b | Meituan, Class B |
Hotels, Restaurants & Leisure | 6,040 | 110,413 | ||||||||||
| Midea Group Co. Ltd., Class A |
Household Durables | 2,500 | 19,589 | |||||||||||
| Minth Group Ltd. |
Automobile Components | 3,340 | 10,084 | |||||||||||
| NetEase, Inc. |
Entertainment | 3,617 | 63,586 | |||||||||||
| New China Life Insurance Co. Ltd., Class A |
Insurance | 1,000 | 4,441 | |||||||||||
| New China Life Insurance Co. Ltd., Class H |
Insurance | 4,500 | 10,697 | |||||||||||
| Perfect World Co. Ltd., Class A |
Entertainment | 1,000 | 2,478 | |||||||||||
| PetroChina Co. Ltd., Class H |
Oil, Gas & Consumable Fuels | 104,000 | 61,606 | |||||||||||
| PICC Property & Casualty Co. Ltd., Class H |
Insurance | 34,000 | 34,693 | |||||||||||
| franklintempleton.com | Annual Report | 45 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) |
||||||||||||||
| Ping An Insurance Group Co. of China Ltd., Class A |
Insurance | 2,500 | $ | 16,600 | ||||||||||
| Ping An Insurance Group Co. of China Ltd., Class H |
Insurance | 19,200 | 124,984 | |||||||||||
| Poly Developments & Holdings Group Co. Ltd., Class A |
Real Estate Management & Development | 3,500 | 7,202 | |||||||||||
| Postal Savings Bank of China Co. Ltd., Class A |
Banks | 16,000 | 10,834 | |||||||||||
| b | Postal Savings Bank of China Co. Ltd., Class H |
Banks | 40,000 | 23,745 | ||||||||||
| Qingdao Port International Co. Ltd., Class A |
Transportation Infrastructure | 1,500 | 1,387 | |||||||||||
| b | Qingdao Port International Co. Ltd., Class H |
Transportation Infrastructure | 5,000 | 2,611 | ||||||||||
| SAIC Motor Corp. Ltd., Class A |
Automobiles | 5,500 | 11,501 | |||||||||||
| Shaanxi Coal Industry Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 4,500 | 13,328 | |||||||||||
| Shandong Hi-speed Co. Ltd., Class A |
Transportation Infrastructure | 1,000 | 891 | |||||||||||
| Shanghai Baosight Software Co. Ltd., Class A |
Software | 500 | 4,237 | |||||||||||
| Shanghai Baosight Software Co. Ltd., Class B |
Software | 3,000 | 9,906 | |||||||||||
| Shanghai Construction Group Co. Ltd., Class A |
Construction & Engineering | 4,500 | 1,789 | |||||||||||
| Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., Class A |
Real Estate Management & Development | 1,000 | 1,455 | |||||||||||
| Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., Class B |
Real Estate Management & Development | 6,500 | 5,025 | |||||||||||
| Shanghai Pudong Development Bank Co. Ltd., Class A |
Banks | 13,000 | 13,611 | |||||||||||
| Shanghai Yuyuan Tourist Mart Group Co. Ltd., Class A |
Specialty Retail | 2,000 | 2,368 | |||||||||||
| Shanxi Coking Coal Energy Group Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 2,000 | 3,201 | |||||||||||
| Shengyi Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 1,000 | 2,688 | |||||||||||
| Shenzhou International Group Holdings Ltd. |
Textiles, Apparel & Luxury Goods | 2,000 | 20,994 | |||||||||||
| a,c | Shimao Group Holdings Ltd. |
Real Estate Management & Development | 9,000 | 2,379 | ||||||||||
| Sichuan Chuantou Energy Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 2,000 | 3,850 | |||||||||||
| Sichuan Road & Bridge Group Co. Ltd., Class A |
Construction & Engineering | 2,000 | 4,019 | |||||||||||
| Sinotruk Hong Kong Ltd. |
Machinery | 2,500 | 3,885 | |||||||||||
| b | Smoore International Holdings Ltd. |
Tobacco | 10,000 | 12,841 | ||||||||||
| a,c | Sunac China Holdings Ltd. |
Real Estate Management & Development | 18,000 | 3,578 | ||||||||||
| Sunny Optical Technology Group Co. Ltd. |
Electronic Equipment, Instruments & Components | 1,500 | 18,143 | |||||||||||
| Tencent Holdings Ltd. |
Interactive Media & Services | 8,900 | 437,407 | |||||||||||
| The People’s Insurance Co. Group of China Ltd., Class H |
Insurance | 45,000 | 15,019 | |||||||||||
| Tingyi Cayman Islands Holding Corp. |
Food Products | 10,000 | 16,663 | |||||||||||
| b | Topsports International Holdings Ltd. |
Specialty Retail | 15,000 | 13,720 | ||||||||||
| Uni-President China Holdings Ltd. |
Food Products | 5,000 | 5,045 | |||||||||||
| Want Want China Holdings Ltd. |
Food Products | 25,000 | 16,083 | |||||||||||
| Western Superconducting Technologies Co. Ltd., Class A |
Metals & Mining | 205 | 2,434 | |||||||||||
| Wuhan Guide Infrared Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 1,500 | 2,641 | |||||||||||
| Xiamen C & D, Inc., Class A |
Trading Companies & Distributors | 1,500 | 2,636 | |||||||||||
| Xinyi Solar Holdings Ltd. |
Semiconductors & Semiconductor Equipment | 21,000 | 25,173 | |||||||||||
| a | XPeng, Inc., Class A |
Automobiles | 500 | 2,787 | ||||||||||
| Yankuang Energy Group Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 1,500 | 7,769 | |||||||||||
| Yankuang Energy Group Co. Ltd., Class H |
Oil, Gas & Consumable Fuels | 8,000 | 28,637 | |||||||||||
| Youngor Group Co. Ltd., Class A |
Real Estate Management & Development | 3,000 | 2,848 | |||||||||||
| Zhejiang NHU Co. Ltd., Class A |
Pharmaceuticals | 1,500 | 3,921 | |||||||||||
| Zoomlion Heavy Industry Science & Technology Co. Ltd., Class A |
Machinery | 3,500 | 3,165 | |||||||||||
| Zoomlion Heavy Industry Science & Technology Co. Ltd., Class H |
Machinery | 9,000 | 4,758 | |||||||||||
| 46 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| China (continued) | ||||||||||||||
| ZTO Express Cayman, Inc. |
Air Freight & Logistics | 250 | $ | 7,134 | ||||||||||
|
|
|
|||||||||||||
| 3,577,976 | ||||||||||||||
|
|
|
|||||||||||||
| Colombia 0.4% |
||||||||||||||
| Banco de Bogota SA |
Banks | 535 | 3,634 | |||||||||||
| Bancolombia SA |
Banks | 1,375 | 10,326 | |||||||||||
| Ecopetrol SA |
Oil, Gas & Consumable Fuels | 26,560 | 13,966 | |||||||||||
| Grupo Argos SA |
Construction Materials | 1,980 | 3,863 | |||||||||||
| Grupo Energia Bogota SA ESP |
Gas Utilities | 12,035 | 3,965 | |||||||||||
| Interconexion Electrica SA ESP |
Electric Utilities | 2,135 | 6,942 | |||||||||||
|
|
|
|||||||||||||
| 42,696 | ||||||||||||||
|
|
|
|||||||||||||
| Czech Republic 0.5% | ||||||||||||||
| CEZ AS |
Electric Utilities | 865 | 42,071 | |||||||||||
| Komercni Banka AS |
Banks | 420 | 13,946 | |||||||||||
| b | Moneta Money Bank AS |
Banks | 1,860 | 7,489 | ||||||||||
|
|
|
|||||||||||||
| 63,506 | ||||||||||||||
|
|
|
|||||||||||||
| Greece 0.5% | ||||||||||||||
| Hellenic Telecommunications Organization SA |
Diversified Telecommunication Services | 1,150 | 16,854 | |||||||||||
| HELLENIQ Energy Holdings SA |
Oil, Gas & Consumable Fuels | 345 | 2,834 | |||||||||||
| JUMBO SA |
Specialty Retail | 550 | 11,652 | |||||||||||
| Motor Oil Hellas Corinth Refineries SA |
Oil, Gas & Consumable Fuels | 375 | 9,648 | |||||||||||
| OPAP SA |
Hotels, Restaurants & Leisure | 1,080 | 17,354 | |||||||||||
|
|
|
|||||||||||||
| 58,342 | ||||||||||||||
|
|
|
|||||||||||||
| Hong Kong 2.2% | ||||||||||||||
| Beijing Enterprises Water Group Ltd., Class A |
Water Utilities | 20,000 | 4,994 | |||||||||||
| Bosideng International Holdings Ltd., Class A |
Household Durables | 20,000 | 11,159 | |||||||||||
| China Everbright Environment Group Ltd., Class B |
Commercial Services & Supplies | 15,000 | 6,439 | |||||||||||
| China Gas Holdings Ltd., Class A |
Gas Utilities | 17,000 | 23,952 | |||||||||||
| China Resources Gas Group Ltd., Class A |
Gas Utilities | 5,500 | 20,284 | |||||||||||
| China Resources Land Ltd., Class H |
Real Estate Management & Development | 15,000 | 68,408 | |||||||||||
| Far East Horizon Ltd. |
Financial Services | 10,000 | 8,994 | |||||||||||
| Geely Automobile Holdings Ltd. |
Automobiles | 25,000 | 32,166 | |||||||||||
| Guangdong Investment Ltd. |
Water Utilities | 15,000 | 15,344 | |||||||||||
| Kingboard Laminates Holdings Ltd. |
Electronic Equipment, Instruments & Components | 5,000 | 5,223 | |||||||||||
| Orient Overseas International Ltd. |
Marine Transportation | 750 | 14,350 | |||||||||||
| Sino Biopharmaceutical Ltd. |
Pharmaceuticals | 45,000 | 25,223 | |||||||||||
| Xinyi Glass Holdings Ltd. |
Automobile Components | 15,000 | 26,866 | |||||||||||
|
|
|
|||||||||||||
| 263,402 | ||||||||||||||
|
|
|
|||||||||||||
| Hungary 0.4% | ||||||||||||||
| MOL Hungarian Oil & Gas PLC |
Oil, Gas & Consumable Fuels | 2,900 | 21,239 | |||||||||||
| OTP Bank Nyrt |
Banks | 770 | 21,955 | |||||||||||
| Richter Gedeon Nyrt |
Pharmaceuticals | 80 | 1,674 | |||||||||||
|
|
|
|||||||||||||
| 44,868 | ||||||||||||||
|
|
|
|||||||||||||
| India 10.2% | ||||||||||||||
| ACC Ltd. |
Construction Materials | 425 | 8,622 | |||||||||||
| Adani Enterprises Ltd. |
Trading Companies & Distributors | 70 | 1,491 | |||||||||||
| Ambuja Cements Ltd. |
Construction Materials | 3,645 | 16,213 | |||||||||||
| Aurobindo Pharma Ltd. |
Pharmaceuticals | 285 | 1,797 | |||||||||||
| Bajaj Auto Ltd. |
Automobiles | 365 | 17,253 | |||||||||||
| Bajaj Holdings & Investment Ltd. |
Financial Services | 145 | 10,445 | |||||||||||
| Bharat Petroleum Corp. Ltd. |
Oil, Gas & Consumable Fuels | 5,225 | 21,890 | |||||||||||
| Bosch Ltd. |
Automobile Components | 45 | 10,606 | |||||||||||
| Britannia Industries Ltd. |
Food Products | 540 | 28,400 | |||||||||||
| franklintempleton.com | Annual Report | 47 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| India (continued) |
||||||||||||||
| Coal India Ltd. |
Oil, Gas & Consumable Fuels | 11,215 | $ | 29,156 | ||||||||||
| Colgate-Palmolive India Ltd. |
Personal Products | 710 | 13,022 | |||||||||||
| Dr Reddy’s Laboratories Ltd. |
Pharmaceuticals | 295 | 16,594 | |||||||||||
| Embassy Office Parks REIT |
Diversified REITs | 3,305 | 12,554 | |||||||||||
| GAIL India Ltd. |
Gas Utilities | 4,790 | 6,129 | |||||||||||
| HCL Technologies Ltd. |
IT Services | 5,595 | 73,884 | |||||||||||
| b | HDFC Asset Management Co. Ltd. |
Capital Markets | 445 | 9,248 | ||||||||||
| HDFC Bank Ltd. |
Banks | 3,315 | 64,924 | |||||||||||
| Hero MotoCorp Ltd. |
Automobiles | 700 | 19,994 | |||||||||||
| Hindustan Petroleum Corp. Ltd. |
Oil, Gas & Consumable Fuels | 3,415 | 9,840 | |||||||||||
| Hindustan Unilever Ltd. |
Household Products | 2,580 | 80,378 | |||||||||||
| Housing Development Finance Corp. Ltd. |
Financial Services | 1,325 | 42,330 | |||||||||||
| Indian Oil Corp. Ltd. |
Oil, Gas & Consumable Fuels | 20,705 | 19,626 | |||||||||||
| Indraprastha Gas Ltd. |
Gas Utilities | 1,890 | 9,859 | |||||||||||
| Indus Towers Ltd. |
Diversified Telecommunication Services | 4,990 | 8,683 | |||||||||||
| Info Edge India Ltd. |
Interactive Media & Services | 400 | 18,123 | |||||||||||
| Infosys Ltd. |
IT Services | 9,950 | 172,885 | |||||||||||
| ITC Ltd. |
Tobacco | 15,725 | 73,380 | |||||||||||
| LIC Housing Finance Ltd. |
Financial Services | 330 | 1,320 | |||||||||||
| Maruti Suzuki India Ltd. |
Automobiles | 40 | 4,036 | |||||||||||
| Mphasis Ltd. |
IT Services | 415 | 9,068 | |||||||||||
| Muthoot Finance Ltd. |
Consumer Finance | 150 | 1,789 | |||||||||||
| NMDC Ltd. |
Metals & Mining | 6,370 | 8,646 | |||||||||||
| NTPC Ltd. |
Independent Power Producers & Energy Traders | 25,415 | 54,150 | |||||||||||
| Oil & Natural Gas Corp. Ltd. |
Oil, Gas & Consumable Fuels | 20,680 | 38,009 | |||||||||||
| Oracle Financial Services Software Ltd. |
Software | 130 | 5,163 | |||||||||||
| Piramal Enterprises Ltd. |
Pharmaceuticals | 695 | 5,737 | |||||||||||
| Power Finance Corp. Ltd. |
Financial Services | 5,405 | 9,980 | |||||||||||
| Power Grid Corp. of India Ltd. |
Electric Utilities | 18,440 | 50,642 | |||||||||||
| REC Ltd. |
Financial Services | 6,370 | 8,949 | |||||||||||
| Reliance Industries Ltd. |
Oil, Gas & Consumable Fuels | 1,555 | 44,106 | |||||||||||
| Shriram Finance Ltd. |
Consumer Finance | 1,000 | 15,324 | |||||||||||
| Steel Authority of India Ltd. |
Metals & Mining | 7,635 | 7,683 | |||||||||||
| Tata Consultancy Services Ltd. |
IT Services | 1,560 | 60,855 | |||||||||||
| Tata Steel Ltd. |
Metals & Mining | 43,095 | 54,798 | |||||||||||
| TVS Motor Co. Ltd. |
Automobiles | 1,230 | 16,122 | |||||||||||
| Varun Beverages Ltd. |
Beverages | 185 | 3,122 | |||||||||||
| Vedanta Ltd. |
Metals & Mining | 5,775 | 19,286 | |||||||||||
| a | Zomato Ltd. |
Hotels, Restaurants & Leisure | 11,660 | 7,236 | ||||||||||
|
|
|
|||||||||||||
| 1,223,347 | ||||||||||||||
|
|
|
|||||||||||||
| Indonesia 1.3% | ||||||||||||||
| Adaro Energy Indonesia Tbk PT, Class B |
Oil, Gas & Consumable Fuels | 83,500 | 16,149 | |||||||||||
| Astra International Tbk PT, Class H |
Automobiles | 117,000 | 46,817 | |||||||||||
| Bank Mandiri Persero Tbk PT, Class A |
Banks | 3,500 | 2,410 | |||||||||||
| Bayan Resources Tbk PT |
Oil, Gas & Consumable Fuels | 17,000 | 23,554 | |||||||||||
| Bukit Asam Tbk PT, Class A |
Oil, Gas & Consumable Fuels | 21,500 | 5,721 | |||||||||||
| Indocement Tunggal Prakarsa Tbk PT |
Construction Materials | 10,000 | 7,019 | |||||||||||
| Indofood Sukses Makmur Tbk PT |
Food Products | 27,000 | 11,164 | |||||||||||
| Telkom Indonesia Persero Tbk PT, Class B |
Diversified Telecommunication Services | 72,500 | 19,631 | |||||||||||
| Unilever Indonesia Tbk PT |
Household Products | 31,000 | 8,993 | |||||||||||
| United Tractors Tbk PT |
Oil, Gas & Consumable Fuels | 9,000 | 17,467 | |||||||||||
|
|
|
|||||||||||||
| 158,925 | ||||||||||||||
|
|
|
|||||||||||||
| Malaysia 3.4% | ||||||||||||||
| Axiata Group Bhd, Class A |
Wireless Telecommunication Services | 4,000 | 2,729 | |||||||||||
| CIMB Group Holdings Bhd, Class A |
Banks | 41,000 | 49,339 | |||||||||||
| HAP Seng Consolidated Bhd |
Industrial Conglomerates | 3,500 | 4,045 | |||||||||||
| 48 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Malaysia (continued) |
||||||||||||||
| Hartalega Holdings Bhd |
Health Care Equipment & Supplies | 9,000 | $ | 3,875 | ||||||||||
| IOI Corp. Bhd |
Food Products | 17,000 | 14,679 | |||||||||||
| Kuala Lumpur Kepong Bhd |
Food Products | 3,000 | 14,128 | |||||||||||
| Malayan Banking Bhd |
Banks | 41,500 | 80,602 | |||||||||||
| Maxis Bhd |
Wireless Telecommunication Services | 12,500 | 11,700 | |||||||||||
| MISC Bhd |
Marine Transportation | 7,500 | 12,272 | |||||||||||
| My EG Services Bhd |
Professional Services | 24,500 | 4,247 | |||||||||||
| Petronas Chemicals Group Bhd |
Chemicals | 15,500 | 24,835 | |||||||||||
| Petronas Gas Bhd |
Gas Utilities | 4,500 | 16,807 | |||||||||||
| Public Bank Bhd |
Banks | 85,000 | 77,054 | |||||||||||
| RHB Bank Bhd |
Banks | 21,500 | 27,189 | |||||||||||
| Sime Darby Bhd |
Industrial Conglomerates | 18,500 | 9,014 | |||||||||||
| Sime Darby Plantation Bhd |
Food Products | 17,500 | 16,935 | |||||||||||
| Tenaga Nasional Bhd |
Electric Utilities | 15,500 | 32,423 | |||||||||||
| Westports Holdings Bhd |
Transportation Infrastructure | 5,500 | 4,487 | |||||||||||
|
|
|
|||||||||||||
| 406,360 | ||||||||||||||
|
|
|
|||||||||||||
| Mexico 2.5% | ||||||||||||||
| Arca Continental SAB de CV |
Beverages | 2,505 | 22,703 | |||||||||||
| Coca-Cola Femsa SAB de CV |
Beverages | 2,685 | 21,522 | |||||||||||
| Fibra Uno Administracion SA de CV |
Diversified REITs | 15,980 | 22,276 | |||||||||||
| b | GMexico Transportes SAB de CV |
Ground Transportation | 2,495 | 5,697 | ||||||||||
| Grupo Aeroportuario del Pacifico SAB de CV, Class B |
Transportation Infrastructure | 1,870 | 36,312 | |||||||||||
| Grupo Aeroportuario del Sureste SAB de CV, Class B |
Transportation Infrastructure | 980 | 29,918 | |||||||||||
| Grupo Financiero Banorte SAB de CV, Class O |
Banks | 10,940 | 92,035 | |||||||||||
| Grupo Mexico SAB de CV, Class B |
Metals & Mining | 7,965 | 37,641 | |||||||||||
| Kimberly-Clark de Mexico SAB de CV, Class A |
Household Products | 7,760 | 16,314 | |||||||||||
| Promotora y Operadora de Infraestructura SAB de CV |
Transportation Infrastructure | 1,135 | 11,312 | |||||||||||
|
|
|
|||||||||||||
| 295,730 | ||||||||||||||
|
|
|
|||||||||||||
| Pakistan 0.0%† | ||||||||||||||
| Oil & Gas Development Co. Ltd. |
Oil, Gas & Consumable Fuels | 2,940 | 863 | |||||||||||
|
|
|
|||||||||||||
| Philippines 0.3% |
||||||||||||||
| Aboitiz Power Corp., Class A |
Independent Power Producers & Energy Traders | 7,500 | 5,132 | |||||||||||
| Globe Telecom, Inc. |
Wireless Telecommunication Services | 190 | 6,514 | |||||||||||
| Manila Electric Co. |
Electric Utilities | 1,600 | 9,153 | |||||||||||
| PLDT, Inc. |
Wireless Telecommunication Services | 450 | 11,754 | |||||||||||
|
|
|
|||||||||||||
| 32,553 | ||||||||||||||
|
|
|
|||||||||||||
| Russia 0.0%† | ||||||||||||||
| a,c | Alrosa PJSC |
Metals & Mining | 54,971 | — | ||||||||||
| a,c | Gazprom PJSC |
Oil, Gas & Consumable Fuels | 44,709 | — | ||||||||||
| a,c | Inter RAO UES PJSC |
Electric Utilities | 811,741 | — | ||||||||||
| a,c | LUKOIL PJSC |
Oil, Gas & Consumable Fuels | 2,268 | — | ||||||||||
| a,c | MMC Norilsk Nickel PJSC |
Metals & Mining | 693 | — | ||||||||||
| a,c | Moscow Exchange MICEX |
Capital Markets | 21,224 | — | ||||||||||
| a,c | Novolipetsk Steel PJSC |
Metals & Mining | 35,119 | — | ||||||||||
| a,c | PhosAgro PJSC |
Chemicals | 1,073 | — | ||||||||||
| a,c | PhosAgro PJSC |
Chemicals | 21 | — | ||||||||||
| a,c | PhosAgro PJSC, GDR |
Chemicals | 1 | — | ||||||||||
| a,c | Polymetal International PLC |
Metals & Mining | 7,294 | — | ||||||||||
| a,c | Polyus PJSC |
Metals & Mining | 756 | — | ||||||||||
| a,c | Rosneft Oil Co. PJSC |
Oil, Gas & Consumable Fuels | 20,055 | — | ||||||||||
| a,c | Severstal PAO |
Metals & Mining | 6,090 | — | ||||||||||
| a,c | Surgutneftegas PJSC |
Oil, Gas & Consumable Fuels | 132,846 | — | ||||||||||
| franklintempleton.com | Annual Report | 49 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Russia (continued) | ||||||||||||||
| a,c | Tatneft PJSC |
Oil, Gas & Consumable Fuels | 29,792 | $ | — | |||||||||
| a,c | TCS Group Holding PLC, GDR |
Banks | 1,778 | — | ||||||||||
| a,c | United Co. RUSAL International PJSC |
Metals & Mining | 24,749 | — | ||||||||||
|
|
|
|||||||||||||
| — | ||||||||||||||
|
|
|
|||||||||||||
| Saudi Arabia 3.9% | ||||||||||||||
| Advanced Petrochemical Co. |
Chemicals | 655 | 8,341 | |||||||||||
| Alinma Bank |
Banks | 690 | 5,413 | |||||||||||
| Banque Saudi Fransi |
Banks | 3,035 | 29,269 | |||||||||||
| Dr Sulaiman Al Habib Medical Services Group Co. |
Health Care Providers & Services | 185 | 14,362 | |||||||||||
| Jarir Marketing Co. |
Specialty Retail | 335 | 14,547 | |||||||||||
| Riyad Bank |
Banks | 4,425 | 35,011 | |||||||||||
| SABIC Agri-Nutrients Co. |
Chemicals | 1,325 | 44,970 | |||||||||||
| Sahara International Petrochemical Co. |
Chemicals | 1,950 | 19,663 | |||||||||||
| Saudi Basic Industries Corp. |
Chemicals | 4,040 | 97,187 | |||||||||||
| Saudi Industrial Investment Group |
Chemicals | 2,045 | 13,609 | |||||||||||
| Saudi National Bank |
Banks | 6,355 | 77,624 | |||||||||||
| Saudi Telecom Co. |
Diversified Telecommunication Services | 8,880 | 94,745 | |||||||||||
| Yanbu National Petrochemical Co. |
Chemicals | 1,520 | 17,068 | |||||||||||
|
|
|
|||||||||||||
| 471,809 | ||||||||||||||
|
|
|
|||||||||||||
| South Africa 5.0% | ||||||||||||||
| Absa Group Ltd. |
Banks | 4,920 | 50,408 | |||||||||||
| African Rainbow Minerals Ltd. |
Metals & Mining | 625 | 8,125 | |||||||||||
| Anglo American Platinum Ltd. |
Metals & Mining | 315 | 16,937 | |||||||||||
| Exxaro Resources Ltd. |
Oil, Gas & Consumable Fuels | 1,435 | 15,088 | |||||||||||
| FirstRand Ltd. |
Financial Services | 27,120 | 92,293 | |||||||||||
| Gold Fields Ltd. |
Metals & Mining | 2,465 | 32,927 | |||||||||||
| Growthpoint Properties Ltd. |
Diversified REITs | 19,460 | 14,324 | |||||||||||
| Impala Platinum Holdings Ltd. |
Metals & Mining | 4,800 | 44,322 | |||||||||||
| Kumba Iron Ore Ltd. |
Metals & Mining | 305 | 7,731 | |||||||||||
| Mr Price Group Ltd. |
Specialty Retail | 1,455 | 11,826 | |||||||||||
| MultiChoice Group |
Media | 2,370 | 16,478 | |||||||||||
| Naspers Ltd., Class N |
Internet & Direct Marketing Retail | 270 | 50,111 | |||||||||||
| Nedbank Group Ltd. |
Banks | 2,775 | 33,916 | |||||||||||
| Old Mutual Ltd. |
Insurance | 26,405 | 17,561 | |||||||||||
| Pick n Pay Stores Ltd. |
Consumer Staples Distribution & Retail | 2,260 | 5,384 | |||||||||||
| Sanlam Ltd. |
Insurance | 10,350 | 32,883 | |||||||||||
| Santam Ltd. |
Insurance | 240 | 3,855 | |||||||||||
| Sibanye Stillwater Ltd. |
Metals & Mining | 15,785 | 32,589 | |||||||||||
| Standard Bank Group Ltd. |
Banks | 7,720 | 75,192 | |||||||||||
| Tiger Brands Ltd. |
Food Products | 975 | 11,019 | |||||||||||
| Vodacom Group Ltd. |
Wireless Telecommunication Services | 4,075 | 28,030 | |||||||||||
|
|
|
|||||||||||||
| 600,999 | ||||||||||||||
|
|
|
|||||||||||||
| South Korea 8.7% | ||||||||||||||
| BNK Financial Group, Inc., Class H |
Banks | 1,620 | 8,101 | |||||||||||
| Cheil Worldwide, Inc., Class A |
Media | 410 | 5,864 | |||||||||||
| DB Insurance Co. Ltd., Class A |
Insurance | 295 | 16,972 | |||||||||||
| Dongsuh Cos., Inc., Class A |
Consumer Staples Distribution & Retail | 285 | 4,297 | |||||||||||
| GS Holdings Corp. |
Oil, Gas & Consumable Fuels | 535 | 16,603 | |||||||||||
| Hana Financial Group, Inc. |
Banks | 1,765 | 55,180 | |||||||||||
| Hanon Systems |
Automobile Components | 915 | 6,171 | |||||||||||
| HD Hyundai Co. Ltd. |
Machinery | 245 | 10,934 | |||||||||||
| HMM Co. Ltd. |
Marine Transportation | 2,140 | 33,452 | |||||||||||
| Hyundai Marine & Fire Insurance Co. Ltd. |
Insurance | 310 | 8,049 | |||||||||||
| Hyundai Motor Co. |
Automobiles | 315 | 44,642 | |||||||||||
| 50 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| South Korea (continued) |
||||||||||||||
| a | Industrial Bank of Korea |
Banks | 1,635 | $ | 12,685 | |||||||||
| a | Kakao Corp. |
Interactive Media & Services | 205 | 9,621 | ||||||||||
| KB Financial Group, Inc. |
Banks | 1,565 | 57,282 | |||||||||||
| Kia Corp. |
Automobiles | 1,205 | 74,974 | |||||||||||
| a | Korea Gas Corp. |
Gas Utilities | 150 | 3,122 | ||||||||||
| a | Korea Investment Holdings Co. Ltd. |
Capital Markets | 240 | 10,139 | ||||||||||
| a | KT Corp. |
Diversified Telecommunication Services | 715 | 16,175 | ||||||||||
| a | KT&G Corp. |
Tobacco | 625 | 40,279 | ||||||||||
| a | Kumho Petrochemical Co. Ltd. |
Chemicals | 100 | 11,038 | ||||||||||
| LG Chem Ltd. |
Chemicals | 25 | 13,673 | |||||||||||
| LG Corp. |
Industrial Conglomerates | 85 | 5,406 | |||||||||||
| a | LG Display Co. Ltd. |
Electronic Equipment, Instruments & Components | 1,190 | 15,018 | ||||||||||
| LG Uplus Corp. |
Diversified Telecommunication Services | 1,145 | 9,525 | |||||||||||
| NAVER Corp. |
Interactive Media & Services | 20 | 3,103 | |||||||||||
| NCSoft Corp. |
Entertainment | 40 | 11,415 | |||||||||||
| a | NH Investment & Securities Co. Ltd. |
Capital Markets | 800 | 5,408 | ||||||||||
| S-1 Corp. |
Commercial Services & Supplies | 100 | 4,248 | |||||||||||
| Samsung Card Co. Ltd. |
Consumer Finance | 120 | 2,802 | |||||||||||
| Samsung Electronics Co. Ltd. |
Technology Hardware, Storage & Peripherals | 7,690 | 378,047 | |||||||||||
| Samsung Fire & Marine Insurance Co. Ltd. |
Insurance | 185 | 29,274 | |||||||||||
| Samsung SDI Co. Ltd. |
Electronic Equipment, Instruments & Components | 30 | 16,937 | |||||||||||
| Samsung Securities Co. Ltd. |
Capital Markets | 380 | 9,253 | |||||||||||
| SD Biosensor, Inc. |
Health Care Equipment & Supplies | 280 | 4,538 | |||||||||||
| Shinhan Financial Group Co. Ltd. |
Banks | 1,085 | 29,462 | |||||||||||
| SK Telecom Co. Ltd. |
Wireless Telecommunication Services | 565 | 20,962 | |||||||||||
| SSANGYONG C&E Co. Ltd. |
Construction Materials | 570 | 2,701 | |||||||||||
| Woori Financial Group, Inc. |
Banks | 3,755 | 32,911 | |||||||||||
|
|
|
|||||||||||||
| 1,040,263 | ||||||||||||||
|
|
|
|||||||||||||
| Taiwan 19.2% | ||||||||||||||
| Acer, Inc., Class H |
Technology Hardware, Storage & Peripherals | 15,000 | 13,868 | |||||||||||
| ASE Technology Holding Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 19,000 | 70,203 | |||||||||||
| Asia Cement Corp. |
Construction Materials | 15,000 | 21,332 | |||||||||||
| Asustek Computer, Inc. |
Technology Hardware, Storage & Peripherals | 3,850 | 34,457 | |||||||||||
| AUO Corp., Class H |
Electronic Equipment, Instruments & Components | 40,200 | 24,294 | |||||||||||
| Catcher Technology Co. Ltd. |
Technology Hardware, Storage & Peripherals | 4,170 | 26,022 | |||||||||||
| Cathay Financial Holding Co. Ltd., Class A |
Insurance | 51,376 | 70,532 | |||||||||||
| Chicony Electronics Co. Ltd. |
Technology Hardware, Storage & Peripherals | 3,340 | 10,454 | |||||||||||
| China Development Financial Holding Corp., Class A |
Banks | 95,000 | 39,158 | |||||||||||
| China Steel Corp., Class A |
Metals & Mining | 70,000 | 71,040 | |||||||||||
| Compal Electronics, Inc., Class H |
Technology Hardware, Storage & Peripherals | 25,000 | 20,732 | |||||||||||
| CTBC Financial Holding Co. Ltd., Class A |
Banks | 100,000 | 71,763 | |||||||||||
| Evergreen Marine Corp. Taiwan Ltd. |
Marine Transportation | 5,500 | 28,631 | |||||||||||
| Far EasTone Telecommunications Co. Ltd. |
Wireless Telecommunication Services | 9,000 | 22,228 | |||||||||||
| Formosa Chemicals & Fibre Corp. |
Chemicals | 22,400 | 50,836 | |||||||||||
| Formosa Plastics Corp. |
Chemicals | 24,000 | 72,361 | |||||||||||
| Fubon Financial Holding Co. Ltd. |
Insurance | 16,500 | 30,618 | |||||||||||
| Giant Manufacturing Co. Ltd. |
Leisure Products | 2,000 | 11,561 | |||||||||||
| Highwealth Construction Corp. |
Real Estate Management & Development | 7,000 | 9,460 | |||||||||||
| Hon Hai Precision Industry Co. Ltd. |
Electronic Equipment, Instruments & Components | 29,200 | 99,739 | |||||||||||
| Innolux Corp. |
Electronic Equipment, Instruments & Components | 50,730 | 24,159 | |||||||||||
| Inventec Corp. |
Technology Hardware, Storage & Peripherals | 15,000 | 15,740 | |||||||||||
| Kinsus Interconnect Technology Corp. |
Semiconductors & Semiconductor Equipment | 1,000 | 3,810 | |||||||||||
| Lite-On Technology Corp. |
Technology Hardware, Storage & Peripherals | 11,700 | 28,167 | |||||||||||
| Macronix International Co. Ltd. |
Semiconductors & Semiconductor Equipment | 10,000 | 11,512 | |||||||||||
| MediaTek, Inc. |
Semiconductors & Semiconductor Equipment | 5,150 | 133,116 | |||||||||||
| Merida Industry Co. Ltd. |
Leisure Products | 1,000 | 5,534 | |||||||||||
| franklintempleton.com | Annual Report | 51 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
|
|
Common Stocks (continued) | |||||||||||||
| Taiwan (continued) |
||||||||||||||
| Micro-Star International Co. Ltd. |
Technology Hardware, Storage & Peripherals | 3,400 | $ | 16,080 | ||||||||||
| Nan Ya Plastics Corp. |
Chemicals | 31,840 | 81,044 | |||||||||||
| Nan Ya Printed Circuit Board Corp. |
Electronic Equipment, Instruments & Components | 1,000 | 9,295 | |||||||||||
| Nanya Technology Corp. |
Semiconductors & Semiconductor Equipment | 6,670 | 14,568 | |||||||||||
| Nien Made Enterprise Co. Ltd. |
Household Durables | 950 | 10,203 | |||||||||||
| Novatek Microelectronics Corp. |
Semiconductors & Semiconductor Equipment | 3,000 | 42,516 | |||||||||||
| Pegatron Corp. |
Technology Hardware, Storage & Peripherals | 12,000 | 27,470 | |||||||||||
| Phison Electronics Corp. |
Semiconductors & Semiconductor Equipment | 1,000 | 12,875 | |||||||||||
| Powerchip Semiconductor Manufacturing Corp. |
Semiconductors & Semiconductor Equipment | 15,000 | 16,307 | |||||||||||
| Powertech Technology, Inc. |
Semiconductors & Semiconductor Equipment | 4,000 | 11,955 | |||||||||||
| Quanta Computer, Inc. |
Technology Hardware, Storage & Peripherals | 15,000 | 43,895 | |||||||||||
| Radiant Opto-Electronics Corp. |
Semiconductors & Semiconductor Equipment | 3,000 | 10,888 | |||||||||||
| Realtek Semiconductor Corp. |
Semiconductors & Semiconductor Equipment | 2,667 | 33,942 | |||||||||||
| Ruentex Industries Ltd. |
Textiles, Apparel & Luxury Goods | 5,000 | 9,278 | |||||||||||
| Simplo Technology Co. Ltd. |
Electronic Equipment, Instruments & Components | 1,000 | 9,952 | |||||||||||
| Sino-American Silicon Products, Inc. |
Semiconductors & Semiconductor Equipment | 3,340 | 17,113 | |||||||||||
| Synnex Technology International Corp. |
Electronic Equipment, Instruments & Components | 7,500 | 15,100 | |||||||||||
| Taiwan Fertilizer Co. Ltd. |
Chemicals | 5,000 | 9,196 | |||||||||||
| Taiwan Glass Industry Corp. |
Building Products | 5,000 | 3,375 | |||||||||||
| Taiwan Mobile Co. Ltd. |
Wireless Telecommunication Services | 10,000 | 33,172 | |||||||||||
| Taiwan Semiconductor Manufacturing Co. Ltd. |
Semiconductors & Semiconductor Equipment | 32,200 | 563,678 | |||||||||||
| Teco Electric & Machinery Co. Ltd. |
Electrical Equipment | 8,000 | 11,167 | |||||||||||
| Tripod Technology Corp. |
Electronic Equipment, Instruments & Components | 3,000 | 11,035 | |||||||||||
| United Microelectronics Corp. |
Semiconductors & Semiconductor Equipment | 55,000 | 95,558 | |||||||||||
| Vanguard International Semiconductor Corp. |
Semiconductors & Semiconductor Equipment | 5,000 | 15,913 | |||||||||||
| Wan Hai Lines Ltd. |
Marine Transportation | 8,200 | 18,448 | |||||||||||
| Win Semiconductors Corp. |
Semiconductors & Semiconductor Equipment | 1,500 | 8,991 | |||||||||||
| Winbond Electronics Corp. |
Semiconductors & Semiconductor Equipment | 15,000 | 13,055 | |||||||||||
| Wistron Corp. |
Technology Hardware, Storage & Peripherals | 15,000 | 20,617 | |||||||||||
| WPG Holdings Ltd. |
Electronic Equipment, Instruments & Components | 8,000 | 13,190 | |||||||||||
| Yang Ming Marine Transport Corp. |
Marine Transportation | 10,000 | 21,118 | |||||||||||
| Yuanta Financial Holding Co. Ltd. |
Capital Markets | 70,520 | 51,765 | |||||||||||
|
|
|
|||||||||||||
| 2,294,086 | ||||||||||||||
|
|
|
|||||||||||||
| Thailand 1.9% | ||||||||||||||
| Advanced Info Service PCL, NVDR |
Wireless Telecommunication Services | 6,000 | 37,198 | |||||||||||
| Banpu PCL, Class A, NVDR |
Oil, Gas & Consumable Fuels | 19,000 | 6,001 | |||||||||||
| BTS Group Holdings PCL, Class A, NVDR |
Ground Transportation | 39,500 | 8,202 | |||||||||||
| Carabao Group PCL, Class A, NVDR |
Beverages | 1,000 | 2,800 | |||||||||||
| Delta Electronics Thailand PCL, Class A, NVDR |
Electronic Equipment, Instruments & Components | 250 | 8,349 | |||||||||||
| Electricity Generating PCL, Class A, NVDR |
Independent Power Producers & Energy Traders | 1,500 | 6,821 | |||||||||||
| Intouch Holdings PCL, NVDR |
Wireless Telecommunication Services | 6,400 | 13,850 | |||||||||||
| JMT Network Services PCL, NVDR |
Consumer Finance | 4,000 | 5,439 | |||||||||||
| Land & Houses PCL, NVDR |
Real Estate Management & Development | 20,500 | 5,905 | |||||||||||
| Osotspa PCL, NVDR |
Beverages | 8,400 | 7,554 | |||||||||||
| PTT Exploration & Production PCL, NVDR |
Oil, Gas & Consumable Fuels | 8,000 | 35,210 | |||||||||||
| PTT PCL, NVDR |
Oil, Gas & Consumable Fuels | 47,500 | 43,756 | |||||||||||
| Ratch Group PCL, NVDR |
Independent Power Producers & Energy Traders | 2,000 | 2,252 | |||||||||||
| Ratch Group PCL |
Independent Power Producers & Energy Traders | 1,000 | 1,126 | |||||||||||
| Siam Cement PCL, NVDR |
Construction Materials | 1,500 | 13,818 | |||||||||||
| Srisawad Corp. PCL, NVDR |
Consumer Finance | 3,500 | 5,399 | |||||||||||
| Thai Oil PCL, NVDR |
Oil, Gas & Consumable Fuels | 5,000 | 7,677 | |||||||||||
| Thai Union Group PCL, NVDR |
Food Products | 11,500 | 4,742 | |||||||||||
| Tisco Financial Group PCL, NVDR |
Banks | 2,000 | 5,878 | |||||||||||
|
|
|
|||||||||||||
| 221,977 | ||||||||||||||
|
|
|
|||||||||||||
| 52 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Turkey 0.4% |
||||||||||||||
| BIM Birlesik Magazalar AS |
Consumer Staples Distribution & Retail | 2,490 | $ | 19,290 | ||||||||||
| Enka Insaat ve Sanayi AS |
Industrial Conglomerates | 645 | 985 | |||||||||||
| Eregli Demir ve Celik Fabrikalari TAS |
Metals & Mining | 7,725 | 14,247 | |||||||||||
| Tofas Turk Otomobil Fabrikasi AS |
Automobiles | 635 | 6,176 | |||||||||||
| Turk Telekomunikasyon AS |
Diversified Telecommunication Services | 2,350 | 2,038 | |||||||||||
| Turkcell Iletisim Hizmetleri AS |
Wireless Telecommunication Services | 2,550 | 4,248 | |||||||||||
| Turkiye Is Bankasi AS, Class C |
Banks | 8,185 | 5,531 | |||||||||||
|
|
|
|||||||||||||
| 52,515 | ||||||||||||||
|
|
|
|||||||||||||
| United Arab Emirates 1.3% | ||||||||||||||
| Abu Dhabi Commercial Bank PJSC |
Banks | 16,097 | 36,380 | |||||||||||
| Abu Dhabi Islamic Bank PJSC |
Banks | 2,590 | 7,038 | |||||||||||
| Abu Dhabi National Oil Co. for Distribution PJSC |
Specialty Retail | 16,690 | 18,996 | |||||||||||
| Dubai Islamic Bank PJSC |
Banks | 16,500 | 23,498 | |||||||||||
| Emirates Telecommunications Group Co. PJSC |
Diversified Telecommunication Services | 6,095 | 36,611 | |||||||||||
| First Abu Dhabi Bank PJSC |
Banks | 3,110 | 10,907 | |||||||||||
| a | International Holding Co. PJSC |
Industrial Conglomerates | 195 | 21,027 | ||||||||||
|
|
|
|||||||||||||
| 154,457 | ||||||||||||||
|
|
|
|||||||||||||
| United States 0.2% | ||||||||||||||
| JBS SA |
Food Products | 3,500 | 12,322 | |||||||||||
| Parade Technologies Ltd. |
Semiconductors & Semiconductor Equipment | 200 | 6,897 | |||||||||||
|
|
|
|||||||||||||
| 19,219 | ||||||||||||||
|
|
|
|||||||||||||
| Total Common Stocks |
11,510,654 | |||||||||||||
|
|
|
|||||||||||||
| Preferred Stocks 3.1% | ||||||||||||||
| Brazil 1.8% | ||||||||||||||
| d | Banco Bradesco SA, 6.492%, pfd |
Banks | 26,000 | 67,535 | ||||||||||
| d | Braskem SA, Class A, 8.76%, pfd |
Chemicals | 1,000 | 3,818 | ||||||||||
| d | Cia Energetica de Minas Gerais, 11.32%, pfd |
Electric Utilities | 8,000 | 18,050 | ||||||||||
| d | Gerdau SA, 13.863%, pfd |
Metals & Mining | 5,775 | 28,805 | ||||||||||
| d | Itau Unibanco Holding SA, 4.349%, pfd |
Banks | 6,000 | 29,277 | ||||||||||
| d | Petroleo Brasileiro SA, 43.945%, pfd |
Oil, Gas & Consumable Fuels | 14,500 | 67,063 | ||||||||||
|
|
|
|||||||||||||
| 214,548 | ||||||||||||||
|
|
|
|||||||||||||
| Chile 0.6% | ||||||||||||||
| d | Sociedad Quimica y Minera de Chile SA, Class B, 0.012%, pfd |
Chemicals | 845 | 68,189 | ||||||||||
|
|
|
|||||||||||||
| Colombia 0.2% |
||||||||||||||
| d | Bancolombia SA, 11.049%, pfd |
Banks | 2,465 | 15,438 | ||||||||||
| d | Grupo Aval Acciones y Valores SA, 0.75%, pfd |
Banks | 21,875 | 2,624 | ||||||||||
|
|
|
|||||||||||||
| 18,062 | ||||||||||||||
|
|
|
|||||||||||||
| Russia 0.0%† | ||||||||||||||
| a,c | Surgutneftegas PJSC, pfd |
Oil, Gas & Consumable Fuels | 162,582 | — | ||||||||||
|
|
|
|||||||||||||
| South Korea 0.5% | ||||||||||||||
| d | Hyundai Motor Co., 7.411%, pfd |
Automobiles | 80 | 5,887 | ||||||||||
| d | Hyundai Motor Co., 7.468%, pfd |
Automobiles | 55 | 3,988 | ||||||||||
| a,d | Kumho Petrochemical Co. Ltd., 7.425%, pfd |
Chemicals | 15 | 846 | ||||||||||
| d | LG Chem Ltd., 3.237%, pfd |
Chemicals | 5 | 1,193 | ||||||||||
| d | Samsung Electronics Co. Ltd., 2.681%, pfd |
Technology Hardware, Storage & Peripherals | 1,210 | 50,097 | ||||||||||
| franklintempleton.com | Annual Report | 53 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Preferred Stocks (continued) | ||||||||||||||
| South Korea (continued) |
||||||||||||||
| d | Samsung Fire & Marine Insurance Co. Ltd., 8.666%, pfd |
Insurance | 15 | $ | 1,835 | |||||||||
|
|
|
|||||||||||||
| 63,846 | ||||||||||||||
|
|
|
|||||||||||||
| Total Preferred Stocks |
364,645 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments (Cost $13,135,315) 99.5% | 11,875,299 | |||||||||||||
| Other Assets, less Liabilities 0.5% | 64,104 | |||||||||||||
|
|
|
|||||||||||||
| Net Assets 100.0% | $ | 11,939,403 | ||||||||||||
|
|
|
|||||||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $307,971, representing 2.6% of net assets.
cFair valued using significant unobservable inputs. Note 8 regarding fair value measurements.
dVariable rate security. The rate shown represents the yield at period end.
At March 31, 2023, 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 | 1 | $49,775 | 6/16/23 | $1,778 | |||||||||||||||
*As of year end.
See Note 7 regarding other derivative information.
See Abbreviations on page 120.
| 54 | Annual 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
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$28.65 | $26.52 | $22.55 | $24.70 | $24.25 | |||||||||||||||
| Income from investment operationsb: | ||||||||||||||||||||
| Net investment incomec |
1.21 | 1.00 | 0.73 | 0.89 | 0.93 | |||||||||||||||
| Net realized and unrealized gains (losses) |
0.43 | 1.93 | 5.27 | (2.61) | 0.79 | |||||||||||||||
| Total from investment operations |
1.64 | 2.93 | 6.00 | (1.72) | 1.72 | |||||||||||||||
| Less distributions from: |
||||||||||||||||||||
| Net investment income |
(1.19) | (0.80) | (0.91) | (0.19) | (0.30) | |||||||||||||||
| Net realized gains |
(0.47) | — | (1.12) | (0.24) | (0.97) | |||||||||||||||
| Total distributions |
(1.66) | (0.80) | (2.03) | (0.43) | (1.27) | |||||||||||||||
| Net asset value, end of year |
$28.63 | $28.65 | $26.52 | $22.55 | $24.70 | |||||||||||||||
| Total returnd |
6.56% | 11.13% | 27.54% | (7.12)% | 7.53% | |||||||||||||||
| Ratios to average net assetse | ||||||||||||||||||||
| Expenses before waiver and payments by affiliates |
0.12% | 0.40% | 0.40% | 0.40% | 0.40% | |||||||||||||||
| Expenses net of waiver and payments by affiliates |
0.12% | 0.40% | 0.40% | 0.40% | 0.40% | |||||||||||||||
| Net investment income |
4.49% | 3.54% | 2.97% | 3.44% | 3.75% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$240,459 | $17,192 | $13,260 | $9,021 | $7,410 | |||||||||||||||
| Portfolio turnover ratef |
49.07%g | 30.20%g | 42.33%g | 26.82%g | 39.24% | |||||||||||||||
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.
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: | 49.07% | 30.20% | 41.62% | 26.82% | — |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 55 | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin International Core Dividend Tilt Index ETF
| Industry | Shares | Value | ||||||||||||
| Common Stocks 98.8% | ||||||||||||||
| Australia 10.7% | ||||||||||||||
| Ampol Ltd. |
Oil, Gas & Consumable Fuels | 9,660 | $ | 197,264 | ||||||||||
| ANZ Group Holdings Ltd. |
Banks | 72,492 | 1,113,287 | |||||||||||
| APA Group |
Gas Utilities | 57,120 | 387,152 | |||||||||||
| Aristocrat Leisure Ltd. |
Hotels, Restaurants & Leisure | 504 | 12,557 | |||||||||||
| ASX Ltd. |
Capital Markets | 9,072 | 395,060 | |||||||||||
| Atlas Arteria Ltd. |
Transportation Infrastructure | 58,716 | 247,355 | |||||||||||
| Aurizon Holdings Ltd. |
Ground Transportation | 87,360 | 196,591 | |||||||||||
| Bendigo & Adelaide Bank Ltd. |
Banks | 27,468 | 159,499 | |||||||||||
| BHP Group Ltd. |
Metals & Mining | 112,140 | 3,547,246 | |||||||||||
| Challenger Ltd. |
Financial Services | 14,364 | 60,031 | |||||||||||
| Cochlear Ltd. |
Health Care Equipment & Supplies | 588 | 93,212 | |||||||||||
| Coles Group Ltd. |
Consumer Staples Distribution & Retail | 38,640 | 466,342 | |||||||||||
| Commonwealth Bank of Australia |
Banks | 25,872 | 1,703,667 | |||||||||||
| Computershare Ltd. |
IT Services | 1,680 | 24,293 | |||||||||||
| CSL Ltd. |
Biotechnology | 6,656 | 1,285,200 | |||||||||||
| Dexus |
Diversified REITs | 51,828 | 260,686 | |||||||||||
| Domino’s Pizza Enterprises Ltd. |
Hotels, Restaurants & Leisure | 3,024 | 101,003 | |||||||||||
| Endeavour Group Ltd. |
Consumer Staples Distribution & Retail | 64,512 | 292,511 | |||||||||||
| Fortescue Metals Group Ltd. |
Metals & Mining | 72,072 | 1,085,598 | |||||||||||
| Glencore PLC |
Metals & Mining | 99,456 | 571,330 | |||||||||||
| Goodman Group |
Diversified REITs | 9,660 | 121,567 | |||||||||||
| GPT Group |
Diversified REITs | 91,476 | 259,768 | |||||||||||
| Harvey Norman Holdings Ltd. |
Broadline Retail | 29,652 | 71,097 | |||||||||||
| Incitec Pivot Ltd. |
Chemicals | 89,376 | 187,361 | |||||||||||
| Macquarie Group Ltd. |
Capital Markets | 6,384 | 751,067 | |||||||||||
| Medibank Pvt Ltd. |
Insurance | 125,328 | 282,033 | |||||||||||
| Mirvac Group |
Diversified REITs | 59,724 | 83,200 | |||||||||||
| National Australia Bank Ltd. |
Banks | 54,432 | 1,010,556 | |||||||||||
| Northern Star Resources Ltd. |
Metals & Mining | 8,064 | 66,485 | |||||||||||
| Origin Energy Ltd. |
Oil, Gas & Consumable Fuels | 29,988 | 166,500 | |||||||||||
| REA Group Ltd. |
Media | 1,008 | 93,185 | |||||||||||
| Rio Tinto Ltd. |
Metals & Mining | 16,212 | 1,304,479 | |||||||||||
| Rio Tinto PLC |
Metals & Mining | 32,508 | 2,201,856 | |||||||||||
| Santos Ltd. |
Oil, Gas & Consumable Fuels | 6,384 | 29,502 | |||||||||||
| Scentre Group |
Real Estate Investment Trusts (REITs | ) | 234,612 | 432,111 | ||||||||||
| SEEK Ltd. |
Professional Services | 8,316 | 133,226 | |||||||||||
| Sonic Healthcare Ltd. |
Health Care Providers & Services | 9,744 | 227,367 | |||||||||||
| South32 Ltd. |
Metals & Mining | 203,700 | 596,191 | |||||||||||
| Stockland |
Real Estate Investment Trusts (REITs | ) | 111,636 | 297,578 | ||||||||||
| Suncorp Group Ltd. |
Insurance | 5,712 | 46,328 | |||||||||||
| Telstra Group Ltd. |
Diversified Telecommunication Services | 51,996 | 146,959 | |||||||||||
| TPG Telecom Ltd. |
Diversified Telecommunication Services | 19,779 | 64,645 | |||||||||||
| Transurban Group |
Transportation Infrastructure | 52,080 | 495,653 | |||||||||||
| Treasury Wine Estates Ltd. |
Beverages | 6,888 | 60,295 | |||||||||||
| Vicinity Ltd. |
Real Estate Investment Trusts (REITs | ) | 177,072 | 230,665 | ||||||||||
| Wesfarmers Ltd. |
Broadline Retail | 30,408 | 1,023,380 | |||||||||||
| Westpac Banking Corp. |
Banks | 76,188 | 1,105,243 | |||||||||||
| WiseTech Global Ltd. |
Software | 8,064 | 351,812 | |||||||||||
| Woodside Energy Group Ltd. |
Oil, Gas & Consumable Fuels | 64,344 | 1,436,768 | |||||||||||
| Woolworths Group Ltd. |
Consumer Staples Distribution & Retail | 10,080 | 255,866 | |||||||||||
| Worley Ltd. |
Energy Equipment & Services | 5,880 | 56,748 | |||||||||||
|
|
|
|||||||||||||
| 25,789,375 | ||||||||||||||
|
|
|
|||||||||||||
| Austria 0.2% |
||||||||||||||
| a,b | BAWAG Group AG |
Banks | 4,032 | 195,636 | ||||||||||
| Erste Group Bank AG |
Banks | 2,100 | 69,587 | |||||||||||
| b | Raiffeisen Bank International AG |
Banks | 6,132 | 94,336 | ||||||||||
| 56 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Austria (continued) |
||||||||||||||
| Strabag SE |
Construction & Engineering | 588 | $ | 25,202 | ||||||||||
|
|
|
|||||||||||||
| 384,761 | ||||||||||||||
|
|
|
|||||||||||||
| Belgium 0.6% | ||||||||||||||
| Ageas SA |
Insurance | 7,980 | 345,581 | |||||||||||
| Etablissements Franz Colruyt NV |
Consumer Staples Distribution & Retail | 2,268 | 66,333 | |||||||||||
| KBC Group NV |
Banks | 14,112 | 970,514 | |||||||||||
| Proximus SADP |
Diversified Telecommunication Services | 7,812 | 75,486 | |||||||||||
| Solvay SA |
Chemicals | 336 | 38,458 | |||||||||||
|
|
|
|||||||||||||
| 1,496,372 | ||||||||||||||
|
|
|
|||||||||||||
| Chile 0.1% | ||||||||||||||
| Antofagasta PLC |
Metals & Mining | 15,456 | 302,138 | |||||||||||
|
|
|
|||||||||||||
| China 0.1% | ||||||||||||||
| a,b | Wuxi Biologics Cayman, Inc. |
Life Sciences Tools & Services | 45,266 | 280,247 | ||||||||||
|
|
|
|||||||||||||
| Denmark 2.4% | ||||||||||||||
| AP Moller - Maersk AS, Class A |
Marine Transportation | 135 | 239,421 | |||||||||||
| AP Moller - Maersk AS, Class B |
Marine Transportation | 258 | 468,284 | |||||||||||
| Coloplast AS, Class B |
Health Care Equipment & Supplies | 2,940 | 386,680 | |||||||||||
| DSV AS |
Air Freight & Logistics | 588 | 113,757 | |||||||||||
| b | Genmab AS |
Biotechnology | 213 | 80,428 | ||||||||||
| Novo Nordisk AS, Class B |
Pharmaceuticals | 24,948 | 3,950,753 | |||||||||||
| a | Orsted AS |
Electric Utilities | 756 | 64,325 | ||||||||||
| Pandora AS |
Textiles, Apparel & Luxury Goods | 924 | 88,323 | |||||||||||
| Tryg AS |
Insurance | 3,360 | 73,457 | |||||||||||
| Vestas Wind Systems AS |
Electrical Equipment | 10,836 | 314,497 | |||||||||||
|
|
|
|||||||||||||
| 5,779,925 | ||||||||||||||
|
|
|
|||||||||||||
| Finland 1.8% | ||||||||||||||
| Elisa Oyj |
Diversified Telecommunication Services | 6,636 | 400,570 | |||||||||||
| b | Fortum OYJ |
Electric Utilities | 19,992 | 306,582 | ||||||||||
| Huhtamaki OYJ |
Containers & Packaging | 756 | 28,090 | |||||||||||
| Kesko OYJ, Class A |
Consumer Staples Distribution & Retail | 4,284 | 92,901 | |||||||||||
| Kesko OYJ, Class B |
Consumer Staples Distribution & Retail | 12,516 | 269,309 | |||||||||||
| Kone OYJ, Class B |
Machinery | 11,592 | 604,518 | |||||||||||
| Metso Outotec OYJ |
Machinery | 10,584 | 115,450 | |||||||||||
| Neste OYJ |
Oil, Gas & Consumable Fuels | 2,520 | 124,381 | |||||||||||
| Nordea Bank Abp |
Banks | 140,280 | 1,496,746 | |||||||||||
| Orion OYJ, Class A |
Pharmaceuticals | 1,260 | 58,179 | |||||||||||
| Orion OYJ, Class B |
Pharmaceuticals | 4,620 | 206,749 | |||||||||||
| Sampo Oyj, Class A |
Insurance | 9,996 | 472,199 | |||||||||||
| b | UPM-Kymmene OYJ |
Paper & Forest Products | 2,184 | 73,438 | ||||||||||
| Wartsila OYJ Abp |
Machinery | 12,936 | 122,104 | |||||||||||
|
|
|
|||||||||||||
| 4,371,216 | ||||||||||||||
|
|
|
|||||||||||||
| France 9.6% | ||||||||||||||
| Air Liquide SA |
Chemicals | 1,344 | 225,161 | |||||||||||
| Airbus SE |
Aerospace & Defense | 1,680 | 225,015 | |||||||||||
| a | Amundi SA |
Capital Markets | 2,856 | 180,123 | ||||||||||
| AXA SA |
Insurance | 35,784 | 1,094,986 | |||||||||||
| BNP Paribas SA |
Banks | 34,860 | 2,091,004 | |||||||||||
| Bouygues SA |
Construction & Engineering | 9,492 | 320,618 | |||||||||||
| Capgemini SE |
IT Services | 1,176 | 218,161 | |||||||||||
| Cie de Saint-Gobain |
Building Products | 6,300 | 358,111 | |||||||||||
| Cie Generale des Etablissements Michelin SCA |
Automobile Components | 3,276 | 100,174 | |||||||||||
| Credit Agricole SA |
Banks | 63,504 | 717,399 | |||||||||||
| Danone SA |
Food Products | 10,416 | 648,547 | |||||||||||
| franklintempleton.com | Annual Report | 57 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| France (continued) | ||||||||||||||
| Dassault Systemes SE |
Software | 8,988 | $ | 369,850 | ||||||||||
| Engie SA |
Multi-Utilities | 64,512 | 1,021,478 | |||||||||||
| EssilorLuxottica SA |
Textiles, Apparel & Luxury Goods | 2,940 | 530,231 | |||||||||||
| Gecina SA |
Diversified REITs | 2,604 | 270,322 | |||||||||||
| Hermes International |
Textiles, Apparel & Luxury Goods | 212 | 429,330 | |||||||||||
| Kering SA |
Textiles, Apparel & Luxury Goods | 1,008 | 657,085 | |||||||||||
| Legrand SA |
Electrical Equipment | 1,428 | 130,446 | |||||||||||
| L’Oreal SA |
Personal Products | 1,512 | 675,565 | |||||||||||
| LVMH Moet Hennessy Louis Vuitton SE |
Textiles, Apparel & Luxury Goods | 4,032 | 3,698,950 | |||||||||||
| Orange SA |
Diversified Telecommunication Services | 86,184 | 1,025,486 | |||||||||||
| Pernod Ricard SA |
Beverages | 1,428 | 323,788 | |||||||||||
| Sanofi |
Pharmaceuticals | 23,268 | 2,534,019 | |||||||||||
| Sartorius Stedim Biotech |
Life Sciences Tools & Services | 196 | 60,050 | |||||||||||
| Schneider Electric SE |
Electrical Equipment | 8,517 | 1,422,046 | |||||||||||
| Societe Generale SA |
Banks | 15,372 | 347,128 | |||||||||||
| Teleperformance |
Professional Services | 840 | 202,327 | |||||||||||
| TotalEnergies SE |
Oil, Gas & Consumable Fuels | 37,632 | 2,222,524 | |||||||||||
| Veolia Environnement SA |
Multi-Utilities | 6,804 | 209,939 | |||||||||||
| Vinci SA |
Construction & Engineering | 7,056 | 810,449 | |||||||||||
| a,b | Worldline SA |
IT Services | 924 | 39,262 | ||||||||||
|
|
|
|||||||||||||
| 23,159,574 | ||||||||||||||
|
|
|
|||||||||||||
| Germany 8.0% | ||||||||||||||
| adidas AG |
Textiles, Apparel & Luxury Goods | 2,520 | 445,668 | |||||||||||
| Allianz SE |
Insurance | 10,920 | 2,524,666 | |||||||||||
| BASF SE |
Chemicals | 30,996 | 1,628,552 | |||||||||||
| Bayer AG |
Pharmaceuticals | 13,524 | 862,782 | |||||||||||
| Bayerische Motoren Werke AG |
Automobiles | 8,988 | 985,680 | |||||||||||
| Continental AG |
Automobile Components | 420 | 31,449 | |||||||||||
| a | Covestro AG |
Chemicals | 9,072 | 375,820 | ||||||||||
| a,b | Delivery Hero SE |
Internet & Direct Marketing Retail | 3,612 | 123,104 | ||||||||||
| Deutsche Boerse AG |
Capital Markets | 1,680 | 327,539 | |||||||||||
| Deutsche Post AG |
Air Freight & Logistics | 27,048 | 1,266,255 | |||||||||||
| Deutsche Telekom AG |
Diversified Telecommunication Services | 38,724 | 940,302 | |||||||||||
| E.ON SE |
Multi-Utilities | 89,628 | 1,119,828 | |||||||||||
| Evonik Industries AG |
Chemicals | 9,324 | 196,118 | |||||||||||
| HeidelbergCement AG |
Construction Materials | 588 | 42,968 | |||||||||||
| Infineon Technologies AG |
Semiconductors & Semiconductor Equipment | 24,444 | 1,000,675 | |||||||||||
| Mercedes-Benz Group AG |
Automobiles | 26,376 | 2,028,286 | |||||||||||
| Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen |
Insurance | 1,764 | 618,070 | |||||||||||
| RWE AG |
Multi-Utilities | 2,184 | 94,058 | |||||||||||
| SAP SE |
Software | 14,952 | 1,885,348 | |||||||||||
| Siemens AG |
Industrial Conglomerates | 12,012 | 1,947,908 | |||||||||||
| Telefonica Deutschland Holding AG |
Diversified Telecommunication Services | 41,916 | 129,196 | |||||||||||
| Vonovia SE |
Real Estate Management & Development | 33,180 | 625,079 | |||||||||||
| a,b | Zalando SE |
Internet & Direct Marketing Retail | 588 | 24,621 | ||||||||||
|
|
|
|||||||||||||
| 19,223,972 | ||||||||||||||
|
|
|
|||||||||||||
| Hong Kong 2.8% | ||||||||||||||
| AIA Group Ltd. |
Insurance | 104,800 | 1,103,411 | |||||||||||
| CK Asset Holdings Ltd. |
Real Estate Management & Development | 22,700 | 137,791 | |||||||||||
| CK Infrastructure Holdings Ltd., Class A |
Electric Utilities | 26,700 | 145,235 | |||||||||||
| CLP Holdings Ltd. |
Electric Utilities | 72,900 | 526,555 | |||||||||||
| Hang Lung Properties Ltd. |
Real Estate Management & Development | 84,000 | 157,086 | |||||||||||
| Hang Seng Bank Ltd. |
Banks | 3,700 | 52,649 | |||||||||||
| Henderson Land Development Co. Ltd. |
Real Estate Management & Development | 58,500 | 202,329 | |||||||||||
| 58 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Hong Kong (continued) | ||||||||||||||
| HK Electric Investments & HK Electric |
||||||||||||||
| Investments Ltd. |
Electric Utilities | 106,325 | $ | 66,640 | ||||||||||
| HKT Trust & HKT Ltd. |
Diversified Telecommunication Services | 161,297 | 214,105 | |||||||||||
| Hong Kong & China Gas Co. Ltd. |
Gas Utilities | 444,000 | 390,836 | |||||||||||
| Hong Kong Exchanges & Clearing Ltd. |
Capital Markets | 11,100 | 492,362 | |||||||||||
| Jardine Matheson Holdings Ltd. |
Industrial Conglomerates | 4,550 | 220,994 | |||||||||||
| Link REIT |
Diversified REITs | 106,000 | 681,915 | |||||||||||
| MTR Corp. Ltd. |
Ground Transportation | 47,500 | 229,030 | |||||||||||
| New World Development Co. Ltd. |
Real Estate Management & Development | 57,000 | 152,848 | |||||||||||
| Power Assets Holdings Ltd. |
Electric Utilities | 61,500 | 329,830 | |||||||||||
| Sino Land Co. Ltd. |
Real Estate Management & Development | 152,200 | 205,908 | |||||||||||
| Sun Hung Kai Properties Ltd. |
Real Estate Management & Development | 44,321 | 621,063 | |||||||||||
| Swire Pacific Ltd., Class A |
Real Estate Management & Development | 5,000 | 38,408 | |||||||||||
| Swire Properties Ltd. |
Real Estate Management & Development | 41,600 | 107,048 | |||||||||||
| Techtronic Industries Co. Ltd. |
Household Durables | 33,870 | 366,100 | |||||||||||
| Wharf Real Estate Investment Co. Ltd. |
Real Estate Management & Development | 27,386 | 157,340 | |||||||||||
|
|
|
|||||||||||||
| 6,599,483 | ||||||||||||||
|
|
|
|||||||||||||
| Ireland 0.2% | ||||||||||||||
| DCC PLC |
Industrial Conglomerates | 336 | 19,601 | |||||||||||
| Experian PLC |
Professional Services | 2,520 | 82,882 | |||||||||||
| James Hardie Industries PLC, CDI |
Construction Materials | 3,780 | 80,582 | |||||||||||
| Smurfit Kappa Group PLC |
Containers & Packaging | 9,492 | 343,718 | |||||||||||
|
|
|
|||||||||||||
| 526,783 | ||||||||||||||
|
|
|
|||||||||||||
| Isle Of Man 0.0%† | ||||||||||||||
| Entain PLC |
Hotels, Restaurants & Leisure | 3,446 | 53,537 | |||||||||||
|
|
|
|||||||||||||
| Israel 0.4% | ||||||||||||||
| Bank Leumi Le-Israel BM |
Banks | 38,640 | 289,748 | |||||||||||
| Bezeq The Israeli Telecommunication Corp. Ltd. |
Diversified Telecommunication Services | 91,140 | 123,675 | |||||||||||
| ICL Group Ltd. |
Chemicals | 31,836 | 213,351 | |||||||||||
| b | Nice Ltd. |
Software | 1,008 | 225,415 | ||||||||||
|
|
|
|||||||||||||
| 852,189 | ||||||||||||||
|
|
|
|||||||||||||
| Italy 3.9% | ||||||||||||||
| A2A SpA |
Multi-Utilities | 76,188 | 121,678 | |||||||||||
| Assicurazioni Generali SpA |
Insurance | 53,172 | 1,061,789 | |||||||||||
| Banca Mediolanum SpA |
Financial Services | 10,375 | 94,211 | |||||||||||
| Banco BPM SpA |
Banks | 66,612 | 260,896 | |||||||||||
| DiaSorin SpA |
Health Care Equipment & Supplies | 168 | 17,716 | |||||||||||
| Enel SpA |
Electric Utilities | 327,600 | 2,002,767 | |||||||||||
| Eni SpA |
Oil, Gas & Consumable Fuels | 79,128 | 1,109,511 | |||||||||||
| Ferrari NV |
Automobiles | 672 | 182,013 | |||||||||||
| FinecoBank Banca Fineco SpA |
Banks | 17,472 | 268,412 | |||||||||||
| Hera SpA |
Multi-Utilities | 33,096 | 93,560 | |||||||||||
| a | Infrastrutture Wireless Italiane SpA |
Diversified Telecommunication Services | 14,616 | 192,460 | ||||||||||
| Intesa Sanpaolo SpA |
Banks | 560,364 | 1,441,352 | |||||||||||
| Mediobanca Banca di Credito Finanziario SpA |
Banks | 28,896 | 290,960 | |||||||||||
| Moncler SpA |
Textiles, Apparel & Luxury Goods | 3,528 | 243,548 | |||||||||||
| a | Poste Italiane SpA |
Insurance | 20,580 | 210,444 | ||||||||||
| Prysmian SpA |
Electrical Equipment | 1,428 | 60,041 | |||||||||||
| Recordati Industria Chimica e Farmaceutica |
||||||||||||||
| SpA |
Pharmaceuticals | 4,536 | 192,000 | |||||||||||
| Snam SpA |
Gas Utilities | 92,988 | 493,920 | |||||||||||
| Terna - Rete Elettrica Nazionale |
Electric Utilities | 62,916 | 517,175 | |||||||||||
| UniCredit SpA |
Banks | 17,892 | 338,429 | |||||||||||
| franklintempleton.com | Annual Report | 59 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
|
|
Common Stocks (continued) | |||||||||||||
| Italy (continued) | ||||||||||||||
| UnipolSai Assicurazioni SpA |
Insurance | 19,824 | $ | 50,140 | ||||||||||
|
|
|
|||||||||||||
| 9,243,022 | ||||||||||||||
|
|
|
|||||||||||||
| Japan 21.3% | ||||||||||||||
| ABC-Mart, Inc. |
Specialty Retail | 1,088 | 59,840 | |||||||||||
| Advance Residence Investment Corp. |
Diversified REITs | 22 | 52,318 | |||||||||||
| Advantest Corp. |
Semiconductors & Semiconductor Equipment | 7,904 | 722,163 | |||||||||||
| AGC, Inc. |
Building Products | 6,600 | 244,233 | |||||||||||
| Aisin Corp. |
Automobile Components | 8,300 | 227,316 | |||||||||||
| Asahi Group Holdings Ltd. |
Beverages | 1,100 | 40,697 | |||||||||||
| Asahi Kasei Corp. |
Chemicals | 12,100 | 84,215 | |||||||||||
| Astellas Pharma, Inc. |
Pharmaceuticals | 32,210 | 455,717 | |||||||||||
| Bridgestone Corp. |
Automobile Components | 16,340 | 658,928 | |||||||||||
| Brother Industries Ltd. |
Technology Hardware, Storage & Peripherals | 1,400 | 20,954 | |||||||||||
| Canon, Inc. |
Technology Hardware, Storage & Peripherals | 29,700 | 659,541 | |||||||||||
| Capcom Co. Ltd. |
Entertainment | 3,402 | 121,034 | |||||||||||
| Chugai Pharmaceutical Co. Ltd. |
Pharmaceuticals | 10,130 | 248,892 | |||||||||||
| Concordia Financial Group Ltd. |
Banks | 12,500 | 45,834 | |||||||||||
| CyberAgent, Inc. |
Media | 18,300 | 153,314 | |||||||||||
| Daifuku Co. Ltd. |
Machinery | 780 | 14,318 | |||||||||||
| Daiichi Sankyo Co. Ltd. |
Pharmaceuticals | 24,700 | 894,909 | |||||||||||
| Daikin Industries Ltd. |
Building Products | 2,442 | 434,033 | |||||||||||
| Daito Trust Construction Co. Ltd. |
Real Estate Management & Development | 3,030 | 300,291 | |||||||||||
| Daiwa House Industry Co. Ltd. |
Real Estate Management & Development | 8,980 | 210,111 | |||||||||||
| Daiwa House REIT Investment Corp. |
Diversified REITs | 84 | 171,358 | |||||||||||
| Daiwa Securities Group, Inc. |
Capital Markets | 23,600 | 110,118 | |||||||||||
| Denso Corp. |
Automobile Components | 9,800 | 548,061 | |||||||||||
| Dentsu Group, Inc. |
Media | 8,000 | 279,510 | |||||||||||
| Disco Corp. |
Semiconductors & Semiconductor Equipment | 4,014 | 461,449 | |||||||||||
| East Japan Railway Co. |
Ground Transportation | 2,210 | 121,800 | |||||||||||
| Eisai Co. Ltd. |
Pharmaceuticals | 5,970 | 336,606 | |||||||||||
| FANUC Corp. |
Machinery | 7,150 | 255,722 | |||||||||||
| Fast Retailing Co. Ltd. |
Specialty Retail | 1,510 | 327,664 | |||||||||||
| Fuji Electric Co. Ltd. |
Electrical Equipment | 900 | 35,164 | |||||||||||
| FUJIFILM Holdings Corp. |
Technology Hardware, Storage & Peripherals | 880 | 44,288 | |||||||||||
| Fujitsu Ltd. |
IT Services | 2,080 | 278,735 | |||||||||||
| GLP J-Reit |
Diversified REITs | 103 | 110,747 | |||||||||||
| GMO Payment Gateway, Inc. |
IT Services | 1,800 | 153,911 | |||||||||||
| Hamamatsu Photonics KK |
Electronic Equipment, Instruments & Components | 2,600 | 138,898 | |||||||||||
| Haseko Corp. |
Household Durables | 9,900 | 114,480 | |||||||||||
| Hirose Electric Co. Ltd. |
Electronic Equipment, Instruments & Components | 1,300 | 168,690 | |||||||||||
| Hitachi Construction Machinery Co. Ltd. |
Machinery | 4,700 | 108,592 | |||||||||||
| Hitachi Ltd. |
Industrial Conglomerates | 7,600 | 414,120 | |||||||||||
| Honda Motor Co. Ltd. |
Automobiles | 26,100 | 688,339 | |||||||||||
| Hoya Corp. |
Health Care Equipment & Supplies | 3,810 | 416,813 | |||||||||||
| Hulic Co. Ltd. |
Real Estate Management & Development | 25,272 | 206,407 | |||||||||||
| Ibiden Co. Ltd. |
Electronic Equipment, Instruments & Components | 5,600 | 221,324 | |||||||||||
| Iida Group Holdings Co. Ltd. |
Household Durables | 7,573 | 122,850 | |||||||||||
| Inpex Corp. |
Oil, Gas & Consumable Fuels | 18,200 | 191,039 | |||||||||||
| Isuzu Motors Ltd. |
Automobiles | 27,100 | 321,519 | |||||||||||
| ITOCHU Corp. |
Trading Companies & Distributors | 8,270 | 267,257 | |||||||||||
| Itochu Techno-Solutions Corp. |
IT Services | 3,700 | 90,491 | |||||||||||
| Japan Exchange Group, Inc. |
Capital Markets | 12,300 | 186,547 | |||||||||||
| Japan Metropolitan Fund Invest |
Diversified REITs | 336 | 244,130 | |||||||||||
| Japan Post Bank Co. Ltd. |
Banks | 5,000 | 40,687 | |||||||||||
| Japan Post Holdings Co. Ltd. |
Insurance | 12,700 | 102,724 | |||||||||||
| Japan Prime Realty Investment Corp. |
Diversified REITs | 35 | 91,780 | |||||||||||
| Japan Real Estate Investment Corp. |
Diversified REITs | 29 | 115,050 | |||||||||||
| 60 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Japan (continued) | ||||||||||||||
| Japan Tobacco, Inc. |
Tobacco | 50,400 | $ | 1,059,578 | ||||||||||
| JFE Holdings, Inc. |
Metals & Mining | 24,300 | 306,557 | |||||||||||
| Kajima Corp. |
Construction & Engineering | 6,630 | 79,606 | |||||||||||
| Kakaku.com, Inc. |
Interactive Media & Services | 4,020 | 54,520 | |||||||||||
| Kao Corp. |
Personal Products | 6,428 | 249,556 | |||||||||||
| KDDI Corp. |
Wireless Telecommunication Services | 21,530 | 662,126 | |||||||||||
| Keyence Corp. |
Electronic Equipment, Instruments & Components | 2,736 | 1,324,932 | |||||||||||
| Kirin Holdings Co. Ltd. |
Beverages | 35,200 | 554,356 | |||||||||||
| Koei Tecmo Holdings Co. Ltd. |
Entertainment | 5,296 | 95,025 | |||||||||||
| Komatsu Ltd. |
Machinery | 19,800 | 487,524 | |||||||||||
| Kubota Corp. |
Machinery | 3,600 | 54,072 | |||||||||||
| Kyocera Corp. |
Electronic Equipment, Instruments & Components | 3,600 | 186,316 | |||||||||||
| Kyowa Kirin Co. Ltd. |
Pharmaceuticals | 2,300 | 49,875 | |||||||||||
| Kyushu Railway Co. |
Ground Transportation | 6,600 | 146,242 | |||||||||||
| Lasertec Corp. |
Semiconductors & Semiconductor Equipment | 3,154 | 551,695 | |||||||||||
| Lawson, Inc. |
Consumer Staples Distribution & Retail | 2,125 | 89,573 | |||||||||||
| Lixil Corp. |
Building Products | 12,100 | 197,924 | |||||||||||
| M3, Inc. |
Health Care Technology | 8,800 | 218,264 | |||||||||||
| Marubeni Corp. |
Trading Companies & Distributors | 28,400 | 383,141 | |||||||||||
| Marui Group Co. Ltd. |
Broadline Retail | 1,100 | 16,720 | |||||||||||
| Mazda Motor Corp. |
Automobiles | 17,000 | 156,473 | |||||||||||
| MINEBEA MITSUMI, Inc. |
Machinery | 4,400 | 83,014 | |||||||||||
| Mitsubishi Chemical Group Corp. |
Chemicals | 8,400 | 49,590 | |||||||||||
| Mitsubishi Corp. |
Trading Companies & Distributors | 16,300 | 581,872 | |||||||||||
| Mitsubishi Electric Corp. |
Electrical Equipment | 25,200 | 298,882 | |||||||||||
| Mitsubishi HC Capital, Inc. |
Financial Services | 34,900 | 179,364 | |||||||||||
| Mitsubishi UFJ Financial Group, Inc. |
Banks | 204,000 | 1,299,659 | |||||||||||
| Mitsui & Co. Ltd. |
Trading Companies & Distributors | 4,800 | 148,447 | |||||||||||
| Mitsui OSK Lines Ltd. |
Marine Transportation | 16,800 | 417,823 | |||||||||||
| Mizuho Financial Group, Inc. |
Banks | 53,900 | 760,570 | |||||||||||
| MonotaRO Co. Ltd. |
Trading Companies & Distributors | 6,540 | 81,424 | |||||||||||
| MS&AD Insurance Group Holdings, Inc. |
Insurance | 5,320 | 164,129 | |||||||||||
| Murata Manufacturing Co. Ltd. |
Electronic Equipment, Instruments & Components | 11,590 | 700,155 | |||||||||||
| NGK Insulators Ltd. |
Machinery | 3,400 | 44,758 | |||||||||||
| NGK Spark Plug Co. Ltd. |
Automobile Components | 8,400 | 172,683 | |||||||||||
| Nidec Corp. |
Electrical Equipment | 8,600 | 442,310 | |||||||||||
| Nihon M&A Center Holdings, Inc. |
Professional Services | 13,290 | 98,260 | |||||||||||
| Nintendo Co. Ltd. |
Entertainment | 49,391 | 1,904,164 | |||||||||||
| Nippon Building Fund, Inc. |
Diversified REITs | 58 | 240,123 | |||||||||||
| Nippon Paint Holdings Co. Ltd. |
Chemicals | 16,800 | 156,273 | |||||||||||
| Nippon Prologis REIT, Inc. |
Diversified REITs | 30 | 63,183 | |||||||||||
| Nippon Steel Corp. |
Metals & Mining | 33,200 | 778,300 | |||||||||||
| Nippon Telegraph & Telephone Corp. |
Diversified Telecommunication Services | 9,290 | 276,557 | |||||||||||
| Nippon Yusen KK |
Marine Transportation | 23,500 | 545,432 | |||||||||||
| Nitto Denko Corp. |
Chemicals | 5,940 | 381,599 | |||||||||||
| Nomura Holdings, Inc. |
Capital Markets | 67,200 | 257,358 | |||||||||||
| Nomura Real Estate Master Fund, Inc. |
Diversified REITs | 107 | 119,389 | |||||||||||
| Nomura Research Institute Ltd. |
IT Services | 7,670 | 176,636 | |||||||||||
| NSK Ltd. |
Machinery | 21,200 | 120,424 | |||||||||||
| Obayashi Corp. |
Construction & Engineering | 5,700 | 43,385 | |||||||||||
| Obic Co. Ltd. |
IT Services | 380 | 59,674 | |||||||||||
| Omron Corp. |
Electronic Equipment, Instruments & Components | 1,492 | 86,399 | |||||||||||
| Ono Pharmaceutical Co. Ltd. |
Pharmaceuticals | 8,400 | 174,450 | |||||||||||
| Oracle Corp. Japan |
Software | 485 | 34,729 | |||||||||||
| Oriental Land Co. Ltd. |
Hotels, Restaurants & Leisure | 2,020 | 68,725 | |||||||||||
| ORIX Corp. |
Financial Services | 26,500 | 433,370 | |||||||||||
| Orix JREIT, Inc. |
Diversified REITs | 124 | 156,526 | |||||||||||
| franklintempleton.com | Annual Report | 61 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Japan (continued) | ||||||||||||||
| Otsuka Corp. |
IT Services | 4,920 | $ | 173,193 | ||||||||||
| Panasonic Holdings Corp. |
Household Durables | 15,100 | 134,106 | |||||||||||
| Recruit Holdings Co. Ltd. |
Professional Services | 14,700 | 403,148 | |||||||||||
| Rohm Co. Ltd. |
Semiconductors & Semiconductor Equipment | 4,050 | 333,823 | |||||||||||
| Santen Pharmaceutical Co. Ltd. |
Pharmaceuticals | 17,200 | 146,037 | |||||||||||
| SBI Holdings, Inc. |
Capital Markets | 12,200 | 240,535 | |||||||||||
| Sekisui Chemical Co. Ltd. |
Household Durables | 14,500 | 204,388 | |||||||||||
| Sekisui House Ltd. |
Household Durables | 13,850 | 280,767 | |||||||||||
| Seven & i Holdings Co. Ltd. |
Consumer Staples Distribution & Retail | 6,976 | 313,184 | |||||||||||
| SG Holdings Co. Ltd. |
Air Freight & Logistics | 8,400 | 123,706 | |||||||||||
| Sharp Corp. |
Household Durables | 10,200 | 71,505 | |||||||||||
| Shimadzu Corp. |
Electronic Equipment, Instruments & Components | 1,100 | 34,217 | |||||||||||
| Shimano, Inc. |
Leisure Products | 1,093 | 187,573 | |||||||||||
| Shin-Etsu Chemical Co. Ltd. |
Chemicals | 31,750 | 1,019,846 | |||||||||||
| Shiseido Co. Ltd. |
Personal Products | 4,100 | 190,413 | |||||||||||
| SoftBank Corp. |
Wireless Telecommunication Services | 126,000 | 1,447,547 | |||||||||||
| SoftBank Group Corp. |
Wireless Telecommunication Services | 10,500 | 408,829 | |||||||||||
| Sojitz Corp. |
Trading Companies & Distributors | 8,600 | 178,539 | |||||||||||
| Sompo Holdings, Inc. |
Insurance | 490 | 19,336 | |||||||||||
| Sony Group Corp. |
Household Durables | 14,200 | 1,278,736 | |||||||||||
| Square Enix Holdings Co. Ltd. |
Entertainment | 2,200 | 105,132 | |||||||||||
| Subaru Corp. |
Automobiles | 17,600 | 279,624 | |||||||||||
| SUMCO Corp. |
Semiconductors & Semiconductor Equipment | 15,100 | 224,758 | |||||||||||
| Sumitomo Chemical Co. Ltd. |
Chemicals | 75,700 | 253,111 | |||||||||||
| Sumitomo Corp. |
Trading Companies & Distributors | 53,500 | 941,044 | |||||||||||
| Sumitomo Electric Industries Ltd. |
Automobile Components | 5,100 | 65,029 | |||||||||||
| Sumitomo Metal Mining Co. Ltd. |
Metals & Mining | 12,000 | 455,241 | |||||||||||
| Sumitomo Mitsui Financial Group, Inc. |
Banks | 28,784 | 1,145,823 | |||||||||||
| Suzuki Motor Corp. |
Automobiles | 1,200 | 43,315 | |||||||||||
| Sysmex Corp. |
Health Care Equipment & Supplies | 2,226 | 144,559 | |||||||||||
| Takeda Pharmaceutical Co. Ltd. |
Pharmaceuticals | 60,600 | 1,980,690 | |||||||||||
| TDK Corp. |
Electronic Equipment, Instruments & Components | 11,360 | 403,306 | |||||||||||
| Tokio Marine Holdings, Inc. |
Insurance | 21,411 | 409,751 | |||||||||||
| Tokyo Century Corp. |
Financial Services | 1,940 | 64,210 | |||||||||||
| Tokyo Electron Ltd. |
Semiconductors & Semiconductor Equipment | 13,746 | 1,656,667 | |||||||||||
| Toray Industries, Inc. |
Chemicals | 12,900 | 73,315 | |||||||||||
| Toshiba Corp. |
Industrial Conglomerates | 4,500 | 150,293 | |||||||||||
| Tosoh Corp. |
Chemicals | 14,674 | 198,130 | |||||||||||
| Toyota Industries Corp. |
Automobile Components | 4,200 | 231,948 | |||||||||||
| Toyota Motor Corp. |
Automobiles | 178,140 | 2,516,366 | |||||||||||
| Toyota Tsusho Corp. |
Trading Companies & Distributors | 1,900 | 80,231 | |||||||||||
| Trend Micro, Inc. |
Software | 890 | 43,266 | |||||||||||
| United Urban Investment Corp. |
Diversified REITs | 136 | 146,127 | |||||||||||
| USS Co. Ltd. |
Specialty Retail | 9,600 | 165,542 | |||||||||||
| Yamaha Motor Co. Ltd. |
Automobiles | 3,300 | 85,792 | |||||||||||
| Yaskawa Electric Corp. |
Machinery | 4,804 | 208,273 | |||||||||||
| Z Holdings Corp. |
Interactive Media & Services | 48,300 | 135,294 | |||||||||||
| ZOZO, Inc. |
Internet & Direct Marketing Retail | 4,770 | 108,059 | |||||||||||
|
|
|
|||||||||||||
| 51,163,563 | ||||||||||||||
|
|
|
|||||||||||||
| Luxembourg 0.0%† | ||||||||||||||
| Eurofins Scientific SE |
Life Sciences Tools & Services | 1,512 | 101,257 | |||||||||||
|
|
|
|||||||||||||
| Netherlands 5.1% | ||||||||||||||
| a,b | Adyen NV |
IT Services | 588 | 932,184 | ||||||||||
| b | Argenx SE |
Biotechnology | 604 | 223,573 | ||||||||||
| b | Argenx SE |
Biotechnology | 68 | 25,170 | ||||||||||
| ASM International NV |
Semiconductors & Semiconductor Equipment | 1,344 | 543,044 | |||||||||||
| 62 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Netherlands (continued) | ||||||||||||||
| ASML Holding NV |
Semiconductors & Semiconductor Equipment | 6,492 | $ | 4,409,681 | ||||||||||
| ING Groep NV |
Banks | 60,144 | 714,204 | |||||||||||
| Koninklijke Ahold Delhaize NV |
Consumer Staples Distribution & Retail | 4,620 | 158,061 | |||||||||||
| Koninklijke DSM NV |
Chemicals | 1,344 | 158,722 | |||||||||||
| Koninklijke KPN NV |
Diversified Telecommunication Services | 145,824 | 515,850 | |||||||||||
| Koninklijke Philips NV |
Health Care Equipment & Supplies | 40,236 | 735,976 | |||||||||||
| NN Group NV |
Insurance | 14,196 | 516,062 | |||||||||||
| b | Prosus NV |
Internet & Direct Marketing Retail | 13,188 | 1,030,764 | ||||||||||
| Shell PLC |
Oil, Gas & Consumable Fuels | 76,272 | 2,177,066 | |||||||||||
| Universal Music Group NV |
Entertainment | 7,308 | 185,036 | |||||||||||
|
|
|
|||||||||||||
| 12,325,393 | ||||||||||||||
|
|
|
|||||||||||||
| New Zealand 0.4% | ||||||||||||||
| Contact Energy Ltd. |
Electric Utilities | 35,616 | 172,471 | |||||||||||
| Fisher & Paykel Healthcare Corp. Ltd. |
Health Care Equipment & Supplies | 11,676 | 194,680 | |||||||||||
| Mercury NZ Ltd. |
Electric Utilities | 26,964 | 106,450 | |||||||||||
| Meridian Energy Ltd. |
Independent Power Producers & Energy Traders | 53,508 | 175,756 | |||||||||||
| Spark New Zealand Ltd. |
Diversified Telecommunication Services | 86,772 | 274,702 | |||||||||||
|
|
|
|||||||||||||
| 924,059 | ||||||||||||||
|
|
|
|||||||||||||
| Norway 1.2% | ||||||||||||||
| Aker ASA, Class A |
Financial Services | 1,092 | 70,068 | |||||||||||
| Aker BP ASA |
Oil, Gas & Consumable Fuels | 14,616 | 357,686 | |||||||||||
| a,b | AutoStore Holdings Ltd. |
Machinery | 37,128 | 79,658 | ||||||||||
| DNB Bank ASA |
Banks | 41,664 | 745,314 | |||||||||||
| Equinor ASA |
Oil, Gas & Consumable Fuels | 756 | 21,562 | |||||||||||
| Gjensidige Forsikring ASA |
Insurance | 8,316 | 136,018 | |||||||||||
| Leroy Seafood Group ASA |
Food Products | 8,148 | 42,245 | |||||||||||
| Mowi ASA |
Food Products | 1,680 | 31,023 | |||||||||||
| Norsk Hydro ASA |
Metals & Mining | 25,620 | 190,320 | |||||||||||
| Orkla ASA |
Food Products | 34,860 | 247,176 | |||||||||||
| Salmar ASA |
Food Products | 2,856 | 124,296 | |||||||||||
| Storebrand ASA |
Insurance | 21,756 | 166,851 | |||||||||||
| Telenor ASA |
Diversified Telecommunication Services | 29,148 | 341,490 | |||||||||||
| TOMRA Systems ASA |
Commercial Services & Supplies | 3,528 | 59,288 | |||||||||||
| Yara International ASA |
Chemicals | 7,728 | 334,928 | |||||||||||
|
|
|
|||||||||||||
| 2,947,923 | ||||||||||||||
|
|
|
|||||||||||||
| Poland 0.3% | ||||||||||||||
| Bank Polska Kasa Opieki SA |
Banks | 6,804 | 134,973 | |||||||||||
| LPP SA |
Textiles, Apparel & Luxury Goods | 45 | 100,068 | |||||||||||
| Polski Koncern Naftowy ORLEN SA |
Oil, Gas & Consumable Fuels | 9,828 | 132,864 | |||||||||||
| Powszechna Kasa Oszczednosci Bank Polski SA |
Banks | 38,892 | 257,471 | |||||||||||
| Powszechny Zaklad Ubezpieczen SA |
Insurance | 24,360 | 198,361 | |||||||||||
|
|
|
|||||||||||||
| 823,737 | ||||||||||||||
|
|
|
|||||||||||||
| Portugal 0.4% | ||||||||||||||
| EDP - Energias de Portugal SA |
Electric Utilities | 88,452 | 482,031 | |||||||||||
| Galp Energia SGPS SA, Class B |
Oil, Gas & Consumable Fuels | 21,504 | 244,377 | |||||||||||
| Jeronimo Martins SGPS SA |
Consumer Staples Distribution & Retail | 6,216 | 146,008 | |||||||||||
|
|
|
|||||||||||||
| 872,416 | ||||||||||||||
|
|
|
|||||||||||||
| Singapore 1.2% | ||||||||||||||
| CapitaLand Ascendas REIT, Class A |
Diversified REITs | 156,300 | 336,218 | |||||||||||
| CapitaLand Integrated Commercial Trust, Class A |
Diversified REITs | 235,700 | 351,010 | |||||||||||
| DBS Group Holdings Ltd., Class A |
Banks | 16,800 | 416,983 | |||||||||||
| franklintempleton.com | Annual Report | 63 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Singapore (continued) | ||||||||||||||
| Keppel Corp. Ltd. |
Industrial Conglomerates | 63,500 | $ | 268,892 | ||||||||||
| Mapletree Pan Asia Commercial Trust |
Diversified REITs | 106,000 | 143,507 | |||||||||||
| Olam Group Ltd. |
Consumer Staples Distribution & Retail | 50,400 | 59,515 | |||||||||||
| Oversea-Chinese Banking Corp. Ltd. |
Banks | 47,200 | 439,144 | |||||||||||
| Singapore Exchange Ltd. |
Capital Markets | 26,798 | 189,463 | |||||||||||
| Singapore Technologies Engineering Ltd. |
Aerospace & Defense | 75,600 | 208,113 | |||||||||||
| United Overseas Bank Ltd. |
Banks | 12,700 | 284,271 | |||||||||||
| Venture Corp. Ltd. |
Electronic Equipment, Instruments & Components | 12,553 | 166,832 | |||||||||||
|
|
|
|||||||||||||
| 2,863,948 | ||||||||||||||
|
|
|
|||||||||||||
| Spain 2.0% | ||||||||||||||
| ACS Actividades de Construccion y Servicios SA |
Construction & Engineering | 10,248 | 326,781 | |||||||||||
| Banco Bilbao Vizcaya Argentaria SA |
Banks | 68,628 | 489,940 | |||||||||||
| CaixaBank SA |
Banks | 12,348 | 48,081 | |||||||||||
| Endesa SA |
Electric Utilities | 14,112 | 306,640 | |||||||||||
| Iberdrola SA |
Electric Utilities | 102,648 | 1,280,829 | |||||||||||
| Industria de Diseno Textil SA |
Specialty Retail | 13,524 | 454,018 | |||||||||||
| Mapfre SA |
Insurance | 44,268 | 89,360 | |||||||||||
| Naturgy Energy Group SA |
Gas Utilities | 8,316 | 250,719 | |||||||||||
| Red Electrica Corp. SA |
Electric Utilities | 19,824 | 348,912 | |||||||||||
| Repsol SA |
Oil, Gas & Consumable Fuels | 2,100 | 32,364 | |||||||||||
| Telefonica SA |
Diversified Telecommunication Services | 258,720 | 1,116,756 | |||||||||||
|
|
|
|||||||||||||
| 4,744,400 | ||||||||||||||
|
|
|
|||||||||||||
| Sweden 2.5% | ||||||||||||||
| Assa Abloy AB, Class B |
Building Products | 4,452 | 106,604 | |||||||||||
| Atlas Copco AB, Class A |
Machinery | 18,396 | 233,357 | |||||||||||
| Atlas Copco AB, Class B |
Machinery | 11,004 | 126,472 | |||||||||||
| Axfood AB |
Consumer Staples Distribution & Retail | 4,704 | 114,861 | |||||||||||
| Castellum AB |
Real Estate Management & Development | 13,944 | 161,903 | |||||||||||
| Electrolux AB, Class B |
Household Durables | 11,004 | 133,624 | |||||||||||
| b | Embracer Group AB |
Entertainment | 6,216 | 29,055 | ||||||||||
| EQT AB |
Capital Markets | 11,256 | 228,603 | |||||||||||
| Essity AB, Class B |
Household Products | 3,612 | 103,244 | |||||||||||
| a | Evolution AB |
Hotels, Restaurants & Leisure | 4,704 | 629,737 | ||||||||||
| H & M Hennes & Mauritz AB, Class B |
Specialty Retail | 32,088 | 457,421 | |||||||||||
| Husqvarna AB, Class B |
Household Durables | 19,992 | 173,207 | |||||||||||
| Investor AB, Class B |
Financial Services | 2,436 | 48,405 | |||||||||||
| Lifco AB, Class B |
Industrial Conglomerates | 9,072 | 195,096 | |||||||||||
| Nibe Industrier AB, Class B |
Building Products | 17,304 | 196,577 | |||||||||||
| Nordnet AB publ |
Capital Markets | 7,980 | 131,402 | |||||||||||
| Securitas AB, Class B |
Commercial Services & Supplies | 18,312 | 162,961 | |||||||||||
| b | Skandinaviska Enskilda Banken AB, Class A |
Banks | 31,500 | 347,366 | ||||||||||
| Skanska AB, Class B |
Construction & Engineering | 14,364 | 219,625 | |||||||||||
| SKF AB, Class B |
Machinery | 2,772 | 54,533 | |||||||||||
| SSAB AB, Class A |
Metals & Mining | 9,744 | 71,829 | |||||||||||
| SSAB AB, Class B |
Metals & Mining | 27,552 | 196,406 | |||||||||||
| Svenska Handelsbanken AB, Class A |
Banks | 37,296 | 323,126 | |||||||||||
| Swedbank AB, Class A |
Banks | 27,384 | 449,334 | |||||||||||
| Tele2 AB, Class B |
Wireless Telecommunication Services | 25,368 | 252,590 | |||||||||||
| Telefonaktiebolaget LM Ericsson, Class B |
Communications Equipment | 57,456 | 335,775 | |||||||||||
| Telia Co. AB |
Diversified Telecommunication Services | 114,156 | 290,301 | |||||||||||
| Volvo AB, Class A |
Machinery | 756 | 16,258 | |||||||||||
| Volvo AB, Class B |
Machinery | 8,064 | 166,303 | |||||||||||
|
|
|
|||||||||||||
| 5,955,975 | ||||||||||||||
|
|
|
|||||||||||||
| 64 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Switzerland 9.9% | ||||||||||||||
| ABB Ltd. |
Electrical Equipment | 15,876 | $ | 545,159 | ||||||||||
| Baloise Holding AG |
Insurance | 1,008 | 157,122 | |||||||||||
| Cie Financiere Richemont SA, Class A |
Textiles, Apparel & Luxury Goods | 9,240 | 1,475,689 | |||||||||||
| EMS-Chemie Holding AG |
Chemicals | 84 | 69,330 | |||||||||||
| Geberit AG |
Building Products | 420 | 234,102 | |||||||||||
| Givaudan SA |
Chemicals | 118 | 384,012 | |||||||||||
| Julius Baer Group Ltd. |
Capital Markets | 6,552 | 446,960 | |||||||||||
| Kuehne & Nagel International AG |
Marine Transportation | 2,100 | 625,023 | |||||||||||
| Lonza Group AG |
Life Sciences Tools & Services | 1,092 | 654,327 | |||||||||||
| Nestle SA |
Food Products | 39,480 | 4,816,858 | |||||||||||
| Novartis AG |
Pharmaceuticals | 47,544 | 4,359,132 | |||||||||||
| Partners Group Holding AG |
Capital Markets | 1,048 | 982,898 | |||||||||||
| Roche Holding AG |
Pharmaceuticals | 11,760 | 3,359,172 | |||||||||||
| Roche Holding AG |
Pharmaceuticals | 420 | 126,430 | |||||||||||
| Schindler Holding AG, PC |
Machinery | 168 | 37,166 | |||||||||||
| SGS SA |
Professional Services | 286 | 629,573 | |||||||||||
| Sika AG |
Chemicals | 1,132 | 316,596 | |||||||||||
| STMicroelectronics NV |
Semiconductors & Semiconductor Equipment | 8,736 | 464,643 | |||||||||||
| Straumann Holding AG |
Health Care Equipment & Supplies | 252 | 37,612 | |||||||||||
| Swatch Group AG |
Textiles, Apparel & Luxury Goods | 84 | 28,817 | |||||||||||
| Swatch Group AG |
Textiles, Apparel & Luxury Goods | 168 | 10,629 | |||||||||||
| Swiss Life Holding AG |
Insurance | 588 | 362,500 | |||||||||||
| Swiss Re AG |
Insurance | 13,104 | 1,346,045 | |||||||||||
| Swisscom AG |
Diversified Telecommunication Services | 1,131 | 722,018 | |||||||||||
| Zurich Insurance Group AG |
Insurance | 3,408 | 1,632,841 | |||||||||||
|
|
|
|||||||||||||
| 23,824,654 | ||||||||||||||
|
|
|
|||||||||||||
| United Kingdom 12.6% | ||||||||||||||
| 3i Group PLC |
Capital Markets | 17,304 | 360,515 | |||||||||||
| abrdn PLC |
Capital Markets | 99,288 | 249,826 | |||||||||||
| Admiral Group PLC |
Insurance | 12,600 | 317,506 | |||||||||||
| Anglo American PLC |
Metals & Mining | 25,368 | 839,989 | |||||||||||
| Ashtead Group PLC |
Trading Companies & Distributors | 2,184 | 133,886 | |||||||||||
| AstraZeneca PLC |
Pharmaceuticals | 24,192 | 3,359,738 | |||||||||||
| Aviva PLC |
Insurance | 123,732 | 618,379 | |||||||||||
| B&M European Value Retail SA |
Broadline Retail | 38,808 | 231,332 | |||||||||||
| BAE Systems PLC |
Aerospace & Defense | 36,876 | 448,020 | |||||||||||
| Barratt Developments PLC |
Household Durables | 48,720 | 281,019 | |||||||||||
| BP PLC |
Oil, Gas & Consumable Fuels | 156,912 | 991,023 | |||||||||||
| British American Tobacco PLC |
Tobacco | 66,108 | 2,321,803 | |||||||||||
| British Land Co. PLC |
Diversified REITs | 24,864 | 119,222 | |||||||||||
| BT Group PLC |
Diversified Telecommunication Services | 104,076 | 187,622 | |||||||||||
| Burberry Group PLC |
Textiles, Apparel & Luxury Goods | 5,376 | 171,895 | |||||||||||
| CK Hutchison Holdings Ltd., Class A |
Real Estate Management & Development | 66,000 | 409,455 | |||||||||||
| a | ConvaTec Group PLC |
Health Care Equipment & Supplies | 19,488 | 55,083 | ||||||||||
| Diageo PLC |
Beverages | 21,588 | 964,666 | |||||||||||
| Direct Line Insurance Group PLC |
Insurance | 62,748 | 106,679 | |||||||||||
| DS Smith PLC |
Containers & Packaging | 62,832 | 244,331 | |||||||||||
| Ferguson PLC |
Trading Companies & Distributors | 2,100 | 276,532 | |||||||||||
| GSK PLC |
Pharmaceuticals | 98,280 | 1,736,497 | |||||||||||
| Hargreaves Lansdown PLC |
Capital Markets | 16,548 | 163,563 | |||||||||||
| HSBC Holdings PLC |
Banks | 263,676 | 1,792,144 | |||||||||||
| Imperial Brands PLC |
Tobacco | 44,604 | 1,028,008 | |||||||||||
| InterContinental Hotels Group PLC |
Hotels, Restaurants & Leisure | 1,008 | 66,206 | |||||||||||
| Intermediate Capital Group PLC |
Capital Markets | 13,860 | 208,560 | |||||||||||
| ITV PLC |
Media | 172,284 | 176,381 | |||||||||||
| J Sainsbury PLC |
Consumer Staples Distribution & Retail | 83,160 | 286,568 | |||||||||||
| Kingfisher PLC |
Specialty Retail | 71,652 | 231,408 | |||||||||||
| franklintempleton.com | Annual Report | 65 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| United Kingdom (continued) | ||||||||||||||
| Land Securities Group PLC |
Diversified REITs | 36,708 | $ | 281,948 | ||||||||||
| Legal & General Group PLC |
Insurance | 271,656 | 802,439 | |||||||||||
| London Stock Exchange Group PLC |
Capital Markets | 2,352 | 228,812 | |||||||||||
| M&G PLC |
Financial Services | 109,452 | 267,957 | |||||||||||
| Mondi PLC |
Paper & Forest Products | 20,076 | 318,231 | |||||||||||
| National Grid PLC |
Multi-Utilities | 100,632 | 1,364,336 | |||||||||||
| NatWest Group PLC |
Banks | 16,632 | 54,208 | |||||||||||
| b | Ocado Group PLC |
Consumer Staples Distribution & Retail | 7,812 | 51,676 | ||||||||||
| Persimmon PLC |
Household Durables | 16,884 | 262,205 | |||||||||||
| Phoenix Group Holdings PLC |
Insurance | 39,396 | 266,158 | |||||||||||
| Reckitt Benckiser Group PLC |
Household Products | 10,248 | 780,289 | |||||||||||
| RELX PLC |
Professional Services | 20,789 | 672,945 | |||||||||||
| Rentokil Initial PLC |
Commercial Services & Supplies | 9,156 | 66,975 | |||||||||||
| Sage Group PLC |
Software | 8,232 | 78,883 | |||||||||||
| Schroders PLC |
Capital Markets | 21,840 | 124,219 | |||||||||||
| Severn Trent PLC |
Water Utilities | 10,668 | 379,753 | |||||||||||
| Smith & Nephew PLC |
Health Care Equipment & Supplies | 3,626 | 50,303 | |||||||||||
| Spirax-Sarco Engineering PLC |
Machinery | 840 | 123,128 | |||||||||||
| SSE PLC |
Electric Utilities | 35,868 | 799,612 | |||||||||||
| St. James’s Place PLC |
Capital Markets | 25,956 | 388,650 | |||||||||||
| Taylor Wimpey PLC |
Household Durables | 174,300 | 256,353 | |||||||||||
| Tesco PLC |
Consumer Staples Distribution & Retail | 61,824 | 203,107 | |||||||||||
| Unilever PLC |
Personal Products | 43,932 | 2,275,996 | |||||||||||
| United Utilities Group PLC |
Water Utilities | 29,484 | 386,428 | |||||||||||
| Vodafone Group PLC |
Wireless Telecommunication Services | 1,261,680 | 1,393,084 | |||||||||||
| b | Wise PLC, Class A |
IT Services | 7,728 | 51,962 | ||||||||||
|
|
|
|||||||||||||
| 30,307,513 | ||||||||||||||
|
|
|
|||||||||||||
| United States 1.1% | ||||||||||||||
| b | Holcim AG, Class B |
Construction Materials | 13,524 | 871,943 | ||||||||||
| Stellantis NV |
Automobiles | 93,744 | 1,704,531 | |||||||||||
|
|
|
|||||||||||||
| 2,576,474 | ||||||||||||||
|
|
|
|||||||||||||
| Total Common Stocks |
237,493,906 | |||||||||||||
|
|
|
|||||||||||||
| Preferred Stocks 0.5% | ||||||||||||||
| Germany 0.5% | ||||||||||||||
| c | Bayerische Motoren Werke AG, 6.172%, pfd |
Automobiles | 1,680 | 172,120 | ||||||||||
| c | Porsche Automobil Holding SE, 4.837%, pfd |
Automobiles | 2,520 | 144,887 | ||||||||||
| c | Sartorius AG, 0.372%, pfd |
Health Care Equipment & Supplies | 588 | 247,228 | ||||||||||
| c | Volkswagen AG, 21.188%, pfd |
Automobiles | 4,788 | 653,570 | ||||||||||
|
|
|
|||||||||||||
| Total Preferred Stocks |
1,217,805 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments |
238,711,711 | |||||||||||||
| Other Assets, less Liabilities 0.7% | 1,747,637 | |||||||||||||
|
|
|
|||||||||||||
| Net Assets 100.0% | $ | 240,459,348 | ||||||||||||
|
|
|
|||||||||||||
†Rounds to less than 0.1% of net assets.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $3,382,704, representing 1.4% of net assets.
bNon-income producing.
cVariable rate security. The rate shown represents the yield at period end.
| 66 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Core Dividend Tilt Index ETF (continued)
At March 31, 2023, 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 | 13 | $ | 1,362,725 | 6/16/23 | $29,508 | ||||||||||||||
*As of year end.
See Note 7 regarding other derivative information.
See Abbreviations on page 120.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 67 | ||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Core Dividend Tilt Index ETFa
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$36.29 | $33.29 | $23.32 | $28.20 | $28.22 | |||||||||||||||
| Income from investment operationsb: |
||||||||||||||||||||
| Net investment incomec |
0.82 | 1.03 | 0.92 | 1.04 | 0.95 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(3.82 | ) | 2.98 | 9.95 | (4.90 | ) | (0.02 | ) | ||||||||||||
| Total from investment operations |
(3.00 | ) | 4.01 | 10.87 | (3.86 | ) | 0.93 | |||||||||||||
| Less distributions from net investment income |
(1.00 | ) | (1.01 | ) | (0.90 | ) | (1.02 | ) | (0.95 | ) | ||||||||||
| Net asset value, end of year |
$32.29 | $36.29 | $33.29 | $23.32 | $28.20 | |||||||||||||||
| Total returnd |
(8.09)% | 12.14% | 47.20% | (14.34)% | 3.51% | |||||||||||||||
| Ratios to average net assetse | ||||||||||||||||||||
| Expenses before waiver and payments by affiliates |
0.19% | 0.45% | 0.45% | 0.45% | 0.45% | |||||||||||||||
| Expenses net of waiver and payments by affiliates |
0.19% | 0.45% | 0.45% | 0.45% | 0.45% | |||||||||||||||
| Net investment income |
2.58% | 2.92% | 3.21% | 3.60% | 3.43% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$24,219 | $30,851 | $26,632 | $18,653 | $16,920 | |||||||||||||||
| Portfolio turnover ratef |
130.60%g | 28.73%g | 42.38%g | 19.79%g | 25.75% | |||||||||||||||
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.
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: | 130.60% | 27.86% | 42.38% | 19.79% | — |
| 68 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin U.S. Core Dividend Tilt Index ETF
| Industry | Shares | Value | ||||||||||
| Common Stocks 99.7% | ||||||||||||
| Brazil 0.3% | ||||||||||||
| a | MercadoLibre, Inc. |
Internet & Direct Marketing Retail | 56 | $ | 73,812 | |||||||
|
|
|
|||||||||||
| China 0.4% | ||||||||||||
| NXP Semiconductors NV |
Semiconductors & Semiconductor Equipment | 510 | 95,102 | |||||||||
|
|
|
|||||||||||
| Ireland 0.1% | ||||||||||||
| Seagate Technology Holdings PLC |
Technology Hardware, Storage & Peripherals | 405 | 26,779 | |||||||||
|
|
|
|||||||||||
| Russia 0.0%† | ||||||||||||
| a,b | Polymetal International PLC |
Metals & Mining | 4,860 | — | ||||||||
| a,b | Tatneft PJSC |
Oil, Gas & Consumable Fuels | 15,990 | — | ||||||||
|
|
|
|||||||||||
| — | ||||||||||||
|
|
|
|||||||||||
| Switzerland 0.0%† | ||||||||||||
| TE Connectivity Ltd. |
Electronic Equipment, Instruments & Components | 75 | 9,836 | |||||||||
|
|
|
|||||||||||
| United States 98.9% | ||||||||||||
| 3M Co. |
Industrial Conglomerates | 1,125 | 118,249 | |||||||||
| Abbott Laboratories |
Health Care Equipment & Supplies | 1,635 | 165,560 | |||||||||
| AbbVie, Inc. |
Biotechnology | 2,025 | 322,724 | |||||||||
| Accenture PLC, Class A |
IT Services | 375 | 107,179 | |||||||||
| a | Adobe, Inc. |
Software | 210 | 80,928 | ||||||||
| Advance Auto Parts, Inc. |
Specialty Retail | 135 | 16,417 | |||||||||
| a | Advanced Micro Devices, Inc. |
Semiconductors & Semiconductor Equipment | 1,125 | 110,261 | ||||||||
| AES Corp. |
Independent Power Producers & Energy Traders | 1,365 | 32,869 | |||||||||
| Agilent Technologies, Inc. |
Life Sciences Tools & Services | 30 | 4,150 | |||||||||
| a | agilon health, Inc. |
Health Care Providers & Services | 90 | 2,138 | ||||||||
| Air Products & Chemicals, Inc. |
Chemicals | 240 | 68,930 | |||||||||
| a | Airbnb, Inc., Class A |
Hotels, Restaurants & Leisure | 210 | 26,124 | ||||||||
| Albemarle Corp. |
Chemicals | 45 | 9,947 | |||||||||
| Alexandria Real Estate Equities, Inc. |
Diversified REITs | 315 | 39,561 | |||||||||
| Alliant Energy Corp. |
Electric Utilities | 510 | 27,234 | |||||||||
| Ally Financial, Inc. |
Consumer Finance | 615 | 15,676 | |||||||||
| a | Alnylam Pharmaceuticals, Inc. |
Biotechnology | 30 | 6,010 | ||||||||
| a | Alphabet, Inc., Class A |
Interactive Media & Services | 3,270 | 339,197 | ||||||||
| a | Alphabet, Inc., Class C |
Interactive Media & Services | 2,895 | 301,080 | ||||||||
| Altria Group, Inc. |
Tobacco | 3,600 | 160,632 | |||||||||
| a | Amazon.com, Inc. |
Internet & Direct Marketing Retail | 5,745 | 593,401 | ||||||||
| Amcor PLC |
Containers & Packaging | 3,120 | 35,506 | |||||||||
| American Electric Power Co., Inc. |
Electric Utilities | 825 | 75,067 | |||||||||
| American Tower Corp. |
Diversified REITs | 435 | 88,888 | |||||||||
| Amgen, Inc. |
Biotechnology | 885 | 213,949 | |||||||||
| Analog Devices, Inc. |
Semiconductors & Semiconductor Equipment | 870 | 171,581 | |||||||||
| Annaly Capital Management, Inc. |
Mortgage Real Estate Investment Trusts (REITs) | 975 | 18,632 | |||||||||
| Apollo Global Management, Inc. |
Financial Services | 885 | 55,897 | |||||||||
| Apple, Inc. |
Technology Hardware, Storage & Peripherals | 9,615 | 1,585,513 | |||||||||
| Applied Materials, Inc. |
Semiconductors & Semiconductor Equipment | 705 | 86,595 | |||||||||
| a | Arista Networks, Inc. |
Communications Equipment | 30 | 5,036 | ||||||||
| AT&T, Inc. |
Diversified Telecommunication Services | 11,190 | 215,407 | |||||||||
| a | Autodesk, Inc. |
Software | 165 | 34,346 | ||||||||
| Automatic Data Processing, Inc. |
IT Services | 105 | 23,376 | |||||||||
| AvalonBay Communities, Inc. |
Diversified REITs | 285 | 47,897 | |||||||||
| Avangrid, Inc. |
Electric Utilities | 120 | 4,786 | |||||||||
| Baker Hughes Co. |
Energy Equipment & Services | 450 | 12,987 | |||||||||
| Bank of America Corp. |
Banks | 3,690 | 105,534 | |||||||||
| Bank of New York Mellon Corp. |
Capital Markets | 1,050 | 47,712 | |||||||||
| Bath & Body Works, Inc. |
Specialty Retail | 225 | 8,231 | |||||||||
| Baxter International, Inc. |
Health Care Equipment & Supplies | 735 | 29,812 | |||||||||
| Becton Dickinson & Co. |
Health Care Equipment & Supplies | 60 | 14,852 | |||||||||
| franklintempleton.com | Annual Report | 69 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||
| Common Stocks (continued) | ||||||||||||
| United States (continued) | ||||||||||||
| Best Buy Co., Inc. |
Specialty Retail | 420 | $ | 32,873 | ||||||||
| a | Bills Holdings, Inc. |
Software | 105 | 8,520 | ||||||||
| BlackRock, Inc. |
Capital Markets | 278 | 186,015 | |||||||||
| Blackstone, Inc. |
Capital Markets | 1,410 | 123,854 | |||||||||
| a | Block, Inc. |
IT Services | 450 | 30,893 | ||||||||
| Boston Properties, Inc. |
Diversified REITs | 300 | 16,236 | |||||||||
| Bristol-Myers Squibb Co. |
Pharmaceuticals | 2,475 | 171,542 | |||||||||
| Broadcom, Inc. |
Semiconductors & Semiconductor Equipment | 443 | 284,202 | |||||||||
| Broadridge Financial Solutions, Inc. |
IT Services | 240 | 35,177 | |||||||||
| a | Cadence Design Systems, Inc. |
Software | 45 | 9,454 | ||||||||
| Camden Property Trust |
Diversified REITs | 225 | 23,589 | |||||||||
| Campbell Soup Co. |
Food Products | 375 | 20,618 | |||||||||
| Cardinal Health, Inc. |
Health Care Providers & Services | 555 | 41,902 | |||||||||
| Carlyle Group, Inc. |
Capital Markets | 450 | 13,977 | |||||||||
| Caterpillar, Inc. |
Machinery | 225 | 51,489 | |||||||||
| a | Ceridian HCM Holding, Inc. |
Software | 300 | 21,966 | ||||||||
| Charles Schwab Corp. |
Capital Markets | 270 | 14,143 | |||||||||
| Chevron Corp. |
Oil, Gas & Consumable Fuels | 1,800 | 293,688 | |||||||||
| Cigna Group |
Health Care Providers & Services | 30 | 7,666 | |||||||||
| Cincinnati Financial Corp. |
Insurance | 135 | 15,131 | |||||||||
| Cisco Systems, Inc. |
Communications Equipment | 4,755 | 248,568 | |||||||||
| Citigroup, Inc. |
Banks | 3,330 | 156,144 | |||||||||
| Citizens Financial Group, Inc. |
Banks | 1,095 | 33,255 | |||||||||
| Clorox Co. |
Household Products | 240 | 37,978 | |||||||||
| a | Cloudflare, Inc., Class A |
Software | 255 | 15,723 | ||||||||
| CME Group, Inc. |
Capital Markets | 750 | 143,640 | |||||||||
| CMS Energy Corp. |
Multi-Utilities | 90 | 5,524 | |||||||||
| Coca-Cola Co. |
Beverages | 4,110 | 254,943 | |||||||||
| Cognex Corp. |
Electronic Equipment, Instruments & Components | 195 | 9,662 | |||||||||
| a | Coinbase Global, Inc., Class A |
Capital Markets | 30 | 2,027 | ||||||||
| Colgate-Palmolive Co. |
Household Products | 360 | 27,054 | |||||||||
| Comcast Corp., Class A |
Media | 3,870 | 146,712 | |||||||||
| Comerica, Inc. |
Banks | 270 | 11,723 | |||||||||
| Conagra Brands, Inc. |
Food Products | 990 | 37,184 | |||||||||
| ConocoPhillips |
Oil, Gas & Consumable Fuels | 75 | 7,441 | |||||||||
| Consolidated Edison, Inc. |
Multi-Utilities | 630 | 60,272 | |||||||||
| Corning, Inc. |
Electronic Equipment, Instruments & Components | 1,545 | 54,508 | |||||||||
| Costco Wholesale Corp. |
Consumer Staples Distribution & Retail | 90 | 44,718 | |||||||||
| Coterra Energy, Inc., Class A |
Oil, Gas & Consumable Fuels | 1,590 | 39,019 | |||||||||
| a | Coupang, Inc. |
Broadline Retail | 270 | 4,320 | ||||||||
| a | Crowdstrike Holdings, Inc., Class A |
Software | 195 | 26,766 | ||||||||
| Crown Castle, Inc. |
Diversified REITs | 885 | 118,448 | |||||||||
| Cummins, Inc. |
Machinery | 210 | 50,165 | |||||||||
| CVS Health Corp. |
Health Care Providers & Services | 1,290 | 95,860 | |||||||||
| Danaher Corp. |
Life Sciences Tools & Services | 195 | 49,148 | |||||||||
| Darden Restaurants, Inc. |
Hotels, Restaurants & Leisure | 240 | 37,238 | |||||||||
| a | Datadog, Inc., Class A |
Software | 270 | 19,618 | ||||||||
| Deere & Co. |
Machinery | 105 | 43,352 | |||||||||
| Dell Technologies, Inc., Class C |
Technology Hardware, Storage & Peripherals | 555 | 22,317 | |||||||||
| Devon Energy Corp. |
Oil, Gas & Consumable Fuels | 1,305 | 66,046 | |||||||||
| a | Dexcom, Inc. |
Health Care Equipment & Supplies | 195 | 22,655 | ||||||||
| Diamondback Energy, Inc. |
Oil, Gas & Consumable Fuels | 360 | 48,661 | |||||||||
| Digital Realty Trust, Inc. |
Diversified REITs | 585 | 57,511 | |||||||||
| Discover Financial Services |
Consumer Finance | 180 | 17,791 | |||||||||
| a | DocuSign, Inc. |
Software | 165 | 9,620 | ||||||||
| Dominion Energy, Inc. |
Multi-Utilities | 1,710 | 95,606 | |||||||||
| a | DoorDash, Inc., Class A |
Internet & Direct Marketing Retail | 90 | 5,720 | ||||||||
| 70 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||
| Common Stocks (continued) | ||||||||||||
| United States (continued) | ||||||||||||
| Dow, Inc. |
Chemicals | 1,455 | $ | 79,763 | ||||||||
| Duke Energy Corp. |
Electric Utilities | 1,560 | 150,493 | |||||||||
| a | Dynatrace, Inc. |
Software | 285 | 12,056 | ||||||||
| Eastman Chemical Co. |
Chemicals | 255 | 21,507 | |||||||||
| Eaton Corp. PLC |
Electrical Equipment | 480 | 82,243 | |||||||||
| eBay, Inc. |
Internet & Direct Marketing Retail | 1,020 | 45,257 | |||||||||
| Edison International |
Electric Utilities | 750 | 52,942 | |||||||||
| a | Edwards Lifesciences Corp. |
Health Care Equipment & Supplies | 75 | 6,205 | ||||||||
| Elevance Health, Inc. |
Health Care Providers & Services | 30 | 13,794 | |||||||||
| Eli Lilly & Co. |
Pharmaceuticals | 615 | 211,203 | |||||||||
| Emerson Electric Co. |
Electrical Equipment | 465 | 40,520 | |||||||||
| a | Enphase Energy, Inc. |
Semiconductors & Semiconductor Equipment | 165 | 34,696 | ||||||||
| Entegris, Inc. |
Semiconductors & Semiconductor Equipment | 150 | 12,302 | |||||||||
| Entergy Corp. |
Electric Utilities | 405 | 43,635 | |||||||||
| EOG Resources, Inc. |
Oil, Gas & Consumable Fuels | 105 | 12,036 | |||||||||
| a | EPAM Systems, Inc. |
IT Services | 15 | 4,485 | ||||||||
| Equinix, Inc. |
Diversified REITs | 75 | 54,078 | |||||||||
| Equity Residential |
Diversified REITs | 690 | 41,400 | |||||||||
| Essex Property Trust, Inc. |
Diversified REITs | 135 | 28,234 | |||||||||
| Estee Lauder Cos., Inc., Class A |
Personal Products | 90 | 22,181 | |||||||||
| a | Etsy, Inc. |
Internet & Direct Marketing Retail | 105 | 11,690 | ||||||||
| Evergy, Inc. |
Electric Utilities | 465 | 28,421 | |||||||||
| Eversource Energy |
Electric Utilities | 540 | 42,260 | |||||||||
| a | Exact Sciences Corp. |
Biotechnology | 105 | 7,120 | ||||||||
| Exelon Corp. |
Electric Utilities | 900 | 37,701 | |||||||||
| Extra Space Storage, Inc. |
Diversified REITs | 270 | 43,991 | |||||||||
| Exxon Mobil Corp. |
Oil, Gas & Consumable Fuels | 3,840 | 421,094 | |||||||||
| Fastenal Co. |
Trading Companies & Distributors | 1,155 | 62,301 | |||||||||
| Federal Realty Investment Trust |
Diversified REITs | 150 | 14,825 | |||||||||
| FedEx Corp. |
Air Freight & Logistics | 75 | 17,137 | |||||||||
| Fidelity National Financial, Inc. |
Insurance | 585 | 20,434 | |||||||||
| Fidelity National Information Services, Inc. |
IT Services | 375 | 20,374 | |||||||||
| Fifth Third Bancorp |
Banks | 1,515 | 40,360 | |||||||||
| FirstEnergy Corp. |
Electric Utilities | 1,110 | 44,467 | |||||||||
| Ford Motor Co. |
Automobiles | 7,440 | 93,744 | |||||||||
| a | Fortinet, Inc. |
Software | 315 | 20,935 | ||||||||
| Franklin Resources, Inc. |
Capital Markets | 585 | 15,760 | |||||||||
| Freeport-McMoRan, Inc. |
Metals & Mining | 210 | 8,591 | |||||||||
| Garmin Ltd. |
Household Durables | 315 | 31,790 | |||||||||
| Gen Digital, Inc. |
Software | 525 | 9,009 | |||||||||
| General Dynamics Corp. |
Aerospace & Defense | 60 | 13,693 | |||||||||
| General Mills, Inc. |
Food Products | 210 | 17,947 | |||||||||
| Genuine Parts Co. |
Distributors | 120 | 20,077 | |||||||||
| Gilead Sciences, Inc. |
Biotechnology | 1,845 | 153,080 | |||||||||
| Goldman Sachs Group, Inc. |
Capital Markets | 120 | 39,253 | |||||||||
| Hasbro, Inc. |
Leisure Products | 270 | 14,496 | |||||||||
| Healthpeak Properties, Inc. |
Diversified REITs | 1,110 | 24,387 | |||||||||
| Hewlett Packard Enterprise Co. |
Technology Hardware, Storage & Peripherals | 2,670 | 42,533 | |||||||||
| Home Depot, Inc. |
Specialty Retail | 915 | 270,035 | |||||||||
| Honeywell International, Inc. |
Industrial Conglomerates | 270 | 51,602 | |||||||||
| HP, Inc. |
Technology Hardware, Storage & Peripherals | 1,875 | 55,031 | |||||||||
| Hubbell, Inc., Class B |
Electrical Equipment | 90 | 21,898 | |||||||||
| a | HubSpot, Inc. |
Software | 60 | 25,725 | ||||||||
| Humana, Inc. |
Health Care Providers & Services | 8 | 3,884 | |||||||||
| Huntington Bancshares, Inc. |
Banks | 3,150 | 35,280 | |||||||||
| Illinois Tool Works, Inc. |
Machinery | 480 | 116,856 | |||||||||
| a | Insulet Corp. |
Health Care Equipment & Supplies | 30 | 9,569 | ||||||||
| franklintempleton.com | Annual Report | 71 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||
| Common Stocks (continued) | ||||||||||||
| United States (continued) | ||||||||||||
| Intel Corp. |
Semiconductors & Semiconductor Equipment | 7,215 | $ | 235,714 | ||||||||
| International Business Machines Corp. |
IT Services | 1,530 | 200,568 | |||||||||
| International Flavors & Fragrances, Inc. |
Chemicals | 555 | 51,038 | |||||||||
| International Paper Co. |
Containers & Packaging | 735 | 26,504 | |||||||||
| Interpublic Group of Cos., Inc. |
Media | 810 | 30,164 | |||||||||
| Intuit, Inc. |
Software | 210 | 93,624 | |||||||||
| a | Intuitive Surgical, Inc. |
Health Care Equipment & Supplies | 105 | 26,824 | ||||||||
| Invesco Ltd. |
Capital Markets | 915 | 15,006 | |||||||||
| Invitation Homes, Inc. |
Diversified REITs | 360 | 11,243 | |||||||||
| Iron Mountain, Inc. |
Diversified REITs | 570 | 30,159 | |||||||||
| J M Smucker Co. |
Food Products | 45 | 7,082 | |||||||||
| Jefferies Financial Group, Inc. |
Capital Markets | 375 | 11,903 | |||||||||
| Johnson & Johnson |
Pharmaceuticals | 2,385 | 369,675 | |||||||||
| Johnson Controls International PLC |
Building Products | 315 | 18,969 | |||||||||
| JPMorgan Chase & Co. |
Banks | 2,340 | 304,925 | |||||||||
| Juniper Networks, Inc. |
Communications Equipment | 660 | 22,717 | |||||||||
| Kellogg Co. |
Food Products | 525 | 35,154 | |||||||||
| KeyCorp |
Banks | 1,995 | 24,977 | |||||||||
| Kimberly-Clark Corp. |
Household Products | 690 | 92,612 | |||||||||
| Kimco Realty Corp. |
Diversified REITs | 1,290 | 25,194 | |||||||||
| Kinder Morgan, Inc. |
Oil, Gas & Consumable Fuels | 3,945 | 69,077 | |||||||||
| KKR & Co., Inc. |
Capital Markets | 315 | 16,544 | |||||||||
| KLA Corp. |
Semiconductors & Semiconductor Equipment | 210 | 83,826 | |||||||||
| Kraft Heinz Co. |
Food Products | 1,635 | 63,225 | |||||||||
| Lam Research Corp. |
Semiconductors & Semiconductor Equipment | 158 | 83,759 | |||||||||
| Lear Corp. |
Automobile Components | 120 | 16,739 | |||||||||
| Lincoln National Corp. |
Insurance | 330 | 7,415 | |||||||||
| Linde PLC |
Chemicals | 150 | 53,316 | |||||||||
| Lockheed Martin Corp. |
Aerospace & Defense | 120 | 56,728 | |||||||||
| Lowe’s Cos., Inc. |
Specialty Retail | 420 | 83,987 | |||||||||
| Lumen Technologies, Inc. |
Diversified Telecommunication Services | 2,280 | 6,042 | |||||||||
| LyondellBasell Industries NV, Class A |
Chemicals | 525 | 49,292 | |||||||||
| M&T Bank Corp. |
Banks | 270 | 32,284 | |||||||||
| MarketAxess Holdings, Inc. |
Capital Markets | 30 | 11,739 | |||||||||
| Marvell Technology, Inc. |
Semiconductors & Semiconductor Equipment | 765 | 33,125 | |||||||||
| Masco Corp. |
Building Products | 120 | 5,966 | |||||||||
| Mastercard, Inc., Class A |
IT Services | 330 | 119,925 | |||||||||
| McDonald’s Corp. |
Hotels, Restaurants & Leisure | 255 | 71,301 | |||||||||
| Medtronic PLC |
Health Care Equipment & Supplies | 1,890 | 152,372 | |||||||||
| Merck & Co., Inc. |
Pharmaceuticals | 2,535 | 269,699 | |||||||||
| a | Meta Platforms, Inc., Class A |
Interactive Media & Services | 1,275 | 270,223 | ||||||||
| MetLife, Inc. |
Insurance | 270 | 15,644 | |||||||||
| Microchip Technology, Inc. |
Semiconductors & Semiconductor Equipment | 1,080 | 90,482 | |||||||||
| Microsoft Corp. |
Software | 5,055 | 1,457,356 | |||||||||
| Mid-America Apartment Communities, Inc. |
Diversified REITs | 225 | 33,984 | |||||||||
| a | Moderna, Inc. |
Biotechnology | 75 | 11,519 | ||||||||
| a | MongoDB, Inc. |
IT Services | 75 | 17,484 | ||||||||
| Monolithic Power Systems, Inc. |
Semiconductors & Semiconductor Equipment | 75 | 37,540 | |||||||||
| Morgan Stanley |
Capital Markets | 1,470 | 129,066 | |||||||||
| MSCI, Inc. |
Capital Markets | 128 | 71,640 | |||||||||
| NetApp, Inc. |
Technology Hardware, Storage & Peripherals | 450 | 28,733 | |||||||||
| a | Netflix, Inc. |
Entertainment | 285 | 98,462 | ||||||||
| Newmont Corp. |
Metals & Mining | 1,455 | 71,324 | |||||||||
| NextEra Energy, Inc. |
Electric Utilities | 480 | 36,998 | |||||||||
| NIKE, Inc., Class B |
Textiles, Apparel & Luxury Goods | 615 | 75,424 | |||||||||
| NiSource, Inc. |
Multi-Utilities | 825 | 23,067 | |||||||||
| Northern Trust Corp. |
Capital Markets | 435 | 38,337 | |||||||||
| 72 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||
| Common Stocks (continued) | ||||||||||||
| United States (continued) | ||||||||||||
| a | Novocure Ltd. |
Health Care Equipment & Supplies | 75 | $ | 4,511 | |||||||
| NRG Energy, Inc. |
Electric Utilities | 450 | 15,431 | |||||||||
| NVIDIA Corp. |
Semiconductors & Semiconductor Equipment | 1,620 | 449,987 | |||||||||
| a | Okta, Inc. |
IT Services | 105 | 9,055 | ||||||||
| Omnicom Group, Inc. |
Media | 420 | 39,623 | |||||||||
| a | ON Semiconductor Corp. |
Semiconductors & Semiconductor Equipment | 300 | 24,696 | ||||||||
| ONEOK, Inc. |
Oil, Gas & Consumable Fuels | 885 | 56,233 | |||||||||
| Oracle Corp. |
Software | 1,185 | 110,110 | |||||||||
| Packaging Corp. of America |
Containers & Packaging | 180 | 24,989 | |||||||||
| a | Palantir Technologies, Inc., Class A |
Software | 2,220 | 18,759 | ||||||||
| a | Palo Alto Networks, Inc. |
Software | 150 | 29,961 | ||||||||
| Paramount Global, Class B |
Media | 1,020 | 22,756 | |||||||||
| Paychex, Inc. |
IT Services | 630 | 72,192 | |||||||||
| a | Paycom Software, Inc. |
Software | 15 | 4,560 | ||||||||
| a | PayPal Holdings, Inc. |
IT Services | 360 | 27,338 | ||||||||
| PepsiCo, Inc. |
Beverages | 1,140 | 207,822 | |||||||||
| Pfizer, Inc. |
Pharmaceuticals | 6,780 | 276,624 | |||||||||
| Philip Morris International, Inc. |
Tobacco | 2,205 | 214,436 | |||||||||
| Phillips 66 |
Oil, Gas & Consumable Fuels | 900 | 91,242 | |||||||||
| Pinnacle West Capital Corp. |
Electric Utilities | 210 | 16,640 | |||||||||
| a | Pinterest, Inc., Class A |
Interactive Media & Services | 675 | 18,407 | ||||||||
| Pioneer Natural Resources Co. |
Oil, Gas & Consumable Fuels | 480 | 98,035 | |||||||||
| a | Plug Power, Inc. |
Electrical Equipment | 750 | 8,790 | ||||||||
| PNC Financial Services Group, Inc. |
Banks | 885 | 112,483 | |||||||||
| PPL Corp. |
Electric Utilities | 1,455 | 40,434 | |||||||||
| Principal Financial Group, Inc. |
Insurance | 495 | 36,788 | |||||||||
| Procter & Gamble Co. |
Household Products | 1,515 | 225,265 | |||||||||
| Prologis, Inc. |
Diversified REITs | 660 | 82,348 | |||||||||
| Prudential Financial, Inc. |
Insurance | 780 | 64,537 | |||||||||
| Public Service Enterprise Group, Inc. |
Multi-Utilities | 960 | 59,952 | |||||||||
| Public Storage |
Diversified REITs | 165 | 49,853 | |||||||||
| QUALCOMM, Inc. |
Semiconductors & Semiconductor Equipment | 1,425 | 181,801 | |||||||||
| Raytheon Technologies Corp. |
Aerospace & Defense | 840 | 82,261 | |||||||||
| Realty Income Corp. |
Diversified REITs | 1,260 | 79,783 | |||||||||
| Regency Centers Corp. |
Diversified REITs | 315 | 19,272 | |||||||||
| Regions Financial Corp. |
Banks | 2,055 | 38,141 | |||||||||
| ResMed, Inc. |
Health Care Equipment & Supplies | 45 | 9,855 | |||||||||
| a | ROBLOX Corp., Class A |
Entertainment | 210 | 9,446 | ||||||||
| Rockwell Automation, Inc. |
Electrical Equipment | 165 | 48,419 | |||||||||
| a | Roku, Inc. |
Entertainment | 165 | 10,860 | ||||||||
| Ross Stores, Inc. |
Specialty Retail | 90 | 9,552 | |||||||||
| a | Salesforce, Inc. |
Software | 525 | 104,884 | ||||||||
| a | ServiceNow, Inc. |
Software | 150 | 69,708 | ||||||||
| Sherwin-Williams Co. |
Chemicals | 45 | 10,115 | |||||||||
| Simon Property Group, Inc. |
Real Estate Investment Trusts (REITs) | 660 | 73,900 | |||||||||
| Skyworks Solutions, Inc. |
Semiconductors & Semiconductor Equipment | 315 | 37,164 | |||||||||
| a | Snap, Inc., Class A |
Interactive Media & Services | 495 | 5,549 | ||||||||
| Snap-on, Inc. |
Machinery | 105 | 25,923 | |||||||||
| a | Snowflake, Inc., Class A |
IT Services | 270 | 41,658 | ||||||||
| a | SolarEdge Technologies, Inc. |
Semiconductors & Semiconductor Equipment | 30 | 9,119 | ||||||||
| Southern Co. |
Electric Utilities | 2,145 | 149,249 | |||||||||
| Southern Copper Corp. |
Metals & Mining | 180 | 13,725 | |||||||||
| a | Splunk, Inc. |
Software | 75 | 7,191 | ||||||||
| Stanley Black & Decker, Inc. |
Machinery | 315 | 25,383 | |||||||||
| Starbucks Corp. |
Hotels, Restaurants & Leisure | 1,215 | 126,518 | |||||||||
| State Street Corp. |
Capital Markets | 555 | 42,008 | |||||||||
| Synchrony Financial |
Consumer Finance | 420 | 12,214 | |||||||||
| franklintempleton.com | Annual Report | 73 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||
| Common Stocks (continued) | ||||||||||||
| United States (continued) | ||||||||||||
| a | Synopsys, Inc. |
Software | 15 | $ | 5,794 | |||||||
| Sysco Corp. |
Consumer Staples Distribution & Retail | 210 | 16,218 | |||||||||
| T Rowe Price Group, Inc. |
Capital Markets | 450 | 50,805 | |||||||||
| Tapestry, Inc. |
Textiles, Apparel & Luxury Goods | 495 | 21,339 | |||||||||
| Target Corp. |
Broadline Retail | 360 | 59,627 | |||||||||
| Teradyne, Inc. |
Semiconductors & Semiconductor Equipment | 90 | 9,676 | |||||||||
| a | Tesla, Inc. |
Automobiles | 2,085 | 432,554 | ||||||||
| Texas Instruments, Inc. |
Semiconductors & Semiconductor Equipment | 1,260 | 234,373 | |||||||||
| Thermo Fisher Scientific, Inc. |
Life Sciences Tools & Services | 100 | 57,637 | |||||||||
| TJX Cos., Inc. |
Specialty Retail | 225 | 17,631 | |||||||||
| Tractor Supply Co. |
Specialty Retail | 135 | 31,730 | |||||||||
| a | Trade Desk, Inc., Class A |
Software | 420 | 25,582 | ||||||||
| Truist Financial Corp. |
Banks | 2,880 | 98,208 | |||||||||
| a | Twilio, Inc., Class A |
IT Services | 165 | 10,994 | ||||||||
| U.S. Bancorp |
Banks | 2,880 | 103,824 | |||||||||
| a | Uber Technologies, Inc. |
Ground Transportation | 990 | 31,383 | ||||||||
| UDR, Inc. |
Diversified REITs | 630 | 25,868 | |||||||||
| UGI Corp. |
Gas Utilities | 435 | 15,121 | |||||||||
| Union Pacific Corp. |
Ground Transportation | 405 | 81,510 | |||||||||
| United Parcel Service, Inc., Class B |
Air Freight & Logistics | 1,125 | 218,239 | |||||||||
| UnitedHealth Group, Inc. |
Health Care Providers & Services | 525 | 248,110 | |||||||||
| a | Unity Software, Inc. |
Software | 150 | 4,866 | ||||||||
| Vail Resorts, Inc. |
Hotels, Restaurants & Leisure | 90 | 21,031 | |||||||||
| Valero Energy Corp. |
Oil, Gas & Consumable Fuels | 270 | 37,692 | |||||||||
| Ventas, Inc. |
Diversified REITs | 825 | 35,764 | |||||||||
| Verizon Communications, Inc. |
Diversified Telecommunication Services | 6,075 | 236,257 | |||||||||
| VF Corp. |
Textiles, Apparel & Luxury Goods | 690 | 15,808 | |||||||||
| Viatris, Inc. |
Pharmaceuticals | 2,700 | 25,974 | |||||||||
| VICI Properties, Inc. |
Diversified REITs | 1,935 | 63,120 | |||||||||
| Visa, Inc., Class A |
IT Services | 780 | 175,859 | |||||||||
| Vistra Corp. |
Independent Power Producers & Energy Traders | 600 | 14,400 | |||||||||
| Walgreens Boots Alliance, Inc. |
Consumer Staples Distribution & Retail | 1,500 | 51,870 | |||||||||
| Walmart, Inc. |
Consumer Staples Distribution & Retail | 180 | 26,541 | |||||||||
| a | Walt Disney Co. |
Media | 375 | 37,549 | ||||||||
| Watsco, Inc. |
Trading Companies & Distributors | 60 | 19,090 | |||||||||
| WEC Energy Group, Inc. |
Multi-Utilities | 300 | 28,437 | |||||||||
| Wells Fargo & Co. |
Banks | 1,815 | 67,845 | |||||||||
| Welltower, Inc. |
Diversified REITs | 780 | 55,918 | |||||||||
| Westrock Co. |
Containers & Packaging | 135 | 4,113 | |||||||||
| Weyerhaeuser Co. |
Diversified REITs | 1,020 | 30,733 | |||||||||
| Whirlpool Corp. |
Household Durables | 105 | 13,862 | |||||||||
| Williams Cos., Inc. |
Oil, Gas & Consumable Fuels | 2,475 | 73,903 | |||||||||
| a | Workday, Inc., Class A |
Software | 90 | 18,589 | ||||||||
| WP Carey, Inc. |
Diversified REITs | 435 | 33,691 | |||||||||
| a | Zillow Group, Inc., Class A |
Real Estate Management & Development | 30 | 1,311 | ||||||||
| a | Zillow Group, Inc., Class C |
Real Estate Management & Development | 90 | 4,002 | ||||||||
| Zions Bancorp NA |
Banks | 255 | 7,632 | |||||||||
| a | ZoomInfo Technologies, Inc., Class A |
Interactive Media & Services | 210 | 5,189 | ||||||||
| 74 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Dividend Tilt Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| United States (continued) | ||||||||||||||
| a | Zscaler, Inc. |
Software | 120 | $ | 14,020 | |||||||||
|
|
|
|||||||||||||
| 23,942,663 | ||||||||||||||
|
|
|
|||||||||||||
| Total Investments (Cost $24,817,800) 99.7% |
24,148,192 | |||||||||||||
| Other Assets, less Liabilities 0.3% |
70,611 | |||||||||||||
|
|
|
|||||||||||||
| Net Assets 100.0% |
$ | 24,218,803 | ||||||||||||
|
|
|
|||||||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bFair valued using significant unobservable inputs. Note 8 regarding fair value measurements.
At March 31, 2023, 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 | 3 | $ | 62,066 | 6/16/23 | $ | 3,707 | |||||||||||||
*As of year end.
See Note 7 regarding other derivative information.
See Abbreviations on page 120.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 75 | ||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Large Cap Multifactor Index ETFa
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$44.86 | $40.04 | $27.61 | $31.41 | $28.51 | |||||||||||||||
| Income from investment operationsb: |
||||||||||||||||||||
| Net investment incomec |
0.82 | 0.77 | 0.72 | 0.76 | 0.66 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(3.48 | ) | 4.89 | 12.49 | (3.89 | ) | 2.71 | |||||||||||||
| Total from investment operations |
(2.66 | ) | 5.66 | 13.21 | (3.13 | ) | 3.37 | |||||||||||||
| Less distributions from net investment income |
(0.83 | ) | (0.84 | ) | (0.78 | ) | (0.67 | ) | (0.47 | ) | ||||||||||
| Net asset value, end of year |
$41.37 | $44.86 | $40.04 | $27.61 | $31.41 | |||||||||||||||
| Total returnd |
(5.79)% | 14.19% | 48.22% | (10.27)% | 11.97% | |||||||||||||||
| Ratios to average net assetse | ||||||||||||||||||||
| Expenses before waiver and payments by affiliates |
0.15% | 0.15% | 0.15% | 0.18% | 0.25% | |||||||||||||||
| Expenses net of waiver and payments by affiliates |
0.15% | 0.15% | 0.15% | 0.18% | 0.25% | |||||||||||||||
| Net investment income |
2.02% | 1.77% | 2.06% | 2.32% | 2.20% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$860,419 | $966,737 | $1,353,407 | $1,311,583 | $1,008,255 | |||||||||||||||
| Portfolio turnover ratef |
51.95%g | 68.37%g | 25.05%g | 19.44%g | 18.04% | |||||||||||||||
aEffective August 1, 2022, Formerly, Franklin LibertyQ U.S. Equity ETF was renamed Franklin U.S. Large Cap Multifactor 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.
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: | 51.95% | 68.37% | 25.05% | 19.44% | — |
| 76 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin U.S. Large Cap Multifactor Index ETF
| Shares | Value | |||||||||
| Common Stocks 99.8% | ||||||||||
| Communication Services 5.4% | ||||||||||
| a | Alphabet, Inc., Class A |
129,792 | $ | 13,463,324 | ||||||
| AT&T, Inc. |
597,376 | 11,499,488 | ||||||||
| Interpublic Group of Cos., Inc. |
29,952 | 1,115,413 | ||||||||
| a | Meta Platforms, Inc., Class A |
29,952 | 6,348,027 | |||||||
| Omnicom Group, Inc. |
18,304 | 1,726,799 | ||||||||
| Verizon Communications, Inc. |
299,520 | 11,648,333 | ||||||||
| World Wrestling Entertainment, Inc., Class A |
9,984 | 911,140 | ||||||||
|
|
|
|||||||||
| 46,712,524 | ||||||||||
|
|
|
|||||||||
| Consumer Discretionary 12.0% |
||||||||||
| a | Amazon.com, Inc. |
113,984 | 11,773,407 | |||||||
| a | AutoNation, Inc. |
6,240 | 838,406 | |||||||
| a | AutoZone, Inc. |
1,940 | 4,768,811 | |||||||
| Best Buy Co., Inc. |
9,984 | 781,448 | ||||||||
| a | Booking Holdings, Inc. |
1,664 | 4,413,610 | |||||||
| BorgWarner, Inc. |
16,640 | 817,190 | ||||||||
| Dick’s Sporting Goods, Inc. |
6,240 | 885,394 | ||||||||
| DR Horton, Inc. |
26,208 | 2,560,260 | ||||||||
| a | Five Below, Inc. |
4,160 | 856,835 | |||||||
| a | Grand Canyon Education, Inc. |
7,488 | 852,883 | |||||||
| H&R Block, Inc. |
22,464 | 791,856 | ||||||||
| Lennar Corp., Class A |
21,216 | 2,230,014 | ||||||||
| Lennar Corp., Class B |
9,984 | 891,671 | ||||||||
| LKQ Corp. |
19,136 | 1,086,159 | ||||||||
| Lowe’s Cos., Inc. |
49,920 | 9,982,502 | ||||||||
| Macy’s, Inc. |
40,352 | 705,757 | ||||||||
| McDonald’s Corp. |
46,592 | 13,027,589 | ||||||||
| a | NVR, Inc. |
250 | 1,393,048 | |||||||
| a | O’Reilly Automotive, Inc. |
6,240 | 5,297,635 | |||||||
| Penske Automotive Group, Inc. |
5,824 | 825,901 | ||||||||
| PulteGroup, Inc. |
20,384 | 1,187,980 | ||||||||
| Ross Stores, Inc. |
20,800 | 2,207,504 | ||||||||
| Starbucks Corp. |
72,800 | 7,580,664 | ||||||||
| Tapestry, Inc. |
22,464 | 968,423 | ||||||||
| Tempur Sealy International, Inc. |
23,296 | 919,959 | ||||||||
| a | Tesla, Inc. |
52,080 | 10,804,517 | |||||||
| TJX Cos., Inc. |
73,216 | 5,737,206 | ||||||||
| Toll Brothers, Inc. |
14,976 | 899,009 | ||||||||
| Tractor Supply Co. |
7,488 | 1,759,980 | ||||||||
| a | Ulta Beauty, Inc. |
4,372 | 2,385,669 | |||||||
| Williams-Sonoma, Inc. |
6,656 | 809,769 | ||||||||
| Yum! Brands, Inc. |
24,960 | 3,296,717 | ||||||||
|
|
|
|||||||||
| 103,337,773 | ||||||||||
|
|
|
|||||||||
| Consumer Staples 4.8% |
||||||||||
| Albertsons Cos., Inc., Class A |
40,768 | 847,159 | ||||||||
| Altria Group, Inc. |
173,472 | 7,740,321 | ||||||||
| General Mills, Inc. |
52,416 | 4,479,471 | ||||||||
| Hershey Co. |
12,896 | 3,280,871 | ||||||||
| Ingredion, Inc. |
8,320 | 846,394 | ||||||||
| Lamb Weston Holdings, Inc. |
8,320 | 869,606 | ||||||||
| Philip Morris International, Inc. |
116,480 | 11,327,680 | ||||||||
| Walmart, Inc. |
82,368 | 12,145,162 | ||||||||
|
|
|
|||||||||
| 41,536,664 | ||||||||||
|
|
|
|||||||||
| Energy 5.0% |
||||||||||
| Chesapeake Energy Corp. |
10,400 | 790,816 | ||||||||
| ConocoPhillips |
99,424 | 9,863,855 | ||||||||
| franklintempleton.com | Annual Report | 77 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Large Cap Multifactor Index ETF (continued)
| Shares | Value | |||||||||
| Energy (continued) | ||||||||||
| Devon Energy Corp. |
56,992 | $ | 2,884,365 | |||||||
| Exxon Mobil Corp. |
126,464 | 13,868,042 | ||||||||
| HF Sinclair Corp. |
16,640 | 805,043 | ||||||||
| Marathon Oil Corp. |
44,928 | 1,076,475 | ||||||||
| Marathon Petroleum Corp. |
37,440 | 5,048,035 | ||||||||
| Ovintiv, Inc. |
19,552 | 705,436 | ||||||||
| PDC Energy, Inc. |
12,480 | 800,967 | ||||||||
| Phillips 66 |
19,552 | 1,982,182 | ||||||||
| Valero Energy Corp. |
34,112 | 4,762,035 | ||||||||
|
|
|
|||||||||
| 42,587,251 | ||||||||||
|
|
|
|||||||||
| Financials 5.0% |
||||||||||
| Ameriprise Financial, Inc. |
4,576 | 1,402,544 | ||||||||
| a | Arch Capital Group Ltd. |
21,632 | 1,468,164 | |||||||
| Arthur J Gallagher & Co. |
14,144 | 2,705,889 | ||||||||
| a | Berkshire Hathaway, Inc., Class B |
24,960 | 7,706,899 | |||||||
| Erie Indemnity Co., Class A |
3,328 | 770,965 | ||||||||
| Evercore, Inc., Class A |
6,240 | 719,971 | ||||||||
| Everest Re Group Ltd. |
2,080 | 744,682 | ||||||||
| FactSet Research Systems, Inc. |
2,816 | 1,168,893 | ||||||||
| Globe Life, Inc. |
7,904 | 869,598 | ||||||||
| Interactive Brokers Group, Inc., Class A |
9,568 | 789,934 | ||||||||
| JPMorgan Chase & Co. |
54,080 | 7,047,165 | ||||||||
| Lazard Ltd., Class A |
22,048 | 730,009 | ||||||||
| LPL Financial Holdings, Inc. |
6,240 | 1,262,976 | ||||||||
| MarketAxess Holdings, Inc. |
2,496 | 976,660 | ||||||||
| MGIC Investment Corp. |
60,320 | 809,494 | ||||||||
| MSCI, Inc. |
3,328 | 1,862,648 | ||||||||
| OneMain Holdings, Inc. |
19,136 | 709,563 | ||||||||
| Principal Financial Group, Inc. |
18,304 | 1,360,353 | ||||||||
| Progressive Corp. |
47,008 | 6,724,965 | ||||||||
| Reinsurance Group of America, Inc. |
5,824 | 773,194 | ||||||||
| SEI Investments Co. |
13,728 | 790,046 | ||||||||
| Synchrony Financial |
39,520 | 1,149,242 | ||||||||
| Unum Group |
21,216 | 839,305 | ||||||||
|
|
|
|||||||||
| 43,383,159 | ||||||||||
|
|
|
|||||||||
| Health Care 19.4% |
||||||||||
| AbbVie, Inc. |
91,104 | 14,519,244 | ||||||||
| Amgen, Inc. |
44,928 | 10,861,344 | ||||||||
| a | Biogen, Inc. |
9,152 | 2,544,531 | |||||||
| Bristol-Myers Squibb Co. |
167,648 | 11,619,683 | ||||||||
| Cardinal Health, Inc. |
24,960 | 1,884,480 | ||||||||
| Chemed Corp. |
1,611 | 866,315 | ||||||||
| Cigna Group |
27,872 | 7,122,132 | ||||||||
| Elevance Health, Inc. |
20,335 | 9,350,236 | ||||||||
| Eli Lilly & Co. |
44,096 | 15,143,448 | ||||||||
| Encompass Health Corp. |
14,976 | 810,202 | ||||||||
| Gilead Sciences, Inc. |
63,232 | 5,246,359 | ||||||||
| HCA Healthcare, Inc. |
17,888 | 4,716,708 | ||||||||
| a | Hologic, Inc. |
10,400 | 839,280 | |||||||
| Humana, Inc. |
9,152 | 4,442,930 | ||||||||
| a | IDEXX Laboratories, Inc. |
3,744 | 1,872,299 | |||||||
| Johnson & Johnson |
73,216 | 11,348,480 | ||||||||
| Merck & Co., Inc. |
131,040 | 13,941,346 | ||||||||
| Organon & Co. |
34,112 | 802,314 | ||||||||
| Pfizer, Inc. |
321,984 | 13,136,947 | ||||||||
| Premier, Inc., Class A |
25,792 | 834,887 | ||||||||
| Quest Diagnostics, Inc. |
9,984 | 1,412,536 | ||||||||
| 78 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Large Cap Multifactor Index ETF (continued)
| Shares | Value | |||||||||
| Health Care (continued) |
||||||||||
| a | Regeneron Pharmaceuticals, Inc. |
9,984 | $ | 8,203,553 | ||||||
| Stryker Corp. |
14,144 | 4,037,688 | ||||||||
| a | United Therapeutics Corp. |
4,160 | 931,674 | |||||||
| UnitedHealth Group, Inc. |
25,376 | 11,992,444 | ||||||||
| a | Vertex Pharmaceuticals, Inc. |
23,712 | 7,470,940 | |||||||
| Viatris, Inc. |
74,048 | 712,342 | ||||||||
|
|
|
|||||||||
| 166,664,342 | ||||||||||
|
|
|
|||||||||
| Industrials 6.8% |
||||||||||
| AGCO Corp. |
5,824 | 787,405 | ||||||||
| Allison Transmission Holdings, Inc. |
17,472 | 790,433 | ||||||||
| a | Builders FirstSource, Inc. |
14,560 | 1,292,637 | |||||||
| BWX Technologies, Inc. |
13,728 | 865,413 | ||||||||
| Caterpillar, Inc. |
22,048 | 5,045,464 | ||||||||
| a | Clean Harbors, Inc. |
6,240 | 889,574 | |||||||
| a | Copa Holdings SA, Class A |
9,568 | 883,605 | |||||||
| a | Copart, Inc. |
17,472 | 1,314,069 | |||||||
| Crane Holdings Co. |
7,072 | 802,672 | ||||||||
| Cummins, Inc. |
10,816 | 2,583,726 | ||||||||
| Donaldson Co., Inc. |
12,896 | 842,625 | ||||||||
| Hubbell, Inc., Class B |
4,576 | 1,113,387 | ||||||||
| Illinois Tool Works, Inc. |
12,896 | 3,139,531 | ||||||||
| Knight-Swift Transportation Holdings, Inc. |
14,560 | 823,805 | ||||||||
| Landstar System, Inc. |
4,576 | 820,294 | ||||||||
| Leidos Holdings, Inc. |
11,232 | 1,034,018 | ||||||||
| Lincoln Electric Holdings, Inc. |
4,992 | 844,147 | ||||||||
| Lockheed Martin Corp. |
22,480 | 10,626,971 | ||||||||
| MSC Industrial Direct Co., Inc., Class A |
9,984 | 838,656 | ||||||||
| nVent Electric PLC |
17,888 | 768,111 | ||||||||
| Old Dominion Freight Line, Inc. |
4,160 | 1,417,894 | ||||||||
| Owens Corning |
9,568 | 916,614 | ||||||||
| PACCAR, Inc. |
50,336 | 3,684,595 | ||||||||
| Rollins, Inc. |
23,296 | 874,299 | ||||||||
| Ryder System, Inc. |
8,320 | 742,477 | ||||||||
| Schneider National, Inc., Class B |
29,536 | 790,088 | ||||||||
| Snap-on, Inc. |
4,576 | 1,129,769 | ||||||||
| Toro Co. |
8,736 | 971,094 | ||||||||
| U-Haul Holding Co. |
12,896 | 769,246 | ||||||||
| United Rentals, Inc. |
3,328 | 1,317,089 | ||||||||
| Valmont Industries, Inc. |
2,496 | 796,923 | ||||||||
| Waste Management, Inc. |
30,784 | 5,023,025 | ||||||||
| Watsco, Inc. |
2,496 | 794,127 | ||||||||
| WW Grainger, Inc. |
4,490 | 3,092,757 | ||||||||
|
|
|
|||||||||
| 58,426,540 | ||||||||||
|
|
|
|||||||||
| Information Technology 36.3% |
||||||||||
| a | Alphabet, Inc., Class C |
112,736 | 11,724,544 | |||||||
| Amdocs Ltd. |
12,480 | 1,198,454 | ||||||||
| Amphenol Corp., Class A |
49,088 | 4,011,471 | ||||||||
| Analog Devices, Inc. |
22,880 | 4,512,394 | ||||||||
| Apple, Inc. |
393,536 | 64,894,086 | ||||||||
| Applied Materials, Inc. |
74,464 | 9,146,413 | ||||||||
| a | Arista Networks, Inc. |
22,880 | 3,840,637 | |||||||
| a | Arrow Electronics, Inc. |
7,072 | 883,081 | |||||||
| Avnet, Inc. |
18,304 | 827,341 | ||||||||
| Broadcom, Inc. |
22,319 | 14,318,531 | ||||||||
| a | CACI International, Inc., Class A |
2,912 | 862,767 | |||||||
| a | Cadence Design Systems, Inc. |
23,712 | 4,981,654 | |||||||
|
|
|
|||||||||
| CDW Corp. |
5,824 | 1,135,039 | ||||||||
|
|
|
|||||||||
| franklintempleton.com | Annual Report | 79 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Large Cap Multifactor Index ETF (continued)
| Shares | Value | |||||||||
| Information Technology (continued) |
||||||||||
| a | Cirrus Logic, Inc. |
9,152 | $ | 1,001,046 | ||||||
| Cisco Systems, Inc. |
256,256 | 13,395,782 | ||||||||
| Corning, Inc. |
62,400 | 2,201,472 | ||||||||
| Dell Technologies, Inc., Class C |
23,712 | 953,460 | ||||||||
| Dolby Laboratories, Inc., Class A |
9,984 | 852,833 | ||||||||
| a | Fair Isaac Corp. |
2,080 | 1,461,595 | |||||||
| a | Fortinet, Inc. |
58,240 | 3,870,630 | |||||||
| a | Gartner, Inc. |
5,824 | 1,897,285 | |||||||
| Hewlett Packard Enterprise Co. |
127,712 | 2,034,452 | ||||||||
| HP, Inc. |
96,928 | 2,844,837 | ||||||||
| International Business Machines Corp. |
79,872 | 10,470,421 | ||||||||
| Jabil, Inc. |
13,728 | 1,210,261 | ||||||||
| KLA Corp. |
13,312 | 5,313,751 | ||||||||
| Lam Research Corp. |
11,709 | 6,207,175 | ||||||||
| a | Lattice Semiconductor Corp. |
13,312 | 1,271,296 | |||||||
| a | Manhattan Associates, Inc. |
6,240 | 966,264 | |||||||
| Mastercard, Inc., Class A |
41,184 | 14,966,678 | ||||||||
| Microchip Technology, Inc. |
35,776 | 2,997,313 | ||||||||
| Microsoft Corp. |
188,448 | 54,329,558 | ||||||||
| Motorola Solutions, Inc. |
12,064 | 3,451,872 | ||||||||
| National Instruments Corp. |
17,888 | 937,510 | ||||||||
| NetApp, Inc. |
19,552 | 1,248,395 | ||||||||
| NVIDIA Corp. |
47,424 | 13,172,965 | ||||||||
| a | ON Semiconductor Corp. |
39,936 | 3,287,532 | |||||||
| Oracle Corp. |
99,008 | 9,199,823 | ||||||||
| QUALCOMM, Inc. |
91,936 | 11,729,195 | ||||||||
| Science Applications International Corp. |
7,488 | 804,661 | ||||||||
| Skyworks Solutions, Inc. |
7,488 | 883,434 | ||||||||
| a | Synopsys, Inc. |
12,064 | 4,659,720 | |||||||
| Texas Instruments, Inc. |
66,976 | 12,458,206 | ||||||||
|
|
|
|||||||||
| 312,415,834 | ||||||||||
|
|
|
|||||||||
| Materials 1.9% |
||||||||||
| Ardagh Metal Packaging SA |
171,392 | 699,279 | ||||||||
| CF Industries Holdings, Inc. |
19,552 | 1,417,324 | ||||||||
| LyondellBasell Industries NV, Class A |
22,464 | 2,109,145 | ||||||||
| Mosaic Co. |
31,200 | 1,431,456 | ||||||||
| Nucor Corp. |
25,376 | 3,919,831 | ||||||||
| Packaging Corp. of America |
7,072 | 981,806 | ||||||||
| Reliance Steel & Aluminum Co. |
5,824 | 1,495,254 | ||||||||
| Silgan Holdings, Inc. |
15,392 | 826,089 | ||||||||
| Southern Copper Corp. |
11,648 | 888,160 | ||||||||
| Steel Dynamics, Inc. |
17,472 | 1,975,384 | ||||||||
| U.S. Steel Corp. |
27,872 | 727,459 | ||||||||
|
|
|
|||||||||
| 16,471,187 | ||||||||||
|
|
|
|||||||||
| Real Estate 2.0% | ||||||||||
| EPR Properties |
20,384 | 776,630 | ||||||||
| Gaming & Leisure Properties, Inc. |
24,128 | 1,256,104 | ||||||||
| National Retail Properties, Inc. |
18,720 | 826,488 | ||||||||
| Omega Healthcare Investors, Inc. |
30,784 | 843,789 | ||||||||
| Public Storage |
13,728 | 4,147,778 | ||||||||
| Realty Income Corp. |
51,168 | 3,239,958 | ||||||||
| Simon Property Group, Inc. |
14,560 | 1,630,283 | ||||||||
| VICI Properties, Inc. |
96,512 | 3,148,222 | ||||||||
| WP Carey, Inc. |
18,720 | 1,449,864 | ||||||||
|
|
|
|||||||||
| 17,319,116 | ||||||||||
|
|
|
|||||||||
| 80 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Large Cap Multifactor Index ETF (continued)
| Shares | Value | |||||||||
| Utilities 1.2% |
||||||||||
| Atmos Energy Corp. |
9,568 | $ | 1,075,061 | |||||||
| Consolidated Edison, Inc. |
29,120 | 2,785,910 | ||||||||
| National Fuel Gas Co. |
14,560 | 840,694 | ||||||||
| NRG Energy, Inc. |
25,376 | 870,143 | ||||||||
| OGE Energy Corp. |
23,296 | 877,327 | ||||||||
| Pinnacle West Capital Corp. |
11,232 | 890,024 | ||||||||
| Sempra Energy |
17,888 | 2,703,950 | ||||||||
|
|
|
|||||||||
| 10,043,109 | ||||||||||
|
|
|
|||||||||
| Total Common Stocks (Cost $822,305,052) |
858,897,499 | |||||||||
|
|
|
|||||||||
| Total Investments (Cost $822,305,052) 99.8% |
858,897,499 | |||||||||
| Other Assets, less Liabilities 0.2% |
1,521,413 | |||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 860,418,912 | ||||||||
|
|
|
|||||||||
aNon-income producing.
At March 31, 2023, 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 | 4 | $827,550 | 6/16/23 | $49,473 | |||||||||||||||
*As of year end.
See Note 7 regarding other derivative information.
See Abbreviations on page 120.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 81 | ||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Mid Cap Multifactor Index ETFa
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$44.90 | $40.84 | $24.94 | $30.32 | $27.70 | |||||||||||||||
| Income from investment operationsb: |
||||||||||||||||||||
| Net investment incomec |
0.71 | 0.54 | 0.45 | 0.50 | 0.47 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(1.73 | ) | 4.03 | 15.86 | (5.41 | ) | 2.53 | |||||||||||||
| Total from investment operations |
(1.02 | ) | 4.57 | 16.31 | (4.91 | ) | 3.00 | |||||||||||||
| Less distributions from net investment income |
(0.57 | ) | (0.51 | ) | (0.41 | ) | (0.47 | ) | (0.38 | ) | ||||||||||
| Net asset value, end of year |
$43.31 | $44.90 | $40.84 | $24.94 | $30.32 | |||||||||||||||
| Total returnd |
(2.17)% | 11.18% | 65.69% | (16.50)% | 10.92% | |||||||||||||||
| Ratios to average net assetse | ||||||||||||||||||||
| Expenses before waiver and payments by affiliates |
0.30% | 0.30% | 0.30% | 0.30% | 0.30% | |||||||||||||||
| Expenses net of waiver and payments by affiliates |
0.30% | 0.30% | 0.30% | 0.30% | 0.30% | |||||||||||||||
| Net investment income |
1.69% | 1.21% | 1.30% | 1.60% | 1.65% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$166,748 | $62,855 | $36,759 | $13,718 | $10,612 | |||||||||||||||
| Portfolio turnover ratef |
24.07%g | 22.76%g | 25.02%g | 24.20%g | 23.49% | |||||||||||||||
aEffective August 1, 2022, Formerly, Franklin LibertyQ U.S. Mid Cap Equity ETF was renamed Franklin U.S. Mid Cap Multifactor 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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 24.07% | 22.76% | 25.02% | 24.20% | — |
| 82 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin U.S. Mid Cap Multifactor Index ETF
| Shares | Value | |||||||||
| Common Stocks 99.9% |
||||||||||
| Communication Services 2.2% | ||||||||||
| Electronic Arts, Inc. |
13,013 | $ | 1,567,416 | |||||||
| Lumen Technologies, Inc. |
72,765 | 192,827 | ||||||||
| Omnicom Group, Inc. |
16,632 | 1,569,063 | ||||||||
| a | Playtika Holding Corp. |
7,469 | 84,101 | |||||||
| World Wrestling Entertainment, Inc., Class A |
3,542 | 323,243 | ||||||||
|
|
|
|||||||||
| 3,736,650 | ||||||||||
|
|
|
|||||||||
| Consumer Discretionary 17.0% |
||||||||||
| Advance Auto Parts, Inc. |
4,851 | 589,930 | ||||||||
| a | AutoNation, Inc. |
2,849 | 382,792 | |||||||
| a | AutoZone, Inc. |
658 | 1,617,463 | |||||||
| Bath & Body Works, Inc. |
16,093 | 588,682 | ||||||||
| Best Buy Co., Inc. |
18,095 | 1,416,296 | ||||||||
| Brunswick Corp. |
4,774 | 391,468 | ||||||||
| Carter’s, Inc. |
3,234 | 232,589 | ||||||||
| Choice Hotels International, Inc. |
1,617 | 189,496 | ||||||||
| Columbia Sportswear Co. |
2,541 | 229,300 | ||||||||
| a | Deckers Outdoor Corp. |
847 | 380,769 | |||||||
| Dick’s Sporting Goods, Inc. |
4,851 | 688,308 | ||||||||
| a | Dollar Tree, Inc. |
11,319 | 1,624,842 | |||||||
| DR Horton, Inc. |
15,631 | 1,526,992 | ||||||||
| Gap, Inc. |
9,163 | 91,997 | ||||||||
| Garmin Ltd. |
11,319 | 1,142,314 | ||||||||
| Genuine Parts Co. |
9,317 | 1,558,827 | ||||||||
| H&R Block, Inc. |
14,553 | 512,993 | ||||||||
| Hanesbrands, Inc. |
29,491 | 155,123 | ||||||||
| Hasbro, Inc. |
9,394 | 504,364 | ||||||||
| Kohl’s Corp. |
6,776 | 159,507 | ||||||||
| a | Leslie’s, Inc. |
9,317 | 102,580 | |||||||
| LKQ Corp. |
17,094 | 970,255 | ||||||||
| Macy’s, Inc. |
17,094 | 298,974 | ||||||||
| a | Mattel, Inc. |
22,407 | 412,513 | |||||||
| Newell Brands, Inc. |
24,101 | 299,816 | ||||||||
| Nordstrom, Inc. |
6,468 | 105,234 | ||||||||
| a | Ollie’s Bargain Outlet Holdings, Inc. |
4,235 | 245,376 | |||||||
| a | O’Reilly Automotive, Inc. |
1,969 | 1,671,642 | |||||||
| Penske Automotive Group, Inc. |
2,156 | 305,742 | ||||||||
| Polaris, Inc. |
4,466 | 494,074 | ||||||||
| Pool Corp. |
3,080 | 1,054,715 | ||||||||
| PulteGroup, Inc. |
11,627 | 677,622 | ||||||||
| Ralph Lauren Corp. |
2,387 | 278,491 | ||||||||
| a | Skechers USA, Inc., Class A |
6,853 | 325,655 | |||||||
| Tapestry, Inc. |
20,482 | 882,979 | ||||||||
| Tempur Sealy International, Inc. |
15,862 | 626,390 | ||||||||
| Thor Industries, Inc. |
2,772 | 220,762 | ||||||||
| Tractor Supply Co. |
7,546 | 1,773,612 | ||||||||
| a | Ulta Beauty, Inc. |
2,772 | 1,512,597 | |||||||
| VF Corp. |
17,325 | 396,916 | ||||||||
| a | Victoria’s Secret & Co. |
6,699 | 228,771 | |||||||
| Whirlpool Corp. |
4,004 | 528,608 | ||||||||
| Williams-Sonoma, Inc. |
6,622 | 805,633 | ||||||||
| a | YETI Holdings, Inc. |
5,236 | 209,440 | |||||||
|
|
|
|||||||||
| 28,412,449 | ||||||||||
|
|
|
|||||||||
| Consumer Staples 6.9% |
||||||||||
| Albertsons Cos., Inc., Class A |
14,399 | 299,211 | ||||||||
| a | BJ’s Wholesale Club Holdings, Inc. |
7,854 | 597,454 | |||||||
| franklintempleton.com | Annual Report | 83 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Mid Cap Multifactor Index ETF (continued)
| Shares | Value | |||||||||
| Consumer Staples (continued) | ||||||||||
| Campbell Soup Co. |
14,553 | $ | 800,124 | |||||||
| Casey’s General Stores, Inc. |
2,233 | 483,355 | ||||||||
| Church & Dwight Co., Inc. |
17,710 | 1,565,741 | ||||||||
| Clorox Co. |
10,318 | 1,632,720 | ||||||||
| Flowers Foods, Inc. |
17,171 | 470,657 | ||||||||
| Hershey Co. |
7,238 | 1,841,420 | ||||||||
| Kellogg Co. |
18,865 | 1,263,200 | ||||||||
| Kroger Co. |
34,650 | 1,710,671 | ||||||||
| Tyson Foods, Inc., Class A |
13,013 | 771,931 | ||||||||
|
|
|
|||||||||
| 11,436,484 | ||||||||||
|
|
|
|||||||||
| Energy 4.5% |
||||||||||
| Antero Midstream Corp. |
25,333 | 265,743 | ||||||||
| Chesapeake Energy Corp. |
7,546 | 573,798 | ||||||||
| Coterra Energy, Inc., Class A |
28,875 | 708,592 | ||||||||
| Devon Energy Corp. |
23,716 | 1,200,267 | ||||||||
| Diamondback Energy, Inc. |
5,698 | 770,199 | ||||||||
| HF Sinclair Corp. |
4,620 | 223,516 | ||||||||
| Ovintiv, Inc. |
14,784 | 533,407 | ||||||||
| PDC Energy, Inc. |
4,928 | 316,279 | ||||||||
| Phillips 66 |
15,400 | 1,561,252 | ||||||||
| Range Resources Corp. |
13,321 | 352,607 | ||||||||
| a | Southwestern Energy Co. |
58,982 | 294,910 | |||||||
| Texas Pacific Land Corp. |
373 | 634,480 | ||||||||
|
|
|
|||||||||
| 7,435,050 | ||||||||||
|
|
|
|||||||||
| Financials 8.7% | ||||||||||
| Affiliated Managers Group, Inc. |
3,234 | 460,586 | ||||||||
| Allstate Corp. |
12,705 | 1,407,841 | ||||||||
| Ally Financial, Inc. |
25,872 | 659,477 | ||||||||
| Assured Guaranty Ltd. |
3,388 | 170,315 | ||||||||
| Brown & Brown, Inc. |
17,941 | 1,030,172 | ||||||||
| Cincinnati Financial Corp. |
12,320 | 1,380,826 | ||||||||
| CNA Financial Corp. |
2,002 | 78,138 | ||||||||
| a,b | Credit Acceptance Corp. |
539 | 235,026 | |||||||
| Discover Financial Services |
15,708 | 1,552,579 | ||||||||
| Erie Indemnity Co., Class A |
1,848 | 428,108 | ||||||||
| Evercore, Inc., Class A |
2,849 | 328,718 | ||||||||
| Everest Re Group Ltd. |
2,002 | 716,756 | ||||||||
| First American Financial Corp. |
8,393 | 467,154 | ||||||||
| Globe Life, Inc. |
7,161 | 787,853 | ||||||||
| Hanover Insurance Group, Inc. |
2,772 | 356,202 | ||||||||
| Janus Henderson Group PLC |
9,702 | 258,461 | ||||||||
| MGIC Investment Corp. |
18,249 | 244,902 | ||||||||
| OneMain Holdings, Inc. |
4,389 | 162,744 | ||||||||
| Prosperity Bancshares, Inc. |
6,468 | 397,911 | ||||||||
| Regions Financial Corp. |
47,663 | 884,625 | ||||||||
| Reinsurance Group of America, Inc. |
3,465 | 460,013 | ||||||||
| SEI Investments Co. |
9,625 | 553,919 | ||||||||
| Synchrony Financial |
36,267 | 1,054,644 | ||||||||
| Unum Group |
10,549 | 417,319 | ||||||||
|
|
|
|||||||||
| 14,494,289 | ||||||||||
|
|
|
|||||||||
| Health Care 8.4% | ||||||||||
| a | Acadia Healthcare Co., Inc. |
5,005 | 361,611 | |||||||
| Chemed Corp. |
1,017 | 546,892 | ||||||||
| Encompass Health Corp. |
9,317 | 504,050 | ||||||||
| a | IDEXX Laboratories, Inc. |
4,004 | 2,002,320 | |||||||
| a | Incyte Corp. |
12,397 | 895,931 | |||||||
| 84 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Mid Cap Multifactor Index ETF (continued)
| Shares | Value | |||||||||
| Health Care (continued) | ||||||||||
| a | Maravai LifeSciences Holdings, Inc., Class A |
5,544 | $ | 77,671 | ||||||
| a | Mettler-Toledo International, Inc. |
1,161 | 1,776,574 | |||||||
| a | Neurocrine Biosciences, Inc. |
7,392 | 748,218 | |||||||
| Organon & Co. |
17,017 | 400,240 | ||||||||
| a | QuidelOrtho Corp. |
3,465 | 308,697 | |||||||
| ResMed, Inc. |
7,392 | 1,618,774 | ||||||||
| Royalty Pharma PLC, Class A |
24,178 | 871,133 | ||||||||
| a | Tenet Healthcare Corp. |
5,313 | 315,698 | |||||||
| a | United Therapeutics Corp. |
3,080 | 689,797 | |||||||
| Universal Health Services, Inc., Class B |
5,236 | 665,496 | ||||||||
| Viatris, Inc. |
64,372 | 619,259 | ||||||||
| a | Waters Corp. |
4,928 | 1,525,857 | |||||||
|
|
|
|||||||||
| 13,928,218 | ||||||||||
|
|
|
|||||||||
| Industrials 18.7% |
||||||||||
| A O Smith Corp. |
8,008 | 553,753 | ||||||||
| Allegion PLC |
6,930 | 739,639 | ||||||||
| Allison Transmission Holdings, Inc. |
8,008 | 362,282 | ||||||||
| a | Builders FirstSource, Inc. |
10,703 | 950,212 | |||||||
| Carrier Global Corp. |
38,500 | 1,761,375 | ||||||||
| CH Robinson Worldwide, Inc. |
9,779 | 971,739 | ||||||||
| Cintas Corp. |
3,696 | 1,710,065 | ||||||||
| Curtiss-Wright Corp. |
2,618 | 461,449 | ||||||||
| Donaldson Co., Inc. |
9,471 | 618,835 | ||||||||
| Dover Corp. |
11,319 | 1,719,809 | ||||||||
| Esab Corp. |
2,541 | 150,097 | ||||||||
| Expeditors International of Washington, Inc. |
13,013 | 1,432,992 | ||||||||
| Fastenal Co. |
33,110 | 1,785,953 | ||||||||
| Fortune Brands Innovations, Inc. |
8,932 | 524,576 | ||||||||
| Graco, Inc. |
12,859 | 938,836 | ||||||||
| Landstar System, Inc. |
2,926 | 524,515 | ||||||||
| Lennox International, Inc. |
2,618 | 657,851 | ||||||||
| Lincoln Electric Holdings, Inc. |
4,774 | 807,283 | ||||||||
| ManpowerGroup, Inc. |
4,081 | 336,805 | ||||||||
| Masco Corp. |
11,242 | 558,952 | ||||||||
| a | Masterbrand, Inc. |
9,471 | 76,147 | |||||||
| MSC Industrial Direct Co., Inc., Class A |
3,927 | 329,868 | ||||||||
| Nordson Corp. |
4,004 | 889,929 | ||||||||
| Old Dominion Freight Line, Inc. |
5,621 | 1,915,862 | ||||||||
| Otis Worldwide Corp. |
21,868 | 1,845,659 | ||||||||
| Robert Half International, Inc. |
8,316 | 670,020 | ||||||||
| Rollins, Inc. |
20,559 | 771,579 | ||||||||
| a | RXO, Inc. |
3,388 | 66,540 | |||||||
| Ryder System, Inc. |
3,157 | 281,731 | ||||||||
| Schneider National, Inc., Class B |
4,697 | 125,645 | ||||||||
| Snap-on, Inc. |
4,697 | 1,159,642 | ||||||||
| Toro Co. |
7,469 | 830,254 | ||||||||
| Trane Technologies PLC |
9,548 | 1,756,641 | ||||||||
| Watsco, Inc. |
2,772 | 881,940 | ||||||||
| WW Grainger, Inc. |
2,829 | 1,948,644 | ||||||||
|
|
|
|||||||||
| 31,117,119 | ||||||||||
|
|
|
|||||||||
| Information Technology 18.8% |
||||||||||
| a | Akamai Technologies, Inc. |
10,087 | 789,812 | |||||||
| Amdocs Ltd. |
9,548 | 916,894 | ||||||||
| a | Arista Networks, Inc. |
12,243 | 2,055,110 | |||||||
| Booz Allen Hamilton Holding Corp. |
13,090 | 1,213,312 | ||||||||
| a | Cadence Design Systems, Inc. |
9,933 | 2,086,824 | |||||||
| CDW Corp. |
9,009 | 1,755,764 | ||||||||
| franklintempleton.com | Annual Report | 85 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Mid Cap Multifactor Index ETF (continued)
| Shares | Value | |||||||||
| Information Technology (continued) | ||||||||||
| Dolby Laboratories, Inc., Class A |
4,389 | $ | 374,908 | |||||||
| a | F5, Inc. |
4,312 | 628,215 | |||||||
| a | Fair Isaac Corp. |
1,913 | 1,344,246 | |||||||
| a | Fortinet, Inc. |
32,109 | 2,133,964 | |||||||
| Gen Digital, Inc. |
36,498 | 626,306 | ||||||||
| Hewlett Packard Enterprise Co. |
81,158 | 1,292,847 | ||||||||
| HP, Inc. |
53,823 | 1,579,705 | ||||||||
| Juniper Networks, Inc. |
23,254 | 800,403 | ||||||||
| a | Manhattan Associates, Inc. |
4,389 | 679,637 | |||||||
| Monolithic Power Systems, Inc. |
3,080 | 1,541,663 | ||||||||
| Motorola Solutions, Inc. |
6,237 | 1,784,593 | ||||||||
| National Instruments Corp. |
9,471 | 496,375 | ||||||||
| NetApp, Inc. |
20,020 | 1,278,277 | ||||||||
| Paychex, Inc. |
13,783 | 1,579,394 | ||||||||
| a | Paycom Software, Inc. |
3,311 | 1,006,577 | |||||||
| a | Synopsys, Inc. |
5,005 | 1,933,181 | |||||||
| Teradyne, Inc. |
10,703 | 1,150,680 | ||||||||
| a | VeriSign, Inc. |
7,469 | 1,578,424 | |||||||
| Vontier Corp. |
12,782 | 349,460 | ||||||||
| Western Union Co. |
36,575 | 407,811 | ||||||||
|
|
|
|||||||||
| 31,384,382 | ||||||||||
|
|
|
|||||||||
| Materials 7.1% |
||||||||||
| Ardagh Metal Packaging SA |
4,774 | 19,478 | ||||||||
| Avery Dennison Corp. |
6,545 | 1,171,097 | ||||||||
| CF Industries Holdings, Inc. |
11,627 | 842,841 | ||||||||
| Chemours Co. |
7,469 | 223,622 | ||||||||
| Huntsman Corp. |
8,778 | 240,166 | ||||||||
| International Paper Co. |
22,869 | 824,656 | ||||||||
| Louisiana-Pacific Corp. |
5,852 | 317,237 | ||||||||
| LyondellBasell Industries NV, Class A |
16,401 | 1,539,890 | ||||||||
| Nucor Corp. |
11,396 | 1,760,340 | ||||||||
| Packaging Corp. of America |
4,389 | 609,325 | ||||||||
| Reliance Steel & Aluminum Co. |
4,774 | 1,225,677 | ||||||||
| RPM International, Inc. |
8,855 | 772,510 | ||||||||
| Sealed Air Corp. |
10,087 | 463,094 | ||||||||
| Sonoco Products Co. |
6,930 | 422,730 | ||||||||
| Steel Dynamics, Inc. |
12,320 | 1,392,899 | ||||||||
|
|
|
|||||||||
| 11,825,562 | ||||||||||
|
|
|
|||||||||
| Real Estate 3.1% | ||||||||||
| AvalonBay Communities, Inc. |
8,547 | 1,436,409 | ||||||||
| Camden Property Trust |
6,699 | 702,323 | ||||||||
| Extra Space Storage, Inc. |
8,932 | 1,455,291 | ||||||||
| First Industrial Realty Trust, Inc. |
8,855 | 471,086 | ||||||||
| Healthcare Realty Trust, Inc. |
19,481 | 376,568 | ||||||||
| Highwoods Properties, Inc. |
8,316 | 192,848 | ||||||||
| National Retail Properties, Inc. |
13,475 | 594,921 | ||||||||
|
|
|
|||||||||
| 5,229,446 | ||||||||||
|
|
|
|||||||||
| Utilities 4.5% |
||||||||||
| Ameren Corp. |
17,171 | 1,483,403 | ||||||||
| American Water Works Co., Inc. |
11,242 | 1,646,841 | ||||||||
| Consolidated Edison, Inc. |
17,402 | 1,664,849 | ||||||||
| FirstEnergy Corp. |
37,730 | 1,511,464 | ||||||||
| National Fuel Gas Co. |
5,698 | 329,002 | ||||||||
| NRG Energy, Inc. |
16,401 | 562,390 | ||||||||
| 86 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Mid Cap Multifactor Index ETF (continued)
| Shares | Value | |||||||||
| Utilities (continued) | ||||||||||
| UGI Corp. |
9,779 | $ | 339,918 | |||||||
|
|
|
|||||||||
| 7,537,867 | ||||||||||
|
|
|
|||||||||
| Total Common Stocks (Cost $159,917,550) |
166,537,516 | |||||||||
|
|
|
|||||||||
| Total Investments before Short-Term Investments |
166,537,516 | |||||||||
|
|
|
|||||||||
| 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, 4.47% |
$ | 130,050 | 130,050 | ||||||
|
|
|
|||||||||
| Total Short-Term Investments (Cost $130,050) |
130,050 | |||||||||
|
|
|
|||||||||
| Total Investments (Cost $160,047,600) 100.0% |
166,667,566 | |||||||||
| Other Assets, less Liabilities 0.0% |
80,007 | |||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 166,747,573 | ||||||||
|
|
|
|||||||||
aNon-income producing.
bA portion or all of the security is on loan at March 31, 2023.
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 120.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 87 | ||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Small Cap Multifactor Index ETFa
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$36.16 | $36.53 | $20.48 | $27.66 | $26.66 | |||||||||||||||
| Income from investment operationsb: |
||||||||||||||||||||
| Net investment incomec |
0.54 | 0.38 | 0.28 | 0.39 | 0.47 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(2.10 | ) | (0.36 | ) | 16.15 | (7.15 | ) | 0.87 | ||||||||||||
| Total from investment operations |
(1.56 | ) | 0.02 | 16.43 | (6.76 | ) | 1.34 | |||||||||||||
| Less distributions from net investment income |
(0.50 | ) | (0.39 | ) | (0.38 | ) | (0.42 | ) | (0.34 | ) | ||||||||||
| Net asset value, end of year |
$34.10 | $36.16 | $36.53 | $20.48 | $27.66 | |||||||||||||||
| Total returnd |
(4.21)% | 0.02% | 80.74% | (24.83)% | 5.05% | |||||||||||||||
| Ratios to average net assetse | ||||||||||||||||||||
| Expenses before waiver and payments by affiliates |
0.35% | 0.35% | 0.35% | 0.35% | 0.35% | |||||||||||||||
| Expenses net of waiver and payments by affiliates |
0.35% | 0.35% | 0.35% | 0.35% | 0.35% | |||||||||||||||
| Net investment income |
1.60% | 1.00% | 0.99% | 1.41% | 1.69% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$17,048 | $16,273 | $14,613 | $13,310 | $17,979 | |||||||||||||||
| Portfolio turnover ratef |
28.79%g | 27.64%g | 34.77%g | 23.83%g | 22.17% | |||||||||||||||
aEffective August 1, 2022, Formerly, Franklin LibertyQ U.S. Small Cap Equity ETF was renamed Franklin U.S. Small Cap Multifactor 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.
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: | 28.79% | 27.64% | 34.77% | 23.83% | — |
| 88 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin U.S. Small Cap Multifactor Index ETF
| Shares | Value | |||||||||
| Common Stocks 100.0% | ||||||||||
| Communication Services 2.5% | ||||||||||
| a | AMC Networks, Inc., Class A |
800 | $ | 14,064 | ||||||
| Cogent Communications Holdings, Inc. |
1,080 | 68,817 | ||||||||
| a | IDT Corp., Class B |
370 | 12,609 | |||||||
| John Wiley & Sons, Inc., Class A |
1,070 | 41,484 | ||||||||
| a | Liberty Latin America Ltd., Class A |
960 | 7,978 | |||||||
| a | Liberty Latin America Ltd., Class C |
3,490 | 28,827 | |||||||
| a | Ooma, Inc. |
470 | 5,880 | |||||||
| a | Playstudios, Inc. |
910 | 3,358 | |||||||
| Scholastic Corp. |
690 | 23,612 | ||||||||
| Sinclair Broadcast Group, Inc., Class A |
680 | 11,669 | ||||||||
| TEGNA, Inc. |
5,380 | 90,976 | ||||||||
| Telephone & Data Systems, Inc. |
2,700 | 28,377 | ||||||||
| a | Thryv Holdings, Inc. |
460 | 10,607 | |||||||
| a | U.S. Cellular Corp. |
330 | 6,841 | |||||||
| a | Yelp, Inc. |
1,970 | 60,479 | |||||||
| a | ZipRecruiter, Inc., Class A |
870 | 13,868 | |||||||
|
|
|
|||||||||
| 429,446 | ||||||||||
|
|
|
|||||||||
| Consumer Discretionary 19.3% | ||||||||||
| a | 1-800- Flowers.com, Inc., Class A |
690 | 7,935 | |||||||
| a | Abercrombie & Fitch Co., Class A |
1,510 | 41,902 | |||||||
| Academy Sports & Outdoors, Inc. |
1,820 | 118,755 | ||||||||
| Acushnet Holdings Corp. |
1,030 | 52,468 | ||||||||
| a | Adtalem Global Education, Inc. |
510 | 19,696 | |||||||
| American Eagle Outfitters, Inc. |
3,940 | 52,954 | ||||||||
| a | American Public Education, Inc. |
390 | 2,114 | |||||||
| a | America’s Car-Mart, Inc. |
150 | 11,882 | |||||||
| a | Asbury Automotive Group, Inc. |
530 | 111,300 | |||||||
| Big 5 Sporting Goods Corp. |
580 | 4,460 | ||||||||
| Big Lots, Inc. |
950 | 10,412 | ||||||||
| Bloomin’ Brands, Inc. |
2,740 | 70,281 | ||||||||
| Bluegreen Vacations Holding Corp. |
130 | 3,559 | ||||||||
| Buckle, Inc. |
980 | 34,976 | ||||||||
| Build-A-Bear Workshop, Inc. |
290 | 6,740 | ||||||||
| Caleres, Inc. |
730 | 15,790 | ||||||||
| Camping World Holdings, Inc., Class A |
930 | 19,409 | ||||||||
| a | CarParts.com, Inc. |
1,010 | 5,393 | |||||||
| Cato Corp., Class A |
430 | 3,801 | ||||||||
| a | Century Casinos, Inc. |
570 | 4,178 | |||||||
| Cheesecake Factory, Inc. |
1,490 | 52,224 | ||||||||
| a | Chico’s FAS, Inc. |
1,380 | 7,590 | |||||||
| a | Children’s Place, Inc. |
240 | 9,660 | |||||||
| a | Chuy’s Holdings, Inc. |
380 | 13,623 | |||||||
| a | Citi Trends, Inc. |
230 | 4,375 | |||||||
| a | Container Store Group, Inc. |
890 | 3,053 | |||||||
| Cracker Barrel Old Country Store, Inc. |
760 | 86,336 | ||||||||
| a | Destination XL Group, Inc. |
1,190 | 6,557 | |||||||
| Dillard’s, Inc., Class A |
140 | 43,075 | ||||||||
| a | Duluth Holdings, Inc., Class B |
370 | 2,361 | |||||||
| Ethan Allen Interiors, Inc. |
750 | 20,595 | ||||||||
| Foot Locker, Inc. |
1,550 | 61,519 | ||||||||
| a | Fossil Group, Inc. |
830 | 2,656 | |||||||
| Franchise Group, Inc. |
590 | 16,078 | ||||||||
| a | Frontdoor, Inc. |
1,520 | 42,378 | |||||||
| a | Funko, Inc., Class A |
630 | 5,941 | |||||||
| a | Genesco, Inc. |
360 | 13,277 | |||||||
| a | G-III Apparel Group Ltd. |
800 | 12,440 | |||||||
| franklintempleton.com | Annual Report | 89 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Small Cap Multifactor Index ETF (continued)
| Shares | Value | |||||||||
| Consumer Discretionary (continued) | ||||||||||
| Group 1 Automotive, Inc. |
390 | $ | 88,304 | |||||||
| Guess?, Inc. |
600 | 11,676 | ||||||||
| Haverty Furniture Cos., Inc. |
510 | 16,274 | ||||||||
| a | Helen of Troy Ltd. |
560 | 53,295 | |||||||
| Hibbett, Inc. |
400 | 23,592 | ||||||||
| Installed Building Products, Inc. |
560 | 63,857 | ||||||||
| Jack in the Box, Inc. |
350 | 30,656 | ||||||||
| JOANN, Inc. |
270 | 429 | ||||||||
| Johnson Outdoors, Inc., Class A |
150 | 9,452 | ||||||||
| Kontoor Brands, Inc. |
1,620 | 78,392 | ||||||||
| La-Z-Boy, Inc. |
1,170 | 34,024 | ||||||||
| LCI Industries |
620 | 68,119 | ||||||||
| a | LGI Homes, Inc. |
480 | 54,734 | |||||||
| Lifetime Brands, Inc. |
330 | 1,940 | ||||||||
| a | Liquidity Services, Inc. |
650 | 8,561 | |||||||
| a | LL Flooring Holdings, Inc. |
680 | 2,584 | |||||||
| a | Lovesac Co. |
310 | 8,959 | |||||||
| a | Malibu Boats, Inc., Class A |
470 | 26,532 | |||||||
| Marine Products Corp. |
231 | 3,047 | ||||||||
| a | MarineMax, Inc. |
510 | 14,663 | |||||||
| a | MasterCraft Boat Holdings, Inc. |
400 | 12,172 | |||||||
| MDC Holdings, Inc. |
1,050 | 40,813 | ||||||||
| a | Modine Manufacturing Co. |
570 | 13,139 | |||||||
| Monarch Casino & Resort, Inc. |
260 | 19,279 | ||||||||
| Monro, Inc. |
740 | 36,578 | ||||||||
| Movado Group, Inc. |
490 | 14,097 | ||||||||
| Murphy USA, Inc. |
600 | 154,830 | ||||||||
| a | National Vision Holdings, Inc. |
1,850 | 34,854 | |||||||
| a | ODP Corp. |
1,060 | 47,679 | |||||||
| a | ONE Group Hospitality, Inc. |
570 | 4,617 | |||||||
| a | OneWater Marine, Inc., Class A |
280 | 7,832 | |||||||
| Oxford Industries, Inc. |
460 | 48,571 | ||||||||
| Papa John’s International, Inc. |
780 | 58,445 | ||||||||
| Patrick Industries, Inc. |
410 | 28,212 | ||||||||
| a | Perdoceo Education Corp. |
1,960 | 26,323 | |||||||
| PetMed Express, Inc. |
550 | 8,932 | ||||||||
| a | Portillo’s, Inc., Class A |
560 | 11,967 | |||||||
| a | Revolve Group, Inc. |
960 | 25,248 | |||||||
| Rocky Brands, Inc. |
150 | 3,461 | ||||||||
| a | Sally Beauty Holdings, Inc. |
3,250 | 50,635 | |||||||
| Shoe Carnival, Inc. |
460 | 11,799 | ||||||||
| Shutterstock, Inc. |
620 | 45,012 | ||||||||
| Signet Jewelers Ltd. |
1,220 | 94,892 | ||||||||
| a | Sleep Number Corp. |
520 | 15,813 | |||||||
| Smith & Wesson Brands, Inc. |
1,370 | 16,865 | ||||||||
| Sonic Automotive, Inc., Class A |
550 | 29,887 | ||||||||
| a | Sonos, Inc. |
2,870 | 56,309 | |||||||
| a | Sportsman’s Warehouse Holdings, Inc. |
1,280 | 10,854 | |||||||
| Standard Motor Products, Inc. |
610 | 22,515 | ||||||||
| Steven Madden Ltd. |
2,110 | 75,960 | ||||||||
| Strategic Education, Inc. |
600 | 53,898 | ||||||||
| a | Stride, Inc. |
1,020 | 40,035 | |||||||
| Sturm Ruger & Co., Inc. |
520 | 29,869 | ||||||||
| Superior Group of Cos., Inc. |
320 | 2,518 | ||||||||
| Texas Roadhouse, Inc. |
1,790 | 193,427 | ||||||||
| a | Tile Shop Holdings, Inc. |
740 | 3,471 | |||||||
| a | Tilly’s, Inc., Class A |
630 | 4,857 | |||||||
| a | Torrid Holdings, Inc. |
200 | 872 | |||||||
| a | Tupperware Brands Corp. |
1,460 | 3,650 | |||||||
| 90 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Small Cap Multifactor Index ETF (continued)
| Shares | Value | |||||||||
| Consumer Discretionary (continued) | ||||||||||
| a | Universal Technical Institute, Inc. |
640 | $ | 4,723 | ||||||
| Upbound Group, Inc. |
1,580 | 38,726 | ||||||||
| a | Vista Outdoor, Inc. |
1,290 | 35,746 | |||||||
| Weyco Group, Inc. |
130 | 3,289 | ||||||||
| Wingstop, Inc. |
770 | 141,357 | ||||||||
| Winmark Corp. |
80 | 25,634 | ||||||||
| Wolverine World Wide, Inc. |
1,940 | 33,077 | ||||||||
| a | XPEL, Inc. |
480 | 32,616 | |||||||
| a | Zumiez, Inc. |
390 | 7,192 | |||||||
|
|
|
|||||||||
| 3,283,380 | ||||||||||
|
|
|
|||||||||
| Consumer Staples 7.0% | ||||||||||
| Alico, Inc. |
120 | 2,904 | ||||||||
| a | BellRing Brands, Inc. |
2,360 | 80,240 | |||||||
| Cal-Maine Foods, Inc. |
450 | 27,401 | ||||||||
| a | Central Garden & Pet Co. |
240 | 9,854 | |||||||
| a | Central Garden & Pet Co., Class A |
1,000 | 39,070 | |||||||
| Coca-Cola Consolidated, Inc. |
130 | 69,560 | ||||||||
| Edgewell Personal Care Co. |
1,060 | 44,965 | ||||||||
| a | elf Beauty, Inc. |
930 | 76,585 | |||||||
| Ingles Markets, Inc., Class A |
430 | 38,141 | ||||||||
| Inter Parfums, Inc. |
500 | 71,120 | ||||||||
| J & J Snack Foods Corp. |
180 | 26,680 | ||||||||
| John B Sanfilippo & Son, Inc. |
230 | 22,292 | ||||||||
| Lancaster Colony Corp. |
480 | 97,382 | ||||||||
| Medifast, Inc. |
360 | 37,321 | ||||||||
| a | National Beverage Corp. |
710 | 37,431 | |||||||
| Natural Grocers by Vitamin Cottage, Inc. |
275 | 3,231 | ||||||||
| Nu Skin Enterprises, Inc., Class A |
1,480 | 58,179 | ||||||||
| PriceSmart, Inc. |
610 | 43,603 | ||||||||
| SpartanNash Co. |
1,070 | 26,536 | ||||||||
| a | Sprouts Farmers Market, Inc. |
2,890 | 101,237 | |||||||
| Tootsie Roll Industries, Inc. |
412 | 18,503 | ||||||||
| a | United Natural Foods, Inc. |
1,310 | 34,519 | |||||||
| Universal Corp. |
670 | 35,436 | ||||||||
| a | USANA Health Sciences, Inc. |
310 | 19,499 | |||||||
| Vector Group Ltd. |
3,930 | 47,199 | ||||||||
| Village Super Market, Inc., Class A |
290 | 6,635 | ||||||||
| WD-40 Co. |
410 | 73,001 | ||||||||
| Weis Markets, Inc. |
510 | 43,182 | ||||||||
|
|
|
|||||||||
| 1,191,706 | ||||||||||
|
|
|
|||||||||
| Energy 2.8% | ||||||||||
| Arch Resources, Inc. |
280 | 36,809 | ||||||||
| California Resources Corp. |
1,500 | 57,750 | ||||||||
| Chord Energy Corp. |
800 | 107,680 | ||||||||
| Comstock Resources, Inc. |
1,120 | 12,085 | ||||||||
| CONSOL Energy, Inc. |
910 | 53,026 | ||||||||
| Crescent Energy Co., Class A |
480 | 5,429 | ||||||||
| CVR Energy, Inc. |
340 | 11,145 | ||||||||
| Magnolia Oil & Gas Corp., Class A |
3,270 | 71,547 | ||||||||
| a | Peabody Energy Corp. |
2,090 | 53,504 | |||||||
| Ranger Oil Corp., Class A |
220 | 8,985 | ||||||||
| SFL Corp. Ltd. |
2,640 | 25,080 | ||||||||
| a | SilverBow Resources, Inc. |
230 | 5,255 | |||||||
| Sitio Royalties Corp., Class A |
1,320 | 29,832 | ||||||||
| VAALCO Energy, Inc. |
1,730 | 7,837 | ||||||||
|
|
|
|||||||||
| 485,964 | ||||||||||
|
|
|
|||||||||
| franklintempleton.com | Annual Report | 91 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Small Cap Multifactor Index ETF (continued)
| Shares | Value | |||||||||
| Financials 9.9% | ||||||||||
| 1st Source Corp. |
420 | $ | 18,123 | |||||||
| Arrow Financial Corp. |
360 | 8,968 | ||||||||
| Associated Banc-Corp |
3,750 | 67,425 | ||||||||
| Banco Latinoamericano de Comercio Exterior SA, Class E |
800 | 13,904 | ||||||||
| Blackstone Mortgage Trust, Inc., Class A |
4,200 | 74,970 | ||||||||
| Brookline Bancorp, Inc. |
1,640 | 17,220 | ||||||||
| City Holding Co. |
340 | 30,899 | ||||||||
| Community Trust Bancorp, Inc. |
340 | 12,903 | ||||||||
| Compass Diversified Holdings |
1,060 | 20,225 | ||||||||
| a | Consumer Portfolio Services, Inc. |
280 | 2,993 | |||||||
| CVB Financial Corp. |
2,560 | 42,701 | ||||||||
| Donegal Group, Inc., Class A |
370 | 5,654 | ||||||||
| a | Donnelley Financial Solutions, Inc. |
630 | 25,742 | |||||||
| Dynex Capital, Inc. |
740 | 8,969 | ||||||||
| Enact Holdings, Inc. |
610 | 13,945 | ||||||||
| Enterprise Bancorp, Inc. |
200 | 6,292 | ||||||||
| Essent Group Ltd. |
2,540 | 101,727 | ||||||||
| a | EZCORP, Inc., Class A |
1,170 | 10,062 | |||||||
| Farmers National Banc Corp. |
700 | 8,848 | ||||||||
| Financial Institutions, Inc. |
320 | 6,170 | ||||||||
| First Business Financial Services, Inc. |
150 | 4,576 | ||||||||
| First Community Bankshares, Inc. |
330 | 8,266 | ||||||||
| First Merchants Corp. |
1,190 | 39,210 | ||||||||
| First of Long Island Corp. |
530 | 7,155 | ||||||||
| GCM Grosvenor, Inc., Class A |
790 | 6,170 | ||||||||
| a | Genworth Financial, Inc., Class A |
11,890 | 59,688 | |||||||
| German American Bancorp, Inc. |
650 | 21,690 | ||||||||
| Guaranty Bancshares, Inc. |
180 | 5,017 | ||||||||
| Hope Bancorp, Inc. |
2,520 | 24,746 | ||||||||
| Houlihan Lokey, Inc. |
1,330 | 116,362 | ||||||||
| Invesco Mortgage Capital, Inc. |
710 | 7,874 | ||||||||
| Investors Title Co. |
30 | 4,530 | ||||||||
| Jackson Financial, Inc., Class A |
1,450 | 54,244 | ||||||||
| Kinsale Capital Group, Inc. |
510 | 153,076 | ||||||||
| Lakeland Bancorp, Inc. |
1,490 | 23,304 | ||||||||
| Macatawa Bank Corp. |
490 | 5,008 | ||||||||
| a | MarketWise, Inc. |
230 | 425 | |||||||
| Mercury General Corp. |
480 | 15,235 | ||||||||
| a | Mr Cooper Group, Inc. |
1,210 | 49,574 | |||||||
| National Western Life Group, Inc., Class A |
70 | 16,983 | ||||||||
| Navient Corp. |
2,150 | 34,378 | ||||||||
| NBT Bancorp, Inc. |
1,110 | 37,418 | ||||||||
| a | NerdWallet, Inc., Class A |
550 | 8,899 | |||||||
| Nexpoint Real Estate Finance, Inc. |
140 | 2,194 | ||||||||
| Northfield Bancorp, Inc. |
1,200 | 14,136 | ||||||||
| Northwest Bancshares, Inc. |
2,960 | 35,609 | ||||||||
| OceanFirst Financial Corp. |
1,170 | 21,622 | ||||||||
| Parke Bancorp, Inc. |
200 | 3,556 | ||||||||
| Peoples Bancorp, Inc. |
690 | 17,767 | ||||||||
| Peoples Financial Services Corp. |
140 | 6,069 | ||||||||
| Provident Bancorp, Inc. |
170 | 1,163 | ||||||||
| RLI Corp. |
980 | 130,252 | ||||||||
| Safety Insurance Group, Inc. |
340 | 25,337 | ||||||||
| Silvercrest Asset Management Group, Inc., Class A |
170 | 3,091 | ||||||||
| Southern Missouri Bancorp, Inc. |
190 | 7,108 | ||||||||
| Stewart Information Services Corp. |
610 | 24,613 | ||||||||
| Stock Yards Bancorp, Inc. |
340 | 18,748 | ||||||||
| Tompkins Financial Corp. |
360 | 23,836 | ||||||||
| TPG RE Finance Trust, Inc. |
1,800 | 13,068 | ||||||||
| 92 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Small Cap Multifactor Index ETF (continued)
| Shares | Value | |||||||||
| Financials (continued) |
||||||||||
| a | Trean Insurance Group, Inc. |
300 | $ | 1,836 | ||||||
| TriCo Bancshares |
570 | 23,706 | ||||||||
| TrustCo Bank Corp. NY |
450 | 14,373 | ||||||||
| UMB Financial Corp. |
920 | 53,102 | ||||||||
| Victory Capital Holdings, Inc., Class A |
330 | 9,659 | ||||||||
| West BanCorp, Inc. |
390 | 7,125 | ||||||||
| Westamerica BanCorp |
600 | 26,580 | ||||||||
| a | World Acceptance Corp. |
100 | 8,329 | |||||||
|
|
|
|||||||||
| 1,694,447 | ||||||||||
|
|
|
|||||||||
| Health Care 7.5% |
||||||||||
| a | Alkermes PLC |
2,990 | 84,288 | |||||||
| a | AMN Healthcare Services, Inc. |
1,270 | 105,359 | |||||||
| a | AtriCure, Inc. |
1,060 | 43,937 | |||||||
| Atrion Corp. |
30 | 18,837 | ||||||||
| a | Bioventus, Inc., Class A |
570 | 610 | |||||||
| a | Cano Health, Inc. |
3,300 | 3,003 | |||||||
| a | Catalyst Pharmaceuticals, Inc. |
2,410 | 39,958 | |||||||
| a | Community Health Systems, Inc. |
3,440 | 16,856 | |||||||
| a | Computer Programs & Systems, Inc. |
300 | 9,060 | |||||||
| CONMED Corp. |
680 | 70,625 | ||||||||
| a | Corcept Therapeutics, Inc. |
2,440 | 52,850 | |||||||
| a | CorVel Corp. |
210 | 39,959 | |||||||
| a | Cross Country Healthcare, Inc. |
970 | 21,650 | |||||||
| a | Eagle Pharmaceuticals, Inc. |
290 | 8,227 | |||||||
| Embecta Corp. |
1,350 | 37,962 | ||||||||
| a | Enanta Pharmaceuticals, Inc. |
440 | 17,794 | |||||||
| a | Figs, Inc., Class A |
2,460 | 15,227 | |||||||
| a | Inari Medical, Inc. |
940 | 58,036 | |||||||
| a | Innoviva, Inc. |
1,770 | 19,912 | |||||||
| a | Intercept Pharmaceuticals, Inc. |
470 | 6,312 | |||||||
| iRadimed Corp. |
180 | 7,083 | ||||||||
| a | Ironwood Pharmaceuticals, Inc. |
3,630 | 38,188 | |||||||
| a | Joint Corp. |
370 | 6,227 | |||||||
| LeMaitre Vascular, Inc. |
450 | 23,161 | ||||||||
| a | Merit Medical Systems, Inc. |
1,250 | 92,437 | |||||||
| a | MiMedx Group, Inc. |
2,230 | 7,604 | |||||||
| National HealthCare Corp. |
340 | 19,744 | ||||||||
| National Research Corp. |
390 | 16,969 | ||||||||
| a | Neogen Corp. |
4,050 | 75,006 | |||||||
| a | Nevro Corp. |
410 | 14,822 | |||||||
| a | NextGen Healthcare, Inc. |
1,040 | 18,106 | |||||||
| a | Organogenesis Holdings, Inc. |
1,590 | 3,387 | |||||||
| a | Orthofix Medical, Inc. |
430 | 7,203 | |||||||
| Patterson Cos., Inc. |
2,390 | 63,980 | ||||||||
| a | Pediatrix Medical Group, Inc. |
2,340 | 34,889 | |||||||
| Phibro Animal Health Corp., Class A |
580 | 8,886 | ||||||||
| a | Prestige Consumer Healthcare, Inc. |
1,260 | 78,914 | |||||||
| SIGA Technologies, Inc. |
1,210 | 6,958 | ||||||||
| a | Tactile Systems Technology, Inc. |
510 | 8,374 | |||||||
| a | Treace Medical Concepts, Inc. |
630 | 15,870 | |||||||
| a | UFP Technologies, Inc. |
80 | 10,387 | |||||||
| a | Vanda Pharmaceuticals, Inc. |
1,210 | 8,216 | |||||||
| a | Vir Biotechnology, Inc. |
1,370 | 31,880 | |||||||
| a | Zynex, Inc. |
610 | 7,320 | |||||||
|
|
|
|||||||||
| 1,276,073 | ||||||||||
|
|
|
|||||||||
| franklintempleton.com | Annual Report | 93 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Small Cap Multifactor Index ETF (continued)
| Shares | Value | |||||||||
| Industrials 22.9% | ||||||||||
| ABM Industries, Inc. |
1,470 | $ | 66,062 | |||||||
| ACCO Brands Corp. |
2,390 | 12,715 | ||||||||
| a | Air Transport Services Group, Inc. |
1,300 | 27,079 | |||||||
| Alamo Group, Inc. |
230 | 42,357 | ||||||||
| Allied Motion Technologies, Inc. |
340 | 13,141 | ||||||||
| Applied Industrial Technologies, Inc. |
1,090 | 154,922 | ||||||||
| a | Atkore, Inc. |
960 | 134,861 | |||||||
| Barnes Group, Inc. |
550 | 22,154 | ||||||||
| Barrett Business Services, Inc. |
130 | 11,523 | ||||||||
| a | BlueLinx Holdings, Inc. |
220 | 14,951 | |||||||
| Boise Cascade Co. |
1,050 | 66,413 | ||||||||
| Brady Corp., Class A |
1,410 | 75,759 | ||||||||
| Brink’s Co. |
960 | 64,128 | ||||||||
| a | Casella Waste Systems, Inc., Class A |
1,100 | 90,926 | |||||||
| a | Cimpress PLC |
430 | 18,843 | |||||||
| Comfort Systems USA, Inc. |
800 | 116,768 | ||||||||
| CompX International, Inc. |
44 | 796 | ||||||||
| a | Concrete Pumping Holdings, Inc. |
320 | 2,176 | |||||||
| Costamare, Inc. |
1,290 | 12,139 | ||||||||
| Covenant Logistics Group, Inc. |
320 | 11,334 | ||||||||
| CRA International, Inc. |
170 | 18,329 | ||||||||
| CSW Industrials, Inc. |
330 | 45,847 | ||||||||
| a | Daseke, Inc. |
890 | 6,880 | |||||||
| Deluxe Corp. |
1,160 | 18,560 | ||||||||
| a | Distribution Solutions Group, Inc. |
130 | 5,910 | |||||||
| a | DXP Enterprises, Inc. |
350 | 9,422 | |||||||
| Eagle Bulk Shipping, Inc. |
250 | 11,375 | ||||||||
| EMCOR Group, Inc. |
590 | 95,928 | ||||||||
| Encore Wire Corp. |
360 | 66,719 | ||||||||
| Ennis, Inc. |
700 | 14,763 | ||||||||
| ESCO Technologies, Inc. |
320 | 30,544 | ||||||||
| Exponent, Inc. |
1,370 | 136,575 | ||||||||
| Forward Air Corp. |
720 | 77,587 | ||||||||
| a | Franklin Covey Co. |
320 | 12,310 | |||||||
| Franklin Electric Co., Inc. |
1,170 | 110,097 | ||||||||
| Global Industrial Co. |
370 | 9,931 | ||||||||
| a | GMS, Inc. |
1,080 | 62,521 | |||||||
| Gorman-Rupp Co. |
420 | 10,500 | ||||||||
| H&E Equipment Services, Inc. |
740 | 32,730 | ||||||||
| Healthcare Services Group, Inc. |
1,850 | 25,660 | ||||||||
| Heartland Express, Inc. |
1,210 | 19,263 | ||||||||
| Heidrick & Struggles International, Inc. |
620 | 18,823 | ||||||||
| a | Heritage-Crystal Clean, Inc. |
500 | 17,805 | |||||||
| Hillenbrand, Inc. |
1,630 | 77,474 | ||||||||
| HNI Corp. |
1,220 | 33,965 | ||||||||
| a | Hudson Technologies, Inc. |
790 | 6,897 | |||||||
| a | IBEX Holdings Ltd. |
190 | 4,636 | |||||||
| ICF International, Inc. |
480 | 52,656 | ||||||||
| Insperity, Inc. |
920 | 111,826 | ||||||||
| Interface, Inc. |
1,320 | 10,718 | ||||||||
| Kadant, Inc. |
290 | 60,471 | ||||||||
| Karat Packaging, Inc. |
110 | 1,466 | ||||||||
| Kelly Services, Inc., Class A |
880 | 14,599 | ||||||||
| Kforce, Inc. |
660 | 41,738 | ||||||||
| Kimball International, Inc., Class B |
980 | 12,152 | ||||||||
| Korn Ferry |
1,680 | 86,923 | ||||||||
| a | Legalzoom.com, Inc. |
2,050 | 19,229 | |||||||
| Luxfer Holdings PLC |
680 | 11,492 | ||||||||
| Marten Transport Ltd. |
1,500 | 31,425 | ||||||||
| 94 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Small Cap Multifactor Index ETF (continued)
| Shares | Value | |||||||||
| Industrials (continued) | ||||||||||
| Matson, Inc. |
940 | $ | 56,090 | |||||||
| Matthews International Corp., Class A |
600 | 21,636 | ||||||||
| McGrath RentCorp |
600 | 55,986 | ||||||||
| Miller Industries, Inc. |
240 | 8,484 | ||||||||
| MillerKnoll, Inc. |
1,860 | 38,037 | ||||||||
| Mueller Industries, Inc. |
1,270 | 93,320 | ||||||||
| Mueller Water Products, Inc., Class A |
3,360 | 46,838 | ||||||||
| National Presto Industries, Inc. |
120 | 8,651 | ||||||||
| NL Industries, Inc. |
230 | 1,394 | ||||||||
| a | NV5 Global, Inc. |
310 | 32,231 | |||||||
| Omega Flex, Inc. |
100 | 11,144 | ||||||||
| a | PAM Transportation Services, Inc. |
190 | 5,440 | |||||||
| Pitney Bowes, Inc. |
2,860 | 11,125 | ||||||||
| Preformed Line Products Co. |
80 | 10,243 | ||||||||
| a | Radiant Logistics, Inc. |
1,010 | 6,626 | |||||||
| Resources Connection, Inc. |
1,010 | 17,231 | ||||||||
| Rush Enterprises, Inc., Class A |
950 | 51,870 | ||||||||
| Rush Enterprises, Inc., Class B |
170 | 10,181 | ||||||||
| Safe Bulkers, Inc. |
1,310 | 4,834 | ||||||||
| a | Saia, Inc. |
730 | 198,618 | |||||||
| Simpson Manufacturing Co., Inc. |
1,110 | 121,700 | ||||||||
| Standex International Corp. |
290 | 35,508 | ||||||||
| Steelcase, Inc., Class A |
2,140 | 18,019 | ||||||||
| Tennant Co. |
540 | 37,006 | ||||||||
| a | Titan Machinery, Inc. |
460 | 14,007 | |||||||
| a | Transcat, Inc. |
160 | 14,302 | |||||||
| Triton International Ltd. |
1,490 | 94,198 | ||||||||
| a | TrueBlue, Inc. |
720 | 12,816 | |||||||
| UFP Industries, Inc. |
1,490 | 118,410 | ||||||||
| UniFirst Corp. |
350 | 61,681 | ||||||||
| Universal Logistics Holdings, Inc. |
220 | 6,413 | ||||||||
| a | V2X, Inc. |
260 | 10,327 | |||||||
| Veritiv Corp. |
330 | 44,596 | ||||||||
| Watts Water Technologies, Inc., Class A |
800 | 134,656 | ||||||||
| Werner Enterprises, Inc. |
2,100 | 95,529 | ||||||||
|
|
|
|||||||||
| 3,903,940 | ||||||||||
|
|
|
|||||||||
| Information Technology 12.2% | ||||||||||
| A10 Networks, Inc. |
1,970 | 30,515 | ||||||||
| ADTRAN Holdings, Inc. |
1,290 | 20,459 | ||||||||
| American Software, Inc., Class A |
720 | 9,079 | ||||||||
| a | Appfolio, Inc., Class A |
460 | 57,261 | |||||||
| a | Aviat Networks, Inc. |
240 | 8,270 | |||||||
| a | Avid Technology, Inc. |
890 | 28,462 | |||||||
| Badger Meter, Inc. |
760 | 92,583 | ||||||||
| Belden, Inc. |
480 | 41,650 | ||||||||
| a | Blackbaud, Inc. |
980 | 67,914 | |||||||
| a | Brightcove, Inc. |
940 | 4,183 | |||||||
| a | Calix, Inc. |
1,290 | 69,131 | |||||||
| a | Cambium Networks Corp. |
270 | 4,784 | |||||||
| Cass Information Systems, Inc. |
160 | 6,930 | ||||||||
| a | Clearfield, Inc. |
270 | 12,577 | |||||||
| a | CommVault Systems, Inc. |
1,240 | 70,358 | |||||||
| a | Consensus Cloud Solutions, Inc. |
450 | 15,341 | |||||||
| CSG Systems International, Inc. |
860 | 46,182 | ||||||||
| a | eGain Corp. |
460 | 3,491 | |||||||
| a | Enfusion, Inc., Class A |
530 | 5,565 | |||||||
| a | ePlus, Inc. |
640 | 31,386 | |||||||
| EVERTEC, Inc. |
1,370 | 46,237 | ||||||||
| franklintempleton.com | Annual Report | 95 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Small Cap Multifactor Index ETF (continued)
| Shares | Value | |||||||||
| Information Technology (continued) | ||||||||||
| a | ExlService Holdings, Inc. |
660 | $ | 106,808 | ||||||
| a | Extreme Networks, Inc. |
2,910 | 55,639 | |||||||
| a | FARO Technologies, Inc. |
380 | 9,352 | |||||||
| Hackett Group, Inc. |
700 | 12,936 | ||||||||
| a | Harmonic, Inc. |
1,060 | 15,465 | |||||||
| Information Services Group, Inc. |
670 | 3,410 | ||||||||
| a | Insight Enterprises, Inc. |
770 | 110,079 | |||||||
| a | International Money Express, Inc. |
860 | 22,171 | |||||||
| Kulicke & Soffa Industries, Inc. |
1,510 | 79,562 | ||||||||
| Methode Electronics, Inc. |
820 | 35,982 | ||||||||
| a | Napco Security Technologies, Inc. |
760 | 28,561 | |||||||
| a | NETGEAR, Inc. |
560 | 10,366 | |||||||
| a | NetScout Systems, Inc. |
1,520 | 43,548 | |||||||
| a | Novanta, Inc. |
960 | 152,726 | |||||||
| a | OneSpan, Inc. |
850 | 14,875 | |||||||
| a | OSI Systems, Inc. |
420 | 42,991 | |||||||
| PC Connection, Inc. |
260 | 11,690 | ||||||||
| Power Integrations, Inc. |
1,500 | 126,960 | ||||||||
| Progress Software Corp. |
1,170 | 67,216 | ||||||||
| a | Qualys, Inc. |
1,090 | 141,722 | |||||||
| a | Rambus, Inc. |
1,210 | 62,025 | |||||||
| a | Rimini Street, Inc. |
1,300 | 5,356 | |||||||
| a | SPS Commerce, Inc. |
980 | 149,254 | |||||||
| a | Squarespace, Inc., Class A |
640 | 20,333 | |||||||
| Vishay Intertechnology, Inc. |
3,140 | 71,027 | ||||||||
| a | Vishay Precision Group, Inc. |
240 | 10,022 | |||||||
|
|
|
|||||||||
| 2,082,434 | ||||||||||
|
|
|
|||||||||
| Materials 4.0% |
||||||||||
| Balchem Corp. |
710 | 89,801 | ||||||||
| Commercial Metals Co. |
2,780 | 135,942 | ||||||||
| Compass Minerals International, Inc. |
730 | 25,032 | ||||||||
| Greif, Inc., Class A |
700 | 44,359 | ||||||||
| Greif, Inc., Class B |
160 | 12,243 | ||||||||
| Innospec, Inc. |
460 | 47,228 | ||||||||
| Kronos Worldwide, Inc. |
530 | 4,881 | ||||||||
| Mativ Holdings, Inc. |
990 | 21,255 | ||||||||
| Myers Industries, Inc. |
940 | 20,144 | ||||||||
| Olympic Steel, Inc. |
210 | 10,964 | ||||||||
| Ramaco Resources, Inc. |
400 | 3,524 | ||||||||
| Ryerson Holding Corp. |
420 | 15,280 | ||||||||
| Sensient Technologies Corp. |
1,000 | 76,560 | ||||||||
| Stepan Co. |
470 | 48,424 | ||||||||
| SunCoke Energy, Inc. |
1,850 | 16,613 | ||||||||
| Sylvamo Corp. |
440 | 20,354 | ||||||||
| Tredegar Corp. |
620 | 5,661 | ||||||||
| Warrior Met Coal, Inc. |
950 | 34,875 | ||||||||
| Worthington Industries, Inc. |
680 | 43,962 | ||||||||
|
|
|
|||||||||
| 677,102 | ||||||||||
|
|
|
|||||||||
| Real Estate 4.5% | ||||||||||
| Agree Realty Corp. |
1,010 | 69,296 | ||||||||
| American Assets Trust, Inc. |
1,150 | 21,378 | ||||||||
| Brandywine Realty Trust |
4,020 | 19,015 | ||||||||
| Broadstone Net Lease, Inc. |
4,000 | 68,040 | ||||||||
| CareTrust REIT, Inc. |
2,490 | 48,754 | ||||||||
| City Office REIT, Inc. |
760 | 5,244 | ||||||||
| Community Healthcare Trust, Inc. |
550 | 20,130 | ||||||||
| Corporate Office Properties Trust |
2,800 | 66,388 | ||||||||
| 96 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Small Cap Multifactor Index ETF (continued)
| Shares | Value | |||||||||
| Real Estate (continued) | ||||||||||
| Douglas Elliman, Inc. |
1,800 | $ | 5,598 | |||||||
| Elme Communities |
1,930 | 34,470 | ||||||||
| Four Corners Property Trust, Inc. |
1,540 | 41,364 | ||||||||
| Franklin Street Properties Corp. |
2,450 | 3,847 | ||||||||
| a | GEO Group, Inc. |
2,690 | 21,224 | |||||||
| Industrial Logistics Properties Trust |
880 | 2,702 | ||||||||
| LTC Properties, Inc. |
800 | 28,104 | ||||||||
| LXP Industrial Trust |
6,980 | 71,964 | ||||||||
| Marcus & Millichap, Inc. |
630 | 20,229 | ||||||||
| Necessity Retail REIT, Inc. |
2,980 | 18,714 | ||||||||
| PotlatchDeltic Corp. |
1,690 | 83,655 | ||||||||
| RE/MAX Holdings, Inc., Class A |
570 | 10,693 | ||||||||
| Retail Opportunity Investments Corp. |
1,360 | 18,986 | ||||||||
| RMR Group, Inc., Class A |
390 | 10,234 | ||||||||
| Tanger Factory Outlet Centers, Inc. |
2,580 | 50,645 | ||||||||
| Urstadt Biddle Properties, Inc., Class A |
600 | 10,542 | ||||||||
| Whitestone REIT |
1,220 | 11,224 | ||||||||
|
|
|
|||||||||
| 762,440 | ||||||||||
|
|
|
|||||||||
| Utilities 7.4% | ||||||||||
| American States Water Co. |
1,050 | 93,335 | ||||||||
| Artesian Resources Corp., Class A |
220 | 12,179 | ||||||||
| Avista Corp. |
2,000 | 84,900 | ||||||||
| Black Hills Corp. |
1,610 | 101,591 | ||||||||
| Brookfield Infrastructure Corp., Class A |
1,700 | 78,302 | ||||||||
| California Water Service Group |
1,500 | 87,300 | ||||||||
| Clearway Energy, Inc., Class A |
780 | 23,423 | ||||||||
| Clearway Energy, Inc., Class C |
1,820 | 57,021 | ||||||||
| Global Water Resources, Inc. |
308 | 3,829 | ||||||||
| MGE Energy, Inc. |
960 | 74,563 | ||||||||
| Northwest Natural Holding Co. |
850 | 40,426 | ||||||||
| NorthWestern Corp. |
1,390 | 80,426 | ||||||||
| ONE Gas, Inc. |
980 | 77,645 | ||||||||
| Otter Tail Corp. |
900 | 65,043 | ||||||||
| PNM Resources, Inc. |
2,300 | 111,964 | ||||||||
| SJW Group |
670 | 51,007 | ||||||||
| Southwest Gas Holdings, Inc. |
1,780 | 111,161 | ||||||||
| Spire, Inc. |
930 | 65,230 | ||||||||
| Unitil Corp. |
410 | 23,386 | ||||||||
| York Water Co. |
330 | 14,751 | ||||||||
|
|
|
|||||||||
| 1,257,482 | ||||||||||
|
|
|
|||||||||
| Total Common Stocks (Cost $16,305,150) |
17,044,414 | |||||||||
|
|
|
|||||||||
| Total Investments (Cost $16,305,150) 100.0% |
17,044,414 | |||||||||
| Other Assets, less Liabilities 0.0%† |
3,147 | |||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 17,047,561 | ||||||||
|
|
|
|||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
See Abbreviations on page 120.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 97 | ||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities
March 31, 2023
| 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 |
$ | 13,135,315 | $ | 226,167,547 | $ | 24,817,800 | ||||||
| Value – Unaffiliated issuers |
$ | 11,875,299 | $ | 238,711,711 | $ | 24,148,192 | ||||||
| Cash |
— | — | 62,692 | |||||||||
| Foreign currency, at value (cost $14,079, $267,764 and $42, respectively) |
14,188 | 267,709 | 43 | |||||||||
| Receivables: |
||||||||||||
| Dividends |
75,975 | 1,564,329 | 69,990 | |||||||||
| Variation margin on futures contracts |
— | 5,759 | 892 | |||||||||
| Deposits with brokers for: |
||||||||||||
| Futures contracts |
1,607 | 46,959 | 3,360 | |||||||||
| Other assets |
2,134 | — | — | |||||||||
|
|
|
|||||||||||
| Total assets |
11,969,203 | 240,596,467 | 24,285,169 | |||||||||
|
|
|
|||||||||||
| Liabilities: |
||||||||||||
| Payables: |
||||||||||||
| Investment securities purchased |
735 | — | 65,105 | |||||||||
| Management fees |
1,883 | 16,406 | 1,261 | |||||||||
| Variation margin on futures contracts |
100 | — | — | |||||||||
| Funds advanced by custodian |
13,463 | 120,713 | — | |||||||||
| Deferred tax |
13,619 | — | — | |||||||||
|
|
|
|||||||||||
| Total liabilities |
29,800 | 137,119 | 66,366 | |||||||||
|
|
|
|||||||||||
| Net assets, at value |
$ | 11,939,403 | $ | 240,459,348 | $ | 24,218,803 | ||||||
|
|
|
|||||||||||
| Net assets consist of: |
||||||||||||
| Paid-in capital |
$ | 43,918,309 | $ | 227,141,925 | $ | 25,342,132 | ||||||
| Total distributable earnings (loss) |
(31,978,906 | ) | 13,317,423 | (1,123,329 | ) | |||||||
|
|
|
|||||||||||
| Net assets, at value |
$ | 11,939,403 | $ | 240,459,348 | $ | 24,218,803 | ||||||
|
|
|
|||||||||||
| Shares outstanding |
500,000 | 8,400,000 | 750,000 | |||||||||
|
|
|
|||||||||||
| Net asset value per share |
$ | 23.88 | $ | 28.63 | $ | 32.29 | ||||||
|
|
|
|||||||||||
| 98 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
March 31, 2023
| 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 |
$ | 822,305,052 | $ | 159,917,550 | $ | 16,305,150 | ||||||
| Cost – Non-controlled affiliates (Note 3c) |
— | 130,050 | — | |||||||||
| Value – Unaffiliated issuers+ |
$ | 858,897,499 | $ | 166,537,516 | $ | 17,044,414 | ||||||
| Value – Non-controlled affiliates (Note 3c) |
— | 130,050 | — | |||||||||
| Cash |
769,073 | 73,075 | — | |||||||||
| Receivables: |
||||||||||||
| Dividends |
894,576 | 177,639 | 15,825 | |||||||||
| Investment securities sold |
16,456,844 | — | — | |||||||||
| Variation margin on futures contracts |
11,539 | — | — | |||||||||
| Deposits with brokers for: |
||||||||||||
| Futures contracts |
44,800 | — | — | |||||||||
|
|
|
|||||||||||
| Total assets |
877,074,331 | 166,918,280 | 17,060,239 | |||||||||
|
|
|
|||||||||||
| Liabilities: |
||||||||||||
| Payables: |
||||||||||||
| Capital shares redeemed |
16,546,481 | — | — | |||||||||
| Management fees |
108,938 | 40,657 | 5,020 | |||||||||
| Funds advanced by custodian |
— | — | 7,658 | |||||||||
| Payable upon return of securities loaned |
— | 130,050 | — | |||||||||
|
|
|
|||||||||||
| Total liabilities |
16,655,419 | 170,707 | 12,678 | |||||||||
|
|
|
|||||||||||
| Net assets, at value |
$ | 860,418,912 | $ | 166,747,573 | $ | 17,047,561 | ||||||
|
|
|
|||||||||||
| Net assets consist of: |
||||||||||||
| Paid-in capital |
$ | 942,122,359 | $ | 161,879,216 | $ | 18,477,586 | ||||||
| Total distributable earnings (loss) |
(81,703,447 | ) | 4,868,357 | (1,430,025 | ) | |||||||
|
|
|
|||||||||||
| Net assets, at value |
$ | 860,418,912 | $ | 166,747,573 | $ | 17,047,561 | ||||||
|
|
|
|||||||||||
| Shares outstanding |
20,800,000 | 3,850,000 | 500,000 | |||||||||
|
|
|
|||||||||||
| Net asset value per share |
$ | 41.37 | $ | 43.31 | $ | 34.10 | ||||||
|
|
|
|||||||||||
| +Includes securities loaned |
— | 127,485 | — | |||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 99 | ||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations
for the year ended March 31, 2023
| 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 |
$ 820,680 | $ 3,121,085 | $ 909,038 | $ 20,263,622 | ||||||||||||
| Interest: |
||||||||||||||||
| Unaffiliated issuers |
— | 1,067 | — | 7,834 | ||||||||||||
| Interest from securities loaned (Note 1d): |
||||||||||||||||
| Unaffiliated issuers (net of fees and rebates) |
— | 336 | 65 | 55 | ||||||||||||
| Non-Controlled affiliates (Note 3c) |
— | — | 15 | 151 | ||||||||||||
|
|
|
|||||||||||||||
| Total investment income |
820,680 | 3,122,488 | 909,118 | 20,271,662 | ||||||||||||
|
|
|
|||||||||||||||
| Expenses: |
||||||||||||||||
| Management fees (Note 3a) |
38,824 | 80,641 | 62,660 | 1,399,775 | ||||||||||||
| Other |
55 | 170 | 55 | — | ||||||||||||
|
|
|
|||||||||||||||
| Total expenses |
38,879 | 80,811 | 62,715 | 1,399,775 | ||||||||||||
| Expenses waived/paid by affiliates (Note 3c) |
(1 | ) | (4 | ) | (2 | ) | (162 | ) | ||||||||
|
|
|
|||||||||||||||
| Net expenses |
38,878 | 80,807 | 62,713 | 1,399,613 | ||||||||||||
|
|
|
|||||||||||||||
| Net investment income |
781,802 | 3,041,681 | 846,405 | 18,872,049 | ||||||||||||
|
|
|
|||||||||||||||
| Realized and unrealized gains (losses): |
||||||||||||||||
| Net realized gain (loss) from: |
||||||||||||||||
| Investments: |
||||||||||||||||
| Unaffiliated issuers |
(890,963 | ) | (2,214,521 | ) | 170,448 | (66,286,347 | ) | |||||||||
| In-kind redemptions |
(117,619 | ) | — | (438,455 | ) | 43,508,869 | ||||||||||
| Foreign currency transactions |
(12,995 | ) | (8,766 | ) | (20,180 | ) | — | |||||||||
| Forward exchange contracts |
— | 1,681,833 | — | — | ||||||||||||
| Futures contracts |
(19,879 | ) | 28,773 | (23,842 | ) | (308,821 | ) | |||||||||
|
|
|
|||||||||||||||
| Net realized gain (loss) |
(1,041,456 | ) | (512,681 | ) | (312,029 | ) | (23,086,299 | ) | ||||||||
|
|
|
|||||||||||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||
| Investments: |
||||||||||||||||
| Unaffiliated issuers |
(1,930,136 | ) | 10,568,665 | (5,188,543 | ) | (54,022,118 | ) | |||||||||
| Translation of other assets and liabilities denominated in foreign currencies |
(1,915 | ) | 5,078 | (168 | ) | — | ||||||||||
| Futures contracts |
(1,058 | ) | 22,440 | (6,326 | ) | (21,118 | ) | |||||||||
| Forward exchange contracts |
— | (252,393 | ) | — | — | |||||||||||
| Change in deferred taxes on unrealized appreciation |
68,518 | — | — | — | ||||||||||||
|
|
|
|||||||||||||||
| Net change in unrealized appreciation (depreciation) |
(1,864,591 | ) | 10,343,790 | (5,195,037 | ) | (54,043,236 | ) | |||||||||
|
|
|
|||||||||||||||
| Net realized and unrealized gain (loss) |
(2,906,047 | ) | 9,831,109 | (5,507,066 | ) | (77,129,535 | ) | |||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
$(2,124,245 | ) | $12,872,790 | $(4,660,661 | ) | $(58,257,486 | ) | |||||||||
|
|
|
|||||||||||||||
| aForeign taxes withheld on dividends |
$97,657 | $319,537 | $24,225 | $— | ||||||||||||
|
|
|
|||||||||||||||
| 100 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the year ended March 31, 2023
| 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 |
$1,885,388 | $ 297,485 | ||||||
| Interest: |
||||||||
| Unaffiliated issuers |
1,589 | 707 | ||||||
| Interest from securities loaned (Note 1d): |
||||||||
| Unaffiliated issuers (net of fees and rebates) |
— | 578 | ||||||
| Non-Controlled affiliates (Note 3c) |
259 | 211 | ||||||
|
|
|
|||||||
| Total investment income |
1,887,236 | 298,981 | ||||||
|
|
|
|||||||
| Expenses: |
||||||||
| Management fees (Note 3a) |
285,120 | 53,686 | ||||||
|
|
|
|||||||
| Total expenses |
285,120 | 53,686 | ||||||
| Expenses waived/paid by affiliates (Note 3c) |
(100 | ) | (106 | ) | ||||
|
|
|
|||||||
| Net expenses |
285,020 | 53,580 | ||||||
|
|
|
|||||||
| Net investment income |
1,602,216 | 245,401 | ||||||
|
|
|
|||||||
| Realized and unrealized gains (losses): |
||||||||
| Net realized gain (loss) from: |
||||||||
| Investments: |
||||||||
| Unaffiliated issuers |
(1,233,981 | ) | (598,572 | ) | ||||
| In-kind redemptions |
3,657,221 | — | ||||||
| Futures contracts |
(40,955 | ) | (888 | ) | ||||
|
|
|
|||||||
| Net realized gain (loss) |
2,382,285 | (599,460 | ) | |||||
|
|
|
|||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||
| Investments: |
||||||||
| Unaffiliated issuers |
(833,649 | ) | (440,618 | ) | ||||
|
|
|
|||||||
| Net change in unrealized appreciation (depreciation) |
(833,649 | ) | (440,618 | ) | ||||
|
|
|
|||||||
| Net realized and unrealized gain (loss) |
1,548,636 | (1,040,078 | ) | |||||
|
|
|
|||||||
| Net increase (decrease) in net assets resulting from operations |
$3,150,852 | $ (794,677 | ) | |||||
|
|
|
|||||||
| aForeign taxes withheld on dividends |
$70 | $213 | ||||||
|
|
|
|||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 101 | ||
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 |
|||||||||||||||
|
|
|
|||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||
| Increase (decrease) in net assets: |
||||||||||||||||
| Operations: |
||||||||||||||||
| Net investment income |
$ 781,802 | $ 1,014,437 | $ 3,041,681 | $ 582,345 | ||||||||||||
| Net realized gain (loss) |
(1,041,456 | ) | 1,714,886 | (512,681 | ) | 1,193,763 | ||||||||||
| Net change in unrealized appreciation (depreciation) |
(1,864,591 | ) | (3,586,587 | ) | 10,343,790 | (117,448 | ) | |||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
(2,124,245 | ) | (857,264 | ) | 12,872,790 | 1,658,660 | ||||||||||
|
|
|
|||||||||||||||
| Distributions to shareholders (Note 1f) |
(808,733 | ) | (972,933 | ) | (1,624,260 | ) | (478,088 | ) | ||||||||
|
|
|
|||||||||||||||
| Capital share transactions: (Note 2) |
(2,127,127 | ) | (5,797,086 | ) | 212,018,520 | 2,752,200 | ||||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets |
(5,060,105 | ) | (7,627,283 | ) | 223,267,050 | 3,932,772 | ||||||||||
| Net assets: |
||||||||||||||||
| Beginning of year |
16,999,508 | 24,626,791 | 17,192,298 | 13,259,526 | ||||||||||||
|
|
|
|||||||||||||||
| End of year |
$11,939,403 | $16,999,508 | $240,459,348 | $17,192,298 | ||||||||||||
|
|
|
|||||||||||||||
| 102 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin U.S. Core Dividend Tilt Index ETF |
Franklin U.S. Large Cap Multifactor Index ETF |
|||||||||||||||
|
|
|
|||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||
| Increase (decrease) in net assets: |
||||||||||||||||
| Operations: |
||||||||||||||||
| Net investment income |
$ 846,405 | $ 821,951 | $ 18,872,049 | $ 20,074,191 | ||||||||||||
| Net realized gain (loss) |
(312,029 | ) | 1,429,154 | (23,086,299 | ) | 253,820,136 | ||||||||||
| Net change in unrealized appreciation (depreciation) |
(5,195,037 | ) | 1,240,892 | (54,043,236 | ) | (111,334,022 | ) | |||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
(4,660,661 | ) | 3,491,997 | (58,257,486 | ) | 162,560,305 | ||||||||||
|
|
|
|||||||||||||||
| Distributions to shareholders (Note 1f) |
(1,064,664 | ) | (803,985 | ) | (19,321,124 | ) | (21,142,944 | ) | ||||||||
|
|
|
|||||||||||||||
| Capital share transactions: (Note 2) |
(906,573 | ) | 1,530,803 | (28,739,866 | ) | (528,086,490 | ) | |||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets |
(6,631,898 | ) | 4,218,815 | (106,318,476 | ) | (386,669,129 | ) | |||||||||
| Net assets: |
||||||||||||||||
| Beginning of year |
30,850,701 | 26,631,886 | 966,737,388 | 1,353,406,517 | ||||||||||||
|
|
|
|||||||||||||||
| End of year |
$24,218,803 | $30,850,701 | $ 860,418,912 | $ 966,737,388 | ||||||||||||
|
|
|
|||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 103 | ||
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 |
|||||||||||||||
|
|
|
|||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||
| Increase (decrease) in net assets: |
||||||||||||||||
| Operations: |
||||||||||||||||
| Net investment income |
$ 1,602,216 | $ 606,903 | $ 245,401 | $ 179,992 | ||||||||||||
| Net realized gain (loss) |
2,382,285 | 4,303,133 | (599,460 | ) | 1,212,551 | |||||||||||
| Net change in unrealized appreciation (depreciation) |
(833,649 | ) | (533,996 | ) | (440,618 | ) | (1,328,181 | ) | ||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
3,150,852 | 4,376,040 | (794,677 | ) | 64,362 | |||||||||||
|
|
|
|||||||||||||||
| Distributions to shareholders (Note 1f) |
(1,398,123 | ) | (586,728 | ) | (231,686 | ) | (184,173 | ) | ||||||||
|
|
|
|||||||||||||||
| Capital share transactions: (Note 2) |
102,139,664 | 22,306,734 | 1,801,034 | 1,779,654 | ||||||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets |
103,892,393 | 26,096,046 | 774,671 | 1,659,843 | ||||||||||||
| Net assets: |
||||||||||||||||
| Beginning of year |
62,855,180 | 36,759,134 | 16,272,890 | 14,613,047 | ||||||||||||
|
|
|
|||||||||||||||
| End of year |
$166,747,573 | $62,855,180 | $17,047,561 | $16,272,890 | ||||||||||||
|
|
|
|||||||||||||||
| 104 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
1. Organization and Significant Accounting Policies
Franklin Templeton ETF Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company consisting of forty-eight separate funds, six of which are included in this report (Funds). The Funds follow the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standard 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 Funds are exchange traded funds (ETF) and seek to provide the investment results that closely correspond, before fees and expenses, to the performance of Fund’s 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 Funds’ investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Funds calculate the net asset value (NAV) per share 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 Funds’ 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, As per standards minutes, 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
| franklintempleton.com | Annual Report | 105 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting
Policies (continued)
a. Financial Instrument Valuation (continued)
applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.
Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Funds’ business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Funds’ portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, an independent pricing service may be used to adjust the Fund’s portfolio securities to the latest indications of fair value at 4 p.m. Eastern time on March 31, 2023. At March 31, 2023, 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. The 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
| 106 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting
Policies (continued)
c. Derivative Financial Instruments (continued)
provisions, including but not limited to collateral requirements, events of default, or early termination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty.
Termination events applicable to the Funds include failure of the Funds to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. However, absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statements of Assets and Liabilities. Early termination by the counterparty may result in an immediate payment by the Funds of any net liability owed to that counterparty under the ISDA agreement.
Collateral requirements differ by type of derivative. Collateral terms are contract specific for OTC derivatives. For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the Fund or the applicable counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary depending on the counterparty and the type of agreement. Generally, collateral is determined at the close of Fund business each day and any additional collateral required due to changes in derivative values may be delivered by the Fund or the counterparty the next business day, or within a few business days. Collateral pledged and/or 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.
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 7 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 the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
| franklintempleton.com | Annual Report | 107 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting
Policies (continued)
e. Income and Deferred Taxes (continued)
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.
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 March 31, 2023, 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 statement 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.
| 108 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
2. Shares of Beneficial Interest (continued)
In addition, for cash Creation Unit transactions, a variable fee for creation transactions and redemption transactions may be charged to the Authorized Participant to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades. Variable fees, if any, are included in capital share transactions in the Statements of Changes in Net Assets.
At March 31, 2023, 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 | ||||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
| Shares sold |
— | $ | 2,776 | — | $ | 12,197 | ||||||||||||||
| Shares redeemed |
(100,000 | ) | (2,129,903 | ) | (200,000 | ) | (5,809,283 | ) | ||||||||||||
| Net increase (decrease) |
(100,000 | ) | $ | (2,127,127 | ) | (200,000 | ) | $ | (5,797,086 | ) | ||||||||||
| Franklin International Core Dividend Tilt Index ETF | ||||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
| Shares sold |
7,800,000 | $ | 212,018,520 | 100,000 | $ | 2,752,200 | ||||||||||||||
| Net increase (decrease) |
7,800,000 | $ | 212,018,520 | 100,000 | $ | 2,752,200 | ||||||||||||||
| Franklin U.S. Core Dividend Tilt Index ETF | ||||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
| Shares sold |
700,000 | $ | 23,221,006 | 100,000 | $ | 3,403,231 | ||||||||||||||
| Shares redeemed |
(800,000 | ) | (24,127,579 | ) | (50,000 | ) | (1,872,428 | ) | ||||||||||||
| Net increase (decrease) |
(100,000 | ) | $ | (906,573 | ) | 50,000 | $ | 1,530,803 | ||||||||||||
| Franklin U.S. Large Cap Multifactor Index ETF | ||||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
| Shares sold |
6,300,000 | $ | 256,215,911 | 7,250,000 | $ | 315,466,656 | ||||||||||||||
| Shares redeemed |
(7,050,000 | ) | (284,955,777 | ) | (19,500,000 | ) | (843,553,146 | ) | ||||||||||||
| Net increase (decrease) |
(750,000 | ) | $ | (28,739,866 | ) | (12,250,000 | ) | $ | (528,086,490 | ) | ||||||||||
| franklintempleton.com | Annual Report | 109 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
2. Shares of Beneficial Interest (continued)
| Franklin U.S. Mid Cap Multifactor Index ETF | ||||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
| Shares sold |
2,800,000 | $ | 116,565,797 | 800,000 | $ | 35,769,669 | ||||||||||||||
| Shares redeemed |
(350,000 | ) | (14,426,133 | ) | (300,000 | ) | (13,462,935 | ) | ||||||||||||
| Net increase (decrease) |
2,450,000 | $ | 102,139,664 | 500,000 | $ | 22,306,734 | ||||||||||||||
| Franklin U.S. Small Cap Multifactor Index ETF | ||||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
| Shares sold |
50,000 | $ | 1,801,034 | 150,000 | $ | 5,610,619 | ||||||||||||||
| Shares redeemed |
— | — | (100,000 | ) | (3,830,965 | ) | ||||||||||||||
| Net increase (decrease) |
50,000 | $ | 1,801,034 | 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 Distributors, LLC (Distributors) |
Principal underwriter |
| 110 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates (continued)
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. 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. 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 March 31, 2023 |
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 year ended March 31, 2023, 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 |
0.29% | |
| Franklin International Core Dividend Tilt Index ETF |
0.12% | |
| Franklin U.S. Core Dividend Tilt Index ETF |
0.19% | |
| 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% |
b. Administrative Fees
Under an agreement with FASL, FT Services provides administrative services to the Fund. The fee is paid by FASL based on the Fund’s average daily net assets, and is not an additional expense of the Fund.
| franklintempleton.com | Annual Report | 111 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates (continued)
c. Investments in Affiliated Management Investment Companies
The Fund invests in one or more affiliated management investment companies. As defined in the 1940 Act, an investment is deemed to be a “Controlled Affiliate” of a fund when a fund owns, either directly or indirectly, 25% or more of the affiliated fund’s outstanding shares or has the power to exercise control over management or policies of such fund. The Fund does not invest for purposes of exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statements of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly.
| Value at Beginning of Year |
Purchases | Sales | Realized Gain (Loss) |
Net Change in (Depreciation) |
Value at End of Year |
Number of Shares Held at End of Year |
Investment Income |
|||||||||||||||||||||||||||||||||
| Franklin International Core | ||||||||||||||||||||||||||||||||||||||||
| Dividend Tilt Index ETF |
|
Dividend |
| |||||||||||||||||||||||||||||||||||||
| Non-Controlled Affiliates |
|
Income |
| |||||||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||||||
| Institutional Fiduciary Trust Money Market Portfolio 4.47% |
$ | — | $ | 47,600 | $ | (47,600 | ) | $— | $— | $ | — | — | $ | — | ||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||||||
| Franklin U.S. Core Dividend | ||||||||||||||||||||||||||||||||||||||||
| Tilt Index ETF | Dividend | |||||||||||||||||||||||||||||||||||||||
| Non-Controlled Affiliates | Income | |||||||||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||||||
| Institutional Fiduciary Trust Money Market Portfolio 4.47% |
$ | — | $ | 7,044 | $ | (7,044 | ) | $— | $— | $ | — | — | $ | 15 | ||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||||||
| Franklin U.S. Large Cap | ||||||||||||||||||||||||||||||||||||||||
| Multifactor Index ETF | Dividend | |||||||||||||||||||||||||||||||||||||||
| Non-Controlled Affiliates | Income | |||||||||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||||||
| Institutional Fiduciary Trust Money Market Portfolio 4.47% |
$ | — | $ | 1,577,703 | $ | (1,577,703 | ) | $— | $— | $ | — | — | $ | 151 | ||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||||||
| Income | ||||||||||||||||||||||||||||||||||||||||
| Franklin U.S. Mid Cap | from | |||||||||||||||||||||||||||||||||||||||
| Multifactor Index ETF | Securities | |||||||||||||||||||||||||||||||||||||||
| Non-Controlled Affiliates | loaned | |||||||||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||||||
| Institutional Fiduciary Trust Money Market Portfolio 4.47% |
$ | 10,850 | $ | 1,631,239 | $ | (1,512,039 | ) | $— | $— | $ | 130,050 | 130,050 | $ | 259 | ||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||||||
| Income | ||||||||||||||||||||||||||||||||||||||||
| Franklin U.S. Small Cap | from | |||||||||||||||||||||||||||||||||||||||
| Multifactor Index ETF |
|
Securities |
| |||||||||||||||||||||||||||||||||||||
| Non-Controlled Affiliates | loaned | |||||||||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||||||
| Institutional Fiduciary Trust Money Market Portfolio 4.47% |
$ | 113,498 | $ | 427,785 | $ | (541,283 | ) | $— | $— | $ | — | — | $ | 211 | ||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||||||
| 112 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates (continued)
d. Other Affiliated Transactions
At March 31, 2023, 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 |
2,030,442 | 9.8% | ||||||
| Franklin Growth Allocation Fund |
2,076,201 | 10.0% | ||||||
| Franklin 529 Portfolios |
4,723,867 | 22.7% | ||||||
|
|
|
|||||||
| 8,830,510 | 42.5% | |||||||
|
|
|
|||||||
aInvestment activities of significant shareholders could have a material impact on the Funds.
4. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains, if any. At March 31, 2023, 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 |
$13,150,118 | $ — | $ — | $ 11,323,282 | ||||||||||||
| Short term |
17,514,104 | — | 529,041 | 107,361,467 | ||||||||||||
|
|
|
|||||||||||||||
| Total capital loss carryforwards |
$30,664,222 | $ — | $529,041 | $118,684,749 | ||||||||||||
|
|
|
|||||||||||||||
| Franklin U.S. Mid Cap Multifactor Index ETF |
Franklin U.S. Small Cap |
|||||||||||||||
| Capital loss carryforwards not subject to expiration: | ||||||||||||||||
| Long term |
$ 582,274 | $1,272,971 | ||||||||||||||
| Short term |
1,342,610 | 883,324 | ||||||||||||||
|
|
|
|||||||||||||||
| Total capital loss carryforwards |
$ 1,924,884 | $2,156,295 | ||||||||||||||
|
|
|
|||||||||||||||
For tax purposes, the Funds may elect to defer any portion of a post-October capital loss or late-year ordinary loss to the first day of the following fiscal year. At March 31, 2023, the deferred losses were as follows:
| Franklin International Core Dividend Tilt Index ETF |
||||||||||
| Post October capital losses |
$838,521 | |||||||||
| Late-year ordinary losses |
$ — | |||||||||
| franklintempleton.com | Annual Report | 113 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
For tax purposes, capital losses may be carried over to offset future capital gains. During the year ended March 31, 2023, the following Fund utilized capital loss carryforwards as follows:
| 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 utilized |
$295,058 | $417,975 | $895,744 | |||||||||
The tax character of distributions paid during the period ended March 31, 2023 and 2022, were as follows:
| Franklin Emerging Market Core |
||||||||
| Dividend Tilt Index ETF | ||||||||
| 2023 | 2022 | |||||||
| Distributions paid from Ordinary income |
$808,733 | $972,933 | ||||||
| Franklin International Core | ||||||||
| Dividend Tilt Index ETF | ||||||||
| 2023 | 2022 | |||||||
| Distributions paid from: |
||||||||
| Ordinary income |
$1,377,235 | $ 478,088 | ||||||
| Long-term Capital Gain |
247,025 | — | ||||||
| $1,624,260 | $ 478,088 | |||||||
| Franklin U.S. Core Dividend | ||||||||
| Tilt Index ETF | ||||||||
| 2023 | 2022 | |||||||
| Distributions paid from Ordinary income |
$1,064,664 | $803,985 | ||||||
| Franklin U.S. Large Cap | ||||||||
| Multifactor Index ETF | ||||||||
| 2023 | 2022 | |||||||
| Distributions paid from Ordinary income |
$19,321,124 | $21,142,944 | ||||||
| Franklin U.S. Mid Cap | ||||||||
| Multifactor Index ETF | ||||||||
| 2023 | 2022 | |||||||
| Distributions paid from Ordinary income |
$1,398,123 | $586,728 | ||||||
| Franklin U.S. Small Cap | ||||||||
| Multifactor Index ETF | ||||||||
| 2023 | 2022 | |||||||
| Distributions paid from Ordinary income |
$231,686 | $184,173 | ||||||
| 114 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
At March 31, 2023, the cost of investments, net unrealized appreciation (depreciation) and undistributed ordinary income for income tax purposes were as follows:
| Franklin Emerging 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 |
$ | 13,270,186 | $ | 227,312,232 | $ | 24,824,083 | $ | 823,090,801 | ||||||||
| Unrealized appreciation |
$ | 1,249,973 | $ | 15,991,329 | $ | 1,333,970 | $ | 73,868,572 | ||||||||
| Unrealized depreciation |
(2,644,860 | ) | (4,591,850 | ) | (2,009,861 | ) | (38,061,874 | ) | ||||||||
| Net unrealized appreciation (depreciation) |
$ | (1,394,887 | ) | $ | 11,399,479 | $ | (675,891 | ) | $ | 35,806,698 | ||||||
| Distributable earnings – undistributed ordinary income |
$ | 98,090 | $ | 2,750,238 | $ | 80,557 | $ | 1,174,602 | ||||||||
| Franklin U.S. Mid Cap Multifactor Index ETF |
Franklin U.S. Small Cap Index ETF |
|||||||||||||||
| Cost of investments |
$ | 160,139,984 | $ | 16,331,858 | ||||||||||||
|
Unrealized appreciation |
$ | 13,188,262 | $ | 2,530,311 | ||||||||||||
| Unrealized depreciation |
(6,660,680 | ) | (1,817,755 | ) | ||||||||||||
| Net unrealized appreciation (depreciation) |
$ | 6,527,582 | $ | 712,556 | ||||||||||||
|
Distributable earnings – undistributed ordinary income |
$ | 265,662 | $ | 13,715 | ||||||||||||
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of passive foreign investment company shares and wash sales.
5. Investment Transactions
Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the year ended March 31, 2023, 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 |
$ | 14,854,790 | $ | 45,172,424 | $ | 43,464,584 | $ | 479,206,706 | ||||||||
| Sales |
$ | 16,225,733 | $ | 36,067,880 | $ | 42,343,674 | $ | 478,828,899 | ||||||||
| Franklin U.S. Mid Cap Multifactor Index ETF |
Franklin U.S. Small Cap Multifactor |
|||||||||||||||
| Purchases |
$ | 24,235,914 | $ | 4,578,216 | ||||||||||||
| Sales |
$ | 23,582,276 | $ | 4,442,633 | ||||||||||||
| franklintempleton.com | Annual Report | 115 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
5. Investment Transactions (continued)
In-kind transactions associated with creation and redemptions for the year ended March 31, 2023, were as follows:
| Franklin Emerging Tilt Index ETF |
Franklin International |
Franklin U.S. Core Dividend Tilt Index ETF |
Franklin U.S. Large Cap Multifactor Index ETF |
|||||||||||||
| Cost of Securities Received |
$ | — | $ | 204,280,213 | $ | 21,928,242 | $ | 254,611,623 | ||||||||
| Value of Securities Delivereda |
$ | 804,277 | $ | — | $ | 24,026,502 | $ | 283,430,791 | ||||||||
| Franklin U.S. Mid Cap Multifactor Index ETF |
Franklin U.S. Small Cap Index ETF |
|||||||||||||||
| Cost of Securities Received |
$ | 116,181,885 | $ | 1,799,657 | ||||||||||||
| Value of Securities Delivereda |
$ | 14,385,413 | $ | — | ||||||||||||
aRealized gains and losses from in-kind redemptions, as shown on the Statement of Operations, are not recognized by the Funds for tax purposes.
At March 31, 2023, 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 |
||||||||||
| Securities lending transactionsa: |
||||||||||
| Equity Investmentsb |
$130,050 | |||||||||
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 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 and a downgrade in the country’s credit rating. Ongoing developments related to the war have caused and may continue to cause severe declines in 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 severely impaired. For example,
| 116 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
6. Concentration of Risk (continued)
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. These as well as any other 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. 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. These circumstances could also have adverse tax, regulatory and/or other consequences to the Fund.
7. Other Derivative Information
At March 31, 2023, the Funds’ investments in derivative contracts are reflected in the Statements of Asset 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 |
$ | 1,778 | a | Variation margin on futures contracts |
$ | — | |||||||||||||
|
|
|
|
|
|||||||||||||||||
| Franklin International Core Dividend Tilt Index ETF | ||||||||||||||||||||
| Equity contracts |
Variation margin on futures contracts |
$ | 29,508 | a | Variation margin on futures contracts |
$ | — | |||||||||||||
|
|
|
|
|
|||||||||||||||||
| Franklin U.S. Core Dividend Tilt Index ETF | ||||||||||||||||||||
| Equity contracts |
Variation margin on futures contracts |
$ | 3,707 | a | Variation margin on futures contracts |
$ | — | |||||||||||||
|
|
|
|
|
|||||||||||||||||
| Franklin U.S. Large Cap Multifactor Index ETF | ||||||||||||||||||||
| Equity contracts |
Variation margin on futures contracts |
$ | 49,473 | a | Variation margin on futures contracts |
$ | — | |||||||||||||
|
|
|
|
|
|||||||||||||||||
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.
| franklintempleton.com | Annual Report | 117 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
7. Other Derivative Information (continued)
For the year ended March 31, 2023, 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 |
$ | (19,879 | ) | Futures contracts |
$ | (1,058 | ) | ||||||||||||
|
|
|
|
|
|||||||||||||||||
| 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 |
$ | 1,681,833 | Forward exchange contracts |
$ | (252,393 | ) | |||||||||||||
| Equity contracts |
Futures contracts |
28,773 | Futures contracts |
22,440 | ||||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Totals |
$ | 1,710,606 | $ | (229,953 | ) | |||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Franklin U.S. Core Dividend Tilt Index ETF | ||||||||||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||||||||||
| Equity contracts |
Futures contracts |
$ | (23,842 | ) | Futures contracts |
$ | (6,326 | ) | ||||||||||||
|
|
|
|
|
|||||||||||||||||
| Franklin U.S. Large Cap Multifactor Index ETF | ||||||||||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||||||||||
| Equity contracts |
Futures contracts |
$ | (308,821 | ) | Futures contracts |
$ | (21,118 | ) | ||||||||||||
|
|
|
|
|
|||||||||||||||||
| Franklin U.S. Mid Cap Multifactor Index ETF | ||||||||||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||||||||||
| Equity contracts |
Futures contracts |
$ | (40,955 | ) | 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 March 31, 2023, the average month end notional amount of futures contracts and average month end contract value for forward exchange contracts were as follows:
| Franklin Emerging Tilt Index ETF |
Franklin International Core Dividend Tilt |
Franklin U.S. Core Dividend Tilt Index ETF |
Franklin U.S. Large Index ETF |
|||||||||||||||||||||||||||||
| Futures contracts |
$ | 103,468 | $ | 283,836 | $ | 117,328 | $ | 1,047,376 | ||||||||||||||||||||||||
| Forward exchange contracts |
$ | — | $ | 20,694,573 | $ | — | $ | — | ||||||||||||||||||||||||
| 118 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
7. Other Derivative Information (continued)
| Franklin U.S. Mid Cap Multifactor Index ETF |
||||||||||||||
| Futures contracts |
$ | 59,298 | ||||||||||||
See Note 1(c) regarding derivative financial instruments.
8. Fair Value Measurements
The Funds follow a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Funds’ own market assumptions (unobservable inputs). These inputs are used in determining the value of the Funds’ financial instruments and are summarized in the following fair value hierarchy:
| • | Level 1 – quoted prices in active markets for identical financial instruments |
| • | Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.) |
| • | Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of financial instruments) |
The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.
A summary of inputs used as of March 31, 2023, 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 |
$ 11,869,342 | $ — | $ | 5,957 | $ | 11,875,299 | ||||||||||
|
|
|
|||||||||||||||
| Other Financial Instruments: |
||||||||||||||||
| Futures Contracts |
$ 1,778 | $ — | $ | — | $ | 1,778 | ||||||||||
|
|
|
|||||||||||||||
| Franklin International Core Dividend Tilt Index ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Equity Investmentsb |
$238,711,711 | $ — | $ | — | $ | 238,711,711 | ||||||||||
|
|
|
|||||||||||||||
| Other Financial Instruments: |
||||||||||||||||
| Futures Contracts |
$ 29,508 | $ — | $ | — | $ | 29,508 | ||||||||||
|
|
|
|||||||||||||||
| Franklin U.S. Core Dividend Tilt Index ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Equity Investmentsb |
$ 24,148,192 | $ — | $ | — | c | $ | 24,148,192 | |||||||||
|
|
|
|||||||||||||||
| Other Financial Instruments: |
||||||||||||||||
| Futures Contracts |
$ 3,707 | $ — | $ | — | $ | 3,707 | ||||||||||
|
|
|
|||||||||||||||
| Franklin U.S. Large Cap Multifactor Index ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Equity Investmentsb |
$858,897,499 | $ — | $ | — | $ | 858,897,499 | ||||||||||
|
|
|
|||||||||||||||
| Other Financial Instruments: |
||||||||||||||||
| Futures Contracts |
$ 49,473 | $ — | $ | — | $ | 49,473 | ||||||||||
|
|
|
|||||||||||||||
| franklintempleton.com | Annual Report | 119 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
8. Fair Value Measurements (continued)
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
| Franklin U.S. Mid Cap Multifactor Index ETF | ||||||||||||||||||||
| Assets: | ||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||
| Equity Investmentsb |
$ | 166,537,516 | $ — | $ | — | $ | 166,537,516 | |||||||||||||
| Short-Term Investments |
130,050 | — | — | 130,050 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Total Investments in Securities |
$ | 166,667,566 | $ — | $ | — | $ | 166,667,566 | |||||||||||||
|
|
|
|||||||||||||||||||
| Franklin U.S. Small Cap Multifactor Index ETF | ||||||||||||||||||||
| Assets: | ||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||
| Equity Investmentsb |
$ | 17,044,414 | $ — | $ | — | $ | 17,044,414 | |||||||||||||
|
|
|
|||||||||||||||||||
aFor detailed categories, see the accompanying Schedules of Investments.
bIncludes common and preferred stocks, warrants, as well as other equity investments.
cIncludes securities determined to have no value at March 31, 2023.
9. New Accounting Pronouncement
In June 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-03, Fair Value Measurement (Topic 820) - Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in the ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, should not be considered in measuring fair value. The ASU is effective for interim and annual reporting periods beginning after December 15, 2023, with the option of early adoption. Management has reviewed the requirements and believes that the adoption of the ASU will not have a material impact on the financial statements.
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 | ||||
| CDI | Clearing House Electronic Subregister | |||
| System Depositary Interest | ||||
| GDR | Global Depositary Receipt | |||
| NVDR | Non-Voting Depositary Receipt | |||
| REIT | Real Estate Investment Trust | |||
| SPA | Standby Purchase Agreement | |||
| 120 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Franklin Templeton ETF Trust and Shareholders of Franklin 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, Franklin U.S. Mid Cap Multifactor Index ETF and Franklin U.S. Small Cap Multifactor Index ETF
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of 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, Franklin U.S. Mid Cap Multifactor Index ETF and Franklin U.S. Small Cap Multifactor Index ETF (six of the funds constituting Franklin Templeton ETF Trust, hereafter collectively referred to as the “Funds”) as of March 31, 2023, the related statements of operations for the year ended March 31, 2023, the statements of changes in net assets for each of the two years in the period ended March 31, 2023, including the related notes, and the financial highlights for each of the five years in the period ended March 31, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of March 31, 2023, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period ended March 31, 2023 and each of the financial highlights for each of the five years in the period ended March 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinions
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of March 31, 2023 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.
PricewaterhouseCoopers LLP
San Francisco, California
May 23, 2023
We have served as the auditor of one or more investment companies in the Franklin Templeton funds since 1948.
| franklintempleton.com | Annual Report | 121 | ||
FRANKLIN TEMPLETON ETF TRUST
By mid-February, tax information related to a shareholder’s proportionate share of distributions paid during the preceding calendar year will be received, if applicable. Please also refer to www.franklintempleton.com for per share tax information related to any distributions paid during the preceding calendar year. Shareholders are advised to consult with their tax advisors for further information on the treatment of these amounts on their tax returns.
The following tax information for the Funds is required to be furnished to shareholders with respect to the income earned and distributions paid during their fiscal year.
The Funds below hereby report the following amounts, or if subsequently determined to be different, the maximum allowable amounts, for the fiscal year ended March 31, 2023:
| Pursuant to: | Franklin Emerging Market Core Dividend Tilt Index ETF |
Franklin ETF |
Franklin U.S. Core Dividend Tilt Index ETF |
Franklin ETF |
||||||||||||||||
| Long-Term Capital Gain Dividends |
§852(b)(3)(C) | $ | — | $ | 247,025 | $ | — | $ | — | |||||||||||
| Dividends Received Deduction (DRD) |
§854(b)(1)(A) | $ | — | $ | — | $ | 594,455 | $ | 18,841,117 | |||||||||||
| Qualified Dividend Income (QDI) |
§854(b)(1)(B) | $ | 401,981 | $ | 1,607,466 | $ | 785,161 | $ | 18,986,693 | |||||||||||
| Short-Term Capital Gain Dividends |
§871(k)(2)(C) | $ | — | $ | 9,570 | $ | — | $ | — | |||||||||||
| Pursuant to: | Franklin U.S. Mid Cap Multifactor Index ETF |
Franklin U.S. Small Cap Index ETF |
||||||||||||||
| Long-Term Capital Gain Dividends |
§852(b)(3)(C) | $ | — | $ | — | |||||||||||
| Dividends Received Deduction (DRD) |
§854(b)(1)(A) | $ | 1,398,123 | $ | 231,686 | |||||||||||
| Qualified Dividend Income (QDI) |
§854(b)(1)(B) | $ | 1,398,123 | $ | 231,686 | |||||||||||
| Short-Term Capital Gain Dividends |
§871(k)(2)(C) | $ | — | $ | — | |||||||||||
Under Section 853 of the Internal Revenue Code, the Funds below intend to elect to pass through to their shareholders the following amounts, or amounts as finally determined, of foreign taxes paid and foreign source income earned by the Funds during the fiscal year ended March 31, 2023:
| Franklin Emerging Market Core Dividend Tilt Index ETF |
Franklin ETF |
|||||||
| Foreign Taxes Paid |
$ | 153,337 | $ 230,231 | |||||
| Foreign Source Income |
$ | 877,475 | $3,362,394 | |||||
| 122 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
The name, year of birth and address of the officers and board members, as well as their affiliations, positions held with the Trust, principal occupations during at least the past five years and number of U.S. registered portfolios overseen in the Franklin Templeton/Legg Mason fund complex, are shown below. Generally, each board member serves until that person’s successor is elected and qualified.
Independent Board Members
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| Rohit Bhagat (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Lead Independent Trustee | Since 2016 | 59 | AssetMark Financial Holdings, Inc. (investment solutions) (2018-present) and PhonePe (2020-present) (payment and financial services); formerly, Axis Bank (financial) (2013- 2021), FlipKart Limited (2019-2020) (eCommerce company); CapFloat Financial Services Pvt., Ltd. (non-banking finance company) (2018) and Zentific Investment Management (hedge fund) (2015-2018). | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Managing Member, Mukt Capital, LLC (private investment firm) (2014-present); Advisor, Optimal Asset Management (investment technology | ||||||||
| and advisory services company) (2015-present); Chief Executive Officer and Director, FinTech Evolution Acquisition (eCommerce company) | ||||||||
| (February 2021-present); and formerly, Chairman, Asia Pacific, BlackRock (2009-2012); Global Chief Operating Officer, Barclays Global | ||||||||
| Investors (investment management) (2005-2009); and Senior Partner, The Boston Consulting Group (management consulting) (1992-2005). | ||||||||
| Deborah D. McWhinney (1955) | Trustee | Since 2020 | 59 | S&P Global, Inc. (financial | ||||
| One Franklin Parkway | information services) (February | |||||||
| San Mateo, CA 94403-1906 | 2022), Borg Warner (automotive) | |||||||
| (2018-present), LegalShield | ||||||||
| (consumer services) (2020-present); | ||||||||
| and formerly, IHS Markit (information | ||||||||
| services) (2015-2022), | ||||||||
| Fluor Corporation (construction | ||||||||
| and engineering) (2014-2020) | ||||||||
| and Focus Financial Partner, LLC | ||||||||
| (financial services) (2018-2020). | ||||||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Director of various companies; and formerly, Board Member, Lloyds Banking Group (2015-2018) (financial institution) and Fresenius Medical Group (2016-2018) (healthcare); Chief Executive Officer (2013-2014) and Chief Operating Officer (2011-2013), CitiGroup Global Enterprise Payments (financial services); and President, Citi’s Personal Banking and Wealth Management (2009-2011). | ||||||||
| Anantha K. Pradeep (1963) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee | Since 2016 | 59 | None | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Chief Executive Officer, Smilable, Inc. (technology company) (2014-present); Chief Executive Officer, MachineVantage (technology company) (2018-present); Founder and Managing Partner, Consult Meridian, LLC (consulting company) (2009-present); and formerly, Founder, BoardVantage (board portal solutions provider delivering paperless process for boards and leadership) (2000-2002). | ||||||||
| franklintempleton.com | Annual Report | 123 | ||
FRANKLIN TEMPLETON ETF TRUST
Interested Board Members and Officers
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| **Jennifer M. Johnson (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee and Chairperson of the Board | Since 2016 | 70 | None | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Chief Executive Officer, President and Director, Franklin Resources, Inc.; officer and/or director or trustee, of some of the other subsidiaries of Franklin Resources, Inc. and of certain funds in the Franklin Templeton/Legg Mason fund complex; and formerly, Chief Operating Officer and Executive Vice President, Franklin Resources, Inc. (1994-2015); Executive Vice President of Operations and Technology, Franklin Resources, Inc. (2005-2010); and Senior Vice President, Franklin Resources, Inc. (2003-2005). | ||||||||
| Alison E. Baur (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President | Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Deputy General Counsel, Franklin Templeton; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Steven J. Gray (1955) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President | Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Distributors, LLC; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Matthew T. Hinkle (1971) One Franklin Parkway San Mateo, CA 94403-1906 |
Chief Executive Officer – Finance and Administration | Since 2017 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Vice President, Franklin Templeton Services, LLC; officer of certain funds in the Franklin Templeton/Legg Mason fund complex; and formerly, Vice President, Global Tax (2012-April 2017) and Treasurer/Assistant Treasurer, Franklin Templeton (2009-2017). | ||||||||
| Fred Jensen (1963) 620 Eighth Avenue, 47th Floor New York, NY 10018 |
Chief Compliance Officer | Since 2021 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Director - Global Compliance of Franklin Templeton; Managing Director of Legg Mason & Co.; Director of Compliance, Legg Mason Office of the Chief Compliance Officer; Chief Compliance Officer, Franklin Advisory Services, LLC; Compliance Officer, Franklin Advisers, Inc.; officer of certain funds in the Franklin Templeton/Legg Mason fund complex; formerly, Chief Compliance Officer of Legg Mason Global Asset Allocation; Chief Compliance Officer, Legg Mason Private Portfolio; Chief Compliance Officer to The Reserves Funds (investment adviser, funds and broker-dealer) and Ambac Financial Group (investment adviser, funds and broker-dealer). | ||||||||
| Susan Kerr (1949) 620 Eighth Avenue New York, NY 10018 |
Vice President - AML Compliance | Since 2021 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Compliance Analyst, Franklin Templeton; Chief Anti-Money Laundering Compliance Officer, Legg Mason & Co., or its affiliates; Anti Money Laundering Compliance Officer; Senior Compliance Officer, LMIS; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Todd Mathias (1983) One Franklin Parkway, San Mateo, Ca 94403-1906 |
Vice President | Since March 2022 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Head of US ETF Product Strategy, Franklin Templeton; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
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FRANKLIN TEMPLETON ETF TRUST
Interested Board Members and Officers (continued)
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| Patrick O’Connor (1967) One Franklin Parkway San Mateo, CA 94403-1906 |
President and Chief Executive Officer – Investment Management | Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| President and Chief Investment Officer, Franklin Advisory Services, LLC; Senior Vice President, Franklin Advisers, Inc.; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Vivek Pai (1970) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 |
Treasurer, Chief Financial Officer and Chief Accounting Officer | Since 2019 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Treasurer, U.S. Fund Administration & Reporting and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Navid J. Tofigh (1972) One Franklin Parkway, San Mateo, Ca 94403-1906 |
Vice President and Secretary | Since 2015 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Lori A. Weber (1964) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 |
Vice President and Secretary | Vice President since 2011 and Secretary since 2013 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Resources, Inc.; Vice President and Secretary, Templeton Investment Counsel, LLC; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
*We base the number of portfolios on each separate series of the U.S. registered investment companies within the Franklin Templeton fund complex. These portfolios have a common investment manager or affiliated investment managers.
**Jennifer M. Johnson is considered to be an interested person of the Fund under the federal securities laws due to her position as an officer and director of Franklin Resources, Inc. (Resources), which is the parent company of the Fund’s investment manager and distributor.
Note 1: Officer information is current as of the date of this report. It is possible that after this date, information about officers may change.
The Sarbanes-Oxley Act of 2002 and Rules adopted by the Securities and Exchange Commission require the Fund to disclose whether the Fund’s Audit Committee includes at least one member who is an audit committee financial expert within the meaning of such Act and Rules. The Fund’s Board has determined that there is at least one such financial expert on the Audit Committee and has designated Rohit Bhagat and Deboarah D. McWhinney as its audit committee financial experts. The Board believes that Mr. Bhagat and Ms. McWhinney qualify as such an expert in view of their extensive business background and experience, including extensive experience in the asset management and financial services industries. Mr. Bhagat has been a Member and Chairman of the Fund’s Audit Committee since 2017. Ms. McWhinney has been a member of the Fund Audit Committee since 2020. As a result of such background and experience, the Board believes that Mr. Bhagat and Ms. McWhinney have acquired an understanding of generally accepted accounting principles and financial statements, the general application of such principles in connection with the accounting estimates, accruals and reserves, and analyzing and evaluating financial statements that presents a breadth and level of complexity of accounting issues generally comparable to those of the Fund, as well as an understanding of internal controls and procedures for financial reporting and an understanding of audit committee functions. Mr. Bhagat and Ms. McWhinney are independent Board members as that term is defined under the relevant Securities and Exchange Commission Rules and Releases.
The Statement of Additional Information (SAI) includes additional information about the board members and is available, without charge, upon request. Shareholders may call (800) DIAL BEN/342-5236 to request the SAI.
| franklintempleton.com | Annual Report | 125 | ||
FRANKLIN TEMPLETON ETF TRUST
Proxy Voting Policies and Procedures
The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.
Quarterly Schedule of Investments
The Trust files a complete schedule of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year as an exhibit to its report on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.
Premium/Discount Information
Information about the differences between the daily market price on the secondary market for the shares of each Fund and each Fund’s net asset value may be found on each Fund’s website at franklintempleton.com.
| 126 | Annual Report | franklintempleton.com | ||
Authorized for distribution only when accompanied or preceded by a summary prospectus and/or prospectus. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. A prospectus contains this and other information; please read it carefully before investing.
To help ensure we provide you with quality service, all calls to and from our service areas are monitored and/or recorded.
|
Annual Report Franklin Templeton ETF Trust | |||||||
| Investment Manager | Distributor | Investor Services | ||||||
| Franklin Advisory Services, LLC |
Franklin Distributors, LLC (800) DIAL BEN®/342-5236 franklintempleton.com |
Transfer Agent State Street Bank and Trust Company 1 Heritage Drive Mail Stop OHD0100 North Quincy, MA 02171 | ||||||
| © 2023 Franklin Templeton Investments. All rights reserved. | ETF A 05/23 | |||||||
| 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 | ||
| Formerly Franklin Federal Tax-Free 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 |
| Contents | ||
| Annual Report | ||
| Visit franklintempleton.com for fund updates and documents, or to find helpful financial planning tools. |
| Not FDIC Insured | | May Lose Value | | No Bank Guarantee |
| franklintempleton.com | Annual Report | 1 | ||
Franklin Disruptive Commerce ETF
This annual report for Franklin Disruptive Commerce ETF covers the fiscal year ended March 31, 2023.
Your Fund’s Goal and Main Investments
The Fund seeks capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in equity securities, predominantly common stock, of companies that are relevant to the Fund’s investment theme of disruptive commerce. These companies include those that are focused on, or that the investment manager believes will benefit from, electronic commerce, auctions, the sharing economy, electronic payment capabilities, drop shipping, direct marketing, significant decreases in transport and delivery costs and other activities or developments, as outlined in more detail in the Prospectus.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -22.48% based on market price and -22.34% 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 -8.58% 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 6.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Economic and Market Overview
U.S. equities, as measured by the Standard & Poor’s® 500 Index (S&P 500®), posted a -7.73% total return for the 12 months ended March 31, 2023.1 High inflation, rising interest rates and geopolitical instability contributed to a sharp
decline in equity prices. Consumer spending continued to rise, but deteriorating financial conditions and investors’ expectations for slower growth pressured equity markets.
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 early in the period. Inflation peaked at 9.1% in June 2022, the highest annual rate since 1981, before gradually sliding to a low of 6% in February 2023. The labor market remained strong amid a high level of nominal growth, which sent the U.S. unemployment rate down to a historic 54-year low of 3.4% in January 2023 before ending the period at 3.5%.
U.S. gross domestic product grew in the second half of 2022 after modestly contracting in the first half of the year. Rising consumer spending and increased exports amid declining inflation led to solid economic growth in the final two quarters of 2022. However, rising interest rates translated to higher borrowing costs for individuals and businesses, which dampened economic activity, especially in the housing and financial markets over the period.
In an effort to control inflation, the U.S. Federal Reserve (Fed) rapidly restricted monetary policy during the period. The Fed raised the federal funds target rate eight times to end the period at a range of 4.75%–5.00%, pushing borrowing costs to their highest levels since 2007. The interest-rate hikes included four successive 75 basis point increases at its June, July, September and November 2022 meetings and smaller increases at its remaining meetings during the period. At its March 2023 meeting, the Fed said it would continue to reduce bond holdings, but departed from previous statements by softening its firm outlook on future rate hikes. Additionally, Fed Chair Jerome Powell said the central bank most likely would not cut rates in 2023.
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 110.
| 2 | Annual Report | franklintempleton.com | ||
FRANKLIN DISRUPTIVE COMMERCE ETF
| Portfolio Composition | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Internet & Direct Marketing Retail | 26.7% | |||
| IT Services | 19.9% | |||
| Trading Companies & Distributors | 9.1% | |||
| Software | 7.7% | |||
| Hotels, Restaurants & Leisure | 6.3% | |||
| Ground Transportation | 5.2% | |||
| Consumer Staples Distribution & Retail | 4.7% | |||
| Entertainment | 3.9% | |||
| Commercial Services & Supplies | 3.3% | |||
| Professional Services | 3.1% | |||
| Interactive Media & Services | 2.3% | |||
| Diversified REITs | 2.0% | |||
| Other | 3.3% | |||
| Other Net Assets | 2.5% | |||
| Top 10 Holdings | ||||
| 3/31/23 | ||||
| Company Sector/Industry |
% of Total Net Assets |
|||
| Amazon.com, Inc. Internet & Direct Marketing Retail |
7.8% | |||
| Shopify, Inc. Interactive Media & Services |
5.1% | |||
| WW Grainger, Inc. Trading Companies & Distributors |
4.8% | |||
| Costco Wholesale Corp. Consumer Staples Merchandise Retail |
4.7% | |||
| MercadoLibre, Inc. Internet & Direct Marketing Retail |
4.4% | |||
| Fastenal Co. Trading Companies & Distributors |
4.3% | |||
| Adyen NV Data Processing & Outsourced Services |
4.3% | |||
| Uber Technologies, Inc. Trucking |
4.0% | |||
| DoorDash, Inc. Internet & Direct Marketing Retail |
3.5% | |||
| Etsy, Inc. Internet & Direct Marketing Retail |
3.4% | |||
Investment Strategy
We seek to identify, using our own fundamental, bottom-up research and analysis, companies positioned to capitalize on disruptive innovation in or that are enabling the further development of the disruptive commerce themes in the
markets in which they operate. Our internal research and analysis leverages insights from diverse sources, including external research, to develop and refine its investment theme and identify and take advantage of trends that have ramification to individual companies or entire industries. 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 may invest across economic sectors, we expect to concentrate our investments in consumer discretionary-related industries.
Manager’s Discussion
The 12 months under review was a tale of two halves for the Fund: Although the final six months of the reporting period resulted in solid overall gains, it was not enough to compensate for the steep losses incurred from April through September 2022.
After declining more sharply than the broader equity market averages in the first nine months of 2022 as investors appeared to brace for a possible recession, stocks related to e-commerce businesses began to stage a partial recovery in October. Throughout the year under review, many e-commerce companies began to reduce staff, cut back on technology spending and other capital-intensive projects, and otherwise sought to right-size their operations to better suit changing market conditions at the end of a prolonged demand boom. Digital payment platform businesses, meanwhile, contended with the specter of waning transaction volumes. The latest data revealed that consumer spending has not collapsed in the current environment, but consumers are allocating more discretionary dollars toward services such as entertainment and travel, at least partially reversing the merchandise-heavy tilt that was in place over the past two-and-a-half years. In select categories, such as clothing, the percentage of sales made online reverted to where it was before the pandemic, according to some estimates. And for the past six quarters through December 2022, online growth has trailed the sales gains of the overall retail industry.
The portfolio held exposures to nine different equity sectors, eight of which produced negative absolute returns, while industrial sector stocks combined for a small contribution that had a negligible impact on overall performance. The bulk
| franklintempleton.com | Annual Report | 3 | ||
FRANKLIN DISRUPTIVE COMMERCE ETF
of the decline occurred in the consumer discretionary, information technology (IT), communication services and financials sectors, which on average comprised roughly two-thirds of the portfolio’s overall composition.
Widespread declines were evident in the consumer discretionary sector, where e-commerce names such as Amazon.com (focused on e-commerce, cloud computing, online advertising, digital streaming and artificial intelligence), online fashion retailer Revolve Group, and vacation rental and short-term homestays broker Airbnb were standout detractors. All of our smaller positions in the household durables; and textiles, apparel and luxury goods industries also posted large losses, owing mostly to a steep selloff in LoveSac, which was liquidated before period-end.
In the IT sector, nearly all holdings suffered double-digit percentage declines, including major detractors such as BILL Holdings (cloud-based back-office software) and Unity Software (video game development platform provider) in the software industry, along with Shopify, an e-commerce platform for online stores and retail point-of-sale systems, in the IT services industry. The stock market headwinds were also quite strong in the tech-adjacent communication services sector, where eight out of 10 related holdings sold off. Interactive media and services providers were an area of acute weakness as the group was led lower by ZoomInfo Technologies, which provides marketing software and data solutions, and which lost more than half of its equity value during the year under review.
Late in the year, many of our holdings tied to e-commerce payments and online transactions were reclassified as financial services companies, where previously such fintech companies had been grouped with IT services industry names. Most of these holdings fared poorly, with our absolute returns curbed foremost by depreciation in Dutch e-payment platform provider Adyen and dLocal, which enables cross-border payments connecting global merchants to emerging markets. Consumer finance stocks such as Upstart Holdings (an AI-enabled peer-to-peer lending platform) were also weak, and we eventually divested the Fund’s holdings in these companies by year-end.
To a lesser extent, consumer staples were also a hindrance as all related stocks sold off, including Costco Wholesale and Freshpet, the latter of which makes premium dog and cat food. The Fund’s health care holdings were limited to a solitary position in Figs, which sells medical uniforms and apparel, and which shed most of its equity value before it
CFA® is a trademark owned by CFA Institute.
was eliminated from the portfolio. ProLogis, a real estate investment trust that specializes in transportation logistics facilities that are a crucial part of the supply chain, was our sole detractor in the real estate sector, while materials sector returns were pressured foremost by a modest selloff in Packaging Corporation of America.
In terms of what aided Fund performance, there were a handful of companies that posted solid gains during the year, with positive overall results in the industrials sector led by gains in industrial supply company WW Grainger, online vehicle auction and remarketing services provider Copart, and freight shipping and logistics company Old Dominion Freight Line.
The rest of the notable contributors helped decrease the overall declines in other sector allocations, including a few e-commerce companies such as Latin America-based MercadoLibre and China-based Alibaba Group Holding (purchased during the period), which aided results in the consumer discretionary sector along with Booking Holdings, an online travel fare aggregator and travel fare metasearch engine provider.
Similar to Alibaba, we initiated a new position in another Chinese company with the purchase of Tencent Holdings in the interactive media and services industry, which went on to rally solidly through period-end and benefited returns in the communication services sector. Elsewhere in the sector, Netflix (also purchased during the period) lent modest support to our otherwise poor results in the entertainment industry. Mixed results in the IT sector, meanwhile, were supported by several software holdings, including key contributor Descartes Systems Group, which specializes in cloud-based logistics and supply-chain management solutions.
Although most payment processing companies dampened absolute returns, both Visa and Mastercard showed resilience and posted small gains within the group. Across the rest of the portfolio, the contributors were generally minor and had little impact in reversing the widespread declines outlined above.
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
| 4 | Annual Report | franklintempleton.com | ||
FRANKLIN DISRUPTIVE COMMERCE ETF
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2023, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
| franklintempleton.com | Annual Report | 5 | ||
FRANKLIN DISRUPTIVE COMMERCE ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (2/27/20), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
| 1-Year |
-22.34% | -22.48% | -22.34% | -22.48% | ||||||||||||
| 3-Year |
+13.66% | +12.41% | +4.36% | +3.98% | ||||||||||||
| Since Inception (2/25/20) |
-3.07% | -3.15% | -1.00% | -1.03% | ||||||||||||
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 8 for Performance Summary footnotes.
| 6 | Annual Report | franklintempleton.com | ||
FRANKLIN DISRUPTIVE COMMERCE ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
2/25/20-3/31/23
See page 8 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 7 | ||
FRANKLIN DISRUPTIVE COMMERCE ETF
PERFORMANCE SUMMARY
Total Annual Operating Expenses6
|
0.50% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. The Fund’s investment strategies incorporate the identification of thematic investment opportunities and its performance may be negatively impacted if the investment manager does not correctly identify such opportunities or if the theme develops in an unexpected manner. By focusing its investments in consumer discretionary related industries, the Fund carries much greater risks of adverse developments and price movements in such industries than a fund that invests in a wider variety of industries. Companies operating within consumer discretionary related industries could be affected by, among other things, overall economic conditions, interest rates, disposable income, fluctuating consumer confidence and consumer demand. Many of these companies compete aggressively on price, potentially affecting their long run profitability. Companies within consumer discretionary related industries may have extensive online operations, which could make these companies particularly vulnerable to cyber security risk. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of the Fund’s prospectus available at the time of publication. Net expenses are capped under a contractual agreement, which cannot be terminated prior to 7/31/23 without Board consent. 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. Source: FactSet. The Russell® Index is market capitalization weighted and measures the performance of the largest 3,000 U.S. companies representing the majority of the U.S. market’s total capitalization.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
| 8 | Annual Report | franklintempleton.com | ||
FRANKLIN DISRUPTIVE COMMERCE ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
| Beginning Account Value 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,174.90 | $2.71 | $1,022.44 | $2.52 | 0.50 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
| franklintempleton.com | Annual Report | 9 | ||
Franklin Dynamic Municipal Bond ETF
This annual report for Franklin Dynamic Municipal Bond ETF covers the fiscal year ended March 31, 2023.
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 whose interest is free from such taxes.1 The Fund seeks to maintain a dollar-weighted average portfolio maturity (the time in which the debt must be repaid) of three to 10 years, and may invest in municipal securities in any rating category by U.S. nationally recognized rating services (or 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 12-month period, the Fund posted cumulative total returns of -0.69% based on market price and -0.82% 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 (a market value-weighted index of tax-exempt, investment-grade municipal bonds with maturities of one year or more) posted a +1.61% 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 12.
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 12 months ended March 31, 2023, the U.S. Federal Reserve (Fed) continued to tighten monetary policy as it tried to get inflation under control without tipping the economy into recession. After several hikes of 75 basis points (bps), the Fed slowed the pace of tightening to 50 bps in December 2022, followed by two 25-bp increases in February and March 2023. This last decision came in the face of regional banking sector turmoil, though fears of widespread contagion quickly abated.
The municipal bond (muni) market witnessed a very challenging year in 2022, primarily driven by the Fed’s monetary policy tightening. High levels of uncertainty led to significant outflows from muni retail vehicles. The first quarter of 2023 saw a reversal of this trend as investors looked for high-quality alternatives amid market volatility. Inflows to munis were met with restricted new issuance, resulting in positive absolute returns year-to-date. Credit fundamentals remained strong, as many muni issuers benefited from federal aid received during the COVID-19 crisis and from the subsequent economic recovery.
For the 12-month period, U.S. fixed income sectors saw better performance relative to equities, as measured by the Standard & Poor’s® 500 Index, which posted a -7.73% total return.2 Investment-grade munis, as measured by the Bloomberg Municipal Bond Index, posted a +0.26% total return, while U.S. Treasuries, as measured by the Bloomberg U.S. Treasury Index, posted a -4.51% total return.2 Investment-grade corporate bonds, as measured by the Bloomberg U.S. Corporate Investment Grade Index, posted a -5.55% 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 113.
| 10 | Annual Report | franklintempleton.com | ||
FRANKLIN DYNAMIC MUNICIPAL BOND ETF
| Portfolio Composition | ||||
| 3/31/23 | ||||
| % of Total Investments |
||||
| Industrial Development Revenue and Pollution Control |
32.36% | |||
| Special Tax | 20.15% | |||
| Health Care | 14.01% | |||
| Education | 8.02% | |||
| Transportation | 5.75% | |||
| Housing | 5.07% | |||
| Local | 4.56% | |||
| Lease | 2.59% | |||
| State | 2.21% | |||
| Other | 2.07% | |||
| Cash | 1.78% | |||
| Utilities | 1.30% | |||
| Refunded | 0.13% | |||
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. 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
During the 12-month period, the portfolio management team invested across the entire quality spectrum, including below investment-grade bonds, to achieve our objective of maximizing income for our investors. As credit spreads fluctuate, we will continue to seek the best opportunities in higher and lower quality securities. The yield curve flattened significantly over the reporting period, and the team focused
on yield curve positioning in an effort to help our investors achieve high levels of tax-free income over the long term.
Thank you for your participation in Franklin Dynamic Municipal Bond ETF. We look forward to serving your future investment needs.
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2023, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
| franklintempleton.com | Annual Report | 11 | ||
FRANKLIN DYNAMIC MUNICIPAL BOND ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (9/5/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231,2
| Cumulative Total Return3 | Average Annual Total Return3 | |||||||||||||||
| Based on NAV4 |
Based on market price5 |
Based on NAV4 |
Based on market price5 |
|||||||||||||
| 1-Year |
-0.82% | -0.69% | -0.82% | -0.69% | ||||||||||||
| 3-Year |
+3.95% | +4.21% | +1.30% | +1.38% | ||||||||||||
| 5-Year |
+10.89% | +10.66% | +2.09% | +2.05% | ||||||||||||
| Since Inception (8/31/17) |
+9.20% | +9.37% | +1.59% | +1.62% | ||||||||||||
| Distribution Rate6 | 30-Day Standardized Yield7 |
Taxable Equivalent 30-Day Standardized Yield8 |
||||||
| 2.92% |
4.18% | 7.06% | ||||||
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 14 for Performance Summary footnotes.
| 12 | Annual Report | franklintempleton.com | ||
FRANKLIN DYNAMIC MUNICIPAL BOND ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
8/31/17-3/31/23
See page 14 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 13 | ||
FRANKLIN DYNAMIC MUNICIPAL BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $0.709845 |
Total Annual Operating Expenses10
| With Fee Waiver |
|
0.30% |
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. Unrated debt securities have less public information and independent credit analysis and they may be subject to a greater risk of illiquidity, price changes or default. The Fund may invest a significant part of its assets in municipal securities that finance similar types of projects, such as utilities, hospitals, higher education and transportation. A change that affects one project would likely affect all similar projects, thereby increasing market risk. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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. Effective December 1, 2022, 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.
3. 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.
4. Assumes reinvestment of distributions based on net asset value.
5. Assumes reinvestment of distributions based on market price.
6. Distribution rate is based on an annualization of the March dividend and the NAV per share on 3/31/23.
7. 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.
8. Taxable equivalent yield assumes the 2023 maximum federal income tax rate of 37.00% plus 3.80% Medicare tax.
9. Source: FactSet. Bloomberg Municipal 1-15 Year Index is a subset of the Bloomberg Municipal Bond Index, which is a market value-weighted index of tax-exempt, investment-grade municipal bonds with maturities of one year or more.
10. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
| 14 | Annual Report | franklintempleton.com | ||
FRANKLIN DYNAMIC MUNICIPAL BOND ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
| Beginning Account Value 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,064.90 | $1.54 | $1,023.44 | $1.51 | 0.30 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
| franklintempleton.com | Annual Report | 15 | ||
This annual report for Franklin Exponential Data ETF covers the fiscal year ended March 31, 2023.
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 we believe are substantially focused on and/or are expected to substantially benefit from the use of large data sets and/or growth of data, including systems, services, hardware, software and other digital and physical infrastructure related to data products or services, as outlined in more detail in the Prospectus.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -26.17% based on market price and -25.99% 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 -8.58% 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 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.
Economic and Market Overview
U.S. equities, as measured by the Standard & Poor’s® 500 Index (S&P 500®), posted a -7.73% total return for the 12 months ended March 31, 2023.1 High inflation, rising interest rates and geopolitical instability contributed to a sharp decline in equity prices. Consumer spending continued to rise, but deteriorating financial conditions and investors’ expectations for slower growth pressured equity markets.
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 early in the period. Inflation peaked at 9.1% in June 2022, the highest annual rate since 1981, before gradually sliding to a low of 6% in February 2023. The labor market remained strong amid a high level of nominal growth, which sent the U.S. unemployment rate down to a historic 54-year low of 3.4% in January 2023 before ending the period at 3.5%.
U.S. gross domestic product grew in the second half of 2022 after modestly contracting in the first half of the year. Rising consumer spending and increased exports amid declining inflation led to solid economic growth in the final two quarters of 2022. However, rising interest rates translated to higher borrowing costs for individuals and businesses, which dampened economic activity, especially in the housing and financial markets over the period.
In an effort to control inflation, the U.S. Federal Reserve (Fed) rapidly restricted monetary policy during the period. The Fed raised the federal funds target rate eight times to end the period at a range of 4.75%–5.00%, pushing borrowing costs to their highest levels since 2007. The interest-rate hikes included four successive 75 basis point increases at its June, July, September and November 2022 meetings and smaller increases at its remaining meetings during the period. At its March 2023 meeting, the Fed said it would continue to reduce bond holdings, but departed from previous statements by softening its firm outlook on future rate hikes. Additionally, Fed Chair Jerome Powell said the central bank most likely would not cut rates in 2023.
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 126.
| 16 | Annual Report | franklintempleton.com | ||
FRANKLIN EXPONENTIAL DATA ETF
| Portfolio Composition | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Software | 49.3% | |||
| IT Services | 15.2% | |||
| Diversified REITs | 11.3% | |||
| Capital Markets | 6.9% | |||
| Interactive Media & Services | 5.9% | |||
| Wireless Telecommunication Services | 3.3% | |||
| Communications Equipment | 3.0% | |||
| Electronic Equipment, Instruments & Components | 2.0% | |||
| Other | 1.9% | |||
| Short-Term Investments & Other Net Assets | 1.2% | |||
| Top 10 Holdings | ||||
| 3/31/23 | ||||
| Company Sector/Industry |
% of Total Net Assets |
|||
| Microsoft Corp. Information Technology |
7.2% | |||
| MongoDB, Inc. Information Technology |
5.3% | |||
| Equinix, Inc. Real Estate |
4.7% | |||
| Palo Alto Networks, Inc. Information Technology |
4.6% | |||
| ServiceNow, Inc. Information Technology |
4.4% | |||
| Cloudflare, Inc., Class A Information Technology |
4.3% | |||
| Snowflake, Inc., Class A Information Technology |
4.2% | |||
| Alphabet, Inc., Class A Communication Services |
|
4.1% |
| |
| Datadog, Inc., Class A Information Technology |
|
4.0% |
| |
| SBA Communications Corp. Real Estate |
|
3.3% |
| |
Investment Strategy
We seek to identify, using our own fundamental, bottom-up research analysis, 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. Our internal research and analysis leverages insights from diverse sources, including external research, to develop and refine its investment and identify and take advantage of trends that have ramifications for individual
companies or entire industries. In analyzing investment opportunities, we also 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 may invest across economic sectors, we expect to concentrate our investments in information technology-related industries.
Manager’s Discussion
During the 12 months under review, the Fund was invested in 13 different industries, with just four of them adding meaningfully to the Fund’s absolute returns. This endpoint result marked an improvement from the midpoint of the annual period, when nearly all the portfolio’s individual stock holdings were net detractors in a broader bear market environment (while the few outliers to the upside were inadequate as they had no material impact on returns). Interest-rate hikes and global macroeconomic conditions applied downward pressure on numerous companies held by the Fund, and several of them compounded those challenges with disappointing earnings reports and forward guidance. Despite the overall gains made from the October low point through period-end, the Fund was unable to recover most of the prior losses.
Three of the Fund’s largest industry allocations—software, information technology (IT) services, and interactive media and services—comprised nearly 70% of its total net assets when combined, and they were also the biggest detractors of the year. Most software holdings posted steep double-digit percentage losses with Datadog (cloud-based “observability” and analytics platform), Zscaler (cloud-based secure network access and data migration services) and SentinelOne (cybersecurity) shedding more than half of their equity value. In our view, the selling in software names often appeared indiscriminate and overdone. For example, top overall detractor Datadog—offering a comprehensive “technology stack” monitoring and analytics platform for software developers, IT operations teams and business users—reported what we considered strong quarterly financial results (in terms of earnings per share, revenues and billings) and raised their full-year outlook for 2022. According to our analysis, Datadog continues to be a best-in-breed business with excellent long-term growth potential (landing new clients and expanding well in large total addressable markets), and overall high quality given the rising validation of its platform, strong unit economics, and high free cash flow.
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FRANKLIN EXPONENTIAL DATA ETF
The other key detractors were a mix of application and systems software providers, including CrowdStrike Holdings, Confluent and GitLab. IT services was another area of widespread weakness—10 out of 11 holdings posted significant declines, and this industry allocation had the worst overall return in the IT sector. The key IT services and internet infrastructure detractors included MongoDB, Cloudflare, Snowflake and Twilio. In particular, MongoDB, which offers an innovative document database used by nearly 40,000 businesses, reported better-than-expected earnings per share, operating income, billings, and revenue in its quarterly financials released during the period. However, the company’s outlook and commentary were disappointing, with guidance generally coming in slightly below analyst forecasts, implying a slowdown. There was growing concern that a challenging economic environment would impact MongoDB’s ability to expand its relationship with existing customers.
Elsewhere in the portfolio, our results in the communication services sector were hurt by the selloffs in ZoomInfo Technologies and Alphabet in the interactive media and services industry; their negative impact was amplified by the fact they were major holdings that began the reporting period at a combined 10.6% of total net assets. Ahead of the deterioration in its equity value, ZoomInfo Technologies, which enables business-to-business marketing strategies by leveraging AI (artificial intelligence), and technographic and firmographic data, started the annual period on a high note, with quarterly sales and earnings that topped consensus expectations, including a 54% surge in revenues year over year. ZoomInfo’s platform strategy resonated with customers and helped deliver another record quarter in the second quarter of 2022, combining strong revenue growth, profitability and free cash flow—all of which prompted management to raise its full-year earnings outlook. The company also noted that it had 1,763 customers with US$100,000 or greater in annual contract value at the end of June 2022, up from 1,100 customers a year earlier.
Technology-oriented REITs (real estate investment trusts) were another area of distinct weakness as the shares of Crown Castle International and SBA Communications posted substantial 12-month losses. The Fund also kept a small exposure to professional services companies in the industrials sector, where TransUnion and TaskUs (sold by period-end) both saw their equity values substantially reduced.
In positive contrast, the Fund’s four advancing industry allocations were (in descending order of impact) communications equipment; wireless telecommunication services; capital markets; and electronic equipment, instruments and components. Across the entire portfolio, only 11 out of 42 individual securities lent material support to our returns, and their combined impact was small relative to the magnitude of the detractors.
In the IT sector, key contributor Arista Networks (a builder of scalable high-performance and ultra-low-latency networks) was our sole position in communications equipment, while the advance in electronic equipment, instruments and components was due exclusively to Keysight Technologies (electronics test and measurement equipment and software). The other notable IT sector contributors pared the losses in IT services (led by technology research and consulting service provider Gartner), and in software, where Fair Isaac and Microsoft were the best of eight net contributors. In particular, Fair Isaac—known for consumer credit scoring and business data analytics—was the Fund’s top overall contributor for the year under review, having posted a robust gain, while most of its peers were selling off. Although Fair Isaac’s revenue comes from its traditional FICO credit-scoring systems, the revenue stream tied to its newer software-as-a-service (SaaS) division has grown rapidly as it offers corporate customers a range of tools to help their companies run more efficiently. This segment leverages predictive modeling, transaction profiling, decision analysis and AI to help companies gain unique, actionable insights. Within these SaaS offerings come increasingly sought-after productivity tools, machine learning models, data retrieval and mapping solutions, real-time data insights, business outcome simulators, and pre-configured solutions such as fraud prevention. As a result, the software division drove Fair Isaac’s stock sharply higher and to record highs. Its management offered investors strong forward earnings guidance for fiscal year 2023 as the company continues to expand its market share and pursue international opportunities; its products are now used by businesses in more than 120 countries.
In the communication services sector, wireless telecommunication services provider T-Mobile US was the only contributor of substance, while overall declines in the real estate sector were partially offset by Equinix, a real estate investment trust focused on data centers and other digital infrastructure. In the financials sector, two out of four positions in the capital markets industry advanced, led by a modest rally in the shares of MSCI, which is widely regarded as the industry standard in constructing and maintaining international equity indices and ESG (environmental, social and governance) indices, along with related data analytics and research.
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FRANKLIN EXPONENTIAL DATA ETF
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
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2023, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
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FRANKLIN EXPONENTIAL DATA ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (1/14/21), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
| 1-Year |
-25.99% | -26.17% | -25.99% | -26.17% | ||||||||||||
| Since Inception (1/12/21) |
-32.56% | -99.98% | -16.30% | -98.03% | ||||||||||||
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 EXPONENTIAL DATA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
1/12/21-3/31/23
See page 22 for Performance Summary footnotes.
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FRANKLIN EXPONENTIAL DATA ETF
PERFORMANCE SUMMARY
Total Annual Operating Expenses6
|
0.50% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. The Fund’s investment strategies incorporate the identification of thematic investment opportunities and its performance may be negatively impacted if the investment manager does not correctly identify such opportunities or if the theme develops in an unexpected manner. By focusing its investments in information technology related industries, the Fund carries much greater risks of adverse developments and price movements in such industries than a Fund that invests in a wider variety of industries. Companies operating within information technology related industries may be affected by worldwide technological developments, the success of their products and services (which may be outdated quickly), anticipated products or services that are delayed or cancelled, and investor perception of the company and/or its products or services. These companies typically face intense competition and potentially rapid product obsolescence. They may also have limited product lines, markets, financial resources or personnel. Technology companies are also heavily dependent on intellectual property rights and may be adversely affected by loss or impairment of those rights. There can be no assurance these companies will be able to successfully protect their intellectual property to prevent the misappropriation of their technology, or that competitors will not develop technology that is substantially similar or superior to such companies’ technology. These companies typically engage in significant amounts of spending on research and development, and there is no guarantee that the products or services produced by these companies will be successful. Technology companies are also potential targets for cyberattacks, which can have a materially adverse impact on the performance of these companies. In addition, companies operating within the technology sector may develop and/or utilize artificial intelligence. Artificial intelligence technology could face increasing regulatory scrutiny in the future, which may limit the development of this technology and impede the growth of companies that develop and/or utilize this technology. Similarly, the collection of data from consumers and other sources could face increased scrutiny as regulators consider how the data is collected, stored, safeguarded and used. The customers and/or suppliers of technology companies may be concentrated in a particular country, region or industry. Any adverse event affecting one of these countries, regions or industries could have a negative impact on these companies. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. As a non-diversified fund, the Fund may invest in a relatively small number of issuers and, as a result, be subject to greater risk of loss with respect to its portfolio securities. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of the Fund’s prospectus available at the time of publication. Net expenses are capped under a contractual agreement, which cannot be terminated prior to 7/31/23 without Board consent. 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. Source: FactSet. The Russell 3000® Index is market capitalization-weighted and measures the performance of the largest 3,000 U.S. companies representing the majority of the U.S. market’s total capitalization.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional 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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,067.80 | $2.58 | $1,022.44 | $2.52 | 0.50 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
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Franklin Genomic Advancements ETF
This annual report for Franklin Genomic Advancements ETF covers the fiscal year ended March 31, 2023.
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 we believe are substantially focused on and/or are expected to substantially benefit from extending and enhancing the quality of human and other life (e.g. animals) through technological and scientific developments, improvements and advancements in such areas as genetic engineering, gene therapy, genome analysis and other uses, as outlined in more detail in the Prospectus.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -17.71% based on market price and -17.84% 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 -8.58% 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 27.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Economic and Market Overview
U.S. equities, as measured by the Standard & Poor’s® 500 Index (S&P 500®), posted a -7.73% total return for the 12 months ended March 31, 2023.1 High inflation, rising interest rates and geopolitical instability contributed to a sharp decline in equity prices. Consumer spending continued to
rise, but deteriorating financial conditions and investors’ expectations for slower growth pressured equity markets.
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 early in the period. Inflation peaked at 9.1% in June 2022, the highest annual rate since 1981, before gradually sliding to a low of 6% in February 2023. The labor market remained strong amid a high level of nominal growth, which sent the U.S. unemployment rate down to a historic 54-year low of 3.4% in January 2023 before ending the period at 3.5%.
U.S. gross domestic product grew in the second half of 2022 after modestly contracting in the first half of the year. Rising consumer spending and increased exports amid declining inflation led to solid economic growth in the final two quarters of 2022. However, rising interest rates translated to higher borrowing costs for individuals and businesses, which dampened economic activity, especially in the housing and financial markets over the period.
In an effort to control inflation, the U.S. Federal Reserve (Fed) rapidly restricted monetary policy during the period. The Fed raised the federal funds target rate eight times to end the period at a range of 4.75%–5.00%, pushing borrowing costs to their highest levels since 2007. The interest-rate hikes included four successive 75 basis point increases at its June, July, September and November 2022 meetings and smaller increases at its remaining meetings during the period. At its March 2023 meeting, the Fed said it would continue to reduce bond holdings, but departed from previous statements by softening its firm outlook on future rate hikes. Additionally, Fed Chair Jerome Powell said the central bank most likely would not cut rates in 2023.
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 129.
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FRANKLIN GENOMIC ADVANCEMENTS ETF
| Portfolio Composition | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Life Sciences Tools & Services | 46.1% | |||
| Biotechnology | 34.0% | |||
| Pharmaceuticals | 4.8% | |||
| Health Care Equipment & Supplies | 4.2% | |||
| Chemicals | 3.6% | |||
| Health Care Providers & Services | 2.1% | |||
| Other | 3.8% | |||
| Other Net Assets | 1.4% | |||
| Top 10 Holdings | ||||
| 3/31/23 | ||||
| Company Sector/Industry |
% of Total Net Assets |
|||
| Thermo Fisher Scientific, Inc. Life Sciences Tools & Services |
|
6.6% |
| |
| Danaher Corp. Life Sciences Tools & Services |
|
5.8% |
| |
| Repligen Corp. Life Sciences Tools & Services |
|
5.5% |
| |
| Sartorius AG Health Care Equipment & Supplies |
|
4.2% |
| |
| Medpace Holdings, Inc. Life Sciences Tools & Services |
|
4.0% |
| |
| Regeneron Pharmaceuticals, Inc. Biotechnology |
|
3.8% |
| |
| Moderna, Inc. Biotechnology |
|
3.8% |
| |
| Vertex Pharmaceuticals, Inc. Biotechnology |
|
3.5% |
| |
| Samsung Biologics Co. Ltd. Life Sciences Tools & Services |
|
3.2% |
| |
| Bruker Corp. Life Sciences Tools & Services |
|
3.1% |
| |
Investment Strategy
We seek to identify, using our own fundamental, bottom-up research and analysis, companies positioned to capitalize on disruptive innovation in or that are enabling the further development of the genomic advancements theme in the markets in which they operate. Our internal research and analysis leverages insights from diverse sources, including external research, to develop or refine our investment theme and identify and take advantage or trends that have ramifications for individual companies or entire industries. We also 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 may invest across economic sectors, we expect to concentrate our investments in health care-related industries.
Manager’s Discussion
During the 12 months under review, all of the Fund’s core areas of investment—life sciences tools and services, biotechnology and pharmaceuticals—experienced widespread absolute declines under bear market conditions, though their overall returns did see some improvement in the latter half of the year. The modest gains accumulated from mid-October through March were, however, achieved amid additional bouts of market volatility and were not nearly enough to compensate for the magnitude of declines sustained in the first six months of the period.
Some of our larger positions in the life sciences tools and services industry had a disproportionately negative impact on returns, including Avantor, a chemicals and materials company that supplies the life sciences, advanced technologies and applied materials industries; Charles River Laboratories International, which specializes in outsourced preclinical research for the biopharma industry; Danaher, which makes diagnostic tools for a wide range of medical, scientific, industrial and commercial applications; and Repligen, which develops and manufactures materials used to make biologic drugs.
Within the biotechnology industry, our sizable positions in Intellia Therapeutics, which develops therapeutics using a CRISPR gene editing system; and Germany-based immunotherapy drug and mRNA-based vaccine developer BioNTech, were at the top of an extensive list of detractors. At the same time, Catalent (global provider of outsourced drug development and drug manufacturing) and British multinational pharmaceutical giant GSK—both of which we completely sold by period-end—were the worst of several detractors that hurt performance in the pharmaceuticals industry.
To a lesser extent, returns in six out of eight other, smaller industry allocations were also negative for the year under review, including a steep loss in health care services that was tied primarily to Guardant Health, a precision oncology company engaged in the treatment of cancer through the
| franklintempleton.com | Annual Report | 25 | ||
FRANKLIN GENOMIC ADVANCEMENTS ETF
use of proprietary blood-based tests, vast data sets, and advanced analytics, and which shed more than half of its equity value. In the semiconductors industry, we held a solitary investment in chipmaker NVIDIA that was detrimental based on the timing of our trading around the stock, having sold it after it shed roughly half of its equity value, and just ahead of a strong rally that took place in early 2023. Elsewhere in the portfolio, all four of our holdings in the health care technology industry traded lower, as did our solitary position in the Office REITs industry—Alexandria Real Estate Equities, which invests in office buildings and laboratories leased to tenants in the life sciences and technology industries.
In terms of what helped the Fund during the year under review, there were only eight substantive contributors across the portfolio, along with a handful of negligible ones that had almost no impact on returns. Most of them were situated in the biotechnology industry, where six companies bucked the overall downtrend with solid, double-digit percentage gains (in descending order of positive impact): Regeneron Pharmaceuticals, Vertex Pharmaceuticals, Sarepta Therapeutics (purchased during the period), Exact Sciences (purchased during the period), Krystal Biotech and Iveric Bio (purchased during the period). Several others surfaced in the life sciences tools and services industry, where contract research organization Medpace Holdings and Bruker, a manufacturer of scientific instruments for molecular and materials research, enjoyed solid rallies and were accompanied by a few other, minor contributors.
The only other notable contributors were multinational drugmaker Eli Lilly in pharmaceuticals, and our newly-initiated stake in Cadence Design Systems (software, hardware and intellectual properties used to design microchips, related systems and printed circuit boards), which was our sole investment in the application software industry.
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 March 31, 2023, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
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FRANKLIN GENOMIC ADVANCEMENTS ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (2/27/20), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
| 1-Year |
-17.84% | -17.71% | -17.84% | -17.71% | ||||||||||||
| 3-Year |
+35.13% | +36.31% | +10.56% | +10.88% | ||||||||||||
| Since Inception (2/25/20) |
+22.05% | +21.97% | +6.65% | +6.62% | ||||||||||||
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 29 for Performance Summary footnotes.
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FRANKLIN GENOMIC ADVANCEMENTS ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
2/25/20-3/31/23
See page 29 for Performance Summary footnotes.
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FRANKLIN GENOMIC ADVANCEMENTS ETF
PERFORMANCE SUMMARY
Total Annual Operating Expenses6
|
0.50% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. The Fund’s investment strategies incorporate the identification of thematic investment opportunities and its performance may be negatively impacted if the investment manager does not correctly identify such opportunities or if the theme develops in an unexpected manner. By focusing its investments in health care related industries, the Fund carries much greater risks of adverse developments and price movements in such industries than a fund that invests in a wider variety of industries. Companies operating within health care related industries face intense competition and potentially rapid product obsolescence. These companies are also heavily dependent on intellectual property rights and may be adversely affected by loss or impairment of those rights. These companies typically engage in significant amounts of spending on research and development, and there is no guarantee that the products or services produced by these companies will be successful, or that competitors will not develop technology that is substantially similar or superior to such companies’ technology. The field of genomic science could face increasing regulatory scrutiny in the future, which may limit the development of this technology and impede the growth of companies that develop and/or utilize this technology. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of the Fund’s prospectus available at the time of publication. Net expenses are capped under a contractual agreement, which cannot be terminated prior to 7/31/23 without Board consent. 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. Source: FactSet. The Russell 3000® Index is market capitalization-weighted and measures the performance of the largest 3,000 U.S. companies representing the majority of the U.S. market’s total capitalization.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
| franklintempleton.com | Annual Report | 29 | ||
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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,024.30 | $2.52 | $1,022.44 | $2.52 | 0.50 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
| 30 | Annual Report | franklintempleton.com | ||
Franklin High Yield Corporate ETF
Formerly, Franklin Liberty High Yield Corporate ETF
This annual report for Franklin High Yield Corporate ETF covers the fiscal year ended March 31, 2023.
Your Fund’s Goal and Main Investments
The Fund seeks to earn a high level of current income. Its secondary goal is to seek capital appreciation to the extent it is possible and consistent with the Fund’s principal goal. The Fund normally invests at least 80% of its net assets in high yield corporate debt securities and investments that provide exposure to high yield corporate debt securities, including bonds, notes, debentures, convertible securities, bank loans and corporate loans, and senior and subordinated debt securities.
Performance Overview
During the 12 month period, the Fund posted cumulative total returns of -1.46% based on market price and -2.68% 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 -3.58% 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
The U.S. bond market, as measured by the Bloomberg U.S. Aggregate Bond Index, posted a -4.78% total return for the
12-month period ended March 31, 2023.1 High inflation amid a strong labor market led to significantly tighter monetary policy, reducing the value of most bonds. While interest rates increased along the yield curve for all U.S. Treasury maturities, relatively large increases in shorter-term interest rates led the yield curve to invert during the period as
investors became increasingly concerned about the economic outlook.
In an effort to control inflation, the U.S. Federal Reserve (Fed) raised the federal funds target rate at each of its eight meetings during the period to end at a range of 4.75%– 5.00%, a full 450 basis points higher than at the beginning of the period. The Fed noted in its March 2023 meeting that inflation remained elevated amid robust job growth and low unemployment. Despite its goal of 2% long-run inflation, the Fed softened its firm outlook on future rate hikes. Furthermore, the Fed indicated it would continue to reduce its U.S. Treasury (UST) and agency debt and mortgage-backed security holdings.
UST bonds, as measured by the Bloomberg U.S. Treasury Index, posted a -4.51% total return for the 12-month period.1 The 10-year UST yield, which moves inversely to price, increased sharply amid high inflation and the Fed’s tightening monetary stance. Mortgage-backed securities (MBS), as measured by the Bloomberg U.S. MBS Fixed Rate Index, posted a -4.85% total return for the period as mortgage rates rose to the highest level in over two decades and modest prepayment rates led to increasing interest-rate sensitivity.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. In this environment, high-yield corporate bonds, as represented by the Bloomberg U.S. Corporate High Yield Index, posted a -3.34% total return, while investment-grade corporate bonds, as represented by the Bloomberg U.S. Corporate Investment Grade Index, posted a -5.55% total return.1
1. 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 132.
| franklintempleton.com | Annual Report | 31 | ||
FRANKLIN HIGH YIELD CORPORATE ETF
| Portfolio Composition | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Corporate Bonds & Notes | 89.7% | |||
| Senior Floating Rate Interests | 3.9% | |||
| Short-Term Investments & Other Net Assets | 6.4% | |||
| Top 10 Sectors/Industries | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Energy | 15.8% | |||
| Media & Entertainment | 11.2% | |||
| Materials | 9.4% | |||
| Financial Services | 5.3% | |||
| Consumer Services | 4.6% | |||
| Utilities | 4.6% | |||
| Commercial & Professional Services | 4.5% | |||
| Capital Goods | 3.9% | |||
| Automobiles & Components | 3.7% | |||
| Health Care Equipment & Services | 3.5% | |||
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 lite loans. The Fund may also invest in defaulted debt securities and 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.
Manager’s Discussion
As the Fed had remained firmly on a hawkish rate path throughout 2022, its rate hike in September 2022 marked the third consecutive 75 basis point (bp) increase. The Fed ended the year with two additional rate increases of 75 bps and 50 bps at its November and December Federal Open Market Committee meetings. In the last few months of 2022, markets focused on slowing inflation data and investors grappled with the potential timing of the transition from a rate hiking cycle to a potential Fed pivot. Against this backdrop, the Fed followed up with two additional 25-bp rate increases at its February and March 2023 meetings. Although investors were encouraged by a general downward trend in inflation data at the beginning of 2023’s first quarter, sentiments were negatively affected in the second half of March as the failure of Silicon Valley Bank spawned additional concerns over the health of U.S. regional and Swiss banks.
In the current environment where labor costs remain a challenge and raw material and logistics costs remain somewhat elevated, the ability to offset costs with price increases has become more tenuous. As such, the variable impact to corporate earnings is likely to drive more fundamental dispersion between winners and losers. Against this backdrop, we remain focused on companies that have capital structures and liquidity profiles that we believe will withstand the potential economic challenges that lie ahead.
Based on benchmark index data, high-yield (HY) spreads generally widened during the 12-month period under review. Most segments of the HY market posted negative absolute returns for the performance period under review. CCC rated bonds returned -8.8%, compared to returns of -3.8% and -2.3% for B and BB rated segments, respectively. From an industry standpoint, the transportation industry stood out as a key performer, followed by the capital goods segment.
The Fund’s yield-curve positioning contributed to performance during the 12-month period under review. Conversely, the Fund’s ratings-quality tilt hindered results.
| 32 | Annual Report | franklintempleton.com | ||
FRANKLIN HIGH YIELD CORPORATE ETF
The Fund’s sector/industry allocations contributed to relative performance for the period, led by overweight positions in energy and industrials and underweight positions in retail. Conversely, underweight positions in aerospace and defense, and in food and beverages, and an overweight position in the media non-cable segment hindered results.
The Fund’s security selection also benefited performance, particularly in the media cable, wired segment and in information technology. Conversely, selection in the energy, health care and financials sectors detracted from 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.
| Top 10 Holdings | ||||
| 3/31/23 | ||||
| Company Sector/Industry |
% of Total Net Assets |
|||
| Federal Home Loan Bank Discount Notes, 4/03/23 | 3.0% | |||
| Vistra Operations Co. LLC, 5.50%, 9/01/26 Utilities |
|
1.4% |
| |
| TransDigm, Inc., 6.25%, 3/15/26 Capital Goods |
|
1.3% |
| |
| Martin Midstream Partners LP/Martin Midstream Finance Corp., 11.50%, 2/15/28 Pipelines |
|
1.1% |
| |
| American Airlines, Inc./AAdvantage Loyalty IP Ltd., 5.50%, 4/20/26 Airlines |
|
1.0% |
| |
| DaVita, Inc., 4.625%, 6/01/30 Health Care Equipment & Services |
|
1.0% |
| |
| United Rentals North America, Inc., 5.50%, 5/15/27 Commercial Services |
|
1.0% |
| |
| Banijay Entertainment SASU, 5.375%, 3/01/25 Media & Entertainment |
|
1.0% |
| |
| Jaguar Land Rover Automotive PLC, 5.50%, 7/15/29 Automobiles & Components |
|
1.0% |
| |
| Harbour Energy PLC, 5.50%, 10/15/26 Energy |
|
1.0% |
| |
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 March 31, 2023, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
| franklintempleton.com | Annual Report | 33 | ||
FRANKLIN HIGH YIELD CORPORATE ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (6/1/18), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
| 1-Year |
-2.68% | -1.46% | -2.68% | -1.46% | ||||||||||||
| 3-Year |
+18.20% | +20.20% | +5.73% | +6.32% | ||||||||||||
| Since Inception (5/30/18) |
+20.07% | +21.26% | +3.85% | +4.07% | ||||||||||||
| Distribution Rate5 | 30-Day Standardized Yield6 |
|||
| 3.86% |
7.74% | |||
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 36 for Performance Summary footnotes.
| 34 | Annual Report | franklintempleton.com | ||
FRANKLIN HIGH YIELD CORPORATE ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
5/30/18-3/31/23
See page 36 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 35 | ||
FRANKLIN HIGH YIELD CORPORATE ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
Short-Term Capital Gain |
Total | ||
| $1.361285 |
$0.065483 |
$1.426768 | ||
Total Annual Operating Expenses8
|
0.40% |
All investments involve risks, including possible loss of principal. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Distributions to shareholders may decline when prevailing interest rates fall or when the Fund experiences defaults on debt securities it holds. The high-yield corporate debt securities and instruments in which the Fund invests tend to be rated below investment grade. Investing in higher-yielding, lower-rated corporate debt securities and instruments involves greater risk of default, which could result in loss of principal – a risk that may be heightened in a slowing economy. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. The markets for particular securities or types of securities are or may become relatively illiquid. Reduced liquidity will have an adverse impact on the security’s value and on the Fund’s ability to sell such securities when necessary to meet the Fund’s liquidity needs or in response to a specific market event. Investing in derivative securities and the use of foreign currency techniques involve special risks as such may not achieve the anticipated benefits and/or may result in losses to the Fund. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of the Fund’s prospectus available at the time of publication. Net expenses are capped under a contractual agreement, which cannot be terminated prior to 7/31/23 without Board consent. 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 March dividend and the NAV per share on 3/31/23.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Source: FactSet. The ICE BofA U.S. High Yield Constrained Index tracks the performance of U.S. dollar-denominated below investment-grade corporate debt publicly issued in the U.S. domestic market.
8. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
| 36 | Annual Report | franklintempleton.com | ||
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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,084.60 | $2.08 | $1,022.94 | $2.02 | 0.40 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
| franklintempleton.com | Annual Report | 37 | ||
Franklin Intelligent Machines ETF
This annual report for Franklin Intelligent Machines ETF covers the fiscal year ended March 31, 2023.
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 we believe are substantially focused on and/or are expected to substantially benefit from the ongoing technology-driven transformation of products, software, systems and machinery as well as product design, manufacture, logistics, distribution and maintenance, including through developments in artificial intelligence, as outlined in more detail in the Prospectus.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -4.44% based on market price and -4.62% 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 -8.58% 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 42.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Economic and Market Overview
U.S. equities, as measured by the Standard & Poor’s® 500 Index (S&P 500®), posted a -7.73% total return for the 12 months ended March 31, 2023.1 High inflation, rising interest rates and geopolitical instability contributed to a sharp decline in equity prices. Consumer spending continued to
rise, but deteriorating financial conditions and investors’ expectations for slower growth pressured equity markets.
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 early in the period. Inflation peaked at 9.1% in June 2022, the highest annual rate since 1981, before gradually sliding to a low of 6% in February 2023. The labor market remained strong amid a high level of nominal growth, which sent the U.S. unemployment rate down to a historic 54-year low of 3.4% in January 2023 before ending the period at 3.5%.
U.S. gross domestic product grew in the second half of 2022 after modestly contracting in the first half of the year. Rising consumer spending and increased exports amid declining inflation led to solid economic growth in the final two quarters of 2022. However, rising interest rates translated to higher borrowing costs for individuals and businesses, which dampened economic activity, especially in the housing and financial markets over the period.
In an effort to control inflation, the U.S. Federal Reserve (Fed) rapidly restricted monetary policy during the period. The Fed raised the federal funds target rate eight times to end the period at a range of 4.75%–5.00%, pushing borrowing costs to their highest levels since 2007. The interest-rate hikes included four successive 75 basis point increases at its June, July, September and November 2022 meetings and smaller increases at its remaining meetings during the period. At its March 2023 meeting, the Fed said it would continue to reduce bond holdings, but departed from previous statements by softening its firm outlook on future rate hikes. Additionally, Fed Chair Jerome Powell said the central bank most likely would not cut rates in 2023.
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 140.
| 38 | Annual Report | franklintempleton.com | ||
FRANKLIN INTELLIGENT MACHINES ETF
| Portfolio Composition | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Semiconductors & Semiconductor Equipment | 36.0% | |||
| Software | 22.9% | |||
| Health Care Equipment & Supplies | 10.6% | |||
| Electronic Equipment, Instruments & Components | 8.9% | |||
| Computers & Peripherals | 4.6% | |||
| Automobiles | 4.6% | |||
| Aerospace & Defense | 3.2% | |||
| Construction & Engineering | 3.0% | |||
| Industrial Conglomerates | 2.1% | |||
| Other | 2.7% | |||
| Other Net Assets | 1.4% | |||
| Top 10 Holdings | ||||
| 3/31/23 | ||||
| Company Sector/Industry |
% of Total Net Assets |
|||
| NVIDIA Corp. Semiconductors & Semiconductor Equipment |
|
7.1% |
| |
| ASML Holding NV Semiconductors & Semiconductor Equipment |
|
4.9% |
| |
| Tesla, Inc. Automobiles |
|
4.6% |
| |
| Apple, Inc. Technology Hardware, Storage & Peripherals |
|
4.6% |
| |
| Cadence Design Systems, Inc. Software |
|
4.3% |
| |
| Intuitive Surgical, Inc. Health Care Equipment & Supplies |
|
4.1% |
| |
| Synopsys, Inc. Software |
|
4.1% |
| |
| Keyence Corp. Electronic Equipment, Instruments & Components |
|
3.4% |
| |
| Axon Enterprise, Inc. Aerospace & Defense |
|
3.2% |
| |
| Descartes Systems Group, Inc. Software |
|
3.0% |
| |
Investment Strategy
We seek to identify, using our own fundamental, bottom-up research and analysis, companies positioned to capitalize on disruptive innovation in or that are enabling the further development of the intelligent machines theme in the markets in which they operate. Our internal research and analysis leverages insights from diverse sources, including external research, to develop and refine its investment theme
and identify and take advantage of trends that have ramifications for individual companies or entire industries. We also 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 may invest across economic sectors, we expect to have significant investments in particular sectors, including technology.
Manager’s Discussion
During the 12 months under review, the Fund was invested in 16 different industries, and only six of them produced positive absolute returns. This was an improvement from the midpoint of the annual period, when all 16 were in negative territory. Although the impressive gains made from October through March recovered most of the steep overall losses incurred in the first half of the year, it was not enough to eliminate weakness that was focused primarily on electric vehicle (EV) manufacturers such as Tesla, which was by far the Fund’s largest individual detractor from absolute returns.
On average, Tesla was the Fund’s biggest investment, and its sharp loss for the year overall would have been worse if not for the solid recovery the company staged in early 2023, as previous concerns centered on rising interest rates and consumer demand began to abate. U.S.-based Tesla has been expanding its footprint as a multinational automotive and clean energy company as it continues to accelerate the world’s transition to sustainable energy. Its manufacturing scope continues to broaden across electric vehicles, battery energy storage solutions (from home to utility grid scale), solar panels and roof tiles, and related services. Late in the period, Tesla released broadly in-line fourth-quarter and full-year 2022 financial results with demand commentary that appeared to ease investor anxiety, owing in part to the specter of lower gross profit margins following recent vehicle price reductions and higher unabsorbed fixed costs associated with factories ramping up in Berlin (Germany) and Austin (USA); it also picked an industrial cluster in Mexico as the location for the construction of its next gigafactory as it continues to expand capacity at a rapid clip. Last year saw several record-breaking achievements as Tesla reported its highest-ever quarterly revenue and
| franklintempleton.com | Annual Report | 39 | ||
FRANKLIN INTELLIGENT MACHINES ETF
operating and net income. Moreover, the EV specialist generated US$7.6 billion of free cash flow and delivered a record 1.31 million vehicles in 2022. We think Tesla is positioned to continue taking swaths of market share across autos and with a richer profit stream than incumbents, while also pioneering new opportunities in significant TAMs (total addressable markets) such as energy storage and possibly one day, artificial intelligence (AI) robotics.
Along with Tesla, the rest of our investments in the consumer discretionary sector anchored the Fund to the downside, as did most health care sector stocks, including standout detractors Intuitive Surgical (robotic surgery systems) and DexCom (next-generation glucose monitoring systems) in the health care equipment and supplies industry; and Azenta (specializing in sample management solutions and genomic services for drug development, clinical research and advanced cell therapies; sold by period-end) in the life sciences tools and services industry.
Within the industrials sector, the overall gains were curbed by widespread declines in the electrical equipment and machinery industries, where Rockwell Automation (industrial automation components; sold by period-end), Sunrun (photovoltaic systems and battery energy storage products) and Chart Industries (specialty equipment servicing applications in the energy, hydrogen/carbon capture and industrial gas markets; bought and sold during the period) were notable detractors.
The rest of the Fund’s major detractors weakened the overall gains among information technology (IT) sector companies. We maintained substantial exposure to tech bellwether Apple, which posted a modest decline for the year. Several smaller IT holdings, meanwhile, suffered much larger declines, including Entegris, SiTime and Wolfspeed (purchased during the period) in the semiconductors and semiconductor equipment industry; Zebra Technologies (mobile computing specialist focused on barcode printers and barcode scanners) in the electronic equipment, instruments and components industry; and several software companies including Atlassian (collaborative and quality-control software for software developers) and Dassault Systèmes (3D product design, simulation and manufacturing software).
In terms of what aided performance, the Fund received a solid boost from IT and industrials sector holdings foremost. Within IT, most software stocks were net contributors including our two largest related holdings—Cadence Design Systems and Synopsys, both of which sell electronic design automation software and services: Cadence focuses on computational software for microchip and circuit board
design, while Synopsys specializes in silicon design/verification, computer systems simulators and application security testing. Eight out of 13 other software holdings were also net contributors, including Ansys and Constellation Software. In particular, Ansys, which specializes in CAE (computer-aided engineering) and multiphysics simulation software, staged a strong comeback toward the end of the reporting period. Like other companies with heavy exposure to the industrial world, Ansys is susceptible to a slowdown in its end markets linked to any moderation in industrial production. Therefore, going into its February earnings report (covering the fourth quarter of 2022), investors were concerned about a potential cyclical slowdown for the company. Ansys showed it can generate double-digit percentage growth even in a slowing economy, based on the strong underlying growth prospects coming from the increasing use of simulation software, not least to produce data used in a so-called “digital twin”—a digital model of a physical asset. The data from digital simulations is used in IoT (internet of things) platforms that connect the digital world with the physical world to predict the physical asset’s behavior better. In addition to giving engineers the power to see how their ideas would perform against millions of variables, it also reduces waste. The company’s latest financial metrics gave management enough confidence to forecast that it would grow more than revenue as the business model continues to shift towards subscription leases, and with simulation becoming an ever-increasing part of industrial customers’ innovative workflow across civil, defense, aerospace, commercial and scientific research programs. The software is helping engineers develop more complex products faster through new cloud options and optimized use of GPUs (graphics processing units) and also helping them design new materials as they seek to develop more sustainable products, including new steels, composites and short fiber reinforced plastics, to name a few.
In the electronic equipment, instruments and components industry, Keyence—a maker of sensors, machine vision systems, measuring instruments, barcode readers, programmable logic controllers and factory automation sensor products—was the best of several net contributors.
Semiconductor-related companies remained one of our core investment themes, comprising roughly a third of the portfolio’s total net assets. In general, these holdings fared poorly in 2022 before rallying solidly in the first quarter of 2023. As a result, most of them ended the annual period with overall gains. Our results were lifted primarily by ASML Holding, ASM International, Analog Devices and Infineon Technologies, though 10 others were also net contributors to absolute returns.
| 40 | Annual Report | franklintempleton.com | ||
FRANKLIN INTELLIGENT MACHINES ETF
Several industrials sector holdings posted strong, double-digit percentage gains, none more so than Axon Enterprise, which designs and manufactures non-lethal weapons primarily for law enforcement. To a lesser extent, further support stemmed from the rally in German multinational industrial manufacturing conglomerate Siemens, and from our positions in construction and engineering services such as Quanta Services (planning, design, installation, program management, maintenance and repair of most types of network infrastructure) and Valmont Industries, which manufactures irrigation equipment, windmill support structures, and utility poles.
Across the rest of the portfolio, the only notable contributor was insulin delivery and management systems developer Insulet, which aided our otherwise lackluster results in the health care sector.
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 March 31, 2023, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
| franklintempleton.com | Annual Report | 41 | ||
FRANKLIN INTELLIGENT MACHINES ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (2/27/20), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
| 1-Year |
-4.62% | -4.44% | -4.62% | -4.44% | ||||||||||||
| 3-Year |
+114.05% | +114.18% | +28.87% | +28.90% | ||||||||||||
| Since Inception (2/25/20) |
+76.97% | +76.65% | +20.25% | +20.18% | ||||||||||||
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 44 for Performance Summary footnotes.
| 42 | Annual Report | franklintempleton.com | ||
FRANKLIN INTELLIGENT MACHINES ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
2/25/20-3/31/23
See page 44 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 43 | ||
FRANKLIN INTELLIGENT MACHINES ETF
PERFORMANCE SUMMARY
Total Annual Operating Expenses6
|
0.54% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. The Fund’s investment strategies incorporate the identification of thematic investment opportunities and its performance may be negatively impacted if the investment manager does not correctly identify such opportunities or if the theme develops in an unexpected manner. The Fund has significant exposure to the technology sector. Companies operating within the technology sector may be affected by worldwide technological developments, the success of their products and services (which may be outdated quickly), anticipated products or services that are delayed or cancelled, and investor perception of the company and/or its products or services. In addition, companies operating within the technology sector may develop and/or utilize artificial intelligence. Artificial intelligence technology could face increasing regulatory scrutiny in the future, which may limit the development of this technology and impede the growth of companies that develop and/or utilize this technology. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of the Fund’s prospectus available at the time of publication. Net expenses are capped under a contractual agreement, which cannot be terminated prior to 7/31/23 without Board consent. 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. Source: FactSet. The Russell 3000® Index is market capitalization-weighted and measures the performance of the largest 3,000 U.S. companies representing the majority of the U.S. market’s total capitalization.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
| 44 | Annual Report | franklintempleton.com | ||
FRANKLIN INTELLIGENT MACHINES ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
| Beginning Account Value 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,305.70 | $2.87 | $1,022.44 | $2.52 | 0.50 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
| franklintempleton.com | Annual Report | 45 | ||
Franklin International Aggregate Bond ETF
Formerly, Franklin Liberty International Aggregate Bond ETF
This annual report for Franklin International Aggregate Bond ETF covers the fiscal year ended March 31, 2023.
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*
3/31/23
| % of Total Net Assets |
||||
|
|
||||
| Europe |
52.9% | |||
|
|
||||
| Asia |
22.1% | |||
|
|
||||
| North America |
6.3% | |||
|
|
||||
| Australia & New Zealand |
3.2% | |||
|
|
||||
| Latin America & Caribbean |
1.8% | |||
|
|
||||
| Supranationals |
1.7% | |||
|
|
||||
| Middle East & Africa |
1.1% | |||
|
|
||||
| Short-Term Investments & Other Net Assets |
10.9% | |||
|
|
||||
*Categories within the Other category are listed in full in the Fund’s Schedule of Investments (SOI), which can be found later in this report.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -2.33 based on market price and -2.38% based on net asset value (NAV). In comparison, the Fund’s benchmark, the Bloomberg Global Aggregate Bond ex-USD Index (100% Hedged to USD), which measures global investment-grade debt from 24 local currency markets, posted a -3.27% cumulative total return.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 49.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from
figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Economic and Market Overview
During the 12-month reporting period, global aggregate bond markets posted significantly negative returns.
U.S. inflation maintained its upward trend over the second quarter of 2022. This caused the U.S. Federal Reserve (Fed) to raise rates by 50 basis points (bps) in early May 2022, then again in June by an unexpected 75 bps. Given persistently rising inflation, the Fed raised rates by a further 75 bps in July. After a hawkish Jackson Hole address from Fed Chair Jerome Powell in August, the central bank hiked rates by another 75 bps in September. The Fed then raised rates by 75 bps early in November but by only 50 bps in December 2022, amid signs of easing inflation. Despite this softer stance, Fed Chair Powell pushed back on investor expectations of a rate cut toward the end of 2023.
Although the Fed raised rates in its February 2023 meeting by only 25 bps, increased investor concerns that U.S. inflation was reaccelerating precipitated a wide sell-off in bonds. While March 2023 was accompanied by further volatility amid concerns about the banking sector, the Fed raised rates by a further 25 bps in March. Against this backdrop, benchmark 10-year U.S. Treasury yields showed extreme volatility but, for the 12-month period review period overall, rose by over 100 bps.
In Europe, after initially holding back from raising the cost of borrowing, the European Central Bank (ECB) raised rates by an unexpected 50 bps in July 2022, 75 bps in both September and October, then in December 2022 by 50 bps. Data released in January 2023 showed that the eurozone economy had grown marginally in the fourth quarter of 2022, despite market expectations of a recession. Although headline inflation slowed significantly, core inflation remained elevated. As a result, the ECB hiked rates by 50 bps at both its February and March 2023 meetings. In European fixed income markets, amid heightened volatility, benchmark 10-year German Bund yields were up almost 170 bps for the 12-month period.
1. 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 143.
| 46 | Annual Report | franklintempleton.com | ||
FRANKLIN INTERNATIONAL AGGREGATE BOND ETF
Portfolio Composition*
3/31/23
| % of Total Net Assets |
||||
| Foreign Government and Agency Securities | 85.2% | |||
| Corporate Bonds & Notes | 3.9% | |||
| Short-Term Investments & Other Net Assets | 10.9% | |||
*Categories within the Other category are listed in full in the Fund’s Schedule of Investments (SOI), which can be found later in this report.
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 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 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.
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 and Canadian 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, underweight allocations to the Chinese, Indonesian and South Korean markets, all of which bettered the benchmark, weighed on relative results, as did an overweight exposure to the underperforming eurozone market.
In contrast, the Fund’s security selection weighed on relative performance, but sector allocation had a neutral impact. Selection in investment-grade financial bonds and hard-currency emerging market debt subtracted from relative value. Conversely, an overweight exposure to German Bunds had a positive influence on relative returns.
The Fund’s currency positioning also detracted from relative results, largely owing to overweight exposures to the Chinese renminbi and Canadian dollar, both of which were down versus the U.S. dollar. In contrast, underweight allocations to the Japanese yen, British pound and euro, all of which also depreciated against the U.S. dollar, added to relative value.
In terms of derivatives 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 593 bps to the Fund’s performance, as the U.S. dollar rose slightly against most other major currencies.
| franklintempleton.com | Annual Report | 47 | ||
FRANKLIN INTERNATIONAL AGGREGATE BOND ETF
Thank you for your participation in Franklin International Aggregate Bond ETF. We look forward to serving your future investment needs.
John W. 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 March 31, 2023, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
| 48 | Annual Report | franklintempleton.com | ||
FRANKLIN INTERNATIONAL AGGREGATE BOND ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (6/1/18), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
| 1-Year |
-2.38% | -2.33% | -2.38% | -2.33% | ||||||||||||
| 3-Year |
-4.96% | -4.91% | -1.68% | -1.66% | ||||||||||||
| Since Inception (5/30/18) |
-1.11% | -0.75% | -0.23% | -0.15% | ||||||||||||
| Distribution Rate5 | 30-Day Standardized Yield6 | |
| 13.73% | 2.54% |
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 51 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 49 | ||
FRANKLIN INTERNATIONAL AGGREGATE BOND ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
5/30/18-3/31/23
See page 51 for Performance Summary footnotes.
| 50 | Annual Report | franklintempleton.com | ||
FRANKLIN INTERNATIONAL AGGREGATE BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
|
$3.480729 |
Total Annual Operating Expenses8
|
0.25% |
All investments involve risks, including possible loss of principal. Bond prices generally move in the opposite direction of interest rates and a rise in interest rates may cause the Fund’s share price to decline. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. The Fund’s investments in foreign securities involve certain risks including economic and political uncertainties. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with their relatively small size and lesser liquidity. Investing in derivative securities and the use of foreign currency techniques involve special risks including counterparty risk, and as such may not achieve the anticipated benefits and/or may result in losses to the Fund. Sovereign debt securities are subject to various risks in addition to those relating to debt securities and foreign securities generally, including, but not limited to, the risk that a governmental entity may be unwilling or unable to pay interest and repay principal on its sovereign debt, or otherwise meet its obligations. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of the Fund’s prospectus available at the time of publication. Net expenses are capped under a contractual agreement, which cannot be terminated prior to 7/31/23 without Board consent. 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 March dividend and the NAV per share on 3/31/23.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Source: FactSet. The Bloomberg Global Aggregate Bond ex-USD Index (100% Hedged to USD) measures global investment-grade debt from 24 local currency markets. This multicurrency benchmark is 100% hedged to the U.S. dollar and includes treasury, government-related, corporate and securitized fixed-rate bonds from both developed and emerging markets issuers. Bond issued in USD are excluded.
8. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
| franklintempleton.com | Annual Report | 51 | ||
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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,013.80 | $1.26 | $1,023.69 | $1.26 | 0.25 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
| 52 | Annual Report | franklintempleton.com | ||
Franklin Investment Grade Corporate ETF
Formerly, Franklin Liberty Investment Grade Corporate ETF
This annual report for Franklin Investment Grade Corporate ETF covers the fiscal year ended March 31, 2023.
Your Fund’s Goal and Main Investments
The Fund seeks a high level of current income as is consistent with prudent investing, while seeking preservation of capital. Under normal market conditions, the Fund invests at least 80% of its net assets in investment-grade corporate debt securities and investments.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -6.25% based on market price and -6.46% based on net asset value (NAV).1 In comparison, the Bloomberg U.S. Corporate Investment Grade Index, which measures the performance of the investment grade, fixed-rate, taxable corporate bond market, posted a -5.55% 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 56.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Economic and Market Overview
When looking back over the previous 12 months, the U.S. economic story was one of inflation, U.S. Federal Reserve (Fed) action, and volatility. As we moved into the second quarter of 2022 (Q2), the U.S. consumer remained strong with spending bolstered by excess savings and a strong U.S. job market.
Inflation became a large issue as the year-over-year change in the Consumer Price Index pushed higher into the summer months, reaching 9.1% in June 2022, the highest level since 1981, before trending lower. The U.S. job market also showed strong resilience with a monthly average of 362,000 jobs created during the 12-month period under review. The
unemployment rate fell to 3.4% in January 2023, the lowest level since 1969.
The Fed was slow to act toward inflation as it initially considered rapid price increases as “transitory.” The Fed capitulated and initiated a program of rapid rate increases at a pace not seen since the 1980s. Over the period under review, the Fed raised its policy rate by a total of 4.50%, taking it to a restrictive level of 4.75% - 5.00%. U.S. Treasury (UST) yields rose over the period with the benchmark 10-year UST rising 113 basis points (bps), however, there was significant volatility along the way.
U.S. corporate bond spreads also saw significant volatility. Spreads generally widened during 2022 as funds flowed out of the sector due to concerns of a possible recession. This trend reversed during the first part of 2023 with spreads tightening as confidence in the Fed increased. However, in March 2023, Silicon Valley Bank faced a liquidity crisis leading regulators to step in to support deposits. This led to an increase in corporate bond spreads, particularly in the financials sector. Although there was some recovery, spreads ended the period modestly wider versus March 2022.
Top 10 Sectors/Industries
3/31/23
| % of Total Net Assets |
||||
|
|
||||
| Banks |
21.7% | |||
|
|
||||
| Electric Utilities |
7.0% | |||
|
|
||||
| Financial Services |
4.7% | |||
|
|
||||
| Electric |
4.4% | |||
|
|
||||
| Health Care Providers & Services |
3.9% | |||
|
|
||||
| Biotechnology |
3.9% | |||
|
|
||||
| Insurance |
3.5% | |||
|
|
||||
| Oil, Gas & Consumable Fuels |
2.9% | |||
|
|
||||
| Food |
2.9% | |||
|
|
||||
| Media |
2.4% | |||
|
|
||||
1. 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 148.
| franklintempleton.com | Annual Report | 53 | ||
FRANKLIN INVESTMENT GRADE CORPORATE ETF
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 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.
Top 10 Holdings
3/31/23
| Issue/Issuer | % of Total Net Assets |
|||
|
|
||||
| Verizon Communications, Inc., senior bond, 3.40%, 3/22/41 | 1.7% | |||
|
|
||||
| Amgen, Inc., 5.60%, 3/02/43 |
1.4% | |||
|
|
||||
| Goldman Sachs Group, Inc., 2.64% to 2/24/27, FRN thereafter, 2/24/28 | 1.4% | |||
|
|
||||
| Bank of America Corp., Series L, 4.183%, 11/25/27 | 1.3% | |||
|
|
||||
| T-Mobile USA, Inc., 2.875%, 2/15/31 |
1.3% | |||
|
|
||||
| Kenvue, Inc., 4.90%, 3/22/33 |
1.3% | |||
|
|
||||
| Wells Fargo & Co., 4.808% to 7/25/27, FRN thereafter, 7/25/28 | 1.3% | |||
|
|
||||
| Vistra Operations Co. LLC, senior secured note, first lien, 3.55%, 7/15/24 | 1.2% | |||
|
|
||||
| Elevance Health, Inc., 4.10%, 5/15/32 |
1.2% | |||
|
|
||||
| BPCE SA, senior note, 5.70%, 10/22/23 |
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 focus on the credit quality of its portfolio is intended to reduce credit risk and help to preserve the Fund’s capital. 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. 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.
Manager’s Discussion
Investment-grade corporate bond absolute performance was negative over the 12 months under review, curbed by a changing macroeconomic environment, fast rising UST yields and modestly wider corporate bond spreads.
The Fund performed worse than the benchmark for the 12 months under review.
The Fund’s sector allocation weighed on performance as an underweight to technology bond issues and overweight to banking names hurt our returns. This was partially offset by positive performance contributions from our overweight to electric utilities and underweight to brokerage firms.
The Fund’s bias toward lower-rated issues, particularly those rated BBB, detracted from relative results as lower-quality issues underperformed their higher-rated counterparts. We did reduce the BBB overweight significantly during the period in anticipation of slower economic growth following aggressive Fed tightening.
Security selection detracted from results, led by companies within the banking segment. The Fund’s holdings in Silicon Valley Bank hurt performance after the bank experienced liquidity issues and was taken over by regulators. However, we saw positive returns from selection in consumer cyclical and non-cyclical issues and capital goods companies.
Duration and yield curve positioning was a positive contributor to relative performance. On average, we maintained a duration slightly lower than the benchmark (especially in bonds with two years to maturity). This lifted returns as UST yields rose over the 12-month period.
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
| 54 | Annual Report | franklintempleton.com | ||
FRANKLIN INVESTMENT GRADE CORPORATE ETF
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2023, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
| franklintempleton.com | Annual Report | 55 | ||
FRANKLIN INVESTMENT GRADE CORPORATE ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (10/5/16), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
| 1-Year |
-6.46% | -6.25% | -6.46% | -6.25% | ||||||||||||
| 3-Year |
-2.04% | -1.25% | -0.68% | -0.42% | ||||||||||||
| 5-Year |
+6.44% | +6.85% | +1.26% | +1.33% | ||||||||||||
| Since Inception (10/3/16) |
+6.98% | +7.17% | +1.05% | +1.07% | ||||||||||||
| Distribution Rate5 | 30-Day Standardized Yield6 |
|||
| 1.87% |
4.97% | |||
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will
fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent
month-end performance, go to franklintempleton.com
or call (800) 342-5236.
See page 58 for Performance Summary footnotes.
| 56 | Annual Report | franklintempleton.com | ||
FRANKLIN INVESTMENT GRADE CORPORATE ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
10/3/16-3/31/23
See page 58 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 57 | ||
FRANKLIN INVESTMENT GRADE CORPORATE ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
|
$0.733018 |
Total Annual Operating Expenses8
|
0.35% |
All investments involve risks, including possible loss of principal. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Distributions to shareholders may decline when prevailing interest rates fall or when the Fund experiences defaults on debt securities it holds. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. The Fund’s investments in foreign securities involve certain risks including currency fluctuations, and economic and political uncertainties. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with their relatively small size and lesser liquidity. Investing in derivative securities and the use of foreign currency techniques involve special risks as such may not achieve the anticipated benefits and/or may result in losses to the Fund. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of the Fund’s prospectus available at the time of publication. Net expenses are capped under a contractual agreement, which cannot be terminated prior to 7/31/23 without Board consent. 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 March dividend and the NAV per share on 3/31/23.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Source: FactSet. The Bloomberg U.S. Corporate Investment Grade Index measures the performance of the investment grade, fixed-rate, taxable corporate bond market. It includes U.S. dollar-denominated securities publicly issued by U.S. and non-U.S. industrial, utility and financial issuers.
8. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
| 58 | Annual Report | franklintempleton.com | ||
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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,066.80 | $1.80 | $1,023.19 | $1.77 | 0.35 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
| franklintempleton.com | Annual Report | 59 | ||
Franklin Municipal Green Bond ETF
Formerly, Franklin Liberty Federal Tax-Free Bond ETF
This annual report for Franklin Municipal Green Bond ETF covers the fiscal year ended March 31, 2023.
Your Fund’s Goal and Main Investments
The Fund seeks to maximize income exempt from federal income taxes, including the federal alternative minimum tax, to the extent consistent with prudent investing and the preservation of shareholders’ capital, by normally investing at least 80% of its net assets in municipal securities whose interest is 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 12-month period, the Fund posted cumulative total returns of -1.72% based on market price and -1.68% 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 +0.26% 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 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.
Municipal Bond Market Overview
During the 12 months ended March 31, 2023, the U.S. Federal Reserve (Fed) continued to tighten monetary policy
as it tried to get inflation under control without tipping the economy into recession. After several hikes of 75 basis points (bps), the Fed slowed the pace of tightening to 50 bps in December 2022, followed by two 25-bp increases in February and March 2023. This last decision came in the face of regional banking sector turmoil, though fears of widespread contagion quickly abated.
The municipal bond (muni) market witnessed a very challenging year in 2022, primarily driven by the Fed’s monetary policy tightening. High levels of uncertainty led to significant outflows from muni retail vehicles. The first quarter of 2023 saw a reversal of this trend as investors looked for high-quality alternatives amid market volatility. Inflows to munis were met with restricted new issuance, resulting in positive absolute returns year-to-date. Credit fundamentals remained strong, as many muni issuers benefited from federal aid received during the COVID-19 crisis and from the subsequent economic recovery.
For the 12-month period, U.S. fixed income sectors saw better performance relative to equities, as measured by the Standard & Poor’s® 500 Index, which posted a -7.73% total return.2 Investment-grade munis, as measured by the Bloomberg Municipal Bond Index, posted a +0.26% total return, while U.S. Treasuries, as measured by the Bloomberg U.S. Treasury Index, posted a -4.51% total return.2 Investment-grade corporate bonds, as measured by the Bloomberg U.S. Corporate Investment Grade Index, posted a -5.55% total return
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 155.
| 60 | Annual Report | franklintempleton.com | ||
FRANKLIN MUNICIPAL GREEN BOND ETF
| Portfolio Composition | ||||
| 3/31/23 | ||||
| % of Total Investments |
||||
| Utilities | 18.04% | |||
| Industrial Development Revenue and Pollution Control | 12.97% | |||
| Transportation | 11.28% | |||
| Lease | 10.47% | |||
| Special Tax | 9.41% | |||
| Local | 8.71% | |||
| Education | 7.68% | |||
| Housing | 7.15% | |||
| Cash | 5.02% | |||
| Other | 4.78% | |||
| Health Care | 4.20% | |||
| Refunded | 0.14% | |||
| State | 0.14% | |||
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.
Manager’s Discussion
During the 12-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.
Ben Barber, CFA
Daniel Workman, CFA
Francisco Rivera
James Conn, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2023, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
| franklintempleton.com | Annual Report | 61 | ||
FRANKLIN MUNICIPAL GREEN BOND ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (9/5/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231,2
| Cumulative Total Return3 | Average Annual Total Return3 | |||||||||||||||
| Based on NAV4 |
Based on market price5 |
Based on NAV4 |
Based on market price5 |
|||||||||||||
| 1-Year |
-1.68% | -1.72% | -1.68% | -1.72% | ||||||||||||
| 3-Year |
-2.23% | -2.54% | -0.75% | -0.85% | ||||||||||||
| 5-Year |
+10.16% | +9.79% | +1.95% | +1.89% | ||||||||||||
| Since Inception (8/31/17) |
+8.56% | +8.54% | +1.48% | +1.48% | ||||||||||||
| Distribution Rate6 | 30-Day Standardized Yield7 |
Taxable Equivalent 30-Day Standardized Yield8 |
||||||
| 3.17% |
3.94% | 6.66% | ||||||
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 64 for Performance Summary footnotes.
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FRANKLIN MUNICIPAL GREEN BOND ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
8/31/17-3/31/23
See page 64 for Performance Summary footnotes.
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FRANKLIN MUNICIPAL GREEN BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
|
$0.652811 |
Total Annual Operating Expenses10
| With Fee Waiver |
|
0.30% |
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.
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. Effective December 1, 2022, 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.
3. 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.
4. Assumes reinvestment of distributions based on net asset value.
5. Assumes reinvestment of distributions based on market price.
6. Distribution rate is based on an annualization of the March dividend and the NAV per share on 3/31/23.
7. 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.
8. Taxable equivalent yield assumes the 2023 maximum federal income tax rate of 37.00% plus 3.80% Medicare tax.
9. Source: FactSet. The Bloomberg Municipal Bond Index is a market value-weighted index of tax-exempt, investment-grade municipal bond with maturities of one year or more.
10. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
| 64 | Annual Report | franklintempleton.com | ||
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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,083.10 | $1.56 | $1,023.44 | $1.51 | 0.30 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
| franklintempleton.com | Annual Report | 65 | ||
Formerly, Franklin Liberty Senior Loan ETF
This annual report for Franklin Senior Loan ETF covers the fiscal year ended March 31, 2023.
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 12-month period, the Fund posted cumulative total returns of +2.71% based on market price and +2.53% based on net asset value (NAV). In comparison, the Fund’s benchmark, the S&P/LSTA U.S. Leveraged Loan 100 Index, which reflects the performance of the largest facilities in the leveraged loan market, posted a +2.42% 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 69.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Economic and Market Overview
The U.S. bond market, as measured by the Bloomberg U.S. Aggregate Bond Index, posted a 4.78% total return for the 12-months ended March 31, 2023.2 High inflation amid a strong labor market led to significantly tighter monetary policy, reducing the value of most bonds. While interest rates increased along the yield curve for all U.S. Treasury maturities, relatively large increases in shorter-term interest rates led the yield curve to invert during the period as investors became increasingly concerned about the economic outlook.
In an effort to control inflation, the U.S. Federal Reserve (Fed) raised the federal funds target rate at each of its eight meetings during the period to end at a range of 4.75% -5.00%, a full 450 basis points higher than at the beginning of the period. The Fed noted in its March 2023 meeting that inflation remained elevated amid robust job growth and low unemployment. Despite its goal of 2% long-run inflation, the Fed softened its firm outlook on future rate hikes. Furthermore, the Fed indicated it would continue to reduce its U.S. Treasury (UST) and agency debt and mortgage-backed security holdings.
UST bonds, as measured by the Bloomberg U.S. Treasury Index, posted a -4.51% total return for the 12-month period.2 The 10-year UST yield (which moves inversely to price, increased sharply amid high inflation and the Fed’s tightening monetary stance. Mortgage-backed securities (MBS), as measured by the Bloomberg U.S. MBS Fixed Rate Index, posted a -4.85% total return for the period as mortgage rates rose to the highest level in over two decades and modest prepayment rates led to increasing interest-rate sensitivity.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. In this environment, high-yield corporate bonds, as represented by the Bloomberg U.S. Corporate High Yield Index, posted a -3.34% total return, while investment-grade corporate bonds, as represented by the Bloomberg U.S. Corporate Investment Grade Index, posted a -5.55% total return.2
| Portfolio Composition | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Senior Floating Rate Interests | 89.0% | |||
| Corporate Bonds & Notes | 4.4% | |||
| Asset-Backed Securities | 0.9% | |||
| Short-Term Investments & Other Net Assets | 5.7% | |||
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. Treasuries, if held to maturity, offer a fixed rate of return and a fixed principal value; their interest payments and principal are guaranteed. 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.
| 66 | Annual Report | franklintempleton.com | ||
| Top 10 Sectors/Industries | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Software | 14.4% | |||
| Commercial Services & Supplies | 7.6% | |||
| Media | 7.0% | |||
| Health Care Providers & Services | 5.7% | |||
| Chemicals | 4.5% | |||
| Airlines | 4.5% | |||
| Pharmaceuticals | 3.7% | |||
| Insurance | 3.5% | |||
| IT Services | 3.0% | |||
| Financial Services | 2.8% | |||
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), the Secured Overnight Financing Rate (SOFR) 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.
| Top 10 Holdings | ||||
| 3/31/23 | ||||
| Company Sector/Industry |
% of Total Net Assets |
|||
| Verscend Holding Corp., 8.84%, 8/27/2025 IT Services |
1.8% | |||
| Greeneden U.S. Holdings II, LLC, 8.84%, 12/1/2027 Technology Hardware, Storage & Peripherals |
1.6% | |||
| Navicure, Inc., 8.84%, 10/22/2026 Software |
1.5% | |||
| Peraton Corp., 8.59%, 2/1/2028 Aerospace & Defense |
1.4% | |||
| Hyland Software, Inc., 8.34%, 7/1/2024 Software |
1.3% | |||
| DCert Buyer, Inc., 8.696%, 10/16/2026 Software |
1.3% | |||
| Amentum Government Services Holdings
LLC, Commercial Services & Supplies |
1.3% | |||
| Gainwell Acquisition Corp., 8.998%, 10/1/2027 Health Care Providers & Services |
1.2% | |||
| United Airlines, Inc., 8.568%, 4/21/2028 Passenger Airlines |
1.2% | |||
| Prime Security Services Borrower LLC,
7.517%, Office Services & Supplies |
1.2% | |||
Manager’s Discussion
The loan market experienced significant volatility during the period as the Fed signaled its commitment to tackling inflation with aggressive tightening. The faster pace of rate hikes was expected to slow economic growth significantly and affect the debt servicing ability of loan issuers. Amid uncertainty about the effect of elevated interest costs on issuers with higher leverage, demand for higher quality issuers increased and BB-rated loans outperformed. Outflows from loan mutual funds increased, but weaker demand from retail investors was offset by steady collateralized loan obligation (CLO) demand and relatively lower new loan issuance.
During the period, the Fund outperformed its benchmark, the S&P/LSTA U.S. Leveraged Loan 100 Index. The Fund’s underweight in higher quality loans detracted from relative performance as the upper tier portion of the benchmark (including BB-rated loans) outperformed. The top individual detractors from performance included issuers that faced operational challenges and were also negatively impacted by credit rating downgrades. Goto Group (a provider of workplace communication software) detracted from performance after reporting revenue declines for a core
| franklintempleton.com | Annual Report | 67 | ||
FRANKLIN SENIOR LOAN ETF
segment, in addition to news of a security breach. Diamond Sports (an operator of regional sports networks) detracted from performance after reporting continued subscriber losses, which led to the company filing for Chapter 11 in March 2023.
However, the Fund’s selection in lower tier loans (CCC-rated) contributed to outperformance versus the benchmark as this segment in the index experienced meaningful declines during the year. Declines among lower tier loans in the index were concentrated among a handful of issuers with large weightings where we had no or minimal exposure. The top contributors to performance included larger positions that benefited from the continued economic recovery. Our position in American Airlines (a global airline operator) traded higher amid a continued recovery in air travel, and the loan contributed to performance after the company paid down and refinanced its term loan debt. Additionally, Verscend Holding (a provider of revenue cycle management services to health care payors) contributed to performance as the company continued to report strong performance. The term loan also outperformed amid demand for loans with shorter maturities in businesses that were perceived to be more defensive.
The Fund maintained its relative underweight in BB loans and overweight in B loans as of March 31, 2023. The portfolio had an underweight position in lower tier loans.
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 March 31, 2023, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
| 68 | Annual Report | franklintempleton.com | ||
FRANKLIN SENIOR LOAN ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (6/1/18), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
| 1-Year |
+2.53% | +2.71% | +2.53% | +2.71% | ||||||||||||
| 3-Year |
+17.90% | +19.84% | +5.64% | +6.22% | ||||||||||||
| Since Inception (5/30/18) |
+16.03% | +16.12% | +3.12% | +3.14% | ||||||||||||
| Distribution Rate5 | 30-Day Standardized Yield6 |
|||
| 7.99% |
8.84% | |||
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 71 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 69 | ||
FRANKLIN SENIOR LOAN ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
5/30/18-3/31/23
See page 71 for Performance Summary footnotes.
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FRANKLIN SENIOR LOAN ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
|
$1.437619 |
Total Annual Operating Expenses8
|
0.45% |
All investments involve risks, including possible loss of principal. Investors should be aware that the Fund’s share price and yield will fluctuate with market conditions. The senior loans and debt securities in which the Fund invests tend to be rated below investment grade. Investing in higher-yielding, lower-rated, senior loans and debt securities involves greater risk of default, which could result in loss of principal --a risk that may be heightened in a slowing economy. Interest earned on senior loans varies with changes in prevailing interest rates. Therefore, while senior loans offer higher interest income when interest rates rise, they will also generate less income when interest rates decline. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. The markets for particular securities or types of securities are or may become relatively illiquid. Reduced liquidity will have an adverse impact on the security’s value and on the Fund’s ability to sell such securities when necessary to meet the Fund’s liquidity needs or in response to a specific market event. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of the Fund’s prospectus available at the time of publication. Net expenses are capped under a contractual agreement, which cannot be terminated prior to 7/31/23 without Board consent. 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 March dividend and the NAV per share on 3/31/23.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Source: FactSet. The S&P/LSTA U.S. Leveraged Loan 100 Index reflects the performance of the largest facilities in the leveraged loan market. This rules-based index consists of the 100 largest loan facilities in the benchmark S&P/LSTA Leveraged Loan Index.
8. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
| franklintempleton.com | Annual Report | 71 | ||
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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,068.80 | $2.32 | $1,022.69 | $2.27 | 0.45 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
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Franklin Systematic Style Premia ETF
Formerly, Franklin Liberty Systematic Style Premia ETF
This annual report for Franklin Systematic Style Premia ETF covers the fiscal year ended March 31, 2023.
Your Fund’s Goal and Main Investments
The Fund seeks to provide absolute return. The Fund seeks to achieve its investment goal by allocating its assets across two underlying alternative investment strategies, which represent top-down and bottom-up approaches to capturing factor-based risk premia. The strategies consist of a top-down risk premia strategy and a bottom-up long/short equity strategy.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +2.55% based on market price and +3.13% 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 +2.50% 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 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.
Economic and Market Overview
The U.S. bond market, as measured by the Bloomberg U.S. Aggregate Bond Index, posted a -4.78% total return for the 12-month period ended March 31, 2023.1 High inflation amid a strong labor market led to significantly tighter monetary policy, reducing the value of most bonds. While interest rates increased along the yield curve for all U.S. Treasury maturities, relatively large increases in shorter-term interest rates led the yield curve to invert during the period as investors became increasingly concerned about the economic outlook.
In an effort to control inflation, the U.S. Federal Reserve (Fed) raised the federal funds target rate at each of its eight meetings during the period to end at a range of 4.75%–5.00%, a full 450 basis points higher than at the beginning of the period. The Fed noted in its March 2023 meeting that inflation remained elevated amid robust job growth and low unemployment. Despite its goal of 2% long-run inflation, the Fed softened its firm outlook on future rate hikes. Furthermore, the Fed indicated it would continue to reduce its U.S. Treasury (UST) and agency debt and mortgage-backed security holdings.
UST bonds, as measured by the Bloomberg U.S. Treasury Index, posted a -4.51% total return for the 12-month period.1 The 10-year UST yield, which moves inversely to price, increased sharply amid high inflation and the Fed’s tightening monetary stance. Mortgage-backed securities (MBS), as measured by the Bloomberg U.S. MBS Fixed Rate Index, posted a -4.85% total return for the period as mortgage rates rose to the highest level in over two decades and modest prepayment rates led to increasing interest-rate sensitivity.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. In this environment, high-yield corporate bonds, as represented by the Bloomberg U.S. Corporate High Yield Index, posted a -3.34% total return, while investment-grade corporate bonds, as represented by the Bloomberg U.S. Corporate Investment Grade Index, posted a -5.55% total return.1
Portfolio Composition
3/31/23
| % of Total Net Assets |
||||
|
|
||||
| Common Stocks |
62.2% | |||
|
|
||||
| Short-Term Investments & Other Net Assets |
37.8% | |||
|
|
||||
1. 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 170.
| franklintempleton.com | Annual Report | 73 | ||
FRANKLIN SYSTEMATIC STYLE PREMIA ETF
Top 10 Sectors/Industries
3/31/23
| % of Total Net Assets |
||||
|
|
||||
| Software |
5.5% | |||
|
|
||||
| Biotechnology |
4.8% | |||
|
|
||||
| Semiconductors & Semiconductor Equipment |
4.1% | |||
|
|
||||
| Oil, Gas & Consumable Fuels |
3.7% | |||
|
|
||||
| IT Services |
3.6% | |||
|
|
||||
| Insurance |
3.4% | |||
|
|
||||
| Consumer Staples Distribution & Retail |
2.2% | |||
|
|
||||
| Metals & Mining |
2.2% | |||
|
|
||||
| Capital Markets |
2.1% | |||
|
|
||||
| Specialty Retail |
1.9% | |||
|
|
||||
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 exposure to the commodity and currency asset classes is obtained indirectly through the use of derivatives, while the exposure to the equity and fixed income asset classes is primarily obtained indirectly through the use of derivatives. 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.
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. 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. 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.
We normally 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’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. The results of such transactions are expected to represent a material component of the Fund’s investment returns.
Top 10 Long Positions
3/31/23
| Company Sector/Industry, Country |
% of Total Net Assets |
|||
|
|
||||
| State Street Institutional U.S. Government Money |
27.8% | |||
| Money Market Funds, United States |
||||
|
|
||||
| Meta Platforms, Inc., Class A |
1.4% | |||
| Interactive Media & Services, United States |
||||
|
|
||||
| Exxon Mobil Corp. |
1.2% | |||
| Oil, Gas & Consumable Fuels, United States |
||||
|
|
||||
| Visa, Inc., Class A |
1.2% | |||
| IT Services, United States |
||||
|
|
||||
| Adobe, Inc. |
1.2% | |||
| Software, United States |
||||
|
|
||||
| Mastercard, Inc., Class A |
1.1% | |||
| IT Services, United States |
||||
|
|
||||
| Netflix, Inc. |
1.1% | |||
| Entertainment, United States |
||||
|
|
||||
| AbbVie, Inc. |
1.1% | |||
| Biotechnology, United States |
||||
|
|
||||
| LVMH Moet Hennessy Louis Vuitton SE |
1.1% | |||
| Textiles, Apparel & Luxury Goods, France |
||||
|
|
||||
| Walmart, Inc. |
1.1% | |||
| Consumer Staples Distribution & Retail, United States |
||||
|
|
||||
| 74 | Annual Report | franklintempleton.com | ||
FRANKLIN SYSTEMATIC STYLE PREMIA ETF
Manager’s Discussion
During the 12 months ended March 31, 2023, both the long/short single equities component strategy and the macro component strategy contributed positively to Fund performance.
Within our long/short single stock equities component, there was positive contribution from all three of our factors. The value factor was the strongest contributor, while quality and momentum also bolstered relative returns. Our portfolio was long lower-volatility stocks and short higher-volatility stocks on aggregate, and this positioning contributed significantly to returns over the year, though less so in the second half. In capital terms, the portfolio was net long, and this detracted from performance.
Within the macro component strategy, equity, fixed income and currency positioning all contributed, while commodities strategies weighed on relative results. Our equity index macro strategies were led by long positioning in Italy, the NASDAQ 100 Index and Spain, along with short positioning in Sweden, Japan and the Standard & Poor’s® 500 Index.
Our fixed income macro strategies had a positive impact. Global yields generally rose during the first half of the period and fell in the second half, as exemplified by the 10-year U.S. Treasury, which started at approximately 2.3% at the end of March 2022, closed above 4% at the end of October 2022, and ended the period below 3.5%. Generally, our long legs detracted and our short legs benefited, as the prices of futures contracts move in the opposite direction to yields. Contributions from short positioning in U.K. Gilts, German bunds and Canadian bonds outweighed detraction from long positioning in French OATs, Italian bonds and longer-term U.S. Treasuries.
The foreign currency macro strategy generated positive results during a period in which the U.S. dollar was very strong in the first half of the 12-month period before weakening in the second half. Long positioning in the Mexican peso and short positioning in the Israeli shekel were key contributors, owing to our foreign currency carry and value factors. Shorts of the euro and Japanese yen also aided performance. Conversely, long positioning in the South African rand weighed on relative returns, as did long positioning in the Australian and Canadian dollars, as commodity-producing countries saw their currencies weaken.
In contrast, commodities strategies detracted from returns, as energy prices fell, some 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
3/31/23
| Company Sector/Industry, Country |
% of Total Value of Underlying Entity |
|||
|
|
||||
| Intel Corp. |
1.6% | |||
| Semiconductors & Semiconductor Equipment, |
||||
| United States |
||||
|
|
||||
| NVIDIA Corp. |
1.6% | |||
| Semiconductors & Semiconductor Equipment, |
||||
| United States |
||||
|
|
||||
| Tesla Inc. |
1.5% | |||
| Automobiles & Components, United States |
||||
|
|
||||
| Keyence Corp. |
1.5% | |||
| Technology Hardware & Equipment, Japan |
||||
|
|
||||
| Advanced Micro Devices Inc. |
1.5% | |||
| Semiconductors & Semiconductor Equipment, |
||||
| United States |
||||
|
|
||||
| Apple Inc. |
1.5% | |||
| Technology Hardware & Equipment, United States |
||||
|
|
||||
| Lam Research Corp. |
1.4% | |||
| Semiconductors & Semiconductor Equipment, |
||||
| United States |
||||
|
|
||||
| AstraZeneca PLC |
1.4% | |||
| Pharmaceuticals, Biotechnology & Life Sciences, |
||||
| United Kingdom |
||||
|
|
||||
| Toyota Motor Corp. |
1.4% | |||
| Automobiles & Components, Japan |
||||
|
|
||||
| Target Corp. |
1.4% | |||
| Consumer Discretionary Distribution & Retail, |
||||
| United States |
||||
|
|
||||
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
| franklintempleton.com | Annual Report | 75 | ||
FRANKLIN SYSTEMATIC STYLE PREMIA ETF
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2023, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
| 76 | Annual Report | franklintempleton.com | ||
FRANKLIN SYSTEMATIC STYLE PREMIA ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (12/20/19), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
| 1-Year |
+3.13% | +2.55% | +3.13% | +2.55% | ||||||||||||
| 3-Year |
+3.65% | +2.31% | +1.20% | +0.77% | ||||||||||||
| Since Inception (12/18/19) |
-3.96% | -4.83% | -1.22% | -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 79 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 77 | ||
FRANKLIN SYSTEMATIC STYLE PREMIA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
12/18/19-3/31/23
See page 79 for Performance Summary footnotes.
| 78 | Annual Report | franklintempleton.com | ||
FRANKLIN SYSTEMATIC STYLE PREMIA ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
|
$0.462414 |
Total Annual Operating Expenses6
|
0.65% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. The Fund is actively managed and could experience losses if the manager’s judgment about particular investments, or its evaluation of the risks, potential returns and correlation properties of the various risk premia in which the Fund invests, prove to be incorrect. The manager’s allocation of Fund assets among different strategies, asset classes and investments may not prove beneficial or produce the desired results. Trading models used by the manager for securities selection and asset allocation may become outdated and the historical patterns upon which the models are based may weaken or disappear. There can be no assurance that the factor-based risk premia investment strategies utilized by the manager will enhance Fund performance, reduce volatility or reduce potential loss. Investments in derivatives involve costs and create economic leverage, which may result in significant volatility and cause the Fund to participate in losses (as well as gains) that significantly exceed the Fund’s initial investment. 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 on 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.
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 as of the Fund’s prospectus available at the time of publication. Net expenses are capped under a contractual agreement, which cannot be terminated prior to 7/31/23 without Board consent. 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. Source: Factset. The ICE BofA U.S. 3-Month Treasury Bill Index tracks the performance of short-term U.S. government securities with a remaining term to final maturity of less than three months.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
| franklintempleton.com | Annual Report | 79 | ||
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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,019.80 | $3.27 | $1,021.69 | $3.28 | 0.65 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
| 80 | Annual Report | franklintempleton.com | ||
Formerly, Franklin Liberty U.S. Core Bond ETF
This annual report for Franklin U.S. Core Bond ETF covers the fiscal year ended March 31, 2023.
Your Fund’s Goal and Main Investments
The Fund seeks total return. Under normal market conditions, the Fund invests at least 80% of its net assets in bonds of U.S. issuers, including government, corporate debt, mortgage-backed and asset-backed securities. Bonds include debt obligations of any maturity, such as bonds, notes, bills and debentures.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -4.84% based on market price and -4.88% based on net asset value (NAV). In comparison, the Bloomberg U.S. Aggregate Bond Index, which measures the performance of the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, posted a -4.78% cumulative total return. You can find more of the Fund’s performance data in the Performance Summary beginning on page 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.
Economic and Market Overview
The U.S. bond market, as measured by the Bloomberg U.S. Aggregate Bond Index, posted a -4.78% total return for the 12-month period ended March 31, 2023.1 High inflation amid a strong labor market led to significantly tighter monetary policy, reducing the value of most bonds. While interest rates increased along the yield curve for all U.S. Treasury maturities, relatively large increases in shorter-term interest rates led the yield curve to invert during the period as investors became increasingly concerned about the economic outlook.
In an effort to control inflation, the U.S. Federal Reserve (Fed) raised the federal funds target rate at each of its eight meetings during the period to end at a range of 4.75%–5.00%, a full 450 basis points higher than at the beginning of the period. The Fed noted in its March 2023 meeting that inflation remained elevated amid robust job growth and low unemployment. Despite its goal of 2% long-run inflation, the Fed softened its firm outlook on future rate hikes. Furthermore, the Fed indicated it would continue to reduce its U.S. Treasury (UST) and agency debt and mortgage-backed security holdings.
UST bonds, as measured by the Bloomberg U.S. Treasury Index, posted a -4.51% total return for the 12-month period.1 The 10-year UST yield, which moves inversely to price, increased sharply amid high inflation and the Fed’s tightening monetary stance. Mortgage-backed securities (MBS), as measured by the Bloomberg U.S. MBS Fixed Rate Index, posted a -4.85% total return for the period as mortgage rates rose to the highest level in over two decades and modest prepayment rates led to increasing interest-rate sensitivity.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. In this environment, high-yield corporate bonds, as represented by the Bloomberg U.S. Corporate High Yield Index, posted a -3.34% total return, while investment-grade corporate bonds, as represented by the Bloomberg U.S. Corporate Investment Grade Index, posted a -5.55% 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 186.
| franklintempleton.com | Annual Report | 81 | ||
FRANKLIN U.S. CORE BOND ETF
Portfolio Composition
3/31/23
| % of Total Net Assets |
||||
|
|
||||
| U.S. Government & Agency Securities |
46.7% | |||
|
|
||||
| Corporate Bonds & Notes |
25.0% | |||
|
|
||||
| Mortgage-Backed Securities |
19.8% | |||
|
|
||||
| Municipal Bonds |
3.0% | |||
|
|
||||
| Asset-Backed Securities |
2.8% | |||
|
|
||||
| Foreign Government and Agency Securities |
1.2% | |||
|
|
||||
| Short-Term Investments & Other Net Assets |
1.4% | |||
|
|
||||
| Top 10 Holdings | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
|
|
||||
| U.S. Treasury Notes, 3.25%, 6/30/27 |
6.7% | |||
|
|
||||
| U.S. Treasury Notes, 1.25%, 12/31/26 |
5.3% | |||
|
|
||||
| U.S. Treasury Notes, 2.125%, 2/29/24 |
4.6% | |||
|
|
||||
| U.S. Treasury Notes, 0.375%, 11/30/25 |
4.6% | |||
|
|
||||
| U.S. Treasury Notes, 0.375%, 1/31/26 |
3.3% | |||
|
|
||||
| U.S. Treasury Notes, 2.75%, 8/15/32 |
2.4% | |||
|
|
||||
| U.S. Treasury Bonds, 1.375%, 8/15/50 |
2.0% | |||
|
|
||||
| U.S. Treasury Notes, 2.125%, 3/31/24 |
1.8% | |||
|
|
||||
| U.S. Treasury Bonds, 2.00%, 11/15/41 |
1.5% | |||
|
|
||||
| U.S. Treasury Notes, 0.875%, 6/30/26 |
1.5% | |||
|
|
||||
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, the Federal National Mortgage Association, and the Federal Home Loan Mortgage Corporation.
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. These derivative transactions may allow the Fund to obtain net long or short exposures to select interest rates, durations or credit risks, for the purposes of seeking to enhance Fund returns, increase liquidity, gain exposure to certain instruments or markets in a more efficient or less expensive way and/or hedge risks associated with its other portfolio investments.
In choosing investments, we select securities in various market sectors based on our assessment of changing economic, market, industry and issuer conditions. We use a top-down analysis of macroeconomic trends, combined with a bottom-up fundamental analysis of market sectors, industries and issuers, to try to take advantage of varying sector reactions to economic events. We may consider selling a security when we believe the security has become fully valued due to either its price appreciation or changes in the issuer’s fundamentals, or when we believe another security is a more attractive investment opportunity.
Manager’s Discussion
During the 12-month period under review, the Fund posted an NAV gross return of -4.88%, modestly underperforming the Bloomberg U.S. Aggregate Bond Index return of -4.78%.1 Duration positioning was the biggest positive contributor to returns relative to the benchmark. Throughout the period under review, the Fund had a duration lower than that of the benchmark, which helped our relative results as U.S. Treasury (UST) yields rose across the curve as the Fed raised interest in an aggressive manner. Sector allocations modestly detracted from the Fund’s results relative to the benchmark. The largest detractions came from an underweight to corporate bonds throughout the period and an overweight to sovereign emerging market debt during 2022’s second quarter, when spreads widened. This was partially offset by positive return contributions from an underweight to agency mortgage-backed securities (MBS) as well as an overweight to municipal (muni) bonds. Positioning in commercial MBS (CMBS) weighed on performance over the past 12-month period. Security selection within sectors was a drag on relative returns, led by selection in corporate bonds and muni issues. In contrast, selection within sovereign emerging markets debt, MBS, and CMBS all lifted performance for the period.
| 82 | Annual Report | franklintempleton.com | ||
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.
Patrick Klein, Ph D.
Tina Chou
Joshua Lohmeier, CFA
Portfolio Management Team
|
| ||
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2023, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
| franklintempleton.com | Annual Report | 83 | ||
FRANKLIN U.S. CORE BOND ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (9/19/19), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
| 1-Year |
-4.88% | -4.84% | -4.88% | -4.84% | ||||||||||||
| 3-Year |
-7.50% | -7.50% | -2.56% | -2.57% | ||||||||||||
| Since Inception (9/17/19) |
-4.61% | -4.61% | -1.32% | -1.33% | ||||||||||||
| 30-Day | ||||||||||||||||
| Distribution Rate5 | Standardized Yield6 | |||||||||||||||
| 2.68% |
4.06% | |||||||||||||||
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 86 for Performance Summary footnotes.
| 84 | Annual Report | franklintempleton.com | ||
FRANKLIN U.S. CORE BOND ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
9/17/19-3/31/23
See page 86 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 85 | ||
FRANKLIN U.S. CORE BOND ETF
PERFORMANCE SUMMARY
|
Distributions (4/1/22–3/31/23)
|
| Net Investment Income |
|
$0.543400 |
Total Annual Operating Expenses8
|
0.14% |
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.
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 as of the Fund’s prospectus available at the time of publication. Net expenses are capped under a contractual agreement, which cannot be terminated prior to 7/31/23 without Board consent. 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 March dividend and the NAV per share on 3/31/23.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Source: FactSet. The Bloomberg U.S. Aggregate Bond Index measures the performance of the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgage pass-throughs), asset-backed securities and commercial mortgage-backed securities (agency and nonagency).
8. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
| 86 | Annual Report | franklintempleton.com | ||
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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,049.60 | $0.72 | $1,024.23 | $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 182/365 to reflect the one-half year period.
| franklintempleton.com | Annual Report | 87 | ||
Franklin U.S. Low Volatility ETF
Formerly, Franklin Liberty U.S. Low Volatility ETF
This annual report for Franklin U.S. Low Volatility ETF covers the fiscal year ended March 31, 2023.
Your Fund’s Goal and Main Investments
The Fund seeks capital appreciation with an emphasis on lower volatility. Under normal market conditions, the Fund invests at least 80% of its net assets in U.S. investments, and primarily equity securities.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -2.44% based on market price and -2.22% 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, which represents the majority of the U.S. market’s total capitalization, posted a -8.39% 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 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.
Economic and Market Overview
The U.S. bond market, as measured by the Bloomberg U.S. Aggregate Bond Index, posted a -4.78% total return for the 12-month period ended March 31, 2023.1 High inflation amid a strong labor market led to significantly tighter monetary policy, reducing the value of most bonds. While interest rates increased along the yield curve for all U.S. Treasury maturities, relatively large increases in shorter-term interest rates led the yield curve to invert during the period as investors became increasingly concerned about the economic outlook.
In an effort to control inflation, the U.S. Federal Reserve (Fed) raised the federal funds target rate at each of its eight meetings during the period to end at a range of 4.75%–5.00%, a full 450 basis points higher than at the beginning of the period. The Fed noted in its March 2023 meeting that inflation remained elevated amid robust job growth and low unemployment. Despite its goal of 2% long-run inflation, the Fed softened its firm outlook on future rate hikes. Furthermore, the Fed indicated it would continue to reduce its U.S. Treasury (UST) and agency debt and mortgage-backed security holdings.
UST bonds, as measured by the Bloomberg U.S. Treasury Index, posted a -4.51% total return for the 12-month period.1 The 10-year UST yield, which moves inversely to price, increased sharply amid high inflation and the Fed’s tightening monetary stance. Mortgage-backed securities (MBS), as measured by the Bloomberg U.S. MBS Fixed Rate Index, posted a -4.85% total return for the period as mortgage rates rose to the highest level in over two decades and modest prepayment rates led to increasing interest-rate sensitivity.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. In this environment, high-yield corporate bonds, as represented by the Bloomberg U.S. Corporate High Yield Index, posted a -3.34% total return, while investment-grade corporate bonds, as represented by the Bloomberg U.S. Corporate Investment Grade Index, posted a -5.55% total return.1
1. 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.
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 196.
| 88 | Annual Report | franklintempleton.com | ||
FRANKLIN U.S. LOW VOLATILITY ETF
| Top 10 Sectors/Industries | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Information Technology | 26.8% | |||
| Health Care | 13.9% | |||
| Consumer Discretionary | 12.1% | |||
| Industrials | 10.2% | |||
| Financials | 10.1% | |||
| Communication Services | 7.9% | |||
| Consumer Staples | 5.0% | |||
| Energy | 4.5% | |||
| Real Estate | 3.0% | |||
| Materials | 2.9% | |||
| Top 10 Holdings | ||||
| 3/31/23 | ||||
| Company Sector/Industry |
% of Total Net Assets |
|||
| Accenture PLC, Class A Information Technology |
|
1.7% |
| |
| ANSYS, Inc. Information Technology |
|
1.7% |
| |
| Oracle Corp. Information Technology |
|
1.7% |
| |
| Intuit, Inc. Information Technology |
|
1.7% |
| |
| Microsoft Corp. Information Technology |
|
1.6% |
| |
| Analog Devices, Inc. Information Technology |
|
1.6% |
| |
| Texas Instruments, Inc. Information Technology |
|
1.6% |
| |
| Amphenol Corp., Class A Information Technology |
|
1.6% |
| |
| Apple, Inc. Information Technology |
|
1.6% |
| |
| International Business Machines Corp. Information Technology |
|
1.6% |
| |
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 actively managed 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
During the 12 months ended March 31, 2023, the Fund outperformed its benchmark, the Russell 1000® Index, although the Fund generated negative absolute returns during the period. Stock selection in the consumer discretionary, information technology (IT) and financials sectors were significant contributors to relative performance during the period. Overweight positions in O’Reilly Automotive and TJX Companies, in addition to an underweight position relative to the benchmark in Amazon.com, drove the consumer discretionary sector’s relative outperformance.
In the IT sector, overweight positions in Analog Devices and Synopsys meaningfully contributed to returns. Meanwhile, the financials sector’s outperformance was led by positions in insurance companies Progressive and Arthur J. Gallagher.
The communication services sector weighed slightly on overall performance. A position in cable and satellite company Liberty Broadband detracted, as revenues and earnings were down for the recent quarter due in part to higher energy and labor costs. A position in Alphabet, however, was a contributor in the sector as the Fund’s underweight position supported relative returns for the period. The utilities sector detracted from returns as electric utility holdings Southern and Duke Energy underperformed slightly during the period.
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
| franklintempleton.com | Annual Report | 89 | ||
FRANKLIN U.S. LOW VOLATILITY ETF
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2023, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
| 90 | Annual Report | franklintempleton.com | ||
FRANKLIN U.S. LOW VOLATILITY ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (9/22/16), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
| 1-Year |
-2.22% | -2.44% | -2.22% | -2.44% | ||||||||||||
| 5-Year |
+71.52% | +71.30% | +11.39% | +11.37% | ||||||||||||
| Since Inception (9/20/16) |
+110.24% | +110.11% | +12.06% | +12.05% | ||||||||||||
| Distribution Rate5 |
30-Day Standardized Yield6 |
|||
| 1.66% |
1.65% | |||
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.
See page 93 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 91 | ||
FRANKLIN U.S. LOW VOLATILITY ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
9/20/16-3/31/23
See page 93 for Performance Summary footnotes.
| 92 | Annual Report | franklintempleton.com | ||
FRANKLIN U.S. LOW VOLATILITY ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
|
$0.784060 |
Total Annual Operating Expenses8
|
0.29% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. There can be no guarantee that the Fund’s volatility strategy will be successful, and achieving the Fund’s volatility strategy does not mean the Fund will achieve a positive or competitive return. The volatility strategy can also be expected to limit the Fund’s participation in market price appreciation when compared to similar funds that do not attempt this strategy. Smaller and midsize-company stocks have historically experienced more price volatility than larger company stocks, especially over the short term. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of the Fund’s prospectus available at the time of publication. Net expenses are capped under a contractual agreement, which cannot be terminated prior to 7/31/23 without Board consent. 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 March dividend and the NAV per share on 3/31/23.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Source: FactSet. The Russell 1000® Index is market capitalization weighted and measures the performance of the approximately 1,000 largest companies in the Russell 3000® Index, which represents the majority of the U.S. market’s total capitalization.
8. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
| franklintempleton.com | Annual Report | 93 | ||
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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,145.10 | $1.55 | $1,023.49 | $1.46 | 0.29 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
| 94 | Annual Report | franklintempleton.com | ||
Franklin U.S. Treasury Bond ETF
Formerly, Franklin Liberty U.S. Treasury Bond ETF
This annual report for Franklin U.S. Treasury Bond ETF covers the fiscal year ended March 31, 2023.
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, including Treasury bonds, bills, notes and Treasury Inflation-Protected Securities (TIPS), and investments that provide exposure to direct obligations of the U.S. Treasury.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -3.95% based on market price and -3.95% based on net asset value (NAV). In comparison, the Bloomberg U.S. Treasury Index, which measures the performance of U.S. dollar-denominated, fixed-rate, nominal debt issued by the U.S. with at least one year until final maturity, posted a -4.51% cumulative total return.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 98.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Economic and Market Overview
The U.S. bond market, as measured by the Bloomberg U.S. Aggregate Bond Index, posted a -4.78% total return for the 12-month period ended March 31, 2023.1 High inflation amid a strong labor market led to significantly tighter monetary policy, reducing the value of most bonds. While interest rates increased along the yield curve for all U.S. Treasury maturities, relatively large increases in shorter-term interest rates led the yield curve to invert during the period as investors became increasingly concerned about the economic outlook.
In an effort to control inflation, the U.S. Federal Reserve (Fed) raised the federal funds target rate at each of its eight meetings during the period to end at a range of 4.75%– 5.00%, a full 450 basis points higher than at the beginning of the period. The Fed noted in its March 2023 meeting that inflation remained elevated amid robust job growth and low unemployment. Despite its goal of 2% long-run inflation, the Fed softened its firm outlook on future rate hikes. Furthermore, the Fed indicated it would continue to reduce its U.S. Treasury (UST) and agency debt and mortgage-backed security holdings.
UST bonds, as measured by the Bloomberg U.S. Treasury Index, posted a -4.51% total return for the 12-month period.1 The 10-year UST yield, which moves inversely to price, increased sharply amid high inflation and the Fed’s tightening monetary stance. Mortgage-backed securities (MBS), as measured by the Bloomberg U.S. MBS Fixed Rate Index, posted a -4.85% total return for the period as mortgage rates rose to the highest level in over two decades and modest prepayment rates led to increasing interest-rate sensitivity.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. In this environment, high-yield corporate bonds, as represented by the Bloomberg U.S. Corporate High Yield Index, posted a -3.34% total return, while investment-grade corporate bonds, as represented by the Bloomberg U.S. Corporate Investment Grade Index, posted a -5.55% total return.1
| Portfolio Composition | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| U.S. Government & Agency Securities | 98.7% | |||
| Short-Term Investments & Other Net Assets | 1.4% | |||
1. 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 200.
| franklintempleton.com | Annual Report | 95 | ||
FRANKLIN U.S. TREASURY BOND ETF
Investment Strategy
The Fund normally invests at least 80% of its net assets in direct obligations of the U.S. Treasury, including Treasury bonds, bills, notes and Treasury Inflation-Protection Securities (TIPS), and investments that provide exposure to direct obligations of the U.S. Treasury. The Fund may invest in U.S. Treasury securities of any maturity and intends to primarily focus on U.S. Treasury securities with a remaining maturity of between 1-30 years. The Fund may also invest in securities issued or guaranteed by the U.S. government, its agencies, or instrumentalities, including government sponsored entities and mortgage-backed securities (MBS). In addition, the Fund may purchase or sell MBS on a delayed delivery or forward commitment basis through the to-be-announced (TBA) market. With TBA transactions, the particular securities to be delivered must meet specified terms and conditions.
To pursue its investment goal, the Fund may enter into certain interest rate-related derivative transactions, principally interest rate/bond futures contracts and interest rate swaps. The use of these derivative transactions may allow the Fund to obtain net long or short exposures to select interest rates or durations. These derivatives may be used to enhance Fund returns, increase liquidity, gain exposure to certain instruments or markets in a more efficient or less expensive way and/or hedge risks associated with its other portfolio investments.
We generally buy and hold high quality fixed income securities. Using this straightforward approach, we seek to produce current income with a high degree of credit safety from a conservatively managed portfolio of U.S. Treasury securities. We may utilize quantitative models to identify investment opportunities as part of the portfolio construction process for the Fund. Quantitative models are proprietary systems that rely on mathematical computations to identify investment opportunities. The Fund is an actively managed ETF and, thus, does not seek to replicate the performance of a specified index.
| Top 10 Holdings | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| U.S. Treasury Notes, 1.50%, 9/30/24 | 9.3% | |||
| U.S. Treasury Notes, 0.75%, 5/31/26 | 8.0% | |||
| U.S. Treasury Bonds, 1.875%, 11/15/51 | 6.8% | |||
| U.S. Treasury Notes, 0.25%, 7/31/25 | 5.2% | |||
| U.S. Treasury Bonds, 3.00%, 5/15/42 | 4.1% | |||
| U.S. Treasury Floating Rate Notes, 4.768% to , 7/31/24 | 3.7% | |||
| U.S. Treasury Bonds, 3.125%, 11/15/41 | 3.6% | |||
| U.S. Treasury Notes, 0.375%, 1/31/26 | 3.4% | |||
| U.S. Treasury Floating Rate Notes, 4.931% to , 1/31/25 | 3.3% | |||
| U.S. Treasury Notes, 1.50%, 11/30/24 | 3.3% | |||
Manager’s Discussion
Yield-curve positioning contributed to relative performance, led mainly by the underweight duration on the five- and 10-year parts of the 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 yield 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 yield curve, and this was a modest detractor from relative results. Performance losses from our non-benchmark allocation to U.S. Treasury Inflation-Protected Securities (TIPS) were offset by security selection gains in the same sector. Our exposure to agency fixed-rate mortgage-backed securities (MBS) had a largely neutral effect on results.
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
| 96 | Annual Report | franklintempleton.com | ||
FRANKLIN U.S. TREASURY BOND ETF
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2023, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
| franklintempleton.com | Annual Report | 97 | ||
FRANKLIN U.S. TREASURY BOND ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (6/11/20), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
| 1-Year |
-3.95% | -3.95% | -3.95% | -3.95% | ||||||||||||
| Since Inception (6/9/20) |
-10.28% | -10.28% | -3.79% | -3.79% | ||||||||||||
| Distribution Rate5 | 30-Day Standardized Yield6 |
|||
| 3.15% |
4.14% | |||
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 100 for Performance Summary footnotes.
| 98 | Annual Report | franklintempleton.com | ||
FRANKLIN U.S. TREASURY BOND ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
6/9/20-3/31/23
See page 100 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 99 | ||
FRANKLIN U.S. TREASURY BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
|
$0.542100 |
Total Annual Operating Expenses8
|
0.08% |
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.
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 as of the Fund’s prospectus available at the time of publication. Net expenses are capped under a contractual agreement, which cannot be terminated prior to 7/31/23 without Board consent. 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 March dividend and the NAV per share on 3/31/23.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Source: FactSet. The Bloomberg U.S. Treasury Index measures the performance of U.S. dollar-denominated, fixed-rate, nominal debt issued by the U.S. Treasury with at least one year until final maturity. Treasuries, if held to maturity, offer a fixed rate of return and a fixed principal value; their interest payments and principal are guaranteed.
8. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
| 100 | Annual Report | franklintempleton.com | ||
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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,035.30 | $0.41 | $1,024.53 | $0.40 | 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 182/365 to reflect the one-half year period.
| franklintempleton.com | Annual Report | 101 | ||
Formerly, Franklin Liberty Ultra Short Bond ETF
This annual report for Franklin Ultra Short Bond ETF covers the fiscal year ended March 31, 2023.
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. The Fund targets an estimated average portfolio duration of one year or less.
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +2.17% based on market price and +2.00% 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 +2.50% cumulative total return.1 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.
Economic and Market Overview
The U.S. bond market, as measured by the Bloomberg U.S. Aggregate Bond Index, posted a -4.78% total return for the 12-month period ended March 31, 2023.1 High inflation amid a strong labor market led to significantly tighter monetary policy, reducing the value of most bonds. While interest rates increased along the yield curve for all U.S. Treasury maturities, relatively large increases in shorter-term interest rates led the yield curve to invert during the period as investors became increasingly concerned about the economic outlook.
In an effort to control inflation, the U.S. Federal Reserve (Fed) raised the federal funds target rate at each of its eight meetings during the period to end at a range of 4.75%–5.00%, a full 450 basis points higher than at the beginning of the period. The Fed noted in its March 2023 meeting that inflation remained elevated amid robust job growth and low unemployment. Despite its goal of 2% long-run inflation, the Fed softened its firm outlook on future rate hikes. Furthermore, the Fed indicated it would continue to reduce its U.S. Treasury (UST) and agency debt and mortgage-backed security holdings.
UST bonds, as measured by the Bloomberg U.S. Treasury Index, posted a -4.51% total return for the 12-month period.1 The 10-year UST yield, which moves inversely to price, increased sharply amid high inflation and the Fed’s tightening monetary stance. Mortgage-backed securities (MBS), as measured by the Bloomberg U.S. MBS Fixed Rate Index, posted a -4.85% total return for the period as mortgage rates rose to the highest level in over two decades and modest prepayment rates led to increasing interest-rate sensitivity.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. In this environment, high-yield corporate bonds, as represented by the Bloomberg U.S. Corporate High Yield Index, posted a -3.34% total return, while investment-grade corporate bonds, as represented by the Bloomberg U.S. Corporate Investment Grade Index, posted a -5.55% total return.1
1. 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 203.
| 102 | Annual Report | franklintempleton.com | ||
FRANKLIN ULTRA SHORT BOND ETF
| Top 10 Sectors/Industries | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Banks | 46.5% | |||
| Telecommunications | 10.2% | |||
| Financial Services | 8.1% | |||
| Miscellaneous Manufacturing | 4.0% | |||
| Auto Manufacturers | 4.0% | |||
| Healthcare-Products | 4.0% | |||
| Insurance | 3.9% | |||
| Pipelines | 2.0% | |||
| Entertainment | 2.0% | |||
| Biotechnology | 2.0% | |||
| Top 10 Holdings | ||||
| 3/31/23 | ||||
| Issue/Issuer | % of Total Net Assets |
|||
| Verizon Communications, Inc., 5.964% to , FRN, 5/15/25 | 6.1% | |||
| Citigroup, Inc., 5.977% to , 5/17/24 | 6.1% | |||
| American Express Co., 5.546% to , 8/03/23 | 6.1% | |||
| Morgan Stanley, 0.731% to 4/05/23, FRN thereafter, 4/05/24 | 6.1% | |||
| JPMorgan Chase & Co., 5.705% to , FRN thereafter, 7/23/24 | 6.1% | |||
| Westpac Banking Corp., 5.728% to , FRN thereafter, 2/26/24 | 6.1% | |||
| Bank of America Corp., 5.334% to , 4/22/25 | 6.0% | |||
| AT&T, Inc., 6.334% to , 6/12/24 | 4.1% | |||
| Citibank Credit Card Issuance Trust, 5.372% to , 4/22/26 | 4.1% | |||
| Discover Card Execution Note Trust, 5.284% to , 12/15/26 | 4.1% | |||
Investment Strategy
The Fund targets debt 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
Over the 12-month period under review, the Fund posted an NAV gross return of +2.00%, underperforming the ICE BofA U.S. 3-Month Treasury Bill Index return of +2.50%.1 The main detractor from relative performance was the Fund’s duration positioning. During much of the 12-month period, the Fund maintained a duration greater than that of the benchmark, which hurt our returns as shorter-term UST yields rose dramatically as the Fed maintained an aggressive pace of rate hikes, 450 basis points in total, to combat multi-decade levels of inflation. The Fund did benefit from our off-benchmark allocation to shorter-maturity investment-grade (IG) corporate bonds, especially in the banking, capital goods and consumer cyclical sectors. However, this was partially offset by negative returns from allocations to technology- and communication-related IG corporate bond issues.
David Yuen retired effective September 30, 2022, and his responsibilities have been allocated to others in the portfolio management team.
| franklintempleton.com | Annual Report | 103 | ||
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
Shawn Lyons, CFA
Thomas Runkel, CFA
Kent Burns, CFA
Johnson Ng, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2023, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
| 104 | Annual Report | franklintempleton.com | ||
FRANKLIN ULTRA SHORT BOND ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (7/16/20), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
| 1-Year |
+2.00% | +2.17% | +2.00% | +2.17% | ||||||||||||
| Since Inception (7/14/20) |
+2.12% | +2.25% | +0.78% | +0.82% | ||||||||||||
| Distribution Rate5 | 30-Day Standardized Yield6 |
|||
| 3.59% |
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 107 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 105 | ||
FRANKLIN ULTRA SHORT BOND ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return is calculated at net asset value and represents the change in value of an investment over the periods shown. It includes any Fund fees and expenses, and reinvested distributions. The unmanaged index include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
7/14/20-3/31/23
See page 107 for Performance Summary footnotes.
| 106 | Annual Report | franklintempleton.com | ||
FRANKLIN ULTRA SHORT BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
|
$0.464900 |
Total Annual Operating Expenses8
|
0.10% |
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. 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.
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 as of the Fund’s prospectus available at the time of publication. Net expenses are capped under a contractual agreement, which cannot be terminated prior to 7/31/23 without Board consent. 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 March dividend and the NAV per share on 3/31/23.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Source: FactSet. The ICE BofA U.S. 3-Month Treasury Bill Index tracks the performance of short-term U.S. government securities with a remaining term to final maturity of less than three months.
8. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
| franklintempleton.com | Annual Report | 107 | ||
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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,020.80 | $0.35 | $1,024.58 | $0.35 | 0.07 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
| 108 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
Franklin Disruptive Commerce ETF
| Year Ended March 31, | ||||||||||||||||
| 2023 | 2022 | 2021 | 2020a | |||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||
| Net asset value, beginning of year |
$30.97 | $49.21 | $21.32 | $25.00 | ||||||||||||
| Income from investment operationsb: |
||||||||||||||||
| Net investment income (loss)c |
0.02 | (0.19 | ) | (0.21 | ) | (0.01 | ) | |||||||||
| Net realized and unrealized gains (losses) |
(6.94 | ) | (17.73 | ) | 28.10 | (3.67 | ) | |||||||||
| Total from investment operations |
(6.92 | ) | (17.92 | ) | 27.89 | (3.68 | ) | |||||||||
| Net realized gains |
— | (0.32 | ) | — | — | |||||||||||
| Net asset value, end of year |
$24.05 | $30.97 | $49.21 | $21.32 | ||||||||||||
| Total returnd |
(22.34)% | (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) |
0.07% | (0.40)% | (0.44)% | (0.32)% | ||||||||||||
| Supplemental data | ||||||||||||||||
| Net assets, end of year (000’s) |
$9,619 | $18,584 | $41,827 | $2,132 | ||||||||||||
| Portfolio turnover ratef |
47.01%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: | 47.01% | 89.79% | 45.81% | 0.94% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 109 | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin Disruptive Commerce ETF
| Country | Shares | Value | ||||||||||||
| Common Stocks 97.5% | ||||||||||||||
| Air Freight & Logistics 1.3% | ||||||||||||||
| United Parcel Service, Inc., Class B |
United States | 483 | $ | 93,697 | ||||||||||
| a | XPO, Inc. |
United States | 897 | 28,614 | ||||||||||
|
|
|
|||||||||||||
| 122,311 | ||||||||||||||
|
|
|
|||||||||||||
| Commercial Services & Supplies 3.3% | ||||||||||||||
| a | Copart, Inc. |
United States | 4,299 | 323,328 | ||||||||||
|
|
|
|||||||||||||
| Consumer Staples Distribution & Retail 4.7% | ||||||||||||||
| Costco Wholesale Corp. |
United States | 910 | 452,152 | |||||||||||
|
|
|
|||||||||||||
| Containers & Packaging 1.3% | ||||||||||||||
| Graphic Packaging Holding Co. |
United States | 1,018 | 25,949 | |||||||||||
| Packaging Corp. of America |
United States | 705 | 97,875 | |||||||||||
|
|
|
|||||||||||||
| 123,824 | ||||||||||||||
|
|
|
|||||||||||||
| Diversified REITs 2.0% | ||||||||||||||
| Prologis, Inc. |
United States | 1,531 | 191,023 | |||||||||||
|
|
|
|||||||||||||
| Entertainment 3.9% | ||||||||||||||
| a | Netflix, Inc. |
United States | 317 | 109,517 | ||||||||||
| a | ROBLOX Corp., Class A |
United States | 1,670 | 75,116 | ||||||||||
| a | Sea Ltd., ADR |
Taiwan | 2,203 | 190,670 | ||||||||||
|
|
|
|||||||||||||
| 375,303 | ||||||||||||||
|
|
|
|||||||||||||
| Food Products 0.4% | ||||||||||||||
| a | Freshpet, Inc. |
United States | 556 | 36,802 | ||||||||||
|
|
|
|||||||||||||
| Ground Transportation 5.2% | ||||||||||||||
| Old Dominion Freight Line, Inc. |
United States | 355 | 120,998 | |||||||||||
| a | Uber Technologies, Inc. |
United States | 12,047 | 381,890 | ||||||||||
|
|
|
|||||||||||||
| 502,888 | ||||||||||||||
|
|
|
|||||||||||||
| Hotels, Restaurants & Leisure 6.3% | ||||||||||||||
| a | Airbnb, Inc., Class A |
United States | 2,217 | 275,795 | ||||||||||
| a | Booking Holdings, Inc. |
United States | 120 | 318,289 | ||||||||||
| a,b | Meituan, Class B |
China | 985 | 18,006 | ||||||||||
|
|
|
|||||||||||||
| 612,090 | ||||||||||||||
|
|
|
|||||||||||||
| Interactive Media & Services 2.3% | ||||||||||||||
| Shutterstock, Inc. |
United States | 847 | 61,492 | |||||||||||
| Tencent Holdings Ltd. |
China | 2,718 | 133,581 | |||||||||||
| a | ZoomInfo Technologies, Inc., Class A |
United States | 952 | 23,524 | ||||||||||
|
|
|
|||||||||||||
| 218,597 | ||||||||||||||
|
|
|
|||||||||||||
| Internet & Direct Marketing Retail 26.7% | ||||||||||||||
| a | Alibaba Group Holding Ltd., Class A |
China | 9,962 | 127,413 | ||||||||||
| a | Amazon.com, Inc. |
United States | 7,218 | 745,547 | ||||||||||
| a | Chewy, Inc., Class A |
United States | 1,302 | 48,669 | ||||||||||
| a | DoorDash, Inc., Class A |
United States | 5,220 | 331,783 | ||||||||||
| eBay, Inc. |
United States | 1,917 | 85,057 | |||||||||||
| a | Etsy, Inc. |
United States | 2,927 | 325,863 | ||||||||||
| a | Expedia Group, Inc. |
United States | 420 | 40,753 | ||||||||||
| a | Global-e Online Ltd. |
Israel | 1,645 | 53,018 | ||||||||||
| JD.com, Inc., ADR |
China | 1,621 | 71,146 | |||||||||||
| a | MercadoLibre, Inc. |
Brazil | 323 | 425,733 | ||||||||||
| Naspers Ltd., Class N |
South Africa | 455 | 84,447 | |||||||||||
| a | PDD Holdings, Inc., ADR |
China | 1,440 | 109,296 | ||||||||||
| Prosus NV |
Netherlands | 1,097 | 85,741 | |||||||||||
| a | Revolve Group, Inc. |
United States | 416 | 10,941 | ||||||||||
| 110 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Disruptive Commerce ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Internet & Direct Marketing Retail (continued) | ||||||||||||||
| ZOZO, Inc. |
Japan | 1,042 | $ | 23,605 | ||||||||||
|
|
|
|||||||||||||
| 2,569,012 | ||||||||||||||
|
|
|
|||||||||||||
| IT Services 19.9% | ||||||||||||||
| a | Adyen NV, ADR |
Netherlands | 26,101 | 413,440 | ||||||||||
| a | Block, Inc. |
United States | 1,937 | 132,975 | ||||||||||
| a | Dlocal Ltd. |
Uruguay | 1,925 | 31,224 | ||||||||||
| a | International Money Express, Inc. |
United States | 1,594 | 41,093 | ||||||||||
| Jack Henry & Associates, Inc. |
United States | 511 | 77,018 | |||||||||||
| Mastercard, Inc., Class A |
United States | 799 | 290,365 | |||||||||||
| a | PayPal Holdings, Inc. |
United States | 478 | 36,299 | ||||||||||
| a | Shopify, Inc., Class A |
Canada | 10,286 | 493,111 | ||||||||||
| a | Toast, Inc., Class A, A |
United States | 4,644 | 82,431 | ||||||||||
| Visa, Inc., Class A |
United States | 1,390 | 313,389 | |||||||||||
|
|
|
|||||||||||||
| 1,911,345 | ||||||||||||||
|
|
|
|||||||||||||
| Professional Services 3.1% | ||||||||||||||
| a | CoStar Group, Inc. |
United States | 3,698 | 254,607 | ||||||||||
| TransUnion |
United States | 654 | 40,640 | |||||||||||
|
|
|
|||||||||||||
| 295,247 | ||||||||||||||
|
|
|
|||||||||||||
| Software 7.7% | ||||||||||||||
| a | Bills Holdings, Inc. |
United States | 843 | 68,401 | ||||||||||
| a | Descartes Systems Group, Inc. |
Canada | 2,673 | 215,471 | ||||||||||
| a | Manhattan Associates, Inc. |
United States | 1,450 | 224,532 | ||||||||||
| a | Sprout Social, Inc., Class A |
United States | 365 | 22,221 | ||||||||||
| a | SPS Commerce, Inc. |
United States | 477 | 72,647 | ||||||||||
| a | Trade Desk, Inc., Class A |
United States | 1,195 | 72,787 | ||||||||||
| a | Unity Software, Inc. |
United States | 2,058 | 66,762 | ||||||||||
|
|
|
|||||||||||||
| 742,821 | ||||||||||||||
|
|
|
|||||||||||||
| Specialty Retail 0.3% | ||||||||||||||
| a | Petco Health & Wellness Co., Inc. |
United States | 3,086 | 27,774 | ||||||||||
|
|
|
|||||||||||||
| Trading Companies & Distributors 9.1% | ||||||||||||||
| Fastenal Co. |
United States | 7,699 | 415,284 | |||||||||||
| WW Grainger, Inc. |
United States | 667 | 459,436 | |||||||||||
|
|
|
|||||||||||||
| 874,720 | ||||||||||||||
|
|
|
|||||||||||||
| Total Common Stocks (Cost $10,805,227) |
9,379,237 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments (Cost $10,805,227) 97.5% |
9,379,237 | |||||||||||||
| Other Assets, less Liabilities 2.5% |
239,838 | |||||||||||||
|
|
|
|||||||||||||
| Net Assets 100.0% |
$ | 9,619,075 | ||||||||||||
|
|
|
|||||||||||||
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $18,006, representing 0.2% of net assets.
See Note 8 regarding other derivative information.
See Abbreviations on page 246.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 111 | ||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Dynamic Municipal Bond ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$24.81 | $26.32 | $24.72 | $24.97 | $24.40 | |||||||||||||||
| Income from investment operationsa: |
||||||||||||||||||||
| Net investment incomeb |
0.74 | 0.61 | 0.59 | 0.58 | 0.63 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(0.96 | ) | (1.56 | ) | 1.59 | (0.17 | ) | 0.57 | ||||||||||||
| Total from investment operations |
(0.22 | ) | (0.95 | ) | 2.18 | 0.41 | 1.20 | |||||||||||||
| Less distributions from net investment income |
(0.71 | ) | (0.56 | ) | (0.58 | ) | (0.66 | ) | (0.63 | ) | ||||||||||
| Net asset value, end of year |
$23.88 | $24.81 | $26.32 | $24.72 | $24.97 | |||||||||||||||
| Total returnc |
(0.82)% | (3.70)% | 8.84% | 1.61% | 4.99% | |||||||||||||||
| Ratios to average net assets | ||||||||||||||||||||
| Expenses before waiver and payments by affiliates |
0.57% | 0.75% | 1.01% | 1.46% | 2.15% | |||||||||||||||
| Expenses net of waiver and payments by affiliates |
0.30% | 0.30% | 0.30% | 0.30% | 0.30% | |||||||||||||||
| Net investment income |
3.12% | 2.32% | 2.29% | 2.29% | 2.57% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$101,497 | $76,908 | $42,112 | $12,362 | $7,490 | |||||||||||||||
| Portfolio turnover rated |
64.13%e | 27.62%e | 14.05%e | 35.28%e | 35.63% | |||||||||||||||
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
dPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash ("Cash creations").
| e Portfolio turnover rate excluding cash creations was as follows: | 64.13% | 27.62% | 14.05% | 35.28% | — |
| 112 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin Dynamic Municipal Bond ETF
| Principal Amount | * | Value | ||||||||
| Municipal Bonds 97.6% | ||||||||||
| Alabama 6.4% | ||||||||||
| Black Belt Energy Gas District, |
||||||||||
| a 4.00%, 12/01/52 |
500,000 | $ | 484,951 | |||||||
| a Gas Project, Series 2022E, VRDN, 5.00%, 5/01/53 |
1,350,000 | 1,428,275 | ||||||||
| a Refunding, VRDN, 4.00%, 6/01/51 |
240,000 | 236,638 | ||||||||
| a Series 2022D-1, VRDN, 4.00%, 7/01/52 |
500,000 | 500,210 | ||||||||
| a Series C-1, 5.25%, 2/01/53 |
1,500,000 | 1,580,754 | ||||||||
| b | County of Mobile, Gomesa Projects, 4.00%, 11/01/45 |
100,000 | 86,800 | |||||||
| Homewood Educational Building Authority, Samford University, Refunding, Series 2019A, 4.00%, 12/01/33 |
100,000 | 103,343 | ||||||||
| Southeast Energy Authority A Cooperative
District, |
1,000,000 | 1,055,329 | ||||||||
| a Cooperative District, 5.50%, 1/01/53 |
500,000 | 534,755 | ||||||||
| a Cooperative District, Series 2022B-1, VRDN, 5.00%, 5/01/53 |
500,000 | 515,459 | ||||||||
|
|
|
|||||||||
| 6,526,514 | ||||||||||
|
|
|
|||||||||
| Alaska 0.1% | ||||||||||
| Alaska Industrial Development & Export Authority, Greater Fairbanks Community Hospital Foundation Obligated Group, Refunding, 4.00%, 4/01/32 |
100,000 | 101,879 | ||||||||
|
|
|
|||||||||
| Arizona 2.7% | ||||||||||
| Arizona Industrial Development Authority, 4.00%, 7/01/29 |
250,000 | 253,021 | ||||||||
| a | Chandler Industrial Development Authority, 5.00%, 9/01/52 |
1,500,000 | 1,572,503 | |||||||
| City of Phoenix Civic Improvement Corp., Wastewater Revenue, Series 2018A, 5.00%, 7/01/25 |
100,000 | 105,578 | ||||||||
| Glendale Industrial Development Authority, 4.00%, 5/15/31 |
160,000 | 144,843 | ||||||||
| Industrial Development Authority of the City of Phoenix Arizona, Downtown Phoenix Student Housing II LLC, Series A, 5.00%, 7/01/31 |
100,000 | 105,131 | ||||||||
| La Paz County Industrial Development Authority, 5.00%, 2/15/31 |
100,000 | 107,709 | ||||||||
| b | Sierra Vista Industrial Development Authority, Georgetown Community Development Authority, 9.00%, 10/01/37 |
250,000 | 241,630 | |||||||
| Tempe Industrial Development Authority, Tempe Life Care Village Obligated Group, Refunding, 4.00%, 12/01/31 |
200,000 | 181,213 | ||||||||
|
|
|
|||||||||
| 2,711,628 | ||||||||||
|
|
|
|||||||||
| Arkansas 0.2% | ||||||||||
| Arkansas Development Finance Authority, |
||||||||||
| Baptist Health Obligated Group, 4.00%, 12/01/34 |
100,000 | 103,093 | ||||||||
| Baptist Memorial Health Care Obligated Group, Refunding, 5.00%, 9/01/32 |
100,000 | 108,878 | ||||||||
|
|
|
|||||||||
| 211,971 | ||||||||||
|
|
|
|||||||||
| California 9.7% | ||||||||||
| a | California Community Choice Financing Authority, 5.25%, 1/01/54 |
1,500,000 | 1,536,161 | |||||||
| b | California Community College Financing Authority, NCCD-Napa Valley Properties LLC, Series 2022A, 4.25%, 7/01/32 |
500,000 | 468,605 | |||||||
| b | California Community Housing Agency, 4.00%, 8/01/47 |
285,000 | 219,468 | |||||||
| California Municipal Finance Authority, |
||||||||||
| AMT, Sereis 2018A, 3.50%, 12/31/35 |
100,000 | 95,427 | ||||||||
| Biola University, Inc., Refunding, 5.00%, 10/01/29 |
100,000 | 106,374 | ||||||||
| Caritas Corp., Refunding Series 2021B, 3.00%, 8/15/31 |
185,000 | 175,070 | ||||||||
| Series 2020B, 4.00%, 9/01/30 |
50,000 | 50,995 | ||||||||
| Series 2021A, 4.00%, 9/01/30 |
205,000 | 208,014 | ||||||||
| Series 2021C, 4.00%, 9/01/31 |
295,000 | 300,604 | ||||||||
| b,c | California Pollution Control Financing Authority, CalPlant I LLC, AMT, 7.50%, 7/01/32 |
250,000 | 12,500 | |||||||
| California School Finance Authority, |
||||||||||
| b Classical Academy Obligated Group, Series 2020A, 3.00%, 10/01/30 |
200,000 | 190,019 | ||||||||
| b John Adams Academies Obligated Group, Series 2022A, 4.50%, 7/01/32 |
250,000 | 236,917 | ||||||||
| b Summit Public Schools Obligated Group, 5.00%, 6/01/27 |
100,000 | 101,833 | ||||||||
| franklintempleton.com | Annual Report | 113 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount | * | Value | ||||||||
| Municipal Bonds (continued) |
||||||||||
| California (continued) |
||||||||||
| California Statewide Communities Development Authority, |
||||||||||
| Community Facilities District No 2015, 4.00%, 9/01/29 |
110,000 | $ | 112,344 | |||||||
| Community Facilities District No 2015-01, 5.00%, 9/01/27 |
65,000 | 68,080 | ||||||||
| Community Facilities District No 2016-02, 4.00%, 9/01/30 |
130,000 | 132,332 | ||||||||
| Community Facilities District No 2018, 4.00%, 9/01/30 |
150,000 | 152,399 | ||||||||
| Improvement Area No. 1, 4.00%, 9/01/31 |
200,000 | 202,645 | ||||||||
| Southern California Edison Co, Refunding, 1.75%, 9/01/29 |
1,500,000 | 1,288,179 | ||||||||
| Special Assessment, 4.00%, 9/02/28 |
250,000 | 253,033 | ||||||||
| Special Assessment, 4.00%, 9/02/31 |
100,000 | 100,601 | ||||||||
| Special Assessment, Series 2020B, 4.00%, 9/02/30 |
125,000 | 126,519 | ||||||||
| Special Assessment, Series 2021A, 4.00%, 9/02/31 |
150,000 | 148,680 | ||||||||
| City of Gardena, 2.066%, 4/01/26 |
1,000,000 | 925,693 | ||||||||
| CSCDA Community Improvement Authority, |
||||||||||
| b 4.00%, 9/01/46 |
200,000 | 161,441 | ||||||||
| b Jefferson Anaheim Social Bonds, 2.875%, 8/01/41 |
155,000 | 130,519 | ||||||||
| b | Elsinore Valley Municipal Water District, Community Facilities District No 2020, Series 2021A, 4.00%, 9/01/27 |
100,000 | 100,183 | |||||||
| Orange County Community Facilities District, No 2017-1, Series 2018A, 5.00%, 8/15/28 |
100,000 | 108,957 | ||||||||
| Perris Joint Powers Authority, Refunding, Series 2017B, 5.00%, 9/01/25 |
100,000 | 104,138 | ||||||||
| Poway Unified School District, 5.00%, 9/01/32 |
250,000 | 285,441 | ||||||||
| River Islands Public Financing Authority, Community Facilities District No 2003-, 5.00%, 9/01/32 |
500,000 | 510,910 | ||||||||
| Sierra View Local Health Care District, Tulare County, Refunding, 5.00%, 7/01/30 |
100,000 | 111,281 | ||||||||
| a | Southern California Public Power Authority, 4.695%, 11/01/38 |
1,000,000 | 896,007 | |||||||
| Sulphur Springs Union School District, Community Facilities District No 2014-1, 5.00%, 9/01/31 |
135,000 | 148,971 | ||||||||
| Transbay Joint Powers Authority, Redevelopment Project Green Bond Subordinate Tax, 2.40%, 10/01/49 |
100,000 | 95,551 | ||||||||
|
|
|
|||||||||
| 9,865,891 | ||||||||||
|
|
|
|||||||||
| Colorado 3.2% | ||||||||||
| Colorado Educational & Cultural Facilities Authority, Golden View Classical Academy, Refunding, 4.00%, 1/01/32 |
200,000 | 198,213 | ||||||||
| Colorado Health Facilities Authority, |
||||||||||
| 4.00%, 8/01/37 |
700,000 | 686,769 | ||||||||
| 4.00%, 8/01/39 |
1,000,000 | 964,339 | ||||||||
| 5.00%, 11/01/33 |
200,000 | 224,771 | ||||||||
| Christian Living Neighborhoods Obligated Group, Refunding, 4.00%, 1/01/29 |
100,000 | 91,262 | ||||||||
| Denver Health & Hospital Authority, Series A, 4.00%, 12/01/37 |
1,000,000 | 934,637 | ||||||||
| Southglenn Metropolitan District, Refunding, 5.00%, 12/01/30 |
100,000 | 100,069 | ||||||||
| Southlands Metropolitan District No. 1, Refunding, Series 2017A-1, 3.50%, 12/01/27 |
100,000 | 93,445 | ||||||||
|
|
|
|||||||||
| 3,293,505 | ||||||||||
|
|
|
|||||||||
| Connecticut 0.5% | ||||||||||
| Connecticut Housing Finance Authority, Refunding, Series 2016A-1, 2.875%, 11/15/30 |
135,000 | 131,502 | ||||||||
| Connecticut State Health & Educational Facilities Authority, |
||||||||||
| Series 2017I-1, 5.00%, 7/01/29 |
5,000 | 5,418 | ||||||||
| b Series 2020A, 5.00%, 1/01/30 |
150,000 | 150,226 | ||||||||
| b | Steel Point Infrastructure Improvement District, Steelpointe Harbor Project, 4.00%, 4/01/31 |
200,000 | 186,080 | |||||||
|
|
|
|||||||||
| 473,226 | ||||||||||
|
|
|
|||||||||
| Delaware 0.1% | ||||||||||
| County of Kent, CHF-Dover LLC, 5.00%, 7/01/29 |
100,000 | 102,192 | ||||||||
|
|
|
|||||||||
| District of Columbia 0.2% | ||||||||||
| District of Columbia, 5.50%, 2/28/35 |
200,000 | 219,707 | ||||||||
|
|
|
|||||||||
| 114 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount | * | Value | ||||||||
| Municipal Bonds (continued) | ||||||||||
| Florida 15.1% | ||||||||||
| Abbott Square Community Development District, Special Assessment, Series 2022, 5.00%, 6/15/32 |
200,000 | $ | 200,741 | |||||||
| b | Artisan Lakes East Community Development District, Special Assessment, Series 2021-2, 2.30%, 5/01/26 |
195,000 | 182,531 | |||||||
| b | Astonia Community Development District, Assessment Area One Project, Special Assessment, 3.375%, 5/01/30 |
145,000 | 136,804 | |||||||
| Avalon Groves Community Development District, Assessment Area 3, Special Assessment, 2.375%, 5/01/26 |
120,000 | 112,648 | ||||||||
| Avalon Park West Community Development District, Special Assessment, Refunding, 3.25%, 5/01/30 |
100,000 | 93,418 | ||||||||
| Avenir Community Development District, Assessment Area 2, Special Assessment, Series 2021A, 2.75%, 5/01/31 |
90,000 | 77,001 | ||||||||
| Babcock Ranch Community Independent Special District, |
||||||||||
| Assessment Area 2C, Special Assessment, 3.00%, 5/01/30 |
50,000 | 45,668 | ||||||||
| Assessment Area 3B, Special Assessment, 3.00%, 5/01/30 |
145,000 | 132,438 | ||||||||
| Belmond Reserve Community Development District, Special Assessment, Series 2020, 3.25%, 5/01/30 |
100,000 | 90,721 | ||||||||
| Berry Bay Community Development District, Assessment Area 1, Special Assessment, 3.125%, 5/01/31 |
100,000 | 88,956 | ||||||||
| Black Creek Community Development District, 5.125%, 6/15/32 |
100,000 | 100,575 | ||||||||
| Capital Projects Finance Authority, |
||||||||||
| 5.00%, 10/01/34 |
785,000 | 810,229 | ||||||||
| University Project, Series 2020A-1, 5.00%, 10/01/32 |
455,000 | 475,510 | ||||||||
| Capital Trust Agency, Inc., |
||||||||||
| b 3.00%, 7/01/31 |
125,000 | 106,674 | ||||||||
| b Educational Growth Fund LLC, 3.375%, 7/01/31 |
100,000 | 92,219 | ||||||||
| Liza Jackson Preparatory School, Inc., 4.00%, 8/01/30 |
100,000 | 100,749 | ||||||||
| Lutz Preparatory School, Inc., Refunding, 4.00%, 6/01/31 |
200,000 | 204,324 | ||||||||
| b WFCS Holdings II LLC, Series 2021A, 3.30%, 1/01/31 |
300,000 | 262,111 | ||||||||
| Celebration Community Development District, Assessment Area One Project, Special Assessment, 2.25%, 5/01/26 |
105,000 | 98,137 | ||||||||
| Coddington Community Development District, Special Assessment, 5.00%, 5/01/32 |
275,000 | 278,372 | ||||||||
| Coral Keys Homes Community Development District, Special Assessment, 3.125%, 5/01/30 |
165,000 | 152,610 | ||||||||
| Cordoba Ranch Community Development District, Special Assessment, Refunding, 3.00%, 5/01/31 |
100,000 | 90,188 | ||||||||
| Cordova Palms Community Development District, |
||||||||||
| Assessment Area 1, Special Assessment, 4.80%, 5/01/27 |
135,000 | 135,026 | ||||||||
| b Special Assessment, 2.80%, 5/01/31 |
100,000 | 85,932 | ||||||||
| County of Osceola Transportation Revenue, Refunding, Series 2020A-2, zero cpn., 10/01/32 |
150,000 | 96,500 | ||||||||
| b | Cypress Bluff Community Development District, Special Assessment, Series 2020A, 3.125%, 5/01/30 |
60,000 | 53,846 | |||||||
| Cypress Park Estates Community Development District, Special Assessment, Series 2022, 4.375%, 5/01/27 |
150,000 | 147,960 | ||||||||
| b | DW Bayview Community Development District, Special Assessment, 3.00%, 5/01/32 |
100,000 | 86,085 | |||||||
| East Bonita Beach Road Community Development District, Special Assessment, 3.00%, 5/01/32 |
100,000 | 86,029 | ||||||||
| Edgewater East Community Development District, Special Assessment, 3.10%, 5/01/31 |
100,000 | 87,799 | ||||||||
| b | Enbrook Community Development District, Special Assessment, 3.00%, 5/01/30 |
100,000 | 88,919 | |||||||
| b | Entrada Community Development District, Special Assessment, 2.125%, 5/01/26 |
100,000 | 92,923 | |||||||
| Epperson North Community Development District, Assessment Area 2, Special Assessment, 3.00%, 5/01/31 |
85,000 | 74,285 | ||||||||
| Florida Development Finance Corp., |
||||||||||
| a,b 7.50%, 7/01/57 |
250,000 | 246,896 | ||||||||
| a,b Brightline Trains Florida LLC, AMT, VRDN, 6.375%, 1/01/49 |
175,000 | 165,425 | ||||||||
| a,b Brightline Trains Florida LLC, Refunding, VRDN, 7.25%, 7/01/57 |
250,000 | 251,982 | ||||||||
| Glenridge on Palmer Ranch Obligated Group, Refunding, 5.00%, 6/01/31 |
200,000 | 193,227 | ||||||||
| b Mayflower Retirement Community, Refunding, 4.00%, 6/01/31 |
100,000 | 87,770 | ||||||||
| franklintempleton.com | Annual Report | 115 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount | * | Value | ||||||||
| Municipal Bonds (continued) | ||||||||||
| Florida (continued) | ||||||||||
| Shands Jacksonville Medical Center Obligated Group, Refunding, 5.00%, 2/01/38 |
1,400,000 | $ | 1,410,180 | |||||||
| b | Forest Lake Community Development District, Assessment Area 1 Project, Special Assessment, 3.25%, 5/01/30 |
145,000 | 135,457 | |||||||
| Grand Oaks Community Development District, Special Assessment, 4.00%, 5/01/30 |
150,000 | 143,982 | ||||||||
| Hammock Reserve Community Development District, Assessment Area One Project, Special Assessment, 3.25%, 5/01/30 |
100,000 | 93,418 | ||||||||
| Herons Glen Recreation District, Special Assessment, Refunding, 3.00%, 5/01/32 |
100,000 | 100,150 | ||||||||
| Hills of Minneola Community Development District, |
||||||||||
| South Parcel Assessment Area, Special Assessment, 2.375%, 5/01/26 |
75,000 | 70,425 | ||||||||
| b South Parcel Assessment Area, Special Assessment, 3.50%, 5/01/31 |
100,000 | 90,762 | ||||||||
| Holly Hill Road East Community Development District, Assessment Area 3 Project, Special Assessment, 4.00%, 11/01/25 |
65,000 | 64,700 | ||||||||
| Indigo Community Development District, 2021 Assessment Area, Phase A1, Special Assessment, 2.70%, 5/01/31 |
100,000 | 85,272 | ||||||||
| Kindred Community Development District II, |
||||||||||
| Special Assessment, 2.20%, 5/01/26 |
70,000 | 65,325 | ||||||||
| Special Assessment, 3.00%, 5/01/30 |
155,000 | 137,672 | ||||||||
| Kingman Gate Community Development District, |
||||||||||
| Special Assessment, 2.50%, 6/15/26 |
85,000 | 80,521 | ||||||||
| Special Assessment, 3.125%, 6/15/30 |
110,000 | 101,616 | ||||||||
| Lakes of Sarasota Community Development District, |
||||||||||
| Special Assessment, Series 2021A-1, 3.40%, 5/01/31 |
135,000 | 123,061 | ||||||||
| Special Assessment, Series 2021B-1, 3.00%, 5/01/26 |
115,000 | 111,036 | ||||||||
| Lakewood Ranch Stewardship District, |
||||||||||
| 4.25%, 5/01/26 |
250,000 | 249,110 | ||||||||
| b Northeast Sector Project, Special Assessment, Refunding, 3.20%, 5/01/30 |
100,000 | 90,213 | ||||||||
| b Special Assessment, 3.125%, 5/01/30 |
60,000 | 53,861 | ||||||||
| Special Assessment, 3.20%, 5/01/30 |
175,000 | 157,703 | ||||||||
| Star Farms at Lakewood Ranch Proj-Phase 1/2, Special Assessment, 2.70%, 5/01/31 |
100,000 | 85,453 | ||||||||
| Laurel Road Community Development District, Special Assessment, Series 2021A-1, 2.60%, 5/01/26 |
100,000 | 94,209 | ||||||||
| Lawson Dunes Community Development District, Special Assessment, 4.375%, 5/01/27 |
200,000 | 197,353 | ||||||||
| b | Magnolia Park Community Development District, Special Assessment, Refunding, 4.00%, 5/01/31 |
47,000 | 46,998 | |||||||
| Meadow View at Twin Creeks Community Development District, Phase 4, Special Assessment, 3.00%, 5/01/31 |
75,000 | 65,458 | ||||||||
| Miami Health Facilities Authority, Miami Jewish Health Systems Obligated Group, Refunding, 5.00%, 7/01/28 |
150,000 | 141,528 | ||||||||
| Mirada II Community Development District, Special Assessment, 3.125%, 5/01/31 |
100,000 | 88,014 | ||||||||
| North AR-1 Pasco Community Development District, Assessment Area Two, Special Assessment, Series 2021A, 3.25%, 5/01/31 |
100,000 | 88,926 | ||||||||
| b | North Powerline Road Community Development District, Special Assessment, 4.75%, 5/01/27 |
280,000 | 278,353 | |||||||
| Old Hickory Community Development District, Special Assessment, 3.00%, 6/15/30 |
100,000 | 91,207 | ||||||||
| d | Orange County Health Facilities Authority, Presbyterian Retirement Communities, Inc. Obligated Group, Refunding, Series 2023A, 5.00%, 8/01/32 |
500,000 | 524,509 | |||||||
| Palm Beach County Health Facilities Authority, Jupiter Medical Center Obligated Group, 5.00%, 11/01/32 |
100,000 | 109,485 | ||||||||
| Palm Coast Park Community Development District, 4.15%, 5/01/27 |
200,000 | 198,184 | ||||||||
| Parkview at Long Lake Ranch Community Development District, Special Assessment, 3.125%, 5/01/30 |
100,000 | 89,560 | ||||||||
| Parrish Plantation Community Development District, Special Assessment, 3.125%, 5/01/31 |
100,000 | 88,577 | ||||||||
| Pine Ridge Plantation Community Development District, Subordinate Lien, Special Assessment, Refunding, Series 2020A-2, 3.30%, 5/01/30 |
150,000 | 135,895 | ||||||||
| Preserve at South Branch Community Development District, Special Assessment, Series 2021, 3.00%, 5/01/31 |
100,000 | 90,188 | ||||||||
| Reunion East Community Development District, Special Assessment, 2.85%, 5/01/31 |
100,000 | 86,309 | ||||||||
| 116 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount | * | Value | ||||||||
| Municipal Bonds (continued) | ||||||||||
| Florida (continued) | ||||||||||
| River Hall Community Development District, |
||||||||||
| Special Assessment, Refunding, Series 2021A-2, 3.00%, 5/01/24 |
30,000 | $ | 29,559 | |||||||
| Special Assessment, Refunding, Series 2021A-2, 3.00%, 5/01/25 |
40,000 | 38,865 | ||||||||
| Rivers Edge II Community Development District, Special Assessment,, 3.00%, 5/01/31 |
100,000 | 87,278 | ||||||||
| b | Rivers Edge III Community Development District, Special Assessment,, 2.40%, 5/01/26 |
100,000 | 93,862 | |||||||
| Saddle Creek Preserve of Polk County Community Development District, Special Assessment, 3.00%, 6/15/30 |
80,000 | 71,169 | ||||||||
| Sanctuary Cove Community Development District, Special Assessment, 2.125%, 5/01/26 |
135,000 | 125,697 | ||||||||
| Sandmine Road Community Development District, |
||||||||||
| b Assessment Area One, Special Assessment, 3.125%, 5/01/30 |
100,000 | 92,318 | ||||||||
| Assessment Area Two, Special Assessment, 2.30%, 11/01/26 |
45,000 | 41,978 | ||||||||
| Sandridge Community Development District, Special Assessment, Series 2021A1, 2.875%, 5/01/26 |
115,000 | 109,564 | ||||||||
| Sawyers Landing Community Development District, Special Assessment, 3.75%, 5/01/31 |
150,000 | 138,701 | ||||||||
| Shingle Creek at Bronson Community Development District, Special Assessment, 3.10%, 6/15/31 |
100,000 | 88,452 | ||||||||
| Six Mile Creek Community Development District, Assessment Area 2, Phase 3, Special Assessment, 3.10%, 5/01/31 |
75,000 | 65,953 | ||||||||
| South Fork East Community Development District, 4.00%, 5/01/31 |
755,000 | 749,501 | ||||||||
| b | Stillwater Community Development District, 2021 Project, Special Assessment, 3.00%, 6/15/31 . |
100,000 | 87,301 | |||||||
| Summer Woods Community Development District, Assessment Area Three Project, Special Assessment, 3.15%, 5/01/31 |
75,000 | 66,200 | ||||||||
| Sunbridge Stewardship District, Special Assessment, 4.50%, 5/01/27 |
235,000 | 235,469 | ||||||||
| Tamarindo Community Development District, Special Assessment, 3.00%, 5/01/31 |
100,000 | 87,445 | ||||||||
| Timber Creek Southwest Community Development District, Special Assessment, Series 2020, 3.00%, 6/15/30 |
150,000 | 133,247 | ||||||||
| Tohoqua Community Development District, |
||||||||||
| Special Assessment, 2.50%, 5/01/26 |
140,000 | 131,843 | ||||||||
| Special Assessment, 2.875%, 5/01/31 |
100,000 | 86,688 | ||||||||
| Tradition Community Development District No. 9, Special Assessment, 2.70%, 5/01/31 |
100,000 | 85,532 | ||||||||
| b | Trevesta Community Development District, Special Assessment, 3.25%, 5/01/30 |
100,000 | 90,300 | |||||||
| V-Dana Community Development District, Assessment Area One-2021 Project, Special Assessment, Series 2021P, 3.125%, 5/01/31 |
100,000 | 88,717 | ||||||||
| b | Veranda Community Development District II, Special Assessment, Refunding, 3.10%, 5/01/31 |
100,000 | 87,937 | |||||||
| Viera Stewardship District, Village 2, Special Assessment, Series 2021, 2.80%, 5/01/31 |
130,000 | 111,711 | ||||||||
| Village Community Development District No. 13, Limited Offering, Special Assessment, 3.00%, 5/01/29 |
100,000 | 92,052 | ||||||||
| West Villages Improvement District, Unit of Development No 7, Special Assessment, 3.125%, 5/01/31 |
100,000 | 88,163 | ||||||||
| Windward Community Development District, Special Assessment, Series 2020A-1, 3.65%, 5/01/30 |
100,000 | 92,669 | ||||||||
| Wiregrass II Community Development District, Assessment Area Two, Special Assessment, 4.50%, 5/01/27 |
225,000 | 223,130 | ||||||||
|
|
|
|||||||||
| 15,299,199 | ||||||||||
|
|
|
|||||||||
| Georgia 5.6% | ||||||||||
| b | Development Authority of Rockdale County, AHPC Terraces at Fieldstone LLC, Series 2021B-S, 4.50%, 12/01/36 |
100,000 | 81,830 | |||||||
| b | George L Smith II Congress Center Authority, Signia Hotel Management LLC,, 3.625%, 1/01/31 |
350,000 | 305,973 | |||||||
| Main Street Natural Gas, Inc., |
||||||||||
| a 5.00%, 6/01/53 |
490,000 | 511,463 | ||||||||
| a 5.00%, 7/01/53 |
1,000,000 | 1,059,055 | ||||||||
| a,b Gas Supply Revenue, , Sereis 2022C, VRDN, 4.00%, 8/01/52 |
1,500,000 | 1,431,149 | ||||||||
| Series 2019A, 5.00%, 5/15/29 |
100,000 | 104,067 | ||||||||
| a Series 2022A, VRDN, 4.00%, 9/01/52 |
500,000 | 489,168 | ||||||||
| a Series 2022B, 5.00%, 12/01/52 |
1,500,000 | 1,559,670 | ||||||||
| franklintempleton.com | Annual Report | 117 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount | * | Value | ||||||||
| Municipal Bonds (continued) |
||||||||||
| Georgia (continued) |
||||||||||
| Municipal Electric Authority of Georgia, Refunding, Series 2019A, 5.00%, 1/01/33 |
100,000 | $ | 109,566 | |||||||
|
|
|
|||||||||
| 5,651,941 | ||||||||||
|
|
|
|||||||||
| Illinois 12.0% | ||||||||||
| Chicago Board of Education Dedicated Capital Improvement Tax, 5.00%, 4/01/38 |
2,065,000 | 2,171,117 | ||||||||
| City of Chicago, |
||||||||||
| 5.00%, 1/01/34 |
1,100,000 | 1,164,703 | ||||||||
| 5.50%, 1/01/39 |
1,050,000 | 1,144,126 | ||||||||
| Refunding, Series 2021A, 5.00%, 1/01/33 |
640,000 | 680,383 | ||||||||
| zero cpn., 1/01/31 |
875,000 | 650,199 | ||||||||
| Illinois Finance Authority, |
||||||||||
| c 2018 Blue Island LLC, Series A-1, 4.25%, 12/01/28 |
100,000 | 1 | ||||||||
| Lifespace Communities, Inc. Obligated Group, Refunding, Series 2015A, 5.00%, 5/15/24 |
245,000 | 242,589 | ||||||||
| b Refunding, 4.00%, 10/01/31 |
180,000 | 162,217 | ||||||||
| a Refunding, Monthly, VRDN, 4.574%, 11/01/34 |
395,000 | 394,282 | ||||||||
| Metropolitan Pier & Exposition Authority, |
||||||||||
| McCormick Place Expansion, Refunding, 3.00%, 6/15/25 |
1,000,000 | 986,656 | ||||||||
| McCormick Project, Refunding, zero cpn., 6/15/28 |
100,000 | 83,194 | ||||||||
| McCormick Project, zero cpn., 12/15/30 |
550,000 | 412,819 | ||||||||
| McCormick Project, zero cpn., 12/15/32 |
85,000 | 58,655 | ||||||||
| Southwestern Illinois Development Authority, Madison County Community Unit School District No 7 Edwardsville, Refunding, zero cpn., 12/01/24 |
245,000 | 231,636 | ||||||||
| State of Illinois, |
||||||||||
| 5.50%, 1/01/30 |
670,000 | 771,338 | ||||||||
| Series 2020B, 5.00%, 10/01/31 |
150,000 | 168,560 | ||||||||
| Series 2021B, 3.00%, 12/01/41 |
500,000 | 413,859 | ||||||||
| Series A, 5.00%, 3/01/31 |
325,000 | 367,824 | ||||||||
| State of Illinois Sales Tax Revenue, |
||||||||||
| 5.00%, 6/15/30 |
695,000 | 762,176 | ||||||||
| Series A, 4.00%, 6/15/27 |
495,000 | 507,286 | ||||||||
| Series D, 4.00%, 6/15/30 |
625,000 | 631,767 | ||||||||
| b | Upper Illinois River Valley Development Authority, Refunding, 3.50%, 12/01/32 |
124,176 | 107,914 | |||||||
| Village of Villa Park, Garden Station Redevelopment Area, 12/31/38 |
100,000 | 74,516 | ||||||||
|
|
|
|||||||||
| 12,187,817 | ||||||||||
|
|
|
|||||||||
| Indiana 0.6% |
||||||||||
| b | City of Goshen, Green Oaks of Goshen LLC, 4.75%, 8/01/24 |
130,000 | 124,078 | |||||||
| b | City of Jeffersonville, Vivera Senior Living of Columbus LLC, Series 2020A, 4.75%, 11/01/30 |
100,000 | 87,367 | |||||||
| Indiana Finance Authority, |
||||||||||
| Ohio Valley Electric Corp., Series 2012C, 3.00%, 11/01/30 |
150,000 | 139,425 | ||||||||
| University of Evansville, 7.00%, 9/01/32 |
180,000 | 169,686 | ||||||||
| b | Indiana Housing & Community Development Authority, Vita of Marion LLC, Series 2021A, |
|||||||||
| 5.00%, 4/01/31 |
100,000 | 87,469 | ||||||||
|
|
|
|||||||||
| 608,025 | ||||||||||
|
|
|
|||||||||
| Iowa 2.6% |
||||||||||
| Iowa Finance Authority, |
||||||||||
| a 3.931%, 5/15/56 |
500,000 | 453,064 | ||||||||
| a 4.00%, 12/01/50 |
1,000,000 | 974,902 | ||||||||
| 4.125%, 5/15/38 |
100,000 | 75,599 | ||||||||
| 5.00%, 5/15/32 |
500,000 | 453,475 | ||||||||
| Iowa Tobacco Settlement Authority, Refunding, Series 2021B-1, 4.00%, 6/01/49 |
710,000 | 701,901 | ||||||||
|
|
|
|||||||||
| 2,658,941 | ||||||||||
|
|
|
|||||||||
| Kentucky 1.3% |
||||||||||
| a | County of Owen, Refunding, VRDN, Series A, 2.45%, 6/01/39 |
100,000 | 92,647 | |||||||
| Kentucky Economic Development Finance Authority, 5.00%, 8/01/29 |
280,000 | 310,978 |
| 118 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount | * | Value | ||||||||
| Municipal Bonds (continued) | ||||||||||
| Kentucky (continued) | ||||||||||
| a | Kentucky Public Energy Authority, Kentucky Public Energy Authority, , Series 2022A2, Daily, VRDN, 4.429%, 8/01/52 |
875,000 | $ | 835,818 | ||||||
| Louisville/Jefferson County Metropolitan Government, Refunding, 4.00%, 5/01/29 |
100,000 | 93,191 | ||||||||
|
|
|
|||||||||
| 1,332,634 | ||||||||||
|
|
|
|||||||||
| Louisiana 2.0% |
||||||||||
| Lakeshore Villages Master Community Development District, 5.00%, 6/01/32 |
245,000 | 246,166 | ||||||||
| Louisiana Local Government Environmental Facilities & Community Development Authority, |
||||||||||
| 3.50%, 11/01/32 |
1,505,000 | 1,386,715 | ||||||||
| b 3.90%, 11/01/44 |
185,000 | 158,318 | ||||||||
| b 5.00%, 7/01/29 |
100,000 | 96,003 | ||||||||
| b Patriot Services Group Obligated Group, 5.25%, 10/01/32 |
145,000 | 127,635 | ||||||||
|
|
|
|||||||||
| 2,014,837 | ||||||||||
|
|
|
|||||||||
| Maryland 0.6% |
||||||||||
| b | City of Baltimore, Harbor Point Special Taxing District, Refunding, 3.25%, 6/01/31 |
100,000 | 88,142 | |||||||
| County of Frederick, Oakdale-Lake Linganore Development District, 3.25%, 7/01/29 |
140,000 | 130,800 | ||||||||
| Maryland Economic Development Corp., Ports America Chesapeake LLC, Refunding, Series 2017A, 5.00%, 6/01/27 |
100,000 | 106,040 | ||||||||
| Maryland Health & Higher Educational Facilities Authority, |
||||||||||
| Adventist Healthcare Obligated Group, Refunding, 4.00%, 1/01/30 |
145,000 | 148,163 | ||||||||
| Refunding, 5.00%, 6/01/30 |
100,000 | 109,963 | ||||||||
|
|
|
|||||||||
| 583,108 | ||||||||||
|
|
|
|||||||||
| Massachusetts 0.3% |
||||||||||
| Massachusetts Development Finance Agency, |
||||||||||
| Foxborough Regional Charter School, Refunding, 5.00%, 7/01/27 |
100,000 | 101,947 | ||||||||
| Salem Community Corp. Obligated Group, Refunding, 5.00%, 1/01/28 |
200,000 | 196,267 | ||||||||
|
|
|
|||||||||
| 298,214 | ||||||||||
|
|
|
|||||||||
| Michigan 0.6% |
||||||||||
| Grand Rapids Economic Development Corp., Refunding, 4.00%, 11/01/27 |
100,000 | 93,006 | ||||||||
| b | Kalamazoo Economic Development Corp., Refunding, 5.00%, 8/15/31 |
110,000 | 102,909 | |||||||
| Michigan Finance Authority, |
||||||||||
| Lawrence Technological University Obligated Group, Refunding, 4.00%, 2/01/27 |
190,000 | 186,566 | ||||||||
| Lawrence Technological University Obligated Group, Refunding, 4.00%, 2/01/32 |
285,000 | 272,616 | ||||||||
|
|
|
|||||||||
| 655,097 | ||||||||||
|
|
|
|||||||||
| Minnesota 1.6% |
||||||||||
| County of Mille Lacs, Series 2018A, 3.00%, 2/01/24 |
135,000 | 135,260 | ||||||||
| Duluth Economic Development Authority, Refunding, 4.00%, 7/01/31 |
125,000 | 114,962 | ||||||||
| a | Minnesota Municipal Gas Agency, 4.229%, 12/01/52 |
1,200,000 | 1,175,702 | |||||||
| Northern Municipal Power Agency, Refunding, 5.00%, 1/01/36 |
100,000 | 106,077 | ||||||||
| St. Louis Park Independent School District No. 283, Series 2018A, 5.00%, 2/01/25 |
100,000 | 104,459 | ||||||||
|
|
|
|||||||||
| 1,636,460 | ||||||||||
|
|
|
|||||||||
| Mississippi 0.3% |
||||||||||
| b | Mississippi Development Bank, Magnolia Regional Health Center, Refunding, 5.00%, 10/01/31 |
150,000 | 160,752 | |||||||
| Mississippi Home Corp., |
||||||||||
| b Patriot Services Group Obligated Group, Series 2021D-8, 3.50%, 6/01/33 |
100,000 | 83,341 | ||||||||
| Patriot Services Group Pascagoula Portfolio II Obligated Group, Series 2021A, 3.65%, 6/01/33 |
100,000 | 84,498 | ||||||||
|
|
|
|||||||||
| 328,591 | ||||||||||
|
|
|
|||||||||
| franklintempleton.com | Annual Report | 119 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount | * | Value | ||||||||
| Municipal Bonds (continued) | ||||||||||
| Missouri 0.2% | ||||||||||
| Cape Girardeau County Industrial Development Authority, SoutheastHEALTH Obligated Group, 5.00%, 3/01/29 |
130,000 | $ | 135,492 | |||||||
| City of Maryland Heights, Westport Plaza Redevelopment, 3.625%, 11/01/31 |
80,000 | 71,688 | ||||||||
|
|
|
|||||||||
| 207,180 | ||||||||||
|
|
|
|||||||||
| Montana 0.1% |
||||||||||
| Cascade County High School District A Great Falls, 5.00%, 7/01/25 |
100,000 | 105,130 | ||||||||
|
|
|
|||||||||
| Nebraska 1.0% |
||||||||||
| a | Central Plains Energy Project, Series 2022-1, VRDN, 5.00%, 5/01/53 |
1,000,000 | 1,035,722 | |||||||
|
|
|
|||||||||
| Nevada 0.7% |
||||||||||
| Carson City, Carson Tahoe Regional Healthcare Obligated Group, 5.00%, 9/01/28 |
140,000 | 149,866 | ||||||||
| City of Las Vegas Special Improvement District No. 611, Special Improvement District No 611, Special Assessment, 3.50%, 6/01/31 |
160,000 | 142,700 | ||||||||
| City of Las Vegas Special Improvement District No. 816, Special Assessment, 2.50%, 6/01/29 |
200,000 | 172,037 | ||||||||
| Tahoe-Douglas Visitors Authority, 5.00%, 7/01/31 |
250,000 | 264,917 | ||||||||
|
|
|
|||||||||
| 729,520 | ||||||||||
|
|
|
|||||||||
| New Jersey 1.0% |
||||||||||
| b | Camden County Improvement Authority, Camden Prep High School Project, 5.00%, 7/15/32 |
250,000 | 267,303 | |||||||
| New Jersey Economic Development Authority, |
||||||||||
| 5.00%, 7/01/32 |
100,000 | 100,263 | ||||||||
| a AMT, Refunding, VRDN, 2.20%, 10/01/39 |
100,000 | 88,369 | ||||||||
| United Airlines, Inc., 5.25%, 9/15/29 |
250,000 | 250,472 | ||||||||
| Pinelands Regional School District, 3.00%, 8/01/27 |
100,000 | 100,408 | ||||||||
| Tobacco Settlement Financing Corp., Refunding, Series 2018A, 5.00%, 6/01/30 |
190,000 | 205,882 | ||||||||
|
|
|
|||||||||
| 1,012,697 | ||||||||||
|
|
|
|||||||||
| New York 7.5% |
||||||||||
| Genesee County Funding Corp., Rochester Regional Health Obligated Group, 5.00%, 12/01/29 . |
200,000 | 216,565 | ||||||||
| Metropolitan Transportation Authority, |
||||||||||
| Green Bond, Series 2017C-1, 5.00%, 11/15/28 |
1,530,000 | 1,653,089 | ||||||||
| Green Bond, Series 2017C-1, 5.00%, 11/15/30 |
940,000 | 1,012,683 | ||||||||
| New York State Dormitory Authority, St Joseph’s College, 5.00%, 7/01/30 |
65,000 | 70,584 | ||||||||
| New York Transportation Development Corp., |
||||||||||
| 2.25%, 8/01/26 |
120,000 | 111,709 | ||||||||
| 3.00%, 8/01/31 |
210,000 | 183,873 | ||||||||
| 4.00%, 1/01/36 |
450,000 | 429,440 | ||||||||
| 5.00%, 1/01/36 |
935,000 | 946,335 | ||||||||
| AMT, 5.25%, 8/01/31 |
90,000 | 92,919 | ||||||||
| Delta Air Lines, Inc., AMT, 4.00%, 10/01/30 |
1,250,000 | 1,227,418 | ||||||||
| Laguardia Gateway Partners LLC Term B, AMT, 5.00%, 7/01/30 |
100,000 | 101,656 | ||||||||
| Port Authority of New York & New Jersey, |
||||||||||
| 4.00%, 7/15/35 |
1,000,000 | 1,030,112 | ||||||||
| Series 230TH, 3.00%, 12/01/31 |
500,000 | 514,358 | ||||||||
|
|
|
|||||||||
| 7,590,741 | ||||||||||
|
|
|
|||||||||
| North Dakota 0.1% |
||||||||||
| b,c | County of Grand Forks, Red River Biorefinery LLC, AMT, 6.625%, 12/15/31 |
125,000 | 68,750 | |||||||
|
|
|
|||||||||
| Ohio 2.1% |
||||||||||
| Akron Bath Copley Joint Township Hospital District, Summa Health System Obligated Group, Refunding, 4.00%, 11/15/33 |
150,000 | 150,279 | ||||||||
| Buckeye Tobacco Settlement Financing Authority, |
||||||||||
| 4.00%, 6/01/39 |
155,000 | 150,205 | ||||||||
| Refunding, Series 2020A-2, Class 1, 5.00%, 6/01/28 |
175,000 | 188,730 | ||||||||
| County of Cuyahoga, Eliza Jennings Obligated Group, Refunding, 5.00%, 5/15/32 |
600,000 | 580,772 | ||||||||
| 120 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount | * | Value | ||||||||
| Municipal Bonds (continued) | ||||||||||
| Ohio (continued) | ||||||||||
| County of Franklin, |
||||||||||
| Ohio Living Obligated Group, Refunding, 4.00%, 7/01/33 |
200,000 | $ | 182,321 | |||||||
| Wesley Communities Obligated Group, Refunding, 5.00%, 11/15/30 |
100,000 | 96,017 | ||||||||
| Franklin County Convention Facilities Authority, 5.00%, 12/01/30 |
100,000 | 102,831 | ||||||||
| b | Ohio Air Quality Development Authority, AMT, 3.75%, 1/15/28 |
100,000 | 97,262 | |||||||
| Ohio Higher Educational Facility Commission, Cleveland Institute of Music/The, 5.00%, 12/01/32 |
300,000 | 325,299 | ||||||||
| State of Ohio, Refunding, 5.00%, 11/15/33 |
200,000 | 214,623 | ||||||||
|
|
|
|||||||||
| 2,088,339 | ||||||||||
|
|
|
|||||||||
| Oregon 0.4% |
||||||||||
| Union County Hospital Facility Authority, Grande Ronde Hospital Inc Obligated Group, 5.00%, 7/01/31 |
340,000 | 370,870 | ||||||||
|
|
|
|||||||||
| Pennsylvania 1.3% |
||||||||||
| Allegheny County Higher Education Building Authority, Robert Morris University, 5.00%, 10/15/26 |
100,000 | 102,038 | ||||||||
| b | Allentown Neighborhood Improvement Zone Development Authority, 5.00%, 5/01/28 |
100,000 | 102,424 | |||||||
| Bucks County Industrial Development Authority, Grand View Hospital/Sellersville PA Obligated Group, 5.00%, 7/01/32 |
150,000 | 155,875 | ||||||||
| Franklin County Industrial Development Authority, Refunding, 5.00%, 12/01/28 |
100,000 | 95,901 | ||||||||
| a | Luzerne County Industrial Development Authority, Pennsylvania-American Water Co., AMT, Refunding, VRDN, 2.45%, 12/01/39 |
100,000 | 92,382 | |||||||
| Pennsylvania Economic Development Financing Authority, UPMC Obligated Group, Series 2017A, 3.375%, 11/15/33 |
125,000 | 125,608 | ||||||||
| Philadelphia Authority for Industrial Development, MaST Community Charter School II, 5.00%, 8/01/30 |
150,000 | 156,639 | ||||||||
| Redevelopment Authority of the City of Philadelphia, Social Bond, Series 2021A, 2.799%, 9/01/33 |
500,000 | 414,135 | ||||||||
| Westmoreland County Industrial Development Authority, Excela Health Obligated Group, Refunding, Series 2020A, 5.00%, 7/01/30 |
100,000 | 107,601 | ||||||||
|
|
|
|||||||||
| 1,352,603 | ||||||||||
|
|
|
|||||||||
| Puerto Rico 2.0% |
||||||||||
| Commonwealth of Puerto Rico, |
||||||||||
| Series 2021A, zero cpn., 7/01/24 |
3,219 | 3,031 | ||||||||
| Series 2021A, zero cpn., 7/01/33 |
12,391 | 7,038 | ||||||||
| Series 2021A1, 4.00%, 7/01/33 |
359,628 | 324,076 | ||||||||
| Series 2021A1, 4.00%, 7/01/35 |
8,654 | 7,564 | ||||||||
| Series 2021A1, 4.00%, 7/01/37 |
7,428 | 6,304 | ||||||||
| Series 2021A1, 4.00%, 7/01/41 |
10,099 | 8,216 | ||||||||
| Series 2021A1, 4.00%, 7/01/46 |
110,503 | 86,464 | ||||||||
| Series 2021A1, 5.625%, 7/01/27 |
10,626 | 10,991 | ||||||||
| Series 2021A1, 5.625%, 7/01/29 |
10,454 | 10,931 | ||||||||
| Series 2021A1, 5.75%, 7/01/31 |
10,154 | 10,789 | ||||||||
| VRDN, 11/01/43 |
45,587 | 19,888 | ||||||||
| GDB Debt Recovery Authority of Puerto Rico, 7.50%, 8/20/40 |
328,067 | 272,296 | ||||||||
| HTA HRRB Custodial Trust, |
||||||||||
| 5.25%, 7/01/32 |
200,000 | 202,465 | ||||||||
| 5.50%, 7/01/28 |
155,000 | 159,885 | ||||||||
| 5.50%, 7/01/29 |
250,000 | 258,350 | ||||||||
| a | Puerto Rico Commonwealth Aqueduct & Sewer Authority, 6.125%, 7/01/24 |
10,000 | 10,135 | |||||||
| Puerto Rico Electric Power Authority, |
||||||||||
| Refunding, Series 2007VV, 5.25%, 7/01/27 |
170,000 | 172,106 | ||||||||
| Refunding, Series 2007VV, 5.25%, 7/01/32 |
175,000 | 175,449 | ||||||||
| franklintempleton.com | Annual Report | 121 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount | * | Value | ||||||||
| Municipal Bonds (continued) | ||||||||||
| Puerto Rico (continued) | ||||||||||
| Puerto Rico Industrial Tourist Educational Medical & Environmental Control Financing Authority, |
||||||||||
| 4.00%, 7/01/37 |
100,000 | $ | 93,711 | |||||||
| 4.00%, 7/01/39 |
100,000 | 91,737 | ||||||||
| 4.00%, 7/01/40 |
100,000 | 90,817 | ||||||||
|
|
|
|||||||||
| 2,022,243 | ||||||||||
|
|
|
|||||||||
| South Carolina 0.5% |
||||||||||
| b | County of Richland, Village at Sandhill Improvement District, Special Assessment, Refunding, 3.00%, 11/01/26 |
100,000 | 91,837 | |||||||
| Patriots Energy Group, Refunding, 4.00%, 6/01/33 |
100,000 | 102,283 | ||||||||
| South Carolina Jobs-Economic Development Authority, |
||||||||||
| AHPC Vista Towers 2021 LLC, 3.65%, 12/01/36 |
100,000 | 80,310 | ||||||||
| b Columbia Portfolio Obligated Group, 6/01/37 |
315,000 | 208,924 | ||||||||
| b Orchard Pk and Willowbrook Apartment, 3.65%, 12/01/36 |
100,000 | 80,557 | ||||||||
|
|
|
|||||||||
| 563,911 | ||||||||||
|
|
|
|||||||||
| Tennessee 3.2% |
||||||||||
| City of Lawrenceburg, Refunding, 2.50%, 6/01/27 |
100,000 | 98,532 | ||||||||
| Cleveland Housing Authority, |
||||||||||
| b Cleveland Forward Phase One LLC, 6.25%, 4/01/41 |
300,000 | 287,616 | ||||||||
| b Cleveland Forward Phase Two LLC, 6.25%, 4/01/41 |
100,000 | 95,872 | ||||||||
| Metropolitan Nashville Airport Authority, Subordinate, AMT, Series 2019B, 5.00%, 7/01/30 |
100,000 | 111,009 | ||||||||
| a | Tennergy Corp., 5.50%, 10/01/53 |
1,500,000 | 1,593,404 | |||||||
| Tennessee Energy Acquisition Corp., |
||||||||||
| a 5.00%, 5/01/52 |
500,000 | 522,026 | ||||||||
| a 5.00%, 5/01/53 |
500,000 | 514,822 | ||||||||
|
|
|
|||||||||
| 3,223,281 | ||||||||||
|
|
|
|||||||||
| Texas 7.2% |
||||||||||
| Arlington Higher Education Finance Corp., Riverwalk Education Foundation, Inc., 4.00%, 8/15/33 |
100,000 | 104,694 | ||||||||
| City of Cedar Park, Refunding, 5.00%, 2/15/24 |
100,000 | 102,043 | ||||||||
| City of Celina, |
||||||||||
| b Celina Hills Public Improvement District, Special Assessment, 4.375%, 9/01/27 |
100,000 | 98,008 | ||||||||
| b Edgewood Creek Public Improvement District, Special Assessment, 3.75%, 9/01/31 |
180,000 | 156,181 | ||||||||
| b Special Assessment, 3.625%, 9/01/30 |
125,000 | 112,484 | ||||||||
| b Sutton Fields II Public Improvement District, Special Assessment, 2.875%, 9/01/27 |
100,000 | 89,596 | ||||||||
| b The Parks at Wilson Creek Public Improvement District, Special Assessment, 3.25%, 9/01/31 |
110,000 | 97,541 | ||||||||
| b Wells North Public Improvement District, Special Assessment, 3.25%, 9/01/30 |
180,000 | 159,051 | ||||||||
| b City of Crandall, Special Assessment, 4.75%, 9/15/31 |
100,000 | 93,150 | ||||||||
| City of Fate, |
||||||||||
| b Monterra Public Improvement District, Special Assessment, 2.75%, 8/15/26 |
97,000 | 89,157 | ||||||||
| b Williamsburg East Public Improvement District, Special Assessment, 3.375%, 8/15/30 |
145,000 | 127,985 | ||||||||
| City of Horseshoe Bay, Escondido Public Improvement District, Special Assessment, Refunding, 3.00%, 10/01/30 |
140,000 | 121,760 | ||||||||
| City of Kyle, |
||||||||||
| b 4.50%, 9/01/33 |
395,000 | 392,715 | ||||||||
| b Creeks Public Improvement District, Special Assessment, 2.75%, 9/01/26 |
100,000 | 90,267 | ||||||||
| Kyle 57 Public Improvement District, Series 2022, 4.75%, 9/01/32 |
133,000 | 130,523 | ||||||||
| b Plum Creek North Public Improvement District, Special Assessment, 4.375%, 9/01/32 |
215,000 | 204,616 | ||||||||
| City of Lago Vista, |
||||||||||
| Special Assessment, Refunding, 3.125%, 9/01/30 |
130,000 | 117,311 | ||||||||
| b Tessera on Lake Travis Public Improvement District, Special Assessment, Refunding, 5.00%, 9/01/30 |
140,000 | 132,579 | ||||||||
| City of Leander, Oak Creek Public Improvement District, Special Assessment, Refunding, 3.25%, 9/01/32 |
100,000 | 87,833 | ||||||||
| 122 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount | * | Value | ||||||||
| Municipal Bonds (continued) | ||||||||||
| Texas (continued) | ||||||||||
| b | City of Liberty Hill, Summerlyn West Public Improvement District, Special Assessment, 3.125%, 9/01/30 |
75,000 | $ | 65,463 | ||||||
| b | City of Mclendon-Chisholm, Sonoma Public Improvement District, Special Assessment, 5.375%, 9/15/32 |
155,000 | 155,137 | |||||||
| City of Pilot Point, |
||||||||||
| b Creekview Public Improvement District, Special Assessment, Series 2022, 5.25%, 9/15/32 |
150,000 | 150,667 | ||||||||
| b Creekview Public Improvement District, Special Assessment, Series 2022, 5.75%, 9/15/32 |
145,000 | 145,286 | ||||||||
| City of Princeton, |
||||||||||
| b Special Assessment, 3.25%, 9/01/30 |
100,000 | 89,651 | ||||||||
| b Winchester Public Improvement District, Special Assessment, 2.875%, 9/01/31 |
100,000 | 85,513 | ||||||||
| b | City of Royse City, Creekshaw Public Improvement District, Special Assessment, 3.125%, 9/15/25 |
150,000 | 143,532 | |||||||
| b | City of Sachse, 6.00%, 9/15/28 |
100,000 | 100,966 | |||||||
| b | City of Tomball, Raburn Reserve Public Improvement District, Special Assessment, 3.375%, 9/15/30 |
100,000 | 90,287 | |||||||
| b | County of Hays, La Cima Public Improvement District, Special Assessment, 3.25%, 9/15/30 |
150,000 | 130,887 | |||||||
| b | County of Medina, Woodlands Public Improvement District IA#1 Project, Special Assessment, 3.50%, 9/01/26 |
100,000 | 91,390 | |||||||
| Ector County Hospital District, Refunding, 5.00%, 9/15/31 |
100,000 | 107,952 | ||||||||
| Matagorda County Navigation District No. 1, 5.125%, 11/01/28 |
1,000,000 | 1,076,481 | ||||||||
| New Hope Cultural Education Facilities Finance Corp., |
||||||||||
| 5.00%, 4/01/31 |
30,000 | 32,117 | ||||||||
| CHF-Collegiate Housing College Station I LLC, 5.00%, 4/01/29 |
100,000 | 99,846 | ||||||||
| Refunding, 4.00%, 1/01/29 |
100,000 | 88,507 | ||||||||
| North Parkway Municipal Management District No. 1, |
||||||||||
| b Legacy Hills Public Improvement District, Special Assessment, 3.625%, 9/15/31 |
50,000 | 44,846 | ||||||||
| b Special Assessment, 4.25%, 9/15/31 |
152,000 | 145,635 | ||||||||
| Texas Municipal Gas Acquisition & Supply Corp. III, 5.00%, 12/15/31 |
1,750,000 | 1,835,270 | ||||||||
| Viridian Municipal Management District, |
||||||||||
| Special Assessment, 2.875%, 12/01/30 |
100,000 | 85,199 | ||||||||
| Viridian Public Improvement District, Special Assessment, 2.375%, 12/01/25 |
40,000 | 37,277 | ||||||||
|
|
|
|||||||||
| 7,309,403 | ||||||||||
|
|
|
|||||||||
| Utah 0.8% |
||||||||||
| Military Installation Development Authority, Series 2021A-2, 4.00%, 6/01/36 |
250,000 | 209,985 | ||||||||
| b | Utah Charter School Finance Authority, Wallace Stegner Academy, Series 2022A, 5.25%, 6/15/32 |
230,000 | 227,178 | |||||||
| Utah Infrastructure Agency, 5.00%, 10/15/32 |
250,000 | 256,868 | ||||||||
| Utah State Building Ownership Authority, Master Lease Program, 2.50%, 5/15/27 |
100,000 | 98,807 | ||||||||
|
|
|
|||||||||
| 792,838 | ||||||||||
|
|
|
|||||||||
| Vermont 0.1% |
||||||||||
| Vermont Public Power Supply Authority, Refunding, Series 2017A, 5.00%, 7/01/28 |
100,000 | 106,995 | ||||||||
|
|
|
|||||||||
| Virginia 0.2% |
||||||||||
| b | Peninsula Town Center Community Development Authority, Special Assessment, Refunding, 4.50%, 9/01/28 |
100,000 | 98,500 | |||||||
| Virginia Small Business Financing Authority, National Senior Campuses, Inc.Obligated Group, Refunding, 5.00%, 1/01/33 |
100,000 | 108,267 | ||||||||
|
|
|
|||||||||
| 206,767 | ||||||||||
|
|
|
|||||||||
| Washington 1.9% |
||||||||||
| Skagit County Public Hospital District No. 1, Refunding, 5.00%, 12/01/29 |
100,000 | 104,406 | ||||||||
| Washington Health Care Facilities Authority, |
||||||||||
| b 3.00%, 12/01/34 |
125,000 | 118,104 | ||||||||
| b 5.00%, 12/01/32 |
250,000 | 277,275 | ||||||||
| 5.00%, 8/01/35 |
970,000 | 1,042,636 | ||||||||
| franklintempleton.com | Annual Report | 123 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
| Principal Amount | * | Value | ||||||||
| Municipal Bonds (continued) | ||||||||||
| Washington (continued) | ||||||||||
| Washington State Housing Finance Commission, b eliseo Obligated Group, Series 2021A, 4.00%, 1/01/31 |
100,000 | $ | 91,349 | |||||||
| b Madison at Rivers Edge Apartments LLC, 3.65%, 1/01/37 |
100,000 | 80,560 | ||||||||
| b Presbyterian Retirement Communities Northwest Obligated Group, Series 2019A, 5.00%, 1/01/34 |
100,000 | 86,357 | ||||||||
| b Spokane United Methodist Homes Obligated Group, 5.00%, 1/01/32 |
100,000 | 88,152 | ||||||||
|
|
|
|||||||||
| 1,888,839 | ||||||||||
|
|
|
|||||||||
| West Virginia 0.2% |
||||||||||
| a | West Virginia Economic Development Authority, Appalachian Power Co., VRDN, 3.75%, 12/01/42 |
250,000 | 249,273 | |||||||
|
|
|
|||||||||
| Wisconsin 1.4% |
||||||||||
| Public Finance Authority,b Coral Academy of Science Reno, 5.375%, 6/01/37 |
335,000 | 330,244 | ||||||||
| b Friends Homes Obligated Group, Refunding, 4.00%, 9/01/29 |
100,000 | 93,683 | ||||||||
| b Ocean Academy Charter School, 4.00%, 10/15/31 |
100,000 | 89,452 | ||||||||
| b Refunding, 4.00%, 3/01/27 |
45,000 | 42,896 | ||||||||
| b Refunding, 4.00%, 7/01/31 |
100,000 | 88,031 | ||||||||
| b Refunding, 5.00%, 10/01/24 |
100,000 | 100,556 | ||||||||
| b Refunding, 5.00%, 10/01/29 |
100,000 | 100,219 | ||||||||
| Refunding, 5.00%, 1/01/30 |
250,000 | 276,579 | ||||||||
| b Signature Preparatory, 5.00%, 6/15/31 |
120,000 | 115,537 | ||||||||
| a,b VRDN, 3.50%, 12/01/50 |
100,000 | 81,389 | ||||||||
| Wisconsin Health & Educational Facilities Authority, St John’s Communities, Inc. Obligated Group, Series 2018A, 4.00%, 9/15/27 |
100,000 | 100,554 | ||||||||
|
|
|
|||||||||
| 1,419,140 | ||||||||||
|
|
|
|||||||||
| Senior Floating Rate Interest 0.5% | ||||||||||
| Real Estate Development 0.5% |
||||||||||
| e | Centennial Gardens LP, Delayed Draw Term Loan, 6.206%, 8/01/24 |
500,000 | 512,502 | |||||||
|
|
|
|||||||||
| Total Floating Rate Loans (Cost $500,000) | 512,502 | |||||||||
|
|
|
|||||||||
| Total Investments (Cost $102,964,295) 98.1% | 99,618,121 | |||||||||
| Other Assets, less Liabilities 1.9% | 1,879,119 | |||||||||
|
|
|
|||||||||
| Net Assets 100.0% | $ | 101,497,240 | ||||||||
|
|
|
|||||||||
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aVariable rate security. The rate shown represents the yield at period end.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $15,271,414, representing 15.0% of net assets.
cSee Note 7 regarding defaulted securities.
dSecurity purchased on a when-issued basis. See Note 1(d).
eFair valued using significant unobservable inputs. Note 9 regarding fair value measurements.
See Note 8 regarding other derivative information.
See Abbreviations on page 246.
| 124 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Exponential Data ETF
| Year Ended March 31, | ||||||||||||
| 2023 | 2022 | 2021a | ||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||
| Net asset value, beginning of year |
$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) |
(5.91 | ) | (0.51 | ) | (1.66 | ) | ||||||
| Total from investment operations |
(5.92 | ) | (0.56 | ) | (1.66 | ) | ||||||
| Net asset value, end of year |
$16.86 | $22.78 | $23.34 | |||||||||
| Total returne |
(25.99)% | (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 |
0.50% | 0.38% | 0.25% | |||||||||
| Net investment income (loss) |
(0.07)% | (0.20)% | (0.07)% | |||||||||
| Supplemental data | ||||||||||||
| Net assets, end of year (000’s) |
$3,372 | $3,417 | $2,334 | |||||||||
| Portfolio turnover rateg |
20.94%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: | 20.94% | 49.72% | 23.20% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 125 | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin Exponential Data ETF
| Country | Shares | Value | ||||||||||||
| Common Stocks 98.8% | ||||||||||||||
| Capital Markets 6.9% | ||||||||||||||
| FactSet Research Systems, Inc. |
United States | 152 | $ | 63,093 | ||||||||||
| Moody’s Corp. |
United States | 66 | 20,197 | |||||||||||
| MSCI, Inc. |
United States | 149 | 83,394 | |||||||||||
| S&P Global, Inc. |
United States | 196 | 67,575 | |||||||||||
|
|
|
|||||||||||||
| 234,259 | ||||||||||||||
|
|
|
|||||||||||||
| Communications Equipment 3.0% | ||||||||||||||
| a | Arista Networks, Inc. |
United States | 593 | 99,541 | ||||||||||
|
|
|
|||||||||||||
| Diversified REITs 11.3% | ||||||||||||||
| Crown Castle, Inc. |
United States | 832 | 111,355 | |||||||||||
| Equinix, Inc. |
United States | 218 | 157,187 | |||||||||||
| SBA Communications Corp. |
United States | 433 | 113,043 | |||||||||||
|
|
|
|||||||||||||
| 381,585 | ||||||||||||||
|
|
|
|||||||||||||
| Electronic Equipment, Instruments & Components 2.0% |
||||||||||||||
| a | Keysight Technologies, Inc. |
United States | 412 | 66,530 | ||||||||||
|
|
|
|||||||||||||
| Health Care Equipment & Supplies 1.4% |
||||||||||||||
| a | Dexcom, Inc. |
United States | 421 | 48,912 | ||||||||||
|
|
|
|||||||||||||
| Interactive Media & Services 5.9% |
||||||||||||||
| a | Alphabet, Inc., Class A |
United States | 1,349 | 139,931 | ||||||||||
| a | ZoomInfo Technologies, Inc., Class A |
United States | 2,418 | 59,749 | ||||||||||
|
|
|
|||||||||||||
| 199,680 | ||||||||||||||
|
|
|
|||||||||||||
| IT Services 15.2% |
||||||||||||||
| Accenture PLC, Class A |
United States | 249 | 71,167 | |||||||||||
| a | Endava PLC, ADR |
United Kingdom | 210 | 14,108 | ||||||||||
| a | EPAM Systems, Inc. |
United States | 41 | 12,259 | ||||||||||
| a | Gartner, Inc. |
United States | 226 | 73,624 | ||||||||||
| a | Globant SA |
United States | 78 | 12,793 | ||||||||||
| a | MongoDB, Inc. |
United States | 762 | 177,637 | ||||||||||
| a | Snowflake, Inc., Class A |
United States | 917 | 141,484 | ||||||||||
| a | Thoughtworks Holding, Inc. |
United States | 1,328 | 9,774 | ||||||||||
|
|
|
|||||||||||||
| 512,846 | ||||||||||||||
|
|
|
|||||||||||||
| Professional Services 0.5% |
||||||||||||||
| TransUnion |
United States | 252 | 15,659 | |||||||||||
|
|
|
|||||||||||||
| Software 49.3% |
||||||||||||||
| a | Cloudflare, Inc., Class A |
United States | 2,328 | 143,544 | ||||||||||
| a | Confluent, Inc., Class A, A |
United States | 1,330 | 32,013 | ||||||||||
| a | Crowdstrike Holdings, Inc., Class A |
United States | 785 | 107,749 | ||||||||||
| a | Datadog, Inc., Class A |
United States | 1,865 | 135,511 | ||||||||||
| a | Fair Isaac Corp. |
United States | 146 | 102,593 | ||||||||||
| a | Fortinet, Inc. |
United States | 1,354 | 89,987 | ||||||||||
| a | Gitlab, Inc., Class A, A |
United States | 1,762 | 60,419 | ||||||||||
| a | HubSpot, Inc. |
United States | 114 | 48,877 | ||||||||||
| Microsoft Corp. |
United States | 837 | 241,307 | |||||||||||
| a | Monday.com Ltd. |
United States | 505 | 72,089 | ||||||||||
| a | Palo Alto Networks, Inc. |
United States | 773 | 154,399 | ||||||||||
| a | Qualtrics International, Inc., Class A |
United States | 1,518 | 27,066 | ||||||||||
| a | Salesforce, Inc. |
United States | 224 | 44,751 | ||||||||||
| a | SentinelOne, Inc., Class A, A |
United States | 2,569 | 42,029 | ||||||||||
| ServiceNow, Inc. |
United States | 318 | 147,781 | |||||||||||
| a | Sprinklr, Inc., Class A |
United States | 1,646 | 21,332 | ||||||||||
| a | Sprout Social, Inc., Class A |
United States | 286 | 17,412 | ||||||||||
| a | Trade Desk, Inc., Class A |
United States | 1,093 | 66,574 | ||||||||||
| Trend Micro, Inc. |
Japan | 1,209 | 58,774 | |||||||||||
| 126 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Exponential Data ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) |
||||||||||||||
| Software (continued) | ||||||||||||||
| a | Zscaler, Inc. |
United States | 402 | $ | 46,966 | |||||||||
|
|
|
|||||||||||||
| 1,661,173 | ||||||||||||||
|
|
|
|||||||||||||
| Wireless Telecommunication Services 3.3% |
||||||||||||||
| a | T-Mobile U.S., Inc. |
United States | 770 | 111,527 | ||||||||||
|
|
|
|||||||||||||
| Total Common Stocks (Cost $3,617,774) |
3,331,712 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments before Short-Term Investments |
3,331,712 | |||||||||||||
|
|
|
|||||||||||||
| Short-Term Investments 1.1% |
||||||||||||||
| Money Market Funds 1.1% |
||||||||||||||
| b,c | Institutional Fiduciary Trust - Money Market Portfolio, 4.47% |
United States | 38,455 | 38,455 | ||||||||||
|
|
|
|||||||||||||
| Total Short-Term Investments (Cost $38,455) |
38,455 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments (Cost $3,656,229) 99.9% |
3,370,167 | |||||||||||||
| Other Assets, less Liabilities 0.1% |
1,969 | |||||||||||||
|
|
|
|||||||||||||
| Net Assets 100.0% |
$ | 3,372,136 | ||||||||||||
|
|
|
|||||||||||||
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 Note 8 regarding other derivative information.
See Abbreviations on page 246.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 127 | ||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Genomic Advancements ETF
| Year Ended March 31, | ||||||||||||||||
| 2023 | 2022 | 2021 | 2020a | |||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||
| Net asset value, beginning of year |
$37.00 | $43.26 | $22.58 | $25.00 | ||||||||||||
| Income from investment operationsb: | ||||||||||||||||
| Net investment income (loss)c |
(0.05 | ) | (0.15 | ) | (0.18 | ) | (0.01 | ) | ||||||||
| Net realized and unrealized gains (losses) |
(6.55 | ) | (5.99 | ) | 20.92 | (2.41 | ) | |||||||||
| Total from investment operations |
(6.60 | ) | (6.14 | ) | 20.74 | (2.42 | ) | |||||||||
| Less distributions from: |
||||||||||||||||
| Net investment income |
— | (0.12 | ) | (0.01 | ) | — | ||||||||||
| Net realized gains |
— | — | (0.05 | ) | — | |||||||||||
| Total distributions |
— | (0.12 | ) | (0.06 | ) | — | ||||||||||
| Net asset value, end of year |
$30.40 | $37.00 | $43.26 | $22.58 | ||||||||||||
| Total returnd |
(17.84)% | (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) |
(0.16)% | (0.32)% | (0.45)% | (0.37)% | ||||||||||||
| Supplemental data | ||||||||||||||||
| Net assets, end of year (000’s) |
$10,641 | $14,799 | $15,140 | $2,258 | ||||||||||||
| Portfolio turnover ratef |
32.63%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: | 31.65% | 59.54% | 44.75% | 2.20% |
| 128 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin Genomic Advancements ETF
| Country | Shares | Value | ||||||||||||
| Common Stocks 94.4% |
||||||||||||||
| Biotechnology 34.0% | ||||||||||||||
| a | Alnylam Pharmaceuticals, Inc. |
United States | 1,333 | $ | 267,027 | |||||||||
| a | Avid Bioservices, Inc. |
United States | 12,366 | 231,986 | ||||||||||
| a | Bavarian Nordic AS |
Denmark | 1,775 | 50,895 | ||||||||||
| a | Beam Therapeutics, Inc. |
United States | 2,006 | 61,424 | ||||||||||
| BioNTech SE, ADR |
Germany | 2,363 | 294,359 | |||||||||||
| a | CRISPR Therapeutics AG |
Switzerland | 1,599 | 72,323 | ||||||||||
| a | Dynavax Technologies Corp. |
United States | 7,840 | 76,910 | ||||||||||
| a | Exact Sciences Corp. |
United States | 2,420 | 164,100 | ||||||||||
| a | Intellia Therapeutics, Inc. |
United States | 5,314 | 198,053 | ||||||||||
| a | Ionis Pharmaceuticals, Inc. |
United States | 5,250 | 187,635 | ||||||||||
| a | IVERIC bio, Inc. |
United States | 3,135 | 76,274 | ||||||||||
| a | Krystal Biotech, Inc. |
United States | 2,418 | 193,585 | ||||||||||
| a | Ligand Pharmaceuticals, Inc. |
United States | 939 | 69,073 | ||||||||||
| a | Moderna, Inc. |
United States | 2,619 | 402,226 | ||||||||||
| a | PTC Therapeutics, Inc. |
United States | 3,224 | 156,171 | ||||||||||
| a | Regeneron Pharmaceuticals, Inc. |
United States | 492 | 404,262 | ||||||||||
| a | Sarepta Therapeutics, Inc. |
United States | 2,139 | 294,818 | ||||||||||
| a | Twist Bioscience Corp. |
United States | 1,449 | 21,851 | ||||||||||
| a | Veracyte, Inc. |
United States | 801 | 17,862 | ||||||||||
| a | Vertex Pharmaceuticals, Inc. |
United States | 1,201 | 378,399 | ||||||||||
|
|
|
|||||||||||||
| 3,619,233 | ||||||||||||||
|
|
|
|||||||||||||
| Chemicals 3.6% | ||||||||||||||
| Corteva, Inc. |
United States | 5,360 | 323,262 | |||||||||||
| FMC Corp. |
United States | 511 | 62,408 | |||||||||||
|
|
|
|||||||||||||
| 385,670 | ||||||||||||||
|
|
|
|||||||||||||
| Diversified REITs 0.4% | ||||||||||||||
| Alexandria Real Estate Equities, Inc. |
United States | 373 | 46,845 | |||||||||||
|
|
|
|||||||||||||
| Health Care Providers & Services 2.1% | ||||||||||||||
| a | Guardant Health, Inc. |
United States | 1,308 | 30,660 | ||||||||||
| Laboratory Corp. of America Holdings |
United States | 508 | 116,545 | |||||||||||
| a | Privia Health Group, Inc. |
United States | 2,687 | 74,188 | ||||||||||
|
|
|
|||||||||||||
| 221,393 | ||||||||||||||
|
|
|
|||||||||||||
| Health Care Technology 1.9% |
||||||||||||||
| a | Doximity, Inc., Class A |
United States | 1,719 | 55,661 | ||||||||||
| a | Schrodinger, Inc. |
United States | 3,978 | 104,741 | ||||||||||
| Simulations Plus, Inc. |
United States | 1,004 | 44,116 | |||||||||||
|
|
|
|||||||||||||
| 204,518 | ||||||||||||||
|
|
|
|||||||||||||
| Life Sciences Tools & Services 46.1% |
||||||||||||||
| Agilent Technologies, Inc. |
United States | 1,704 | 235,731 | |||||||||||
| a | Avantor, Inc. |
United States | 1,209 | 25,558 | ||||||||||
| a | Bio-Rad Laboratories, Inc., Class A |
United States | 239 | 114,486 | ||||||||||
| Bio-Techne Corp. |
United States | 1,460 | 108,317 | |||||||||||
| Bruker Corp. |
United States | 4,171 | 328,842 | |||||||||||
| a | Charles River Laboratories International, Inc. |
United States | 1,111 | 224,222 | ||||||||||
| Danaher Corp. |
United States | 2,427 | 611,701 | |||||||||||
| a | Evotec SE |
Germany | 5,328 | 112,502 | ||||||||||
| a | ICON PLC |
Ireland | 548 | 117,047 | ||||||||||
| a | Illumina, Inc. |
United States | 288 | 66,974 | ||||||||||
| a | IQVIA Holdings, Inc. |
United States | 543 | 107,997 | ||||||||||
| Lonza Group AG |
Switzerland | 436 | 261,252 | |||||||||||
| a | Medpace Holdings, Inc. |
United States | 2,262 | 425,369 | ||||||||||
| a | Olink Holding AB, ADR |
Sweden | 560 | 12,617 | ||||||||||
| OmniAb, Inc. |
United States | 240 | 0 | |||||||||||
| franklintempleton.com | Annual Report | 129 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Genomic Advancements ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) |
||||||||||||||
| Life Sciences Tools & Services (continued) |
||||||||||||||
| OmniAb, Inc. |
United States | 240 | $ | 0 | ||||||||||
| a | Oxford Nanopore Technologies PLC |
United Kingdom | 33,333 | 91,703 | ||||||||||
| PerkinElmer, Inc. |
United States | 1,402 | 186,831 | |||||||||||
| a | QIAGEN NV |
Netherlands | 5,038 | 231,395 | ||||||||||
| a | Repligen Corp. |
United States | 3,498 | 588,923 | ||||||||||
| a,b | Samsung Biologics Co. Ltd. |
South Korea | 570 | 345,017 | ||||||||||
| Thermo Fisher Scientific, Inc. |
United States | 1,224 | 705,477 | |||||||||||
|
|
|
|||||||||||||
| 4,901,961 | ||||||||||||||
|
|
|
|||||||||||||
| Pharmaceuticals 4.8% |
||||||||||||||
| AstraZeneca PLC, ADR |
United Kingdom | 3,866 | 268,339 | |||||||||||
| Bristol-Myers Squibb Co. |
United States | 1,610 | 111,589 | |||||||||||
| Eli Lilly & Co. |
United States | 366 | 125,692 | |||||||||||
|
|
|
|||||||||||||
| 505,620 | ||||||||||||||
|
|
|
|||||||||||||
| Semiconductors & Semiconductor Equipment 0.2% | ||||||||||||||
| a | Azenta, Inc. |
United States | 544 | 24,273 | ||||||||||
|
|
|
|||||||||||||
| Software 1.3% | ||||||||||||||
| a | Cadence Design Systems, Inc. |
United States | 682 | 143,281 | ||||||||||
|
|
|
|||||||||||||
| Total Common Stocks (Cost $12,608,600) |
10,052,794 | |||||||||||||
|
|
|
|||||||||||||
| Preferred Stock 4.2% |
||||||||||||||
| Health Care Equipment & Supplies 4.2% | ||||||||||||||
| c | Sartorius AG, 0.00%, 0.372%, pfd. |
Germany | 1,055 | 443,581 | ||||||||||
|
|
|
|||||||||||||
| Total Preferred Stocks (Cost $642,905) |
443,581 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments (Cost $13,251,505) 98.6% |
10,496,375 | |||||||||||||
| Other Assets, less Liabilities 1.4% |
145,099 | |||||||||||||
|
|
|
|||||||||||||
| Net Assets 100.0% |
$ | 10,641,474 | ||||||||||||
|
|
|
|||||||||||||
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $345,017, representing 3.2% of net assets.
cVariable rate security. The rate shown represents the yield at period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 246.
| 130 | Annual 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
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019b | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$24.76 | $26.16 | $22.67 | $25.45 | $25.00 | |||||||||||||||
| Income from investment operationsc: | ||||||||||||||||||||
| Net investment incomed |
1.25 | 1.20 | 1.23 | 1.33 | 1.21 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(1.95 | ) | (1.34 | ) | 3.73 | (2.51 | ) | 0.49 | ||||||||||||
| Total from investment operations |
(0.70 | ) | (0.14 | ) | 4.96 | (1.18 | ) | 1.70 | ||||||||||||
| Less distributions from: | ||||||||||||||||||||
| Net investment income |
(1.36 | ) | (1.18 | ) | (1.47 | ) | (1.56 | ) | (1.23 | ) | ||||||||||
| Net realized gains |
(0.07 | ) | (0.08 | ) | — | (0.04 | ) | (0.02 | ) | |||||||||||
| Total distributions |
(1.43 | ) | (1.26 | ) | (1.47 | ) | (1.60 | ) | (1.25 | ) | ||||||||||
| Net asset value, end of year |
$22.63 | $24.76 | $26.16 | $22.67 | $25.45 | |||||||||||||||
| Total returne |
(2.68)% | (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 |
5.51% | 4.62% | 4.84% | 5.29% | 5.80% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$208,167 | $334,286 | $346,586 | $130,362 | $10,181 | |||||||||||||||
| Portfolio turnover rateg |
17.13%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: | 17.13% | 43.83% | 53.18% | 129.98% | — |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 131 | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin High Yield Corporate ETF
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes 89.7% |
||||||||||||||
| Airlines 1.8% | ||||||||||||||
| a | American Airlines, Inc./AAdvantage Loyalty IP Ltd., senior secured note, 5.50%, 4/20/26 |
United States | 2,200,000 | $ | 2,167,752 | |||||||||
| a | United Airlines, Inc., 4.375%, 4/15/26 |
United States | 1,700,000 | 1,628,393 | ||||||||||
|
|
|
|||||||||||||
| 3,796,145 | ||||||||||||||
|
|
|
|||||||||||||
| Apparel 0.3% | ||||||||||||||
| a | Hanesbrands, Inc., 9.00%, 2/15/31 |
United States | 600,000 | 614,823 | ||||||||||
|
|
|
|||||||||||||
| Auto Manufacturers 0.2% | ||||||||||||||
| Ford Motor Credit Co. LLC, 6.95%, 3/06/26 |
United States | 500,000 | 508,085 | |||||||||||
|
|
|
|||||||||||||
| Automobiles & Components 3.7% | ||||||||||||||
| Adient Global Holdings Ltd., |
||||||||||||||
| 7.00%, 4/15/28 |
United States | 500,000 | 514,440 | |||||||||||
| 8.25%, 4/15/31 |
United States | 900,000 | 927,536 | |||||||||||
| Dana, Inc., senior note, 5.625%, 6/15/28 |
United States | 700,000 | 658,210 | |||||||||||
| a | Dornoch Debt Merger Sub, Inc., 6.625%, 10/15/29 |
United States | 1,700,000 | 1,148,998 | ||||||||||
| Goodyear Tire & Rubber Co., |
||||||||||||||
| 5.00%, 7/15/29 |
United States | 1,000,000 | 894,680 | |||||||||||
| senior bond, 4.875%, 3/15/27 |
United States | 1,000,000 | 945,300 | |||||||||||
| a | Jaguar Land Rover Automotive PLC, 5.50%, 7/15/29 |
United Kingdom | 2,600,000 | 2,044,302 | ||||||||||
| a | Real Hero Merger Sub 2, Inc., senior note, 6.25%, 2/01/29 |
United States | 700,000 | 518,223 | ||||||||||
|
|
|
|||||||||||||
| 7,651,689 | ||||||||||||||
|
|
|
|||||||||||||
| Capital Goods 3.9% | ||||||||||||||
| a | ATS Corp., 4.125%, 12/15/28 |
Canada | 900,000 | 799,250 | ||||||||||
| a | Chart Industries, Inc., 7.50%, 1/01/30 |
United States | 900,000 | 931,023 | ||||||||||
| a | Cornerstone Building Brands, Inc., senior note, 6.125%, 1/15/29 |
United States | 1,400,000 | 1,000,844 | ||||||||||
| a | Standard Industries, Inc., 4.75%, 1/15/28 |
United States | 200,000 | 187,119 | ||||||||||
| a | Stericycle, Inc., Senior note, 3.875%, 1/15/29 |
United States | 1,100,000 | 961,640 | ||||||||||
| a | TransDigm, Inc., senior secured note, 6.25%, 3/15/26 |
United States | 2,700,000 | 2,705,197 | ||||||||||
| a | Vertiv Group Corp., 4.125%, 11/15/28 |
United States | 1,700,000 | 1,501,924 | ||||||||||
|
|
|
|||||||||||||
| 8,086,997 | ||||||||||||||
|
|
|
|||||||||||||
| Chemicals 0.9% | ||||||||||||||
| Celanese U.S. Holdings LLC, 6.33%, 7/15/29 |
United States | 1,900,000 | 1,922,891 | |||||||||||
|
|
|
|||||||||||||
| Commercial & Professional Services 4.5% | ||||||||||||||
| a | APX Group, Inc., 5.75%, 7/15/29 |
United States | 1,100,000 | 985,886 | ||||||||||
| a | Gartner, Inc., 3.625%, 6/15/29 |
United States | 600,000 | 535,923 | ||||||||||
| Grand Canyon University, 5.125%, 10/01/28 |
United States | 1,700,000 | 1,538,041 | |||||||||||
| a | H&E Equipment Services, Inc., senior note, 3.875%, 12/15/28 |
United States | 1,900,000 | 1,667,250 | ||||||||||
| a | Herc Holdings, Inc., senior note, 5.50%, 7/15/27 |
United States | 600,000 | 579,795 | ||||||||||
| a | MPH Acquisition Holdings LLC, 5.75%, 11/01/28 |
United States | 1,600,000 | 1,152,662 | ||||||||||
| a | NESCO Holdings II, Inc., secured note, 5.50%, 4/15/29 |
United States | 600,000 | 543,417 | ||||||||||
| a | Prime Security Services Borrower LLC/Prime Finance, Inc., senior secured note, first lien, 3.375%, 8/31/27 |
United States | 1,800,000 | 1,615,428 | ||||||||||
| a | PROG Holdings, Inc., 6.00%, 11/15/29 |
United States | 800,000 | 681,149 | ||||||||||
|
|
|
|||||||||||||
| 9,299,551 | ||||||||||||||
|
|
|
|||||||||||||
| Commercial Banks 0.5% |
||||||||||||||
| Credit Suisse Group AG, 4.55%, 4/17/26 |
Switzerland | 1,200,000 | 1,108,500 | |||||||||||
|
|
|
|||||||||||||
| Commercial Services 1.3% |
||||||||||||||
| a | Ashtead Capital, Inc., 1.50%, 8/12/26 |
United Kingdom | 700,000 | 614,306 | ||||||||||
| United Rentals North America, Inc., 5.50%, 5/15/27 |
United States | 2,100,000 | 2,082,160 | |||||||||||
|
|
|
|||||||||||||
| 2,696,466 | ||||||||||||||
|
|
|
|||||||||||||
| Construction Materials 0.4% |
||||||||||||||
| a | Camelot Return Merger Sub, Inc., 8.75%, 8/01/28 |
United States | 800,000 | 741,600 | ||||||||||
|
|
|
|||||||||||||
| 132 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin High Yield Corporate ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) |
||||||||||||||
| Consumer Discretionary Distribution & Retail 1.1% | ||||||||||||||
| a | Fertitta Entertainment LLC/Fertitta Entertainment Finance Co., Inc., 6.75%, 1/15/30 |
United States | 1,100,000 | $ | 905,993 | |||||||||
| a | Gap, Inc., 3.625%, 10/01/29 |
United States | 600,000 | 428,520 | ||||||||||
| Macy’s Retail Holdings LLC, |
||||||||||||||
| a | 6.125%, 3/15/32 |
United States | 400,000 | 352,476 | ||||||||||
| a | 5.875%, 3/15/30 |
United States | 700,000 | 622,101 | ||||||||||
|
|
|
|||||||||||||
| 2,309,090 | ||||||||||||||
|
|
|
|||||||||||||
| Consumer Durables & Apparel 0.5% |
||||||||||||||
| a | Ashton Woods USA LLC/Ashton Woods Finance Co., 4.625%, 4/01/30 |
United States | 1,200,000 | 989,400 | ||||||||||
|
|
|
|||||||||||||
| Consumer Services 4.6% | ||||||||||||||
| a,b,c | 24 Hour Fitness Worldwide, Inc., senior note, 8.00%, 6/01/22 |
United States | 800,000 | — | ||||||||||
| Carnival Corp., |
||||||||||||||
| a | 7.625%, 3/01/26 |
United States | 800,000 | 730,784 | ||||||||||
| a | senior note, 5.75%, 3/01/27 |
United States | 2,000,000 | 1,642,830 | ||||||||||
| a | NCL Corp. Ltd., 5.875%, 3/15/26 |
United States | 1,300,000 | 1,107,795 | ||||||||||
| a | Royal Caribbean Cruises Ltd., 5.50%, 8/31/26 |
United States | 1,800,000 | 1,686,069 | ||||||||||
| a | Station Casinos LLC, 4.50%, 2/15/28 |
United States | 1,400,000 | 1,265,145 | ||||||||||
| a | Studio City Finance Ltd., senior note, 5.00%, 1/15/29 |
United States | 2,300,000 | 1,768,205 | ||||||||||
| a | Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., senior bond, 5.50%, 3/01/25 |
United States | 1,500,000 | 1,473,645 | ||||||||||
|
|
|
|||||||||||||
| 9,674,473 | ||||||||||||||
|
|
|
|||||||||||||
| Distribution/Wholesale 0.2% |
||||||||||||||
| a | Ritchie Bros Holdings, Inc., 6.75%, 3/15/28 |
Canada | 400,000 | 412,432 | ||||||||||
|
|
|
|||||||||||||
| Diversified Financial Services 0.4% | ||||||||||||||
| a | Jane Street Group/JSG Finance, Inc., senior secured, 4.50%, 11/15/29 |
United States | 600,000 | 537,876 | ||||||||||
| a | PRA Group, Inc., 8.375%, 2/01/28 |
United States | 300,000 | 300,218 | ||||||||||
|
|
|
|||||||||||||
| 838,094 | ||||||||||||||
|
|
|
|||||||||||||
| Energy 15.8% | ||||||||||||||
| a | Antero Resources Corp., 7.625%, 2/01/29 |
United States | 601,000 | 615,111 | ||||||||||
| a | Atlantica Sustainable Infrastructure PLC, 4.125%, 6/15/28 |
Spain | 1,400,000 | 1,257,760 | ||||||||||
| a | Calumet Specialty Products Partners LP/Calumet Finance Corp., 8.125%, 1/15/27 |
United States | 700,000 | 667,059 | ||||||||||
| Cheniere Energy Partners LP, |
||||||||||||||
| 4.00%, 3/01/31 |
United States | 800,000 | 712,784 | |||||||||||
| senior note, 4.50%, 10/01/29 |
United States | 1,000,000 | 929,946 | |||||||||||
| Cheniere Energy, Inc., senior secured, 4.625%, 10/15/28 |
United States | 1,700,000 | 1,617,448 | |||||||||||
| a | Chesapeake Energy Corp., 6.75%, 4/15/29 |
United States | 2,000,000 | 1,987,450 | ||||||||||
| Crestwood Midstream Partners LP/Crestwood Midstream Finance Corp., |
||||||||||||||
| senior note, 5.75%, 4/01/25 |
United States | 700,000 | 684,460 | |||||||||||
| a | senior note, 8.00%, 4/01/29 |
United States | 1,200,000 | 1,225,080 | ||||||||||
| a | CrownRock LP/CrownRock Finance, Inc., 5.00%, 5/01/29 |
United States | 1,000,000 | 932,800 | ||||||||||
| a | CSI Compressco LP/CSI Compressco Finance, Inc., senior secured note, first lien, 7.50%, 4/01/25 |
United States | 1,000,000 | 953,760 | ||||||||||
| a | DT Midstream, Inc., 4.125%, 6/15/29 |
United States | 1,500,000 | 1,316,771 | ||||||||||
| a | Enerflex Ltd., 9.00%, 10/15/27 |
Canada | 1,100,000 | 1,070,812 | ||||||||||
| EnLink Midstream Partners LP, senior note, 4.15%, 6/01/25 |
United States | 1,900,000 | 1,844,738 | |||||||||||
| a | EQM Midstream Partners LP, 7.50%, 6/01/27 |
United States | 1,600,000 | 1,607,952 | ||||||||||
| a | Harbour Energy PLC, 5.50%, 10/15/26 |
United Kingdom | 2,300,000 | 2,015,513 | ||||||||||
| Hilcorp Energy I LP/Hilcorp Finance Co., |
||||||||||||||
| a | senior bond, 6.00%, 2/01/31 |
United States | 400,000 | 369,795 | ||||||||||
| a | senior note, 5.75%, 2/01/29 |
United States | 1,700,000 | 1,567,043 | ||||||||||
| a | Kinetik Holdings LP, 5.875%, 6/15/30 |
United States | 1,600,000 | 1,542,400 | ||||||||||
| a | Nabors Industries Ltd., senior note, 7.25%, 1/15/26 |
United States | 600,000 | 572,841 | ||||||||||
| a | Nabors Industries, Inc., 7.375%, 5/15/27 |
United States | 1,200,000 | 1,176,360 | ||||||||||
| franklintempleton.com | Annual Report | 133 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin High Yield Corporate ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) |
||||||||||||||
| Energy (continued) |
||||||||||||||
| Occidental Petroleum Corp., |
||||||||||||||
| senior bond, 6.45%, 9/15/36 |
United States | 800,000 | $ | 842,000 | ||||||||||
| senior bond, 8.875%, 7/15/30 |
United States | 1,500,000 | 1,746,105 | |||||||||||
| a | SunCoke Energy, Inc., 4.875%, 6/30/29 |
United States | 1,100,000 | 959,012 | ||||||||||
| Sunoco LP/Sunoco Finance Corp., senior note, 6.00%, 4/15/27 |
United States | 1,500,000 | 1,482,746 | |||||||||||
| Venture Global Calcasieu Pass LLC, |
||||||||||||||
| a | 4.125%, 8/15/31 |
United States | 800,000 | 703,672 | ||||||||||
| a | 3.875%, 8/15/29 |
United States | 900,000 | 812,610 | ||||||||||
| Weatherford International Ltd., |
||||||||||||||
| a | 8.625%, 4/30/30 |
United States | 500,000 | 511,980 | ||||||||||
| a | 6.50%, 9/15/28 |
United States | 1,100,000 | 1,102,921 | ||||||||||
|
|
|
|||||||||||||
| 32,828,929 | ||||||||||||||
|
|
|
|||||||||||||
| Entertainment 0.3% |
||||||||||||||
| a | Caesars Entertainment, Inc., 7.00%, 2/15/30 |
United States | 600,000 | 611,049 | ||||||||||
|
|
|
|||||||||||||
| Financial Services 5.3% |
||||||||||||||
| a | Apollo Commercial Real Estate Finance, Inc., 4.625%, 6/15/29 |
United States | 1,600,000 | 1,127,152 | ||||||||||
| a | Global Net Lease, Inc./Global Net Lease Operating Partnership LP, senior note, 3.75%, 12/15/27 |
United States | 1,400,000 | 1,109,169 | ||||||||||
| a | Jefferson Capital Holdings LLC, 6.00%, 8/15/26 |
United States | 1,500,000 | 1,274,484 | ||||||||||
| a | Ladder Capital Finance Holdings LLLP/Ladder Capital Finance Corp., 4.75%, 6/15/29 |
United States | 1,500,000 | 1,085,872 | ||||||||||
| a | Necessity Retail REIT, Inc./American Finance Operating Partner LP, 4.50%, 9/30/28 |
United States | 1,900,000 | 1,423,341 | ||||||||||
| a | Oxford Finance LLC/Oxford Finance Co.-Issuer II, Inc., 6.375%, 2/01/27 |
United States | 1,500,000 | 1,404,367 | ||||||||||
| a | PRA Group, Inc., 5.00%, 10/01/29 |
United States | 1,500,000 | 1,256,866 | ||||||||||
| a | VICI Properties LP/VICI Note Co., Inc., 3.875%, 2/15/29 |
United States | 2,000,000 | 1,780,290 | ||||||||||
| a | XHR LP, 4.875%, 6/01/29 |
United States | 600,000 | 509,491 | ||||||||||
|
|
|
|||||||||||||
| 10,971,032 | ||||||||||||||
|
|
|
|||||||||||||
| Food, Beverage & Tobacco 0.2% | ||||||||||||||
| a | Primo Water Holdings, Inc., 4.375%, 4/30/29 |
Canada | 400,000 | 349,514 | ||||||||||
|
|
|
|||||||||||||
| Hand/Machine Tools 0.5% | ||||||||||||||
| Regal Rexnord Corp., |
||||||||||||||
| a | 6.40%, 4/15/33 |
United States | 500,000 | 500,904 | ||||||||||
| a | 6.30%, 2/15/30 |
United States | 600,000 | 604,756 | ||||||||||
|
|
|
|||||||||||||
| 1,105,660 | ||||||||||||||
|
|
|
|||||||||||||
| Health Care Equipment & Services 3.5% |
||||||||||||||
| Centene Corp., senior note, 4.25%, 12/15/27 |
United States | 2,000,000 | 1,928,920 | |||||||||||
| CHS/Community Health Systems, Inc., |
||||||||||||||
| a | senior secured note, 6.00%, 1/15/29 |
United States | 1,000,000 | 846,890 | ||||||||||
| a | secured note, 6.875%, 4/15/29 |
United States | 1,400,000 | 868,420 | ||||||||||
| a | DaVita, Inc., 4.625%, 6/01/30 |
United States | 2,500,000 | 2,136,250 | ||||||||||
| a | Tenet Healthcare Corp., 6.125%, 6/15/30 |
United States | 1,500,000 | 1,481,100 | ||||||||||
|
|
|
|||||||||||||
| 7,261,580 | ||||||||||||||
|
|
|
|||||||||||||
| Healthcare-Products 0.8% |
||||||||||||||
| a | Garden Spinco Corp., 8.625%, 7/20/30 |
United States | 1,600,000 | 1,711,193 | ||||||||||
|
|
|
|||||||||||||
| Healthcare-Services 0.2% |
||||||||||||||
| Tenet Healthcare Corp., 6.125%, 10/01/28 |
United States | 500,000 | 479,673 | |||||||||||
|
|
|
|||||||||||||
| Household & Personal Products 1.0% |
||||||||||||||
| a | Spectrum Brands, Inc., senior bond, 5.50%, 7/15/30 |
United States | 800,000 | 704,687 | ||||||||||
| a | VM Consolidated, Inc., senior note, 5.50%, 4/15/29 |
United States | 1,600,000 | 1,418,723 | ||||||||||
|
|
|
|||||||||||||
| 2,123,410 | ||||||||||||||
|
|
|
|||||||||||||
| 134 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin High Yield Corporate ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) |
||||||||||||||
| Insurance 0.8% | ||||||||||||||
| a | Alliant Holdings Intermediate LLC/Alliant Holdings Co-Issuer, 6.75%, 4/15/28 |
United States | 700,000 | $ | 692,846 | |||||||||
| a | Jones Deslauriers Insurance Management, Inc., 10.50%, 12/15/30 |
Canada | 1,000,000 | 1,008,463 | ||||||||||
|
|
|
|||||||||||||
| 1,701,309 | ||||||||||||||
|
|
|
|||||||||||||
| Leisure Time 0.3% | ||||||||||||||
| a | Carnival Holdings Bermuda Ltd., 10.375%, 5/01/28 |
United States | 600,000 | 646,017 | ||||||||||
|
|
|
|||||||||||||
| Lodging 0.9% | ||||||||||||||
| Las Vegas Sands Corp., |
||||||||||||||
| 3.20%, 8/08/24 |
United States | 500,000 | 484,029 | |||||||||||
| 3.50%, 8/18/26 |
United States | 1,400,000 | 1,307,953 | |||||||||||
|
|
|
|||||||||||||
| 1,791,982 | ||||||||||||||
|
|
|
|||||||||||||
| Machinery-Diversified 0.0% |
||||||||||||||
| a | Titan Acquisition Ltd./Titan Co.-Borrower LLC, 7.75%, 4/15/26 |
Canada | 100,000 | 83,852 | ||||||||||
|
|
|
|||||||||||||
| Materials 8.5% |
||||||||||||||
| a | Advanced Drainage Systems, Inc., 6.375%, 6/15/30 |
United States | 1,400,000 | 1,373,410 | ||||||||||
| a | Arcosa, Inc., 4.375%, 4/15/29 |
United States | 1,400,000 | 1,246,532 | ||||||||||
| Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc., |
||||||||||||||
| a | senior note, 5.25%, 8/15/27 |
Luxembourg | 200,000 | 157,882 | ||||||||||
| a | senior secured note, first lien, 5.25%, 4/30/25 |
Luxembourg | 1,700,000 | 1,676,106 | ||||||||||
| a | ASP Unifrax Holdings, Inc., 5.25%, 9/30/28 |
United States | 400,000 | 320,120 | ||||||||||
| a | Consolidated Energy Finance SA, 5.625%, 10/15/28 |
Luxembourg | 400,000 | 344,512 | ||||||||||
| a | Constellium SE, 3.75%, 4/15/29 |
France | 1,700,000 | 1,474,750 | ||||||||||
| a | Eco Material Technologies, Inc., 7.875%, 1/31/27 |
United States | 1,300,000 | 1,235,105 | ||||||||||
| a | Gates Global LLC/Gates Corp., senior note, 6.25%, 1/15/26 |
United States | 1,600,000 | 1,574,200 | ||||||||||
| a | Glatfelter Corp., 4.75%, 11/15/29 |
United States | 900,000 | 595,407 | ||||||||||
| a | GPD Cos., Inc., senior secured note, 10.125%, 4/01/26 |
United States | 550,000 | 500,665 | ||||||||||
| a | Novelis Corp., senior bond, 4.75%, 1/30/30 |
United States | 1,400,000 | 1,288,000 | ||||||||||
| a | OI European Group BV, 4.75%, 2/15/30 |
United States | 1,000,000 | 916,280 | ||||||||||
| a | Owens-Brockway Glass Container, Inc., senior note, 5.875%, 8/15/23 |
United States | 422,000 | 421,760 | ||||||||||
| a | Pactiv Evergreen Group Issuer, Inc./Pactiv Evergreen Group Issuer LLC, senior secured note, 4.00%, 10/15/27 |
United States | 1,500,000 | 1,348,823 | ||||||||||
| a | Rain CII Carbon LLC/CII Carbon Corp., 7.25%, 4/01/25 |
United States | 1,000,000 | 969,580 | ||||||||||
| a | Roller Bearing Co. of America, Inc., 4.375%, 10/15/29 |
United States | 800,000 | 715,328 | ||||||||||
| a | Trivium Packaging Finance BV, senior secured note, 5.50%, 8/15/26 |
Netherlands | 1,600,000 | 1,534,736 | ||||||||||
|
|
|
|||||||||||||
| 17,693,196 | ||||||||||||||
|
|
|
|||||||||||||
| Media & Entertainment 10.3% | ||||||||||||||
| a | Banijay Entertainment SASU, senior note, 5.375%, 3/01/25 |
France | 2,100,000 | 2,054,986 | ||||||||||
| CCO Holdings LLC/CCO Holdings Capital Corp., |
||||||||||||||
| a | senior bond, 5.375%, 6/01/29 |
United States | 1,300,000 | 1,195,129 | ||||||||||
| a | senior bond, 4.50%, 8/15/30 |
United States | 1,700,000 | 1,438,429 | ||||||||||
| a | Clear Channel International BV, senior secured note, first lien, 6.625%, 8/01/25 |
United States | 600,000 | 584,390 | ||||||||||
| a | Clear Channel Outdoor Holdings, Inc., 7.50%, 6/01/29 |
United States | 1,200,000 | 853,920 | ||||||||||
| a | Cogent Communications Group, Inc., 3.50%, 5/01/26 |
United States | 1,900,000 | 1,773,460 | ||||||||||
| a | CSC Holdings LLC, senior note, 7.50%, 4/01/28 |
United States | 2,500,000 | 1,596,000 | ||||||||||
| Diamond Sports Group LLC/Diamond Sports Finance Co., |
||||||||||||||
| a,b | senior note, 6.625%, 8/15/27 |
United States | 900,000 | 12,375 | ||||||||||
| a,b | first lien, 5.375%, 8/15/26 |
United States | 900,000 | 50,625 | ||||||||||
| a | Directv Financing LLC/Directv Financing Co.-Obligor, Inc., 5.875%, 8/15/27 . |
United States | 1,900,000 | 1,722,654 | ||||||||||
| a | DISH DBS Corp., 5.75%, 12/01/28 |
United States | 2,300,000 | 1,720,687 | ||||||||||
| a | Everi Holdings, Inc., 5.00%, 7/15/29 |
United States | 1,000,000 | 891,166 | ||||||||||
| a | Motion Bondco DAC, 6.625%, 11/15/27 |
United Kingdom | 300,000 | 277,150 | ||||||||||
| franklintempleton.com | Annual Report | 135 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin High Yield Corporate ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) |
||||||||||||||
| Media & Entertainment (continued) | ||||||||||||||
| Netflix, Inc., |
||||||||||||||
| senior unsecured, 6.375%, 5/15/29 |
United States | 600,000 | $ | 643,002 | ||||||||||
| senior bond, 5.75%, 3/01/24 |
United States | 1,000,000 | 1,005,969 | |||||||||||
| senior unsecured note, 5.875%, 11/15/28 |
United States | 1,200,000 | 1,264,020 | |||||||||||
| a | Northwest Fiber LLC/Northwest Fiber Finance Sub, Inc., senior note, 6.00%, 2/15/28 |
United States | 800,000 | 592,676 | ||||||||||
| a | Sirius XM Radio, Inc., 4.00%, 7/15/28 |
United States | 1,900,000 | 1,634,000 | ||||||||||
| a | Univision Communications, Inc., senior note, 6.625%, 6/01/27 |
United States | 900,000 | 854,190 | ||||||||||
| a | Virgin Media Secured Finance PLC, senior secured bond, 4.50%, 8/15/30 |
United Kingdom | 1,400,000 | 1,205,617 | ||||||||||
|
|
|
|||||||||||||
| 21,370,445 | ||||||||||||||
|
|
|
|||||||||||||
| Oil & Gas 3.2% | ||||||||||||||
| a | Endeavor Energy Resources LP/EER Finance, Inc., 5.75%, 1/30/28 |
United States | 2,000,000 | 1,986,980 | ||||||||||
| Occidental Petroleum Corp., 5.50%, 12/01/25 |
United States | 1,400,000 | 1,399,679 | |||||||||||
| PBF Holding Co. LLC/PBF Finance Corp., 7.25%, 6/15/25 |
United States | 1,800,000 | 1,788,858 | |||||||||||
| a | Transocean Titan Financing Ltd., 8.375%, 2/01/28 |
United States | 400,000 | 412,008 | ||||||||||
| a | Transocean, Inc., 8.75%, 2/15/30 |
United States | 1,000,000 | 1,020,900 | ||||||||||
|
|
|
|||||||||||||
| 6,608,425 | ||||||||||||||
|
|
|
|||||||||||||
| Packaging & Containers 1.5% |
||||||||||||||
| LABL, Inc., 9.50%, 11/01/28 |
United States | 400,000 | 404,000 | |||||||||||
| Mauser Packaging Solutions Holding Co., |
||||||||||||||
| a | 9.25%, 4/15/27 |
United States | 500,000 | 462,500 | ||||||||||
| a | 7.875%, 8/15/26 |
United States | 1,600,000 | 1,601,448 | ||||||||||
| a | Sealed Air Corp./Sealed Air Corp. U.S., 6.125%, 2/01/28 |
United States | 600,000 | 607,320 | ||||||||||
|
|
|
|||||||||||||
| 3,075,268 | ||||||||||||||
|
|
|
|||||||||||||
| Pharmaceuticals 1.4% | ||||||||||||||
| a | 1375209 BC Ltd., 9.00%, 1/30/28 |
Canada | 261,000 | 259,042 | ||||||||||
| Bausch Health Cos., Inc., |
||||||||||||||
| a | 14.00%, 10/15/30 |
Canada | 92,000 | 52,252 | ||||||||||
| a | 11.00%, 9/30/28 |
Canada | 465,000 | 344,491 | ||||||||||
| a | BellRing Brands, Inc., 7.00%, 3/15/30 |
United States | 1,100,000 | 1,115,257 | ||||||||||
| Teva Pharmaceutical Finance Netherlands III BV, |
||||||||||||||
| 7.875%, 9/15/29 |
Israel | 500,000 | 523,750 | |||||||||||
| 8.125%, 9/15/31 |
Israel | 500,000 | 525,475 | |||||||||||
|
|
|
|||||||||||||
| 2,820,267 | ||||||||||||||
|
|
|
|||||||||||||
| Pharmaceuticals, Biotechnology & Life Sciences 0.7% | ||||||||||||||
| a | Bausch Health Cos., Inc., 4.875%, 6/01/28 |
United States | 1,000,000 | 590,900 | ||||||||||
| a,b | Par Pharmaceutical, Inc., senior secured note, 7.50%, 4/01/27 |
United States | 400,000 | 297,942 | ||||||||||
| Teva Pharmaceutical Finance Netherlands III BV, 4.75%, 5/09/27 |
Israel | 700,000 | 654,274 | |||||||||||
|
|
|
|||||||||||||
| 1,543,116 | ||||||||||||||
|
|
|
|||||||||||||
| Pipelines 1.4% |
||||||||||||||
| a | EnLink Midstream LLC, 6.50%, 9/01/30 |
United States | 600,000 | 607,380 | ||||||||||
| a | Martin Midstream Partners LP/Martin Midstream Finance Corp., 11.50%, 2/15/28 |
United States | 2,300,000 | 2,204,619 | ||||||||||
| a | Venture Global Calcasieu Pass LLC, 6.25%, 1/15/30 |
United States | 100,000 | 100,848 | ||||||||||
|
|
|
|||||||||||||
| 2,912,847 | ||||||||||||||
|
|
|
|||||||||||||
| Retail 0.5% | ||||||||||||||
| a | Evergreen Acqco 1 LP/TVI, Inc., 9.75%, 4/26/28 |
United States | 1,000,000 | 951,025 | ||||||||||
|
|
|
|||||||||||||
| Software & Services 1.0% | ||||||||||||||
| a | Gartner, Inc., senior note, 4.50%, 7/01/28 |
United States | 1,600,000 | 1,520,264 | ||||||||||
| a | Rocket Software, Inc., senior note, 6.50%, 2/15/29 |
United States | 800,000 | 630,825 | ||||||||||
|
|
|
|||||||||||||
| 2,151,089 | ||||||||||||||
|
|
|
|||||||||||||
| 136 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin High Yield Corporate ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) |
||||||||||||||
| Technology Hardware & Equipment 0.3% |
||||||||||||||
| a | McAfee Corp., 7.375%, 2/15/30 |
United States | 700,000 | $ | 587,576 | |||||||||
|
|
|
|||||||||||||
| Telecommunication Services 1.9% | ||||||||||||||
| a | Altice France Holding SA, senior note, 10.50%, 5/15/27 |
Luxembourg | 600,000 | 459,540 | ||||||||||
| a | Altice France SA, senior note, first lien, 8.125%, 2/01/27 |
France | 1,000,000 | 926,600 | ||||||||||
| a | CommScope Technologies LLC, 5.00%, 3/15/27 |
United States | 1,500,000 | 1,098,600 | ||||||||||
| a | Iliad Holding SASU, 6.50%, 10/15/26 |
France | 1,600,000 | 1,526,271 | ||||||||||
|
|
|
|||||||||||||
| 4,011,011 | ||||||||||||||
|
|
|
|||||||||||||
| Transportation 0.5% | ||||||||||||||
| a | First Student Bidco, Inc./First Transit Parent, Inc., 4.00%, 7/31/29 |
United States | 1,200,000 | 1,045,259 | ||||||||||
|
|
|
|||||||||||||
| Utilities 4.6% | ||||||||||||||
| Calpine Corp., |
||||||||||||||
| a | senior note, 5.125%, 3/15/28 |
United States | 1,000,000 | 916,910 | ||||||||||
| a | first lien, 4.50%, 2/15/28 |
United States | 1,200,000 | 1,114,582 | ||||||||||
| a | Leeward Renewable Energy Operations LLC, 4.25%, 7/01/29 |
United States | 1,800,000 | 1,569,963 | ||||||||||
| Talen Energy Supply LLC, |
||||||||||||||
| b | senior note, 6.50%, 6/01/25 |
United States | 900,000 | 369,000 | ||||||||||
| a,b | senior note, 7.625%, 6/01/28 |
United States | 1,000,000 | 1,033,253 | ||||||||||
| a | TTM Technologies, Inc., senior note, 4.00%, 3/01/29 |
United States | 1,800,000 | 1,568,529 | ||||||||||
| a | Vistra Operations Co. LLC, senior note, 5.50%, 9/01/26 |
United States | 3,100,000 | 3,014,143 | ||||||||||
|
|
|
|||||||||||||
| 9,586,380 | ||||||||||||||
|
|
|
|||||||||||||
| Total Corporate Bonds & Notes (Cost $205,987,297) |
186,671,340 | |||||||||||||
|
|
|
|||||||||||||
| Senior Floating Rate Interests 3.9% |
||||||||||||||
| Materials 0.9% |
||||||||||||||
| Hexion Holdings Corp., 2022 USD Term Loan, 9.454%, 3/15/29 |
United States | 1,091,750 | 982,919 | |||||||||||
| Hexion Holdings Corporation, 2022 USD 2nd Lien Term Loan, 12.297%, 3/15/30 |
United States | 1,186,047 | 992,329 | |||||||||||
|
|
|
|||||||||||||
| 1,975,248 | ||||||||||||||
|
|
|
|||||||||||||
| Software & Services 1.4% |
||||||||||||||
| Athenahealth Group, Inc., |
||||||||||||||
| 2022 Term Loan B, 8.259%, 2/15/29 |
United States | 1,507,949 | 1,415,587 | |||||||||||
| d | 2022 Delayed Draw Term Loan, TBD, 3.50%, 2/15/29 |
United States | 184,783 | 173,465 | ||||||||||
| McAfee LLC, 2022 USD Term Loan, 8.515%, 3/01/29 |
United States | 1,389,500 | 1,310,646 | |||||||||||
|
|
|
|||||||||||||
| 2,899,698 | ||||||||||||||
|
|
|
|||||||||||||
| Chemicals 0.7% |
||||||||||||||
| PMHC II, Inc., 2022 Term Loan B, 9.076%, 4/23/29 |
United States | 1,691,500 | 1,495,481 | |||||||||||
|
|
|
|||||||||||||
| Media & Entertainment 0.9% |
||||||||||||||
| Diamond Sports Group, LLC, 2022 First Priority Term Loan, 12.775%, 5/25/26 |
United States | 198,816 | 187,633 | |||||||||||
| Fertitta Entertainment LLC, 2022 Term Loan B, 8.807%, 1/27/29 |
United States | 1,683,000 | 1,660,818 | |||||||||||
|
|
|
|||||||||||||
| 1,848,451 | ||||||||||||||
|
|
|
|||||||||||||
| Total Floating Rate Loans (Cost $8,845,189) |
8,218,878 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments before Short-Term Investments |
194,890,218 | |||||||||||||
|
|
|
|||||||||||||
| franklintempleton.com | Annual Report | 137 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin High Yield Corporate ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Short-Term Investments 3.0% |
||||||||||||||
| U.S. Government & Agency Securities 3.0% | ||||||||||||||
| e | Federal Home Loan Bank Discount Notes, 04/03/23 |
United States | 6,295,000 | $ | 6,295,000 | |||||||||
|
|
|
|||||||||||||
| Total Short-Term Investments |
6,295,000 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments |
201,185,218 | |||||||||||||
| Other Assets, less Liabilities 3.4% |
6,982,146 | |||||||||||||
|
|
|
|||||||||||||
| Net Assets 100.0% |
$ | 208,167,364 | ||||||||||||
|
|
|
|||||||||||||
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $152,932,667, representing 73.5% of net assets.
bSee Note 7 regarding defaulted securities.
cFair valued using significant unobservable inputs. Note 9 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 246.
| 138 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Intelligent Machines ETF
| Year Ended March 31, | ||||||||||||||||
| 2023 | 2022 | 2021 | 2020a | |||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||
| Net asset value, beginning of year |
$46.30 | $43.24 | $20.67 | $25.00 | ||||||||||||
| Income from investment operationsb: | ||||||||||||||||
| Net investment income (loss)c |
— | (0.10 | ) | (0.06 | ) | — | ||||||||||
| Net realized and unrealized gains (losses) |
(2.14 | ) | 3.25 | 22.63 | (4.33 | ) | ||||||||||
| Total from investment operations |
(2.14 | ) | 3.15 | 22.57 | (4.33 | ) | ||||||||||
| Less distributions from: |
||||||||||||||||
| Net investment income |
— | — | (0.00 | )d | — | |||||||||||
| Net realized gains |
— | (0.09 | ) | — | — | |||||||||||
| Total distributions |
— | (0.09 | ) | — | — | |||||||||||
| Net asset value, end of year |
$44.16 | $46.30 | $43.24 | $20.67 | ||||||||||||
| Total returne |
(4.62)% | 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) |
—% | (0.21)% | (0.17)% | 0.20% | ||||||||||||
| Supplemental data | ||||||||||||||||
| Net assets, end of year (000’s) |
$8,832 | $11,574 | $10,809 | $2,067 | ||||||||||||
| Portfolio turnover rateg |
19.82%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 $0.005 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: | 19.38% | 35.98% | 75.25% | — |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 139 | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin Intelligent Machines ETF
| Country | Shares | Value | ||||||||||||
| Common Stocks 98.6% |
||||||||||||||
| Aerospace & Defense 3.2% | ||||||||||||||
| a | Axon Enterprise, Inc. |
United States | 1,240 | $ | 278,814 | |||||||||
|
|
|
|||||||||||||
| Automobiles 4.6% | ||||||||||||||
| a | Tesla, Inc. |
United States | 1,954 | 405,377 | ||||||||||
|
|
|
|||||||||||||
| Computers & Peripherals 4.6% | ||||||||||||||
| Apple, Inc. |
United States | 2,452 | 404,335 | |||||||||||
|
|
|
|||||||||||||
| Construction & Engineering 3.0% | ||||||||||||||
| Quanta Services, Inc. |
United States | 1,081 | 180,138 | |||||||||||
| Valmont Industries, Inc. |
United States | 271 | 86,525 | |||||||||||
|
|
|
|||||||||||||
| 266,663 | ||||||||||||||
|
|
|
|||||||||||||
| Electrical Equipment 0.7% | ||||||||||||||
| Eaton Corp. PLC |
United States | 266 | 45,576 | |||||||||||
| a | Sunrun, Inc. |
United States | 987 | 19,888 | ||||||||||
|
|
|
|||||||||||||
| 65,464 | ||||||||||||||
|
|
|
|||||||||||||
| Electronic Equipment, Instruments & Components 8.9% | ||||||||||||||
| Amphenol Corp., Class A |
United States | 1,017 | 83,109 | |||||||||||
| Keyence Corp. |
Japan | 625 | 302,662 | |||||||||||
| a | Keysight Technologies, Inc. |
United States | 671 | 108,353 | ||||||||||
| Samsung SDI Co. Ltd. |
South Korea | 336 | 189,699 | |||||||||||
| TE Connectivity Ltd. |
Switzerland | 300 | 39,345 | |||||||||||
| a | Trimble, Inc. |
United States | 375 | 19,658 | ||||||||||
| a | Zebra Technologies Corp., Class A |
United States | 126 | 40,068 | ||||||||||
|
|
|
|||||||||||||
| 782,894 | ||||||||||||||
|
|
|
|||||||||||||
| Health Care Equipment & Supplies 10.6% |
||||||||||||||
| a | Dexcom, Inc. |
United States | 1,644 | 191,000 | ||||||||||
| a | IDEXX Laboratories, Inc. |
United States | 312 | 156,025 | ||||||||||
| a | Insulet Corp. |
United States | 578 | 184,359 | ||||||||||
| a | Intuitive Surgical, Inc. |
United States | 1,428 | 364,811 | ||||||||||
| ResMed, Inc. |
United States | 186 | 40,732 | |||||||||||
|
|
|
|||||||||||||
| 936,927 | ||||||||||||||
|
|
|
|||||||||||||
| Health Care Technology 1.5% | ||||||||||||||
| a | Inspire Medical Systems, Inc. |
United States | 575 | 134,590 | ||||||||||
|
|
|
|||||||||||||
| Household Durables 0.5% | ||||||||||||||
| Panasonic Holdings Corp. |
Japan | 4,640 | 41,209 | |||||||||||
|
|
|
|||||||||||||
| Industrial Conglomerates 2.1% |
||||||||||||||
| Honeywell International, Inc. |
United States | 221 | 42,237 | |||||||||||
| Roper Technologies, Inc. |
United States | 200 | 88,138 | |||||||||||
| Siemens AG |
Germany | 366 | 59,352 | |||||||||||
|
|
|
|||||||||||||
| 189,727 | ||||||||||||||
|
|
|
|||||||||||||
| Semiconductors & Semiconductor Equipment 36.0% |
||||||||||||||
| Analog Devices, Inc. |
United States | 996 | 196,431 | |||||||||||
| Applied Materials, Inc. |
United States | 1,669 | 205,003 | |||||||||||
| ASM International NV |
Netherlands | 556 | 224,652 | |||||||||||
| ASML Holding NV |
Netherlands | 631 | 429,528 | |||||||||||
| a | Enphase Energy, Inc. |
United States | 937 | 197,032 | ||||||||||
| Entegris, Inc. |
United States | 1,578 | 129,412 | |||||||||||
| a | First Solar, Inc. |
United States | 270 | 58,725 | ||||||||||
| Infineon Technologies AG |
Germany | 3,026 | 123,877 | |||||||||||
| KLA Corp. |
United States | 221 | 88,216 | |||||||||||
| Lam Research Corp. |
United States | 173 | 91,711 | |||||||||||
| Microchip Technology, Inc. |
United States | 611 | 51,190 | |||||||||||
| 140 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Intelligent Machines ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) |
||||||||||||||
| Semiconductors & Semiconductor Equipment (continued) | ||||||||||||||
| NVIDIA Corp. |
United States | 2,267 | $ | 629,705 | ||||||||||
| NXP Semiconductors NV |
China | 228 | 42,516 | |||||||||||
| a | SiTime Corp. |
United States | 425 | 60,448 | ||||||||||
| a | SolarEdge Technologies, Inc. |
United States | 236 | 71,732 | ||||||||||
| Taiwan Semiconductor Manufacturing Co. Ltd., ADR |
Taiwan | 2,837 | 263,898 | |||||||||||
| Teradyne, Inc. |
United States | 1,804 | 193,948 | |||||||||||
| Texas Instruments, Inc. |
United States | 447 | 83,146 | |||||||||||
| a | Wolfspeed, Inc. |
United States | 623 | 40,464 | ||||||||||
|
|
|
|||||||||||||
| 3,181,634 | ||||||||||||||
|
|
|
|||||||||||||
| Software 22.9% | ||||||||||||||
| a | Altair Engineering, Inc., Class A |
United States | 1,559 | 112,420 | ||||||||||
| a | ANSYS, Inc. |
United States | 615 | 204,672 | ||||||||||
| a | Atlassian Corp., Class A |
United States | 308 | 52,720 | ||||||||||
| a | Autodesk, Inc. |
United States | 757 | 157,577 | ||||||||||
| Bentley Systems, Inc., Class B |
United States | 1,074 | 46,171 | |||||||||||
| a | Cadence Design Systems, Inc. |
United States | 1,803 | 378,792 | ||||||||||
| Constellation Software, Inc. |
Canada | 100 | 187,750 | |||||||||||
| Dassault Systemes SE |
France | 2,037 | 83,821 | |||||||||||
| a | Descartes Systems Group, Inc. |
Canada | 3,307 | 266,544 | ||||||||||
| a | Lumine Group, Inc. |
Canada | 300 | 3,261 | ||||||||||
| a | PTC, Inc. |
United States | 1,291 | 165,545 | ||||||||||
| a | Synopsys, Inc. |
United States | 943 | 364,234 | ||||||||||
|
|
|
|||||||||||||
| 2,023,507 | ||||||||||||||
|
|
|
|||||||||||||
| Total Common Stocks (Cost $7,424,171) |
8,711,141 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments (Cost $7,424,171) 98.6% |
8,711,141 | |||||||||||||
| Other Assets, less Liabilities 1.4% |
121,057 | |||||||||||||
|
|
|
|||||||||||||
| Net Assets 100.0% |
$ | 8,832,198 | ||||||||||||
|
|
|
|||||||||||||
aNon-income producing.
See Note 8 regarding other derivative information.
See Abbreviations on page 246.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 141 | ||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin International Aggregate Bond ETFa
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019b | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$23.65 | $25.02 | $24.95 | $24.56 | $25.00 | |||||||||||||||
| Income from investment operationsc: | ||||||||||||||||||||
| Net investment income (loss)d |
0.19 | 0.05 | (0.01 | ) | 0.22 | 0.39 | ||||||||||||||
| Net realized and unrealized gains (losses) |
(0.77 | ) | (0.87 | ) | 0.19 | 0.78 | (0.40 | ) | ||||||||||||
| Total from investment operations |
(0.58 | ) | (0.82 | ) | 0.18 | 1.00 | (0.01 | ) | ||||||||||||
| Less distributions from: | ||||||||||||||||||||
| Net investment income |
(3.48 | ) | (0.42 | ) | (0.11 | ) | (0.09 | ) | (0.43 | ) | ||||||||||
| Net realized gains |
— | (0.13 | ) | — | (0.52 | ) | — | |||||||||||||
| Total distributions |
(3.48 | ) | (0.55 | ) | (0.11 | ) | (0.61 | ) | (0.43 | ) | ||||||||||
| Net asset value, end of year |
$19.59 | $23.65 | $25.02 | $24.95 | $24.56 | |||||||||||||||
| Total returne |
(2.38)% | (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) |
0.86% | 0.21% | (0.03)% | 0.87% | 1.91% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$276,164 | $193,968 | $181,405 | $4,989 | $4,912 | |||||||||||||||
| Portfolio turnover rateg |
31.03%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").
| h Portfolio turnover rate excluding cash creations was as follows: | 31.03% | 24.12% | 72.21% | 66.78% | — |
| 142 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin International Aggregate Bond ETF
| Principal Amount* | Value | |||||||||||||
| Foreign Government and Agency Securities 85.2% |
||||||||||||||
| Australia 3.2% | ||||||||||||||
| a | Australia Government Bonds, Series 149, 149, 2.25%, 5/21/28 |
4,100,000 | AUD | $ | 2,638,362 | |||||||||
| a | New South Wales Treasury Corp., Series 27, 3.00%, 5/20/27 |
2,000,000 | AUD | 1,315,744 | ||||||||||
| a,b | Queensland Treasury Corp., senior bond, 3.25%, 8/21/29 |
3,200,000 | AUD | 2,096,615 | ||||||||||
| a | Western Australian Treasury Corp., Series 26, 26, 3.00%, 10/21/26 |
4,100,000 | AUD | 2,708,301 | ||||||||||
|
|
|
|||||||||||||
| 8,759,022 | ||||||||||||||
|
|
|
|||||||||||||
| Austria 4.1% | ||||||||||||||
| Republic of Austria Government Bonds, |
||||||||||||||
| a,b 1.20%, 10/20/25 |
7,600,000 | EUR | 7,939,669 | |||||||||||
| a,b senior bond, 1.50%, 2/20/47 |
4,300,000 | EUR | 3,471,146 | |||||||||||
|
|
|
|||||||||||||
| 11,410,815 | ||||||||||||||
|
|
|
|||||||||||||
| Belgium 3.1% |
||||||||||||||
| a,b | Kingdom of Belgium Government Bonds, Series 75, 1.00%, 6/22/31 |
9,200,000 | EUR | 8,653,887 | ||||||||||
|
|
|
|||||||||||||
| Canada 4.1% |
||||||||||||||
| Canada Government Bonds, |
||||||||||||||
| 1.25%, 3/01/25 |
8,000,000 | CAD | 5,659,193 | |||||||||||
| 5.00%, 6/01/37 |
4,600,000 | CAD | 4,162,158 | |||||||||||
| senior bond, 2.00%, 12/01/51 |
2,600,000 | CAD | 1,540,166 | |||||||||||
|
|
|
|||||||||||||
| 11,361,517 | ||||||||||||||
|
|
|
|||||||||||||
| China 6.6% |
||||||||||||||
| Agricultural Development Bank of China, Series 2008, Series 2008, Unsecured 3.45%, 9/23/25 |
13,000,000 | CNY | 1,924,833 | |||||||||||
| China Development Bank, |
||||||||||||||
| Series 2003, 2003, 3.23%, 1/10/25 |
24,000,000 | CNY | 3,532,231 | |||||||||||
| Series 2004, 2004, 3.43%, 1/14/27 |
25,000,000 | CNY | 3,715,963 | |||||||||||
| China Government Bonds, |
||||||||||||||
| Series INBK, 3.03%, 3/11/26 |
25,000,000 | CNY | 3,693,096 | |||||||||||
| Series INBK, 2.85%, 6/04/27 |
25,000,000 | CNY | 3,665,379 | |||||||||||
| Export-Import Bank of China, Series 2003, Series 2003, Unsecured 2.17%, 4/07/23 |
11,000,000 | CNY | 1,600,416 | |||||||||||
|
|
|
|||||||||||||
| 18,131,918 | ||||||||||||||
|
|
|
|||||||||||||
| Cyprus 1.1% |
||||||||||||||
| a | Cyprus Government International Bonds, 1.50%, 4/16/27 |
3,000,000 | EUR | 3,018,190 | ||||||||||
|
|
|
|||||||||||||
| France 6.6% |
||||||||||||||
| French Republic Government Bonds OAT, |
||||||||||||||
| a 2.00%, 11/25/32 |
11,700,000 | EUR | 11,823,473 | |||||||||||
|
a,c zero cpn., 11/25/29 |
7,000,000 | EUR | 6,375,539 | |||||||||||
|
|
|
|||||||||||||
| 18,199,012 | ||||||||||||||
|
|
|
|||||||||||||
| Germany 10.0% | ||||||||||||||
| a,c | Bundesobligation, zero cpn., Series G, 10/10/25 |
7,000,000 | EUR | 7,139,318 | ||||||||||
| a | Bundesrepublik Deutschland Bundesanleihe, senior bond, zero cpn., 8/15/26 |
18,000,000 | EUR | 18,009,409 | ||||||||||
| Kreditanstalt fuer Wiederaufbau, Senior note, 2.05%, 2/16/26 |
300,000,000 | JPY | 2,389,752 | |||||||||||
|
|
|
|||||||||||||
| 27,538,479 | ||||||||||||||
|
|
|
|||||||||||||
| Italy 3.7% |
||||||||||||||
| Italy Buoni Poliennali Del Tesoro, |
||||||||||||||
| a senior bond, 1.25%, 12/01/26 |
7,700,000 | EUR | 7,742,957 | |||||||||||
| a,b Series CAC, 2.45%, 9/01/50 |
3,300,000 | EUR | 2,511,991 | |||||||||||
|
|
|
|||||||||||||
| 10,254,948 | ||||||||||||||
|
|
|
|||||||||||||
| Japan 15.5% | ||||||||||||||
| Development Bank of Japan, Inc., Series INTL, 2.30%, 3/19/26 |
1,000,000,000 | JPY | 8,000,507 | |||||||||||
| Japan Government Five Year Bonds, Series 142, 142, 0.10%, 12/20/24 |
1,600,000,000 | JPY | 12,090,059 | |||||||||||
| Japan Government Thirty Year Bonds, Series 65, 0.40%, 12/20/49 |
550,000,000 | JPY | 3,358,794 | |||||||||||
| franklintempleton.com | Annual Report | 143 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Aggregate Bond ETF (continued)
| Principal Amount* | Value | |||||||||||||
| Foreign Government and Agency Securities (continued) |
||||||||||||||
| Japan (continued) |
||||||||||||||
| Japan Government Twenty Year Bonds, |
||||||||||||||
| senior bond, 1.50%, 3/20/33 |
1,100,000,000 | JPY | $ | 9,150,312 | ||||||||||
| Series 155, 1.00%, 12/20/35 |
1,300,000,000 | JPY | 10,235,556 | |||||||||||
|
|
|
|||||||||||||
| 42,835,228 | ||||||||||||||
|
|
|
|||||||||||||
| Mexico 1.8% |
||||||||||||||
| d | Mexico Bonos, Series M, senior bond, 8.00%, 11/07/47 |
100,000,000 | MXN | 4,942,564 | ||||||||||
|
|
|
|||||||||||||
| Netherlands 1.8% |
||||||||||||||
| a,b | Netherlands Government Bonds, 0.50%, 7/15/26 |
5,000,000 | EUR | 5,070,997 | ||||||||||
|
|
|
|||||||||||||
| Poland 3.2% |
||||||||||||||
| Republic of Poland Government Bonds, Series 1029, 2.75%, 10/25/29 |
46,000,000 | PLN | 8,853,655 | |||||||||||
|
|
|
|||||||||||||
| Romania 1.0% |
||||||||||||||
| a | Romania Government International Bonds, senior bond, 2.00%, 1/28/32 |
3,600,000 | EUR | 2,761,839 | ||||||||||
|
|
|
|||||||||||||
| Spain 6.9% |
||||||||||||||
| Spain Government Bonds, |
||||||||||||||
| c senior note, zero cpn., 1/31/25 |
9,200,000 | EUR | 9,475,915 | |||||||||||
|
a,b senior unsecured bond, 1.25%, 10/31/30 |
9,900,000 | EUR | 9,420,019 | |||||||||||
|
|
|
|||||||||||||
| 18,895,934 | ||||||||||||||
|
|
|
|||||||||||||
| e | Supranational 1.7% |
|||||||||||||
| Asian Development Bank, senior bond, 339-00-1, 2.35%, 6/21/27 |
240,000,000 | JPY | 1,985,319 | |||||||||||
| a | European Investment Bank, senior bond, 1.90%, 1/26/26 |
330,000,000 | JPY | 2,618,431 | ||||||||||
|
|
|
|||||||||||||
| 4,603,750 | ||||||||||||||
|
|
|
|||||||||||||
| Sweden 3.1% | ||||||||||||||
| Sweden Government Bonds, |
||||||||||||||
| a,b Series 1057, 1.50%, 11/13/23 |
35,000,000 | SEK | 3,331,676 | |||||||||||
|
a,b Series 1060, 0.75%, 5/12/28 |
60,000,000 | SEK | 5,335,762 | |||||||||||
|
|
|
|||||||||||||
| 8,667,438 | ||||||||||||||
|
|
|
|||||||||||||
| United Kingdom 7.7% |
||||||||||||||
| U.K. Gilts, |
||||||||||||||
| a 4.75%, 12/07/30 |
8,000,000 | GBP | 10,785,862 | |||||||||||
| a 1.75%, 9/07/37 |
8,700,000 | GBP | 8,335,810 | |||||||||||
| a 3.50%, 7/22/68 |
1,800,000 | GBP | 2,146,998 | |||||||||||
|
|
|
|||||||||||||
| 21,268,670 | ||||||||||||||
|
|
|
|||||||||||||
| Total Foreign Government and Agency Securities (Cost $260,937,879) |
235,227,863 | |||||||||||||
|
|
|
|||||||||||||
| Corporate Bonds & Notes 3.9% |
||||||||||||||
| Denmark 0.0% |
||||||||||||||
| a | Nykredit Realkredit AS, secured bond, 1.00%, 10/01/50 |
1,030,596 | DKK | 111,121 | ||||||||||
|
|
|
|||||||||||||
| France 0.7% |
||||||||||||||
| a | Air Liquide Finance SA, senior note, 1.375%, 4/02/30 |
700,000 | EUR | 678,823 | ||||||||||
| a | Orange SA, senior note, 1.375%, 3/20/28 |
1,200,000 | EUR | 1,175,885 | ||||||||||
|
|
|
|||||||||||||
| 1,854,708 | ||||||||||||||
|
|
|
|||||||||||||
| Germany 0.4% |
||||||||||||||
| a | Deutsche Telekom AG, senior note, 0.875%, 3/25/26 |
500,000 | EUR | 509,135 | ||||||||||
| a,c | Siemens Financieringsmaatschappij NV, senior note, zero cpn., , 2/20/26 |
700,000 | EUR | 693,694 | ||||||||||
|
|
|
|||||||||||||
| 1,202,829 | ||||||||||||||
|
|
|
|||||||||||||
| Romania 0.2% |
||||||||||||||
| a | Globalworth Real Estate Investments Ltd., senior note, 3.00%, 3/29/25 |
500,000 | EUR | 472,566 | ||||||||||
|
|
|
|||||||||||||
| United Kingdom 0.4% |
||||||||||||||
| a | RELX Finance BV, senior note, 0.50%, 3/10/28 |
1,200,000 | EUR | 1,129,231 | ||||||||||
|
|
|
|||||||||||||
| 144 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Aggregate Bond ETF (continued)
| Principal Amount* | Value | |||||||||||||
| Corporate Bonds & Notes (continued) |
||||||||||||||
| United States 2.2% | ||||||||||||||
| AbbVie, Inc., senior note, 1.375%, 5/17/24 |
700,000 | EUR | $ | 741,565 | ||||||||||
| Air Products & Chemicals, Inc., senior note, 0.50%, 5/05/28 |
1,000,000 | EUR | 927,495 | |||||||||||
| Apple, Inc., senior bond, 1.625%, 11/10/26 |
700,000 | EUR | 720,987 | |||||||||||
| AT&T, Inc., senior note, 0.25%, 3/04/26 |
1,000,000 | EUR | 986,716 | |||||||||||
| Procter & Gamble Co., senior note, 0.50%, 10/25/24 |
700,000 | EUR | 727,372 | |||||||||||
| a | Schlumberger Finance France SAS, senior note, 1.00%, 2/18/26 |
500,000 | EUR | 506,140 | ||||||||||
| Stryker Corp., senior note, 0.25%, 12/03/24 |
1,000,000 | EUR | 1,028,971 | |||||||||||
| Verizon Communications, Inc., senior note, 0.875%, 4/02/25 |
500,000 | EUR | 515,074 | |||||||||||
|
|
|
|||||||||||||
| 6,154,320 | ||||||||||||||
|
|
|
|||||||||||||
| Total Corporate Bonds & Notes (Cost $9,696,974) |
10,924,775 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments before Short Term Investments ($270,634,853) |
246,152,638 | |||||||||||||
|
|
|
|||||||||||||
| Short-Term Investments 5.1% |
||||||||||||||
| U.S. Government & Agency Securities 5.1% |
||||||||||||||
| c | Federal Home Loan Bank Discount Notes, 4/03/23 |
14,010,000 | 14,010,000 | |||||||||||
|
|
|
|||||||||||||
| Total Short-Term Investments (Cost $14,006,614) |
14,010,000 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments (Cost $284,641,467) 94.2% |
260,162,638 | |||||||||||||
| Other Assets, less Liabilities 5.8% |
16,001,106 | |||||||||||||
|
|
|
|||||||||||||
| Net Assets 100.0% |
$ | 276,163,744 | ||||||||||||
|
|
|
|||||||||||||
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States.
Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At March 31, 2023, the value of was $140,528,590, representing 50.9% of net assets.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $47,831,762, representing 17.3% of net assets.
cThe security was issued on a discount basis with no stated coupon rate.
dPrincipal amount is stated in 100 Mexican Peso Units.
eA supranational organization is an entity formed by two or more central governments through international treaties.
At March 31, 2023 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 |
||||||||||||||||||||||||||||
| Mexican Peso |
CITI | 17,500,000 | $ | 912,352 | 5/04/23 | $ — | $ (52,756 | ) | ||||||||||||||||||||
| Australian Dollar |
CITI | 1,600,000 | 1,093,488 | 5/11/23 | 19,575 | — | ||||||||||||||||||||||
| Australian Dollar |
CITI | 1,500,000 | 1,041,468 | 5/11/23 | 34,675 | — | ||||||||||||||||||||||
| Australian Dollar |
CITI | 2,100,000 | 1,487,327 | 5/11/23 | 77,816 | — | ||||||||||||||||||||||
| Australian Dollar |
CITI | 7,290,000 | 5,176,374 | 5/11/23 | 283,357 | — | ||||||||||||||||||||||
| Canadian Dollar |
CITI | 2,600,000 | 1,955,222 | 5/11/23 | — | (32,109 | ) | |||||||||||||||||||||
| Canadian Dollar |
CITI | 2,000,000 | 1,478,498 | 5/11/23 | — | (819 | ) | |||||||||||||||||||||
| Canadian Dollar |
CITI | 1,600,000 | 1,199,228 | 5/11/23 | 15,774 | — | ||||||||||||||||||||||
| Canadian Dollar |
CITI | 14,420,000 | 10,752,969 | 5/11/23 | 87,088 | — | ||||||||||||||||||||||
| Chinese Yuan |
CITI | 119,200,000 | 17,694,964 | 5/11/23 | 284,099 | — | ||||||||||||||||||||||
| Danish Krone |
CITI | 1,141,000 | 168,534 | 5/11/23 | 1,611 | — | ||||||||||||||||||||||
| Euro |
CITI | 9,000,000 | 9,583,740 | 5/11/23 | — | (220,997 | ) | |||||||||||||||||||||
| Euro |
CITI | 13,000,000 | 13,954,446 | 5/11/23 | — | (207,952 | ) | |||||||||||||||||||||
| Euro |
CITI | 1,484,622 | 1,578,316 | 5/11/23 | — | (39,053 | ) | |||||||||||||||||||||
| Euro |
CITI | 6,100,000 | 6,660,895 | 5/11/23 | — | (15,462 | ) | |||||||||||||||||||||
| Euro |
CITI | 14,000,000 | 15,386,185 | 5/11/23 | 134,372 | — | ||||||||||||||||||||||
| franklintempleton.com | Annual Report | 145 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
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) |
| |||||||||||||||||||||||||||
| Euro |
CITI | 78,170,000 | $85,726,999 | 5/11/23 | $ 567,413 | $ — | ||||||||||||||||||||||
| Great British Pound |
CITI | 2,100,000 | 2,528,749 | 5/11/23 | — | (70,407 | ) | |||||||||||||||||||||
| Great British Pound |
CITI | 1,900,000 | 2,291,210 | 5/11/23 | — | (60,407 | ) | |||||||||||||||||||||
| Great British Pound |
CITI | 2,400,000 | 2,948,678 | 5/11/23 | — | (21,786 | ) | |||||||||||||||||||||
| Great British Pound |
CITI | 10,895,968 | 13,506,359 | 5/11/23 | 20,491 | — | ||||||||||||||||||||||
| Japanese Yen |
CITI | 550,000,000 | 4,108,669 | 5/11/23 | — | (55,232 | ) | |||||||||||||||||||||
| Japanese Yen |
CITI | 280,000,000 | 2,209,693 | 5/11/23 | 89,890 | — | ||||||||||||||||||||||
| Japanese Yen |
CITI | 5,799,000,000 | 45,504,838 | 5/11/23 | 1,602,181 | — | ||||||||||||||||||||||
| Mexican Peso |
CITI | 38,000,000 | 2,006,172 | 5/11/23 | — | (86,687 | ) | |||||||||||||||||||||
| Mexican Peso |
CITI | 18,600,000 | 970,727 | 5/11/23 | — | (53,673 | ) | |||||||||||||||||||||
| Mexican Peso |
CITI | 18,000,000 | 966,990 | 5/11/23 | — | (24,364 | ) | |||||||||||||||||||||
| Polish Zloty |
CITI | 12,000,000 | 2,662,578 | 5/11/23 | — | (119,508 | ) | |||||||||||||||||||||
| Polish Zloty |
CITI | 5,000,000 | 1,107,616 | 5/11/23 | — | (51,587 | ) | |||||||||||||||||||||
| Polish Zloty |
CITI | 14,050,000 | 3,223,771 | 5/11/23 | — | (33,589 | ) | |||||||||||||||||||||
| Polish Zloty |
CITI | 5,000,000 | 1,158,403 | 5/11/23 | — | (800 | ) | |||||||||||||||||||||
| Swedish Krona |
CITI | 13,000,000 | 1,246,740 | 5/11/23 | — | (12,335 | ) | |||||||||||||||||||||
| Swedish Krona |
CITI | 18,000,000 | 1,731,155 | 5/11/23 | — | (12,180 | ) | |||||||||||||||||||||
| Swedish Krona |
CITI | 12,000,000 | 1,164,087 | 5/11/23 | 1,864 | — | ||||||||||||||||||||||
| Swedish Krona |
CITI | 44,500,000 | 4,373,640 | 5/11/23 | 63,729 | — | ||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
| Total Forward Exchange Contracts |
$3,283,935 | $(1,171,703 | ) | |||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
| Net unrealized appreciation (depreciation) |
|
$ 2,112,232 | ||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.
See Note 8 regarding other derivative information.
See Abbreviations on page 246.
| 146 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Investment Grade Corporate ETFa
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$23.71 | $25.47 | $24.22 | $24.09 | $23.97 | |||||||||||||||
| Income from investment operationsb: |
||||||||||||||||||||
| Net investment incomec |
0.68 | 0.58 | 0.60 | 0.73 | 0.82 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(2.22 | ) | (1.63 | ) | 1.71 | 0.27 | 0.21 | |||||||||||||
| Total from investment operations |
(1.54 | ) | (1.05 | ) | 2.31 | 1.00 | 1.03 | |||||||||||||
| Less distributions from: |
||||||||||||||||||||
| Net investment income |
(0.73 | ) | (0.66 | ) | (0.83 | ) | (0.81 | ) | (0.91 | ) | ||||||||||
| Net realized gains |
— | (0.05 | ) | (0.23 | ) | (0.06 | ) | — | ||||||||||||
| Total distributions |
(0.73 | ) | (0.71 | ) | (1.06 | ) | (0.87 | ) | (0.91 | ) | ||||||||||
| Net asset value, end of year |
$21.44 | $23.71 | $25.47 | $24.22 | $24.09 | |||||||||||||||
| Total returnd |
(6.46)% | (4.30)% | 9.43% | 4.02% | 4.46% | |||||||||||||||
| Ratios to average net assets | ||||||||||||||||||||
| Expenses before waiver and payments by affiliates |
0.35% | 0.42% | 0.50% | 0.58% | 1.07% | |||||||||||||||
| Expenses net of waiver and payments by affiliates |
0.35% | 0.35% | 0.35% | 0.35% | 0.35% | |||||||||||||||
| Net investment income |
3.13% | 2.27% | 2.27% | 2.86% | 3.49% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$644,363 | $981,602 | $1,018,639 | $553,338 | $18,065 | |||||||||||||||
| Portfolio turnover ratee |
27.84%f | 36.76%f | 53.32%f | 52.17%f | 22.02% | |||||||||||||||
a Effective August 1, 2022, Formerly, Franklin Liberty Investment Grade Corporate ETF was renamed Franklin Investment Grade Corporate ETF.
b The amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
c Based on average daily shares outstanding.
d Total 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.
e Portfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| f Portfolio turnover rate excluding cash creations was as follows: | 27.84% | 36.76% | 53.32% | 52.17% | — |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 147 | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin Investment Grade Corporate ETF
| `Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes 96.5% | ||||||||||||||
| Aerospace & Defense 1.9% | ||||||||||||||
| Boeing Co., |
||||||||||||||
| 5.15%, 5/01/30 |
United States | 2,000,000 | $ | 2,013,542 | ||||||||||
| 3.65%, 3/01/47 |
United States | 4,900,000 | 3,581,217 | |||||||||||
| Lockheed Martin Corp., |
||||||||||||||
| senior note, 4.07%, 12/15/42 |
United States | 3,300,000 | 3,034,800 | |||||||||||
| 4.15%, 6/15/53 |
United States | 3,800,000 | 3,459,405 | |||||||||||
|
|
|
|||||||||||||
| 12,088,964 | ||||||||||||||
|
|
|
|||||||||||||
| Agriculture 1.6% | ||||||||||||||
| a | Cargill, Inc., 2.125%, 11/10/31 |
United States | 3,800,000 | 3,157,459 | ||||||||||
| a | JT International Financial Services BV, 6.875%, 10/24/32 |
Japan | 6,375,000 | 7,043,384 | ||||||||||
|
|
|
|||||||||||||
| 10,200,843 | ||||||||||||||
|
|
|
|||||||||||||
| Air Freight & Logistics 0.8% | ||||||||||||||
| FedEx Corp., senior bond, 4.75%, 11/15/45 |
United States | 5,500,000 | 4,973,863 | |||||||||||
|
|
|
|||||||||||||
| Airlines 1.9% | ||||||||||||||
| a | Delta Air Lines, Inc./SkyMiles IP Ltd., first lien, 4.50%, 10/20/25 |
United States | 7,608,419 | 7,485,455 | ||||||||||
| United Airlines 2016-1 Class A Pass Through Trust, Series A, 3.45%, 1/07/30 |
United States | 2,626,223 | 2,282,836 | |||||||||||
| United Airlines 2020-1 Class B Pass Through Trust, 2020-1 Class B, 4.875%, 7/15/27 |
United States | 2,428,790 | 2,350,479 | |||||||||||
|
|
|
|||||||||||||
| 12,118,770 | ||||||||||||||
|
|
|
|||||||||||||
| Banks 21.7% | ||||||||||||||
| a | Banco de Chile, 2.99%, 12/09/31 |
Chile | 1,800,000 | 1,477,857 | ||||||||||
| Banco Santander SA, sub. note, 2.749%, 12/03/30 |
Spain | 5,700,000 | 4,452,693 | |||||||||||
| Bancolombia SA, senior note, 3.00%, 1/29/25 |
Colombia | 5,000,000 | 4,708,314 | |||||||||||
| Bank of America Corp., |
||||||||||||||
| 2.592% to 4/29/30, FRN thereafter, 4/29/31 |
United States | 4,000,000 | 3,389,799 | |||||||||||
| Series L, 4.183%, 11/25/27 |
United States | 9,100,000 | 8,801,780 | |||||||||||
| 4.571% to 4/27/32, FRN thereafter, 4/27/33 |
United States | 5,250,000 | 5,001,390 | |||||||||||
| a | BNP Paribas SA, senior note, 4.705% to 1/10/24, FRN thereafter, 1/10/25 |
France | 6,600,000 | 6,527,057 | ||||||||||
| a | BPCE SA, senior note, 5.70%, 10/22/23 |
France | 7,600,000 | 7,543,134 | ||||||||||
| Citigroup, Inc., |
||||||||||||||
| senior bond, 3.668% to 7/24/27, FRN thereafter, 7/24/28 |
United States | 5,200,000 | 4,930,237 | |||||||||||
| 3.057% to 1/25/32, FRN thereafter, 1/25/33 |
United States | 5,200,000 | 4,404,383 | |||||||||||
| a | Credit Agricole SA, 4.375%, 3/17/25 |
France | 3,800,000 | 3,652,877 | ||||||||||
| Deutsche Bank AG, |
||||||||||||||
| senior note, 2.129% to 11/24/25, FRN thereafter, 11/24/26 |
Germany | 3,300,000 | 2,846,647 | |||||||||||
| 0.898%, 5/28/24 |
Germany | 3,500,000 | 3,287,389 | |||||||||||
| Fifth Third Bancorp, 4.772% to 7/28/29, FRN thereafter, 7/28/30 |
United States | 4,135,000 | 3,828,091 | |||||||||||
| Goldman Sachs Group, Inc., |
||||||||||||||
| Series V, 4.125% to 12/31/99, FRN thereafter, 12/31/99 |
United States | 2,000,000 | 1,660,013 | |||||||||||
| 2.64% to 2/24/27, FRN thereafter, 2/24/28 |
United States | 9,700,000 | 8,857,003 | |||||||||||
| 4.387% to 6/15/26, FRN thereafter, 6/15/27 |
United States | 1,400,000 | 1,368,964 | |||||||||||
| HSBC Holdings PLC, senior note, 1.645% to 4/18/25, FRN thereafter, 4/18/26 |
United Kingdom | 4,700,000 | 4,295,706 | |||||||||||
| JPMorgan Chase & Co., |
||||||||||||||
| 2.522% to 4/22/30, FRN thereafter, 4/22/31 |
United States | 5,500,000 | 4,705,100 | |||||||||||
| sub. bond, 4.25%, 10/01/27 |
United States | 6,000,000 | 5,907,906 | |||||||||||
| 2.963% to 1/25/32, FRN thereafter, 1/25/33 |
United States | 4,550,000 | 3,894,231 | |||||||||||
| 4.851% to 7/25/27, FRN thereafter, 7/25/28 |
United States | 4,200,000 | 4,195,998 | |||||||||||
| KeyBank NA, 4.15%, 8/08/25 |
United States | 2,000,000 | 1,892,720 | |||||||||||
| Morgan Stanley, |
||||||||||||||
| 0.791% to 1/22/24, FRN thereafter, 1/22/25 |
United States | 3,300,000 | 3,175,642 | |||||||||||
| 0.731% to 4/05/23, FRN thereafter, 4/05/24 |
United States | 4,000,000 | 3,998,846 | |||||||||||
| 148 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Investment Grade Corporate ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) | ||||||||||||||
| Banks (continued) | ||||||||||||||
| a | National Australia Bank Ltd., sub. note, 2.332%, 8/21/30 |
Australia | 9,500,000 | $ | 7,424,967 | |||||||||
| a | Standard Chartered PLC, senior note, 1.456% to 1/14/27, FRN thereafter, 1/14/27 |
United Kingdom | 4,700,000 | 4,132,921 | ||||||||||
| Truist Bank, sub. note, 3.30%, 5/15/26 |
United States | 3,300,000 | 3,042,165 | |||||||||||
| Truist Financial Corp., sub. bond, 3.875%, 3/19/29 |
United States | 5,400,000 | 4,860,852 | |||||||||||
| a | UniCredit SpA, 1.982% to 6/03/27, FRN thereafter, 6/03/27 |
Italy | 4,000,000 | 3,495,028 | ||||||||||
| Wells Fargo & Co., 4.808% to 7/25/27, FRN thereafter, 7/25/28 |
United States | 8,300,000 | 8,202,690 | |||||||||||
|
|
|
|||||||||||||
| 139,962,400 | ||||||||||||||
|
|
|
|||||||||||||
| Beverages 2.2% | ||||||||||||||
| Anheuser-Busch Cos. LLC/Anheuser-Busch InBev Worldwide, Inc., 4.90%, 2/01/46 |
United States | 3,500,000 | 3,424,903 | |||||||||||
| Anheuser-Busch InBev Worldwide, Inc., senior bond, 5.80%, 1/23/59 |
Belgium | 3,500,000 | 3,848,192 | |||||||||||
| PepsiCo, Inc., 1.625%, 5/01/30 |
United States | 8,500,000 | 7,197,538 | |||||||||||
|
|
|
|||||||||||||
| 14,470,633 | ||||||||||||||
|
|
|
|||||||||||||
| Biotechnology 3.9% | ||||||||||||||
| Amgen, Inc., 5.60%, 3/02/43 |
United States | 9,000,000 | 9,279,416 | |||||||||||
| Bio-Rad Laboratories, Inc., 3.30%, 3/15/27 |
United States | 5,250,000 | 4,955,175 | |||||||||||
| a | CSL Finance PLC, 4.25%, 4/27/32 |
Australia | 5,400,000 | 5,236,398 | ||||||||||
| Illumina, Inc., 5.80%, 12/12/25 |
United States | 5,300,000 | 5,352,958 | |||||||||||
|
|
|
|||||||||||||
| 24,823,947 | ||||||||||||||
|
|
|
|||||||||||||
| Capital Markets 1.4% | ||||||||||||||
| Brixmor Operating Partnership LP, senior bond, 4.125%, 5/15/29 |
United States | 2,400,000 | 2,200,817 | |||||||||||
| a | Credit Suisse Group AG, senior bond, 3.869% to 1/12/28, FRN thereafter, 1/12/29 |
Switzerland | 2,600,000 | 2,321,286 | ||||||||||
| Morgan Stanley, 1.794% to 2/13/31, FRN thereafter, 2/13/32 |
United States | 5,900,000 | 4,635,524 | |||||||||||
|
|
|
|||||||||||||
| 9,157,627 | ||||||||||||||
|
|
|
|||||||||||||
| Chemicals 1.6% | ||||||||||||||
| Celanese U.S. Holdings LLC, 5.90%, 7/05/24 |
United States | 4,700,000 | 4,703,898 | |||||||||||
| DuPont de Nemours, Inc., 5.419%, 11/15/48 |
United States | 5,400,000 | 5,412,757 | |||||||||||
|
|
|
|||||||||||||
| 10,116,655 | ||||||||||||||
|
|
|
|||||||||||||
| Diversified REITs 2.1% | ||||||||||||||
| Essex Portfolio LP, senior bond, 2.65%, 3/15/32 |
United States | 9,000,000 | 7,351,443 | |||||||||||
| a | Global Net Lease, Inc./Global Net Lease Operating Partnership LP, senior note, 3.75%, 12/15/27 |
United States | 2,200,000 | 1,742,979 | ||||||||||
| Simon Property Group LP, senior note, 3.375%, 12/01/27 |
United States | 5,000,000 | 4,670,887 | |||||||||||
|
|
|
|||||||||||||
| 13,765,309 | ||||||||||||||
|
|
|
|||||||||||||
| Diversified Telecommunication Services 1.7% | ||||||||||||||
| Verizon Communications, Inc., senior bond, 3.40%, 3/22/41 |
United States | 14,000,000 | 11,144,379 | |||||||||||
|
|
|
|||||||||||||
| Electric 4.4% | ||||||||||||||
| Baltimore Gas & Electric Co., 4.55%, 6/01/52 |
United States | 2,400,000 | 2,191,623 | |||||||||||
| DTE Electric Co., Series B, 3.65%, 3/01/52 |
United States | 7,500,000 | 5,983,576 | |||||||||||
| NextEra Energy Capital Holdings, Inc., 6.051%, 3/01/25 |
United States | 4,200,000 | 4,274,845 | |||||||||||
| PacifiCorp, 5.35%, 12/01/53 |
United States | 6,800,000 | 6,974,166 | |||||||||||
| Public Service Enterprise Group, Inc., 2.45%, 11/15/31 |
United States | 7,100,000 | 5,882,574 | |||||||||||
| Virginia Electric & Power Co., Series D, 4.65%, 8/15/43 |
United States | 3,050,000 | 2,774,260 | |||||||||||
|
|
|
|||||||||||||
| 28,081,044 | ||||||||||||||
|
|
|
|||||||||||||
| Electric Utilities 6.9% | ||||||||||||||
| a | Comision Federal de Electricidad, 3.348%, 2/09/31 |
Mexico | 1,100,000 | 873,434 | ||||||||||
| Commonwealth Edison Co., first mortgage, Secured, 4.00%, 3/01/48 |
United States | 3,200,000 | 2,727,132 | |||||||||||
| Duke Energy Progress LLC, senior bond, 2.50%, 8/15/50 |
United States | 6,200,000 | 3,898,931 | |||||||||||
| a | EDP Finance BV, 1.71%, 1/24/28 |
Netherlands | 4,200,000 | 3,578,397 | ||||||||||
| franklintempleton.com | Annual Report | 149 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Investment Grade Corporate ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) |
||||||||||||||
| Electric Utilities (continued) | ||||||||||||||
| a | Enel Finance International NV, senior note, 3.625%, 5/25/27 |
Italy | 5,300,000 | $ | 5,032,066 | |||||||||
| Exelon Corp., 4.05%, 4/15/30 |
United States | 6,200,000 | 5,922,426 | |||||||||||
| Georgia Power Co., |
||||||||||||||
| Series 2010-C, 4.75%, 9/01/40 |
United States | 6,000,000 | 5,529,329 | |||||||||||
| senior bond, 4.30%, 3/15/42 |
United States | 2,445,000 | 2,160,301 | |||||||||||
| Public Service Electric & Gas Co., First Mortgage, 3.15%, 1/01/50 |
United States | 3,000,000 | 2,244,175 | |||||||||||
| Virginia Electric & Power Co., Series A, 3.50%, 3/15/27 |
United States | 5,200,000 | 4,998,465 | |||||||||||
| a | Vistra Operations Co. LLC, senior secured note, first lien, 3.55%, 7/15/24 |
United States | 8,100,000 | 7,824,644 | ||||||||||
|
|
|
|||||||||||||
| 44,789,300 | ||||||||||||||
|
|
|
|||||||||||||
| Electronic Equipment, Instruments & Components 1.1% | ||||||||||||||
| Flex Ltd., senior note, 3.75%, 2/01/26 |
Singapore | 3,800,000 | 3,651,118 | |||||||||||
| Teledyne FLIR LLC, 2.50%, 8/01/30 |
United States | 4,000,000 | 3,368,656 | |||||||||||
|
|
|
|||||||||||||
| 7,019,774 | ||||||||||||||
|
|
|
|||||||||||||
| Energy Equipment & Services 1.3% | ||||||||||||||
| Baker Hughes Holdings LLC/Baker Hughes Co.-Obligor, Inc., senior bond, 4.08%, 12/15/47 |
United States | 1,000,000 | 813,990 | |||||||||||
| Kinder Morgan, Inc., 2.00%, 2/15/31 |
United States | 4,400,000 | 3,554,942 | |||||||||||
| a | Schlumberger Holdings Corp., senior bond, 4.30%, 5/01/29 |
United States | 4,000,000 | 3,916,217 | ||||||||||
|
|
|
|||||||||||||
| 8,285,149 | ||||||||||||||
|
|
|
|||||||||||||
| Entertainment 0.2% | ||||||||||||||
| a | Warnermedia Holdings, Inc., 5.05%, 3/15/42 |
United States | 1,400,000 | 1,172,274 | ||||||||||
|
|
|
|||||||||||||
| Environmental Control 0.6% | ||||||||||||||
| Republic Services, Inc., 5.00%, 4/01/34 |
United States | 4,000,000 | 4,077,893 | |||||||||||
|
|
|
|||||||||||||
| Financial Services 4.7% | ||||||||||||||
| AerCap Ireland Capital DAC/AerCap Global Aviation Trust, 3.00%, 10/29/28 |
Ireland | 5,000,000 | 4,368,753 | |||||||||||
| Air Lease Corp., 0.80%, 8/18/24 |
United States | 5,000,000 | 4,666,068 | |||||||||||
| American Express Co., 2.25%, 3/04/25 |
United States | 5,000,000 | 4,765,826 | |||||||||||
| Aon Global Ltd., 4.60%, 6/14/44 |
Ireland | 8,000,000 | 7,142,224 | |||||||||||
| Capital One Financial Corp., 4.985% to 7/24/25, FRN thereafter, 7/24/26 |
United States | 3,300,000 | 3,183,742 | |||||||||||
| Mastercard, Inc., 4.85%, 3/09/33 |
United States | 5,650,000 | 5,870,496 | |||||||||||
|
|
|
|||||||||||||
| 29,997,109 | ||||||||||||||
|
|
|
|||||||||||||
| Food 2.9% | ||||||||||||||
| General Mills, Inc., 5.241%, 11/18/25 |
United States | 3,000,000 | 3,009,563 | |||||||||||
| JBS USA LUX SA/JBS USA Food Co./JBS USA Finance, Inc., |
||||||||||||||
| a3.625%, 1/15/32 |
United States | 1,800,000 | 1,493,496 | |||||||||||
| a2.50%, 1/15/27 |
United States | 3,500,000 | 3,112,253 | |||||||||||
| Kraft Heinz Foods Co., 5.00%, 6/04/42 |
United States | 5,200,000 | 4,991,758 | |||||||||||
| a | Nestle Holdings, Inc., 4.70%, 1/15/53 |
United States | 4,000,000 | 4,045,682 | ||||||||||
| Sysco Corp., 3.30%, 7/15/26 |
United States | 2,000,000 | 1,922,269 | |||||||||||
|
|
|
|||||||||||||
| 18,575,021 | ||||||||||||||
|
|
|
|||||||||||||
| Gas 0.4% | ||||||||||||||
| Piedmont Natural Gas Co., Inc., 5.05%, 5/15/52 |
United States | 3,000,000 | 2,791,441 | |||||||||||
|
|
|
|||||||||||||
| Ground Transportation 1.0% | ||||||||||||||
| Burlington Northern Santa Fe LLC, Sr. Unsecured, 5.75%, 5/01/40 |
United States | 6,000,000 | 6,467,970 | |||||||||||
|
|
|
|||||||||||||
| Health Care Providers & Services 3.9% | ||||||||||||||
| CVS Health Corp., senior bond, 5.30%, 12/05/43 |
United States | 3,000,000 | 2,955,762 | |||||||||||
| Elevance Health, Inc., 4.10%, 5/15/32 |
United States | 8,100,000 | 7,752,421 | |||||||||||
| HCA, Inc., senior secured bond, first lien, 4.50%, 2/15/27 |
United States | 5,800,000 | 5,668,436 | |||||||||||
| STERIS Irish FinCo UnLtd Co., 3.75%, 3/15/51 |
Ireland | 3,300,000 | 2,432,535 | |||||||||||
| UnitedHealth Group, Inc., 3.05%, 5/15/41 |
United States | 8,000,000 | 6,313,910 | |||||||||||
|
|
|
|||||||||||||
| 25,123,064 | ||||||||||||||
|
|
|
|||||||||||||
| 150 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Investment Grade Corporate ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) | ||||||||||||||
| Healthcare-Products 0.8% | ||||||||||||||
| a | GE HealthCare Technologies, Inc., 5.55%, 11/15/24 |
United States | 5,400,000 | $ | 5,434,673 | |||||||||
|
|
|
|||||||||||||
| Home Builders 0.3% | ||||||||||||||
| MDC Holdings, Inc., 2.50%, 1/15/31 |
United States | 2,300,000 | 1,790,949 | |||||||||||
|
|
|
|||||||||||||
| Hotels, Restaurants & Leisure 0.5% | ||||||||||||||
| Las Vegas Sands Corp., Senior unsecured, 3.90%, 8/08/29 |
United States | 2,300,000 | 2,078,349 | |||||||||||
| Marriott International, Inc., Series R, 3.125%, 6/15/26 |
United States | 1,000,000 | 945,380 | |||||||||||
|
|
|
|||||||||||||
| 3,023,729 | ||||||||||||||
|
|
|
|||||||||||||
| Household Products 1.6% | ||||||||||||||
| Haleon U.S. Capital LLC, 3.375%, 3/24/27 |
United States | 5,800,000 | 5,503,187 | |||||||||||
| a | Kimberly-Clark de Mexico SAB de CV, senior bond, 2.431%, 7/01/31 |
Mexico | 5,900,000 | 4,910,065 | ||||||||||
|
|
|
|||||||||||||
| 10,413,252 | ||||||||||||||
|
|
|
|||||||||||||
| Insurance 3.5% | ||||||||||||||
| Aflac, Inc., senior bond, 4.75%, 1/15/49 |
United States | 5,500,000 | 5,153,627 | |||||||||||
| Allstate Corp., senior bond, 4.20%, 12/15/46 |
United States | 4,800,000 | 4,053,507 | |||||||||||
| Berkshire Hathaway Finance Corp., 3.85%, 3/15/52 |
United States | 1,500,000 | 1,258,831 | |||||||||||
| Brown & Brown, Inc., 2.375%, 3/15/31 |
United States | 4,000,000 | 3,200,458 | |||||||||||
| a | MassMutual Global Funding II, 5.05%, 12/07/27 |
United States | 6,000,000 | 6,078,674 | ||||||||||
| MetLife, Inc., junior sub. bond, 6.40%, 12/15/66 |
United States | 3,000,000 | 2,906,715 | |||||||||||
|
|
|
|||||||||||||
| 22,651,812 | ||||||||||||||
|
|
|
|||||||||||||
| Interactive Media & Services 0.2% | ||||||||||||||
| a | Tencent Holdings Ltd., senior note, 3.595%, 1/19/28 |
China | 1,500,000 | 1,417,228 | ||||||||||
|
|
|
|||||||||||||
| Internet 1.1% | ||||||||||||||
| Amazon.com, Inc., 3.95%, 4/13/52 |
United States | 6,000,000 | 5,331,864 | |||||||||||
| Meta Platforms, Inc., 4.45%, 8/15/52 |
United States | 2,200,000 | 1,937,948 | |||||||||||
|
|
|
|||||||||||||
| 7,269,812 | ||||||||||||||
|
|
|
|||||||||||||
| IT Services 0.8% | ||||||||||||||
| Apple, Inc., 2.80%, 2/08/61 |
United States | 7,500,000 | 5,112,648 | |||||||||||
|
|
|
|||||||||||||
| Lodging 0.7% | ||||||||||||||
| Las Vegas Sands Corp., 3.20%, 8/08/24 |
United States | 4,500,000 | 4,356,258 | |||||||||||
|
|
|
|||||||||||||
| Media 2.4% | ||||||||||||||
| Charter Communications Operating LLC/Charter Communications Operating Capital, |
||||||||||||||
| 2.80%, 4/01/31 |
United States | 5,600,000 | 4,510,566 | |||||||||||
| 3.50%, 3/01/42 |
United States | 3,000,000 | 2,029,480 | |||||||||||
| Comcast Corp., |
||||||||||||||
| senior bond, 4.95%, 10/15/58 |
United States | 5,000,000 | 4,849,180 | |||||||||||
| 5.25%, 11/07/25 |
United States | 3,000,000 | 3,066,889 | |||||||||||
| Fox Corp., senior bond, 5.476%, 1/25/39 |
United States | 900,000 | 862,818 | |||||||||||
|
|
|
|||||||||||||
| 15,318,933 | ||||||||||||||
|
|
|
|||||||||||||
| Miscellaneous Manufacturing 0.2% | ||||||||||||||
| Parker-Hannifin Corp., 4.25%, 9/15/27 |
United States | 1,400,000 | 1,374,705 | |||||||||||
|
|
|
|||||||||||||
| Multi-Utilities 0.2% | ||||||||||||||
| Berkshire Hathaway Energy Co., Sr. Unsecured, 5.15%, 11/15/43 |
United States | 1,000,000 | 983,022 | |||||||||||
|
|
|
|||||||||||||
| Oil & Gas 1.4% | ||||||||||||||
| Exxon Mobil Corp., 3.452%, 4/15/51 |
United States | 5,000,000 | 3,988,277 | |||||||||||
| a | Var Energi ASA, 7.50%, 1/15/28 |
Norway | 5,000,000 | 5,186,240 | ||||||||||
|
|
|
|||||||||||||
| 9,174,517 | ||||||||||||||
|
|
|
|||||||||||||
| franklintempleton.com | Annual Report | 151 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Investment Grade Corporate ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) | ||||||||||||||
| Oil, Gas & Consumable Fuels 2.9% | ||||||||||||||
| Aker BP ASA, |
||||||||||||||
| a senior note, 3.75%, 1/15/30 |
Norway | 2,300,000 | $ | 2,078,714 | ||||||||||
| a senior bond, 4.00%, 1/15/31 |
Norway | 2,200,000 | 1,999,543 | |||||||||||
| Canadian Natural Resources Ltd., 3.85%, 6/01/27 |
Canada | 4,125,000 | 3,953,689 | |||||||||||
| Chevron Corp., senior bond, 3.078%, 5/11/50 |
United States | 1,000,000 | 758,418 | |||||||||||
| Exxon Mobil Corp., senior bond, 3.567%, 3/06/45 |
United States | 4,200,000 | 3,489,290 | |||||||||||
| Sabine Pass Liquefaction LLC, first lien, 4.20%, 3/15/28 |
United States | 5,700,000 | 5,479,827 | |||||||||||
| TransCanada PipeLines Ltd., senior note, 6.10%, 6/01/40 |
Canada | 1,200,000 | 1,240,495 | |||||||||||
|
|
|
|||||||||||||
| 18,999,976 | ||||||||||||||
|
|
|
|||||||||||||
| Personal Products 1.3% | ||||||||||||||
| Kenvue, Inc., 4.90%, 3/22/33 |
United States | 8,000,000 | 8,268,695 | |||||||||||
|
|
|
|||||||||||||
| Pharmaceuticals 1.7% | ||||||||||||||
| Bristol-Myers Squibb Co., |
||||||||||||||
| 4.125%, 6/15/39 |
United States | 3,500,000 | 3,263,178 | |||||||||||
| senior bond, 5.00%, 8/15/45 |
United States | 2,400,000 | 2,447,680 | |||||||||||
| 3.70%, 3/15/52 |
United States | 2,300,000 | 1,924,259 | |||||||||||
| CVS Health Corp., 5.00%, 2/20/26 |
United States | 3,000,000 | 3,035,235 | |||||||||||
|
|
|
|||||||||||||
| 10,670,352 | ||||||||||||||
|
|
|
|||||||||||||
| Pipelines 1.4% | ||||||||||||||
| Eastern Gas Transmission & Storage, Inc., 3.90%, 11/15/49 |
United States | 2,600,000 | 1,975,009 | |||||||||||
| Energy Transfer LP, |
||||||||||||||
| 5.15%, 3/15/45 |
United States | 1,700,000 | 1,482,916 | |||||||||||
| 4.90%, 3/15/35 |
United States | 1,200,000 | 1,122,248 | |||||||||||
| Enterprise Products Operating LLC, 5.35%, 1/31/33 |
United States | 1,600,000 | 1,659,040 | |||||||||||
| MPLX LP, 5.00%, 3/01/33 |
United States | 3,000,000 | 2,937,272 | |||||||||||
|
|
|
|||||||||||||
| 9,176,485 | ||||||||||||||
|
|
|
|||||||||||||
| Real Estate Management & Development 0.8% | ||||||||||||||
| Alexandria Real Estate Equities, Inc., 2.95%, 3/15/34 |
United States | 4,000,000 | 3,205,128 | |||||||||||
| ERP Operating LP, senior bond, 4.50%, 7/01/44 |
United States | 2,500,000 | 2,195,889 | |||||||||||
|
|
|
|||||||||||||
| 5,401,017 | ||||||||||||||
|
|
|
|||||||||||||
| Retail 1.1% | ||||||||||||||
| Home Depot, Inc., 3.625%, 4/15/52 |
United States | 4,100,000 | 3,305,198 | |||||||||||
| Target Corp., 2.95%, 1/15/52 |
United States | 5,000,000 | 3,620,594 | |||||||||||
|
|
|
|||||||||||||
| 6,925,792 | ||||||||||||||
|
|
|
|||||||||||||
| Shipbuilding 0.7% | ||||||||||||||
| Huntington Ingalls Industries, Inc., 0.67%, 8/16/23 |
United States | 4,300,000 | 4,228,951 | |||||||||||
|
|
|
|||||||||||||
| Software 2.3% | ||||||||||||||
| Fiserv, Inc., 5.60%, 3/02/33 |
United States | 3,400,000 | 3,528,106 | |||||||||||
| Microsoft Corp., senior bond, 2.675%, 6/01/60 |
United States | 7,600,000 | 5,254,774 | |||||||||||
| Salesforce, Inc., 1.95%, 7/15/31 |
United States | 2,300,000 | 1,927,198 | |||||||||||
| ServiceNow, Inc., 1.40%, 9/01/30 |
United States | 5,200,000 | 4,191,381 | |||||||||||
|
|
|
|||||||||||||
| 14,901,459 | ||||||||||||||
|
|
|
|||||||||||||
| Telecommunications 1.5% | ||||||||||||||
| AT&T, Inc., 3.50%, 6/01/41 |
United States | 1,900,000 | 1,501,112 | |||||||||||
| T-Mobile USA, Inc., 2.875%, 2/15/31 |
United States | 9,600,000 | 8,291,603 | |||||||||||
|
|
|
|||||||||||||
| 9,792,715 | ||||||||||||||
|
|
|
|||||||||||||
| Trucking & Leasing 0.3% | ||||||||||||||
| a | SMBC Aviation Capital Finance DAC, 1.90%, 10/15/26 |
Ireland | 2,000,000 | 1,756,358 | ||||||||||
|
|
|
|||||||||||||
| 152 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Investment Grade Corporate ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) |
||||||||||||||
| Wireless Telecommunication Services 0.6% | ||||||||||||||
| a | Sprint Spectrum Co. LLC/Sprint Spectrum Co. II LLC/Sprint Spectrum Co. III LLC, senior secured bond, first lien, 5.152%, 9/20/29 |
United States | 3,900,000 | $ | 3,877,061 | |||||||||
|
|
|
|||||||||||||
| Total Corporate Bonds & Notes (Cost $692,760,134) |
621,523,828 | |||||||||||||
|
|
|
|||||||||||||
| U.S. Government & Agency Securities 0.3% |
||||||||||||||
| U.S. Treasury Note, 0.125%, 10/15/23 |
United States | 2,000,000 | 1,951,379 | |||||||||||
|
|
|
|||||||||||||
| Total U.S. Government & Agency Securities |
1,951,379 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments before Short-Term Investments |
623,475,207 | |||||||||||||
|
|
|
|||||||||||||
| Short-Term Investments 1.6% |
||||||||||||||
| U.S. Government & Agency Securities 1.6% |
||||||||||||||
| b | Federal Home Loan Bank Discount Notes, 04/3/23 |
United States | 10,670,000 | 10,670,000 | ||||||||||
|
|
|
|||||||||||||
| Total Short-Term Investments (Cost $10,667,421) |
10,670,000 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments (Cost $705,421,110) 98.4% |
634,145,207 | |||||||||||||
| Other Assets, less Liabilities 1.6% |
10,217,382 | |||||||||||||
|
|
|
|||||||||||||
| Net Assets 100.0% |
$ | 644,362,589 | ||||||||||||
|
|
|
|||||||||||||
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $125,027,821, representing 19.4% of net assets.
bThe security was issued on a discount basis with no stated coupon rate.
At March 31, 2023, 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 | $9,078,828 | 6/21/23 | $(293,894 | ) | ||||||||||||||||||
| U.S. Treasury Ultra 10 Yr. (CBT) |
Short | 44 | 5,330,188 | 6/21/23 | (198,406 | ) | ||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Total Futures Contracts |
$(492,300 | ) | ||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
*As of year end.
See Note 8 regarding other derivative information.
See Abbreviations on page 246.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 153 | ||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Municipal Green Bond ETFa
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$24.99 | $26.86 | $26.07 | $25.20 | $24.34 | |||||||||||||||
| Income from investment operationsb: |
||||||||||||||||||||
| Net investment incomec |
0.61 | 0.36 | 0.40 | 0.46 | 0.67 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(1.05 | ) | (1.79 | ) | 0.94 | 1.02 | 0.85 | |||||||||||||
| Total from investment operations |
(0.44 | ) | (1.43 | ) | 1.34 | 1.48 | 1.52 | |||||||||||||
| Less distributions from net investment income |
(0.65 | ) | (0.44 | ) | (0.55 | ) | (0.61 | ) | (0.66 | ) | ||||||||||
| Net asset value, end of year |
$23.90 | $24.99 | $26.86 | $26.07 | $25.20 | |||||||||||||||
| Total returnd |
(1.68)% | (5.44)% | 5.16% | 5.92% | 6.38% | |||||||||||||||
| Ratios to average net assets | ||||||||||||||||||||
| Expenses before waiver and payments by affiliates |
0.60% | 0.66% | 0.78% | 1.00% | 2.05% | |||||||||||||||
| Expenses net of waiver and payments by affiliates |
0.30% | 0.30% | 0.30% | 0.30% | 0.30% | |||||||||||||||
| Net investment income |
2.57% | 1.34% | 1.50% | 1.77% | 2.74% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$112,349 | $104,939 | $126,221 | $28,674 | $8,820 | |||||||||||||||
| Portfolio turnover ratee |
66.77%f | 48.41%f | 11.86%f | 17.21%f | 21.21% | |||||||||||||||
aEffective August 1, 2022, Formerly, Franklin Liberty Federal Tax-Free Bond ETF was renamed Franklin Municipal Green Bond 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.
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: | 66.77% | 48.41% | 11.86% | 17.21% | — |
| 154 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin Municipal Green Bond ETF
| Principal Amount* | Value | |||||||||
| Municipal Bonds 99.1% |
||||||||||
| Alabama 0.3% | ||||||||||
| a | County of Mobile, Gomesa Projects, 4.00%, 11/01/45 |
400,000 | $ | 347,202 | ||||||
|
|
|
|||||||||
| Arizona 0.6% | ||||||||||
| Arizona State University, Series B, 5.00%, 7/01/42 |
235,000 | 246,034 | ||||||||
| City of Phoenix Civic Improvement Corp., 5.00%, 7/01/44 |
360,000 | 396,577 | ||||||||
|
|
|
|||||||||
| 642,611 | ||||||||||
|
|
|
|||||||||
| Arkansas 0.4% | ||||||||||
| Central Arkansas Water, 4.00%, 10/01/33 |
375,000 | 392,663 | ||||||||
|
|
|
|||||||||
| California 29.1% | ||||||||||
| Alameda Community Facilities District, 5.00%, 9/01/48 |
1,000,000 | 986,942 | ||||||||
| California Community Choice Financing Authority, |
||||||||||
| b 5.00%, 7/01/53 |
3,500,000 | 3,681,286 | ||||||||
| b 5.00%, 12/01/53 |
2,500,000 | 2,613,635 | ||||||||
| b 5.25%, 1/01/54 |
2,000,000 | 2,048,215 | ||||||||
| b Green Bond, VRDN, 4.00%, 10/01/52 |
500,000 | 498,973 | ||||||||
| California Housing Finance Agency, Lakeside Drive Senior Housing LP, Series 2019, 2.35%, 12/01/35 |
94,865 | 84,464 | ||||||||
| California Infrastructure & Economic Development Bank, |
||||||||||
| 4.00%, 5/01/51 |
1,000,000 | 925,195 | ||||||||
| 5.00%, 8/01/49 |
180,000 | 193,186 | ||||||||
| California Science Center Foundation, 4.00%, 5/01/46 |
790,000 | 748,275 | ||||||||
| b FRN thereafter, 4.32%, 8/01/47 |
3,100,000 | 3,065,206 | ||||||||
| California Municipal Finance Authority, 4.00%, 5/15/39 |
3,445,000 | 3,442,451 | ||||||||
| a | California School Finance Authority, 5.75%, 7/01/42 |
250,000 | 247,966 | |||||||
| California State Public Works Board, |
||||||||||
| 4.00%, 5/01/40 |
1,000,000 | 1,021,860 | ||||||||
| 4.00%, 5/01/47 |
1,500,000 | 1,488,323 | ||||||||
| California Air Resources Board, Series 2022D, 4.00%, 5/01/44 |
1,000,000 | 998,758 | ||||||||
| City of Foster City, 4.00%, 8/01/32 |
135,000 | 143,537 | ||||||||
| City of Los Angeles Department of Airports Customer Facility Charge Revenue, Department of Airports Customer Facility Charge Revenue, 4.058%, 5/15/37 |
1,000,000 | 898,294 | ||||||||
| City of San Francisco Public Utilities Commission Water Revenue, Series A, 4.00%, 11/01/50 |
100,000 | 100,019 | ||||||||
| Los Angeles County Metropolitan Transportation Authority Sales Tax Revenue, 5.00%, 7/01/44 . |
150,000 | 162,218 | ||||||||
| Peninsula Corridor Joint Powers Board, Series 2022A, 5.00%, 6/01/38 |
1,000,000 | 1,147,909 | ||||||||
| Perris Joint Powers Authority, Refunding, Series 2017B, 5.00%, 9/01/37 |
100,000 | 104,196 | ||||||||
| Port of Los Angeles, 5.00%, 8/01/25 |
95,000 | 99,531 | ||||||||
| San Diego Association of Governments, Green Bond, 5.00%, 11/15/24 |
2,000,000 | 2,030,891 | ||||||||
| San Diego County Regional Airport Authority, 5.00%, 7/01/51 |
2,000,000 | 2,087,128 | ||||||||
| San Francisco Bay Area Rapid Transit District, |
||||||||||
| 3.00%, 8/01/36 |
170,000 | 163,780 | ||||||||
| 4.25%, 8/01/52 |
1,000,000 | 1,024,538 | ||||||||
| Santa Cruz County Capital Financing Authority, 4.00%, 6/01/42 |
1,500,000 | 1,512,720 | ||||||||
| Southern California Public Power Authority, 4.00%, 7/01/38 |
150,000 | 153,285 | ||||||||
| Three Rivers Levee Improvement Authority, |
||||||||||
| 4.00%, 9/01/32 |
100,000 | 101,121 | ||||||||
| Community Facilities District No 2006-1, Refunding, 4.00%, 9/01/27 |
250,000 | 255,021 | ||||||||
| Refunding, 4.00%, 9/01/29 |
250,000 | 256,769 | ||||||||
| Refunding, 4.00%, 9/01/31 |
200,000 | 203,365 | ||||||||
| Transbay Joint Powers Authority, |
||||||||||
| 5.00%, 10/01/34 |
150,000 | 163,509 | ||||||||
| Redevelopment Project Green Bond Subordinate Tax, 2.40%, 10/01/49 |
95,000 | 90,773 | ||||||||
|
|
|
|||||||||
| 32,743,339 | ||||||||||
|
|
|
|||||||||
| Colorado 1.9% | ||||||||||
| Board of Water Commissioners City & County of Denver, Series A, 5.00%, 9/15/47 |
150,000 | 161,088 | ||||||||
| b | City & County of Denver, 3.70%, 12/01/31 |
300,000 | 300,000 | |||||||
| franklintempleton.com | Annual Report | 155 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Municipal Green Bond ETF (continued)
| Principal Amount* | Value | |||||||||
| Municipal Bonds (continued) |
||||||||||
| Colorado (continued) | ||||||||||
| University of Colorado, |
||||||||||
| 5.00%, 6/01/27 |
150,000 | $ | 166,107 | |||||||
| b Refunding, VRDN, 2.00%, 6/01/51 |
1,500,000 | 1,462,282 | ||||||||
|
|
|
|||||||||
| 2,089,477 | ||||||||||
|
|
|
|||||||||
| Connecticut 0.8% | ||||||||||
| Connecticut State Health & Educational Facilities Authority, 4.00%, 7/01/31 |
145,000 | 161,637 | ||||||||
| Hartford County Metropolitan District Clean Water Project Revenue, Clean Water Project Revenue, Refunding, Series 2021A, 4.00%, 2/01/39 |
745,000 | 760,654 | ||||||||
|
|
|
|||||||||
| 922,291 | ||||||||||
|
|
|
|||||||||
| District of Columbia 3.4% | ||||||||||
| District of Columbia, |
||||||||||
| 5.50%, 8/31/33 |
155,000 | 172,282 | ||||||||
| 5.50%, 2/28/37 |
845,000 | 899,978 | ||||||||
| District of Columbia Water & Sewer Authority, |
||||||||||
| Series A, 5.00%, 10/01/44 |
340,000 | 369,916 | ||||||||
| Sub Series 2019A, 4.00%, 10/01/49 |
1,515,000 | 1,490,683 | ||||||||
| Sub Series 2022B, 5.00%, 10/01/34 |
715,000 | 859,749 | ||||||||
|
|
|
|||||||||
| 3,792,608 | ||||||||||
|
|
|
|||||||||
| Florida 1.3% | ||||||||||
| Babcock Ranch Community Independent Special District, 4.00%, 5/01/40 |
840,000 | 751,398 | ||||||||
| City of Tampa, 5.00%, 5/01/36 |
135,000 | 148,921 | ||||||||
| County of Palm Beach Water & Sewer Revenue, 4.00%, 10/01/31 |
100,000 | 108,961 | ||||||||
| Somerset Community Development District, |
||||||||||
| 4.00%, 5/01/32 |
415,000 | 391,539 | ||||||||
| 4.20%, 5/01/37 |
50,000 | 45,659 | ||||||||
|
|
|
|||||||||
| 1,446,478 | ||||||||||
|
|
|
|||||||||
| Georgia 1.7% | ||||||||||
| b | Athens-Clarke County Unified Government Development Authority, University of Georgia Athletic Association, Inc., Series 2005B, Daily, VRDN, 3.75%, 7/01/35 |
500,000 | 500,000 | |||||||
| Cobb County Kennestone Hospital Authority, WellStar Health System Obligated Group, 3.00%, 4/01/37 |
910,000 | 815,825 | ||||||||
| b | Main Street Natural Gas, Inc., Series 2018B, Monthly, VRDN, 3.874%, 4/01/48 |
425,000 | 425,442 | |||||||
| Private Colleges & Universities Authority, 5.00%, 9/01/48 |
100,000 | 108,291 | ||||||||
|
|
|
|||||||||
| 1,849,558 | ||||||||||
|
|
|
|||||||||
| Illinois 3.6% | ||||||||||
| Illinois Finance Authority, |
||||||||||
| 4.00%, 7/01/37 |
425,000 | 442,508 | ||||||||
| State of Illinois Water Revolving Fund - Clean Water Program, 4.00%, 7/01/38 |
1,435,000 | 1,483,566 | ||||||||
| Metropolitan Water Reclamation District of Greater Chicago, Green Bond, Series 2021B, 5.00%, 12/01/33 |
1,685,000 | 1,974,779 | ||||||||
| a | Upper Illinois River Valley Development Authority, Refunding, 3.50%, 12/01/32 |
149,011 | 129,497 | |||||||
|
|
|
|||||||||
| 4,030,350 | ||||||||||
|
|
|
|||||||||
| Indiana 1.0% | ||||||||||
| Indianapolis Local Public Improvement Bond Bank, |
||||||||||
| 5.00%, 1/15/27 |
610,000 | 668,353 | ||||||||
| 5.00%, 7/15/27 |
450,000 | 498,550 | ||||||||
|
|
|
|||||||||
| 1,166,903 | ||||||||||
|
|
|
|||||||||
| Kentucky 0.4% | ||||||||||
| b | City of Berea, 3.84%, 6/01/32 |
500,000 | 500,000 | |||||||
|
|
|
|||||||||
| 156 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Municipal Green Bond ETF (continued)
| Principal Amount* | Value | |||||||||
| Municipal Bonds (continued) |
||||||||||
| Louisiana 3.0% | ||||||||||
| Louisiana Local Government Environmental Facilities & Community Development Authority, |
||||||||||
| a 3.90%, 11/01/44 |
480,000 | $ | 410,771 | |||||||
| a 4.50%, 11/01/47 |
1,000,000 | 925,678 | ||||||||
| a Parish of St Bernard LA, 4.00%, 11/01/45 |
1,000,000 | 868,004 | ||||||||
| Terrebonne Levee & Conservation District Sales Tax Revenue, |
||||||||||
| Series 2020B, 4.00%, 6/01/39 |
1,000,000 | 1,004,901 | ||||||||
| Series B, 4.00%, 6/01/40 |
100,000 | 99,998 | ||||||||
|
|
|
|||||||||
| 3,309,352 | ||||||||||
|
|
|
|||||||||
| Maine 0.2% | ||||||||||
| City of Portland General Airport Revenue, 4.00%, 1/01/35 |
245,000 | 250,290 | ||||||||
|
|
|
|||||||||
| Maryland 5.0% | ||||||||||
| Maryland Community Development Administration, Series 2021C, 0.375%, 7/01/23 |
500,000 | 496,883 | ||||||||
| Maryland Economic Development Corp., 5.25%, 6/30/47 |
2,000,000 | 2,041,490 | ||||||||
| Maryland Health & Higher Educational Facilities Authority, Adventist Healthcare Obligated Group, Refunding, 4.00%, 1/01/30 |
365,000 | 372,963 | ||||||||
| b | Montgomery County Housing Opportunities Commission, 3.65%, 1/01/63 |
2,650,000 | 2,650,000 | |||||||
| Washington Suburban Sanitary Commission, 3.00%, 6/01/35 |
100,000 | 97,220 | ||||||||
|
|
|
|||||||||
| 5,658,556 | ||||||||||
|
|
|
|||||||||
| Massachusetts 2.4% | ||||||||||
| Massachusetts Development Finance Agency, |
||||||||||
| 4.00%, 7/01/47 |
135,000 | 121,149 | ||||||||
| Springfield College, Green Bond, 5.00%, 6/01/26 |
420,000 | 436,260 | ||||||||
| Springfield College, Green Bond, 5.00%, 6/01/27 |
440,000 | 461,180 | ||||||||
| Massachusetts Housing Finance Agency, |
||||||||||
| Series C-1, 2.65%, 12/01/34 |
100,000 | 90,882 | ||||||||
| Sustainability Bond, Series 2021B-1, 2.60%, 12/01/41 |
2,000,000 | 1,538,054 | ||||||||
|
|
|
|||||||||
| 2,647,525 | ||||||||||
|
|
|
|||||||||
| Michigan 0.1% | ||||||||||
| b | Green Lake Township Economic Development Corp., Interlochen Center for the Arts, VRDN, 3.65%, 6/01/34 |
100,000 | 100,000 | |||||||
|
|
|
|||||||||
| Minnesota 1.5% | ||||||||||
| City of Minneapolis, 3.00%, 12/01/40 |
100,000 | 89,007 | ||||||||
| Minnesota Higher Education Facilities Authority, Series A, 5.00%, 10/01/52 |
1,500,000 | 1,577,645 | ||||||||
|
|
|
|||||||||
| 1,666,652 | ||||||||||
|
|
|
|||||||||
| Mississippi 0.6% | ||||||||||
| a | Mississippi Development Bank, County of Jackson Project, 3.625%, 11/01/36 |
500,000 | 449,292 | |||||||
| a | Mississippi Home Corp., Patriot Services Group Obligated Group, 5.20%, 6/01/36 |
280,000 | 231,020 | |||||||
|
|
|
|||||||||
| 680,312 | ||||||||||
|
|
|
|||||||||
| New Jersey 3.6% | ||||||||||
| City of Newark Mass Transit Access Tax Revenue, 6.00%, 11/15/62 |
1,000,000 | 1,141,793 | ||||||||
| New Jersey Educational Facilities Authority, Series A, 5.00%, 7/01/32 |
645,000 | 707,828 | ||||||||
| b | New Jersey Health Care Facilities Financing Authority, 2.95%, 7/01/43 |
500,000 | 500,000 | |||||||
| Newark Board of Education, |
||||||||||
| 5.00%, 7/15/30 |
620,000 | 707,526 | ||||||||
| 5.00%, 7/15/31 |
575,000 | 665,069 | ||||||||
| Sustainability Bonds, 5.00%, 7/15/25 |
250,000 | 262,795 | ||||||||
|
|
|
|||||||||
| 3,985,011 | ||||||||||
|
|
|
|||||||||
| franklintempleton.com | Annual Report | 157 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Municipal Green Bond ETF (continued)
| Principal Amount* | Value | |||||||||
| Municipal Bonds (continued) |
||||||||||
| New Mexico 0.2% | ||||||||||
| City of Santa Fe Wastewater Utility System Revenue, |
||||||||||
| 5.00%, 6/01/29 |
100,000 | $ | 112,809 | |||||||
| Wastewater Utility System Revenue, 4.00%, 6/01/35 |
100,000 | 105,091 | ||||||||
|
|
|
|||||||||
| 217,900 | ||||||||||
|
|
|
|||||||||
| New York 9.1% | ||||||||||
| Battery Park City Authority, 5.00%, 11/01/49 |
100,000 | 108,740 | ||||||||
| Metropolitan Transportation Authority, |
||||||||||
| Climate Bond Certified, 5.00%, 11/15/32 |
605,000 | 669,879 | ||||||||
| Green Bond, Series 2021A-1, 4.00%, 11/15/45 |
2,000,000 | 1,861,162 | ||||||||
| Refunding, Series 2017B, 5.00%, 11/15/28 |
430,000 | 465,622 | ||||||||
| Series A-1-GROUP 1, 4.00%, 11/15/41 |
600,000 | 591,000 | ||||||||
| Series B, 5.00%, 11/15/24 |
150,000 | 154,334 | ||||||||
| Series B-2, 4.00%, 11/15/32 |
215,000 | 224,883 | ||||||||
| New York Liberty Development Corp., |
||||||||||
| 7 World Trade Center II LLC, Refunding , Sereis 2022A1, 3.00%, 9/15/43 |
1,000,000 | 831,139 | ||||||||
| Green Bonds- 4 World Trade, Refunding, 2.50%, 11/15/36 |
2,000,000 | 1,638,098 | ||||||||
| New York Power Authority, 5.00%, 11/15/29 |
1,250,000 | 1,466,946 | ||||||||
| New York State Dormitory Authority, 5.00%, 7/01/35 |
100,000 | 124,897 | ||||||||
| New York State Housing Finance Agency, |
||||||||||
| Series N, 2.60%, 11/01/34 |
100,000 | 89,237 | ||||||||
| Series P, 2.00%, 5/01/28 |
100,000 | 94,451 | ||||||||
| b Sustainability Bonds, Series 2022A, VRDN, 2.50%, 11/01/60 |
1,500,000 | 1,454,046 | ||||||||
| b | Triborough Bridge & Tunnel Authority, Refunding, Series 2001C, Daily, VRDN, 3.62%, 1/01/32 |
500,000 | 500,000 | |||||||
|
|
|
|||||||||
| 10,274,434 | ||||||||||
|
|
|
|||||||||
| North Carolina 0.2% | ||||||||||
| b | Charlotte-Mecklenburg Hospital Authority, 3.65%, 1/15/38 |
200,000 | 200,000 | |||||||
|
|
|
|||||||||
| Ohio 5.4% | ||||||||||
| American Municipal Power, Inc., |
||||||||||
| 4.00%, 2/15/41 |
1,380,000 | 1,346,364 | ||||||||
| 5.00%, 2/15/44 |
1,660,000 | 1,745,549 | ||||||||
| Ohio State University, 4.00%, 12/01/39 |
2,730,000 | 2,803,145 | ||||||||
| State of Ohio, |
||||||||||
| Series A, 4.00%, 3/01/30 |
100,000 | 110,428 | ||||||||
| Series B, 4.00%, 3/01/24 |
50,000 | 50,664 | ||||||||
|
|
|
|||||||||
| 6,056,150 | ||||||||||
|
|
|
|||||||||
| Oregon 2.9% | ||||||||||
| Hospital Facilities Authority of Multnomah County Oregon, Terwilliger Plaza Inc Obligated Group, Refunding, 4.00%, 12/01/51 |
500,000 | 348,788 | ||||||||
| Port of Portland Airport Revenue, |
||||||||||
| 5.50%, 7/01/53 |
2,250,000 | 2,473,159 | ||||||||
| Series 2020-27A, 5.00%, 7/01/36 |
150,000 | 163,610 | ||||||||
| b | State of Oregon, 3.80%, 6/01/39 |
300,000 | 300,000 | |||||||
|
|
|
|||||||||
| 3,285,557 | ||||||||||
|
|
|
|||||||||
| Pennsylvania 1.7% | ||||||||||
| School District of Philadelphia, |
||||||||||
| Green Bond, Series 2019B, 5.00%, 9/01/29 |
1,600,000 | 1,801,762 | ||||||||
| Series B, 5.00%, 9/01/31 |
100,000 | 115,775 | ||||||||
|
|
|
|||||||||
| 1,917,537 | ||||||||||
|
|
|
|||||||||
| Puerto Rico 0.7% | ||||||||||
| HTA HRRB Custodial Trust, 5.50%, 7/01/28 |
550,000 | 567,335 | ||||||||
| HTA TRRB Custodial Trust, 5.25%, 7/01/36 |
200,000 | 201,580 | ||||||||
|
|
|
|||||||||
| 768,915 | ||||||||||
|
|
|
|||||||||
| 158 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Municipal Green Bond ETF (continued)
| Principal Amount* | Value | |||||||||
| Municipal Bonds (continued) |
||||||||||
| Rhode Island 0.2% | ||||||||||
| Rhode Island Housing & Mortgage Finance Corp., 2.75%, 10/01/34 |
150,000 | $ | 136,826 | |||||||
| Rhode Island Infrastructure Bank, Series A, 4.00%, 10/01/27 |
50,000 | 53,037 | ||||||||
|
|
|
|||||||||
| 189,863 | ||||||||||
|
|
|
|||||||||
| Tennessee 1.1% | ||||||||||
| City of Kingsport, Series 2017B, 3.00%, 3/01/35 |
130,000 | 126,240 | ||||||||
| b | Metropolitan Government Nashville & Davidson County Industrial Development Board, Waste Management, Inc. of Tennessee Project, VRDN, 0.58%, 8/01/31 |
1,200,000 | 1,145,608 | |||||||
|
|
|
|||||||||
| 1,271,848 | ||||||||||
|
|
|
|||||||||
| Texas 0.9% | ||||||||||
| Harris County Flood Control District, Series 2022A, 4.25%, 10/01/47 |
1,000,000 | 1,015,139 | ||||||||
|
|
|
|||||||||
| Utah 6.2% | ||||||||||
| Central Valley Water Reclamation Facility, Series C, 4.00%, 3/01/47 |
3,050,000 | 3,010,328 | ||||||||
| City of Spanish Fork City Sewer Revenue, 5.00%, 9/01/26 |
175,000 | 189,281 | ||||||||
| Intermountain Power Agency, Series A, 5.00%, 7/01/43 |
3,000,000 | 3,323,836 | ||||||||
| Utah Infrastructure Agency, 4.00%, 10/15/30 |
500,000 | 476,448 | ||||||||
|
|
|
|||||||||
| 6,999,893 | ||||||||||
|
|
|
|||||||||
| Vermont 0.7% | ||||||||||
| City of Burlington Electric System Revenue, Electric System Revenue, Series 2022A, 5.00%, 7/01/31 |
500,000 | 585,235 | ||||||||
| Vermont Educational & Health Buildings Financing Agency, 5.00%, 12/01/38 |
195,000 | 202,797 | ||||||||
|
|
|
|||||||||
| 788,032 | ||||||||||
|
|
|
|||||||||
| Virginia 1.2% | ||||||||||
| Charles City County Economic Development Authority, Waste Management, Inc., AMT, 1.45%, 4/01/27 |
1,100,000 | 986,879 | ||||||||
| City of Hampton, |
||||||||||
| 3.00%, 9/01/35 |
240,000 | 235,992 | ||||||||
| 4.00%, 9/01/31 |
100,000 | 111,198 | ||||||||
| 5.00%, 9/01/27 |
50,000 | 55,753 | ||||||||
|
|
|
|||||||||
| 1,389,822 | ||||||||||
|
|
|
|||||||||
| Washington 2.0% | ||||||||||
| Central Puget Sound Regional Transit Authority, |
||||||||||
| 4.00%, 11/01/46 |
2,000,000 | 1,991,342 | ||||||||
| Series S-1, 5.00%, 11/01/32 |
150,000 | 159,669 | ||||||||
| FYI Properties, 5.00%, 6/01/24 |
135,000 | 138,431 | ||||||||
|
|
|
|||||||||
| 2,289,442 | ||||||||||
|
|
|
|||||||||
| Wisconsin 5.7% | ||||||||||
| Milwaukee Metropolitan Sewerage District, |
||||||||||
| 3.00%, 10/01/32 |
1,000,000 | 993,844 | ||||||||
| Series A, 3.00%, 10/01/35 |
150,000 | 143,169 | ||||||||
| Public Finance Authority, |
||||||||||
| RED River Valley Alliance LLC, AMT, 4.00%, 9/30/51 |
2,265,000 | 1,873,901 | ||||||||
| RED River Valley Alliance LLC, AMT, 4.00%, 3/31/56 |
500,000 | 403,677 | ||||||||
| a,b VRDN, 3.50%, 12/01/50 |
200,000 | 162,777 | ||||||||
| franklintempleton.com | Annual Report | 159 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Municipal Green Bond ETF (continued)
| Principal Amount* | Value | |||||||||
| Municipal Bonds (continued) |
||||||||||
| Wisconsin (continued) | ||||||||||
| University of Wisconsin Hospitals & Clinics, Obligated Group, Green Bond, 4.00%, 4/01/46 |
3,000,000 | $ | 2,844,821 | |||||||
|
|
|
|||||||||
| 6,422,189 | ||||||||||
|
|
|
|||||||||
| Total Investments (Cost $114,556,326) 99.1% |
111,307,899 | |||||||||
| Other Assets, less Liabilities 0.9% |
1,041,031 | |||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 112,348,930 | ||||||||
|
|
|
|||||||||
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $3,772,207, representing 3.4% of net assets.
bVariable rate security. The rate shown represents the yield at period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 246.
| 160 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Senior Loan ETFa
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019b | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$24.70 | $24.83 | $22.85 | $24.85 | $25.00 | |||||||||||||||
| Income from investment operationsc: |
||||||||||||||||||||
| Net investment incomed |
1.49 | 0.91 | 0.70 | 0.99 | 0.81 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(0.92 | ) | (0.23 | ) | 1.99 | (1.90 | ) | (0.21 | ) | |||||||||||
| Total from investment operations |
0.57 | 0.68 | 2.69 | (0.91 | ) | 0.60 | ||||||||||||||
| Less distributions from net investment income |
(1.44 | ) | (0.81 | ) | (0.71 | ) | (1.09 | ) | (0.75 | ) | ||||||||||
| Net asset value, end of year |
$23.83 | $24.70 | $24.83 | $22.85 | $24.85 | |||||||||||||||
| Total returne |
2.53% | 2.76% | 11.91% | (3.92)% | 2.44% | |||||||||||||||
| Ratios to average net assetsf | ||||||||||||||||||||
| Expenses before waiver and payments by affiliates |
0.45% | 0.58% | 0.92% | 0.97% | 1.00% | |||||||||||||||
| Expenses net of waiver and payments by affiliates |
0.45% | 0.45% | 0.45% | 0.45% | 0.45% | |||||||||||||||
| Net investment income |
6.28% | 3.72% | 2.88% | 4.02% | 3.90% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$206,120 | $292,722 | $201,101 | $54,833 | $57,165 | |||||||||||||||
| Portfolio turnover rateg |
26.07%h | 35.67%h | 45.87%h | 51.48%h | 10.62% | |||||||||||||||
a Effective August 1, 2022, Formerly, Franklin Liberty Senior Loan ETF was renamed Franklin Senior Loan ETF.
b For the period May 30, 2018 (commencement of operations) to March 31, 2019.
c The amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
d Based on average daily shares outstanding.
e Total 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.
f Ratios are annualized for periods less than one year.
g Portfolio 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: | 26.08% | 35.67% | 45.87% | 51.48% | — |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 161 | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin Senior Loan ETF
| Country | Principal Amount | Value | ||||||||||||
| Corporate Bonds & Notes 4.4% | ||||||||||||||
| Airlines 0.9% | ||||||||||||||
| a | Air Canada, 3.875%, 8/15/26 |
Canada | 700,000 | $ | 636,343 | |||||||||
| a | American Airlines, Inc./AAdvantage Loyalty IP Ltd., senior secured note, 5.50%, 4/20/26 |
United States | 800,000 | 788,274 | ||||||||||
| a | Delta Air Lines, Inc./SkyMiles IP Ltd., first lien, 4.50%, 10/20/25 |
United States | 229,169 | 225,465 | ||||||||||
| a | United Airlines, Inc., 4.375%, 4/15/26 |
United States | 140,000 | 134,103 | ||||||||||
|
|
|
|||||||||||||
| 1,784,185 | ||||||||||||||
|
|
|
|||||||||||||
| Chemicals 0.4% | ||||||||||||||
| a | ASP Unifrax Holdings, Inc., 5.25%, 9/30/28 |
United States | 419,400 | 335,646 | ||||||||||
| a | SCIH Salt Holdings, Inc., senior secured note, 4.875%, 5/01/28 |
United States | 500,000 | 446,360 | ||||||||||
|
|
|
|||||||||||||
| 782,006 | ||||||||||||||
|
|
|
|||||||||||||
| Commercial Services & Supplies 0.1% | ||||||||||||||
| a | MPH Acquisition Holdings LLC, senior secured, 5.50%, 9/01/28 |
United States | 213,000 | 169,537 | ||||||||||
|
|
|
|||||||||||||
| Communications Equipment 0.1% | ||||||||||||||
| a | CommScope, Inc., senior secured, 4.75%, 9/01/29 |
United States | 288,500 | 240,753 | ||||||||||
|
|
|
|||||||||||||
| Construction Materials 0.2% | ||||||||||||||
| a | Cemex SAB de CV, senior secured note, 5.20%, 9/17/30 |
Mexico | 375,000 | 346,234 | ||||||||||
|
|
|
|||||||||||||
| Containers & Packaging 0.2% | ||||||||||||||
| a | Pactiv Evergreen Group Issuer, Inc./Pactiv Evergreen Group Issuer LLC, senior secured note, 4.00%, 10/15/27 |
United States | 400,000 | 359,686 | ||||||||||
|
|
|
|||||||||||||
| Electric 0.3% | ||||||||||||||
| a | Calpine Corp., first lien, 4.50%, 2/15/28 |
United States | 800,000 | 743,055 | ||||||||||
|
|
|
|||||||||||||
| Entertainment 0.1% | ||||||||||||||
| a | International Game Technology PLC, senior secured note, first lien, 5.25%, 1/15/29 |
United Kingdom | 300,000 | 287,550 | ||||||||||
|
|
|
|||||||||||||
| Environmental Control 0.3% | ||||||||||||||
| a | GFL Environmental, Inc., 3.50%, 9/01/28 |
Canada | 600,000 | 543,561 | ||||||||||
|
|
|
|||||||||||||
| Financial Services 0.4% | ||||||||||||||
| a | Altice France SA, senior secured, 5.125%, 7/15/29 |
France | 500,000 | 376,725 | ||||||||||
| a | Jane Street Group/JSG Finance, Inc., senior secured, 4.50%, 11/15/29 |
United States | 300,000 | 268,938 | ||||||||||
| a | Vmed O2 U.K. Financing I PLC, senior secured bond, 4.25%, 1/31/31 |
United Kingdom | 210,000 | 178,920 | ||||||||||
|
|
|
|||||||||||||
| 824,583 | ||||||||||||||
|
|
|
|||||||||||||
| Insurance 0.2% | ||||||||||||||
| a | Acrisure LLC/Acrisure Finance, Inc., 4.25%, 2/15/29 |
United States | 500,000 | 426,933 | ||||||||||
|
|
|
|||||||||||||
| Media 0.3% | ||||||||||||||
| a | Directv Financing LLC/Directv Financing Co.-Obligor, Inc., 5.875%, 8/15/27 |
.United States | 750,000 | 679,995 | ||||||||||
| a | Univision Communications, Inc., senior secured note, first lien, 5.125%, 2/15/25 |
United States | 44,444 | 43,705 | ||||||||||
|
|
|
|||||||||||||
| 723,700 | ||||||||||||||
|
|
|
|||||||||||||
| Oil, Gas & Consumable Fuels 0.1% | ||||||||||||||
| Cheniere Energy, Inc., senior secured, 4.625%, 10/15/28 |
United States | 150,000 | 142,716 | |||||||||||
| a | Weatherford International Ltd., 6.50%, 9/15/28 |
United States | 44,600 | 44,718 | ||||||||||
|
|
|
|||||||||||||
| 187,434 | ||||||||||||||
|
|
|
|||||||||||||
| Packaging & Containers 0.4% | ||||||||||||||
| a | Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc., 4.125%, 8/15/26 |
United States | 500,000 | 466,927 | ||||||||||
| a | Mauser Packaging Solutions Holding Co., 7.875%, 8/15/26 |
United States | 305,600 | 305,877 | ||||||||||
|
|
|
|||||||||||||
| 772,804 | ||||||||||||||
|
|
|
|||||||||||||
| 162 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Senior Loan ETF (continued)
| Country | Principal Amount | Value | ||||||||||||
| Corporate Bonds & Notes (continued) | ||||||||||||||
| Pharmaceuticals 0.3% | ||||||||||||||
| a,b | Endo Luxembourg Finance Co. I Sarl/Endo U.S., Inc., 6.125%, 4/01/29 |
United States | 925,000 | $ | 685,083 | |||||||||
|
|
|
|||||||||||||
| Specialty Retail 0.1% | ||||||||||||||
| a | Staples, Inc., 7.50%, 4/15/26 |
United States | 161,000 | 141,213 | ||||||||||
|
|
|
|||||||||||||
| Total Corporate Bonds & Notes (Cost $9,636,911) |
9,018,317 | |||||||||||||
|
|
|
|||||||||||||
| c | Senior Floating Rate Interests 89.0% | |||||||||||||
| Aerospace & Defense 2.2% | ||||||||||||||
| Madison IAQ LLC, Term Loan, 8.302%, 6/21/28 |
United States | 1,715,190 | 1,636,506 | |||||||||||
| Peraton Corp., Term Loan B, 8.59%, 2/01/28 |
United States | 2,924,043 | 2,893,589 | |||||||||||
|
|
|
|||||||||||||
| 4,530,095 | ||||||||||||||
|
|
|
|||||||||||||
| Air Freight & Logistics 1.5% | ||||||||||||||
| First Student Bidco, Inc., |
||||||||||||||
| d Term Loan C, 8.143%, 7/21/28 |
United States | 378,538 | 363,532 | |||||||||||
| d Term Loan B, 8.143%, 7/21/28 |
United States | 1,012,648 | 972,507 | |||||||||||
| Kenan Advantage Group, Inc., 2021 Term Loan B1, 8.59%, 3/24/26 |
United States | 1,749,417 | 1,739,944 | |||||||||||
|
|
|
|||||||||||||
| 3,075,983 | ||||||||||||||
|
|
|
|||||||||||||
| Automobile Components 0.8% | ||||||||||||||
| Clarios Global LP, 2021 USD Term Loan B, 8.09%, 4/30/26 |
United States | 1,755,327 | 1,749,473 | |||||||||||
|
|
|
|||||||||||||
| Automobile Manufacturers 0.7% | ||||||||||||||
| American Trailer World Corp., Term Loan B, 8.657%, 3/03/28 |
United States | 1,595,532 | 1,398,085 | |||||||||||
|
|
|
|||||||||||||
| Automotive Parts & Equipment 2.7% | ||||||||||||||
| DexKo Global, Inc., 2021 USD Term Loan B, 8.909%, 10/04/28 |
United States | 1,289,244 | 1,211,084 | |||||||||||
| First Brands Group LLC, |
||||||||||||||
| 2022 Incremental Term Loan, 10.246%, 3/30/27 |
United States | 350,877 | 337,719 | |||||||||||
| 2021 Term Loan, 10.252%, 3/30/27 |
United States | 2,311,456 | 2,231,999 | |||||||||||
| Truck Hero, Inc., 2021 Term Loan B, 8.59%, 1/31/28 |
United States | 2,066,376 | 1,846,462 | |||||||||||
|
|
|
|||||||||||||
| 5,627,264 | ||||||||||||||
|
|
|
|||||||||||||
| Building Products 1.8% | ||||||||||||||
| Allied Universal Holdco LLC, 2021 USD Incremental Term Loan B, 8.657%, 5/12/28 |
United States | 1,749,256 | 1,663,831 | |||||||||||
| Solis IV BV, USD Term Loan B1, 8.373%, 2/26/29 |
Netherlands | 1,095,759 | 989,317 | |||||||||||
| White Cap Buyer LLC, Term Loan B, 8.557%, 10/19/27 |
United States | 971,897 | 963,470 | |||||||||||
|
|
|
|||||||||||||
| 3,616,618 | ||||||||||||||
|
|
|
|||||||||||||
| Capital Markets 2.0% | ||||||||||||||
| Citadel Securities LP, 2021 Term Loan B, 7.422%, 2/02/28 |
United States | 1,424,625 | 1,414,090 | |||||||||||
| Edelman Financial Center LLC, 2021 Term Loan B, 8.59%, 4/07/28 |
United States | 1,275,334 | 1,232,489 | |||||||||||
| Jane Street Group LLC, 2021 Term Loan, 7.59%, 1/26/28 |
United States | 1,413,314 | 1,393,528 | |||||||||||
|
|
|
|||||||||||||
| 4,040,107 | ||||||||||||||
|
|
|
|||||||||||||
| Casinos & Gaming 2.5% | ||||||||||||||
| Bally’s Corp., 2021 Term Loan B, 7.959%, 10/02/28 |
United States | 1,775,520 | 1,699,119 | |||||||||||
| Caesars Entertainment Corp., Term Loan B, 8.157%, 2/06/30 |
United States | 474,825 | 473,242 | |||||||||||
| Scientific Games Holdings LP, 2022 USD Term Loan B, 8.103%, 4/04/29 |
United States | 1,476,008 | 1,457,905 | |||||||||||
| Scientific Games International, Inc., 2022 USD Term Loan, 7.96%, 4/14/29 . |
United States | 1,306,407 | 1,298,510 | |||||||||||
| Stars Group Holdings B.V. (The), 2022 USD Term Loan B, 8.41%, 7/22/28 |
Ireland | 168,645 | 168,872 | |||||||||||
|
|
|
|||||||||||||
| 5,097,648 | ||||||||||||||
|
|
|
|||||||||||||
| Chemicals 4.2% | ||||||||||||||
| Hexion Holdings Corp., 2022 USD Term Loan, 9.454%, 3/15/29 |
United States | 1,588,000 | 1,429,700 | |||||||||||
| INEOS Styrolution US Holding LLC, TBD, 2021 USD Term Loan B, 7.59%, 1/29/26 |
United States | 1,698,966 | 1,684,525 | |||||||||||
| LSF11 A5 Holdco LLC, Term Loan, 8.422%, 10/15/28 |
United States | 1,553,816 | 1,509,152 | |||||||||||
| Nouryon USA LLC, TBD, 2023 Term Loan, TBD, 3/02/28 |
United States | 507,813 | 507,178 | |||||||||||
| franklintempleton.com | Annual Report | 163 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Senior Loan ETF (continued)
| Country | Principal Amount | Value | ||||||||||||
| c | Senior Floating Rate Interests (continued) | |||||||||||||
| Chemicals (continued) | ||||||||||||||
| PMHC II, Inc., 2022 Term Loan B, 9.076%, 4/23/29 |
United States | 2,189,997 | $ | 1,936,209 | ||||||||||
| SCIH Salt Holdings Inc., 2021 Incremental Term Loan B, 8.825%, 3/16/27 |
United States | 1,588,211 | 1,553,040 | |||||||||||
|
|
|
|||||||||||||
| 8,619,804 | ||||||||||||||
|
|
|
|||||||||||||
| Commercial Services & Supplies 4.1% | ||||||||||||||
| Amentum Government Services Holdings LLC, 2022 Term Loan, 8.764%, 2/15/29 |
United States | 2,622,221 | 2,569,777 | |||||||||||
| APX Group, Inc., 2021 Term Loan B, 8.25%, 7/10/28 |
United States | 1,286,979 | 1,283,189 | |||||||||||
| KUEHG Corp., 2018 Incremental Term Loan, 8.909%, 2/21/25 |
United States | 1,075,833 | 1,058,652 | |||||||||||
| MPH Acquisition Holdings LLC, 2021 Term Loan B, 9.203%, 9/01/28 |
United States | 693,965 | 596,379 | |||||||||||
| d | PECF USS Intermediate Holding III Corp., Term Loan B, 9.09%, 12/15/28 |
United States | 1,322,429 | 1,120,434 | ||||||||||
| Spin Holdco, Inc., 2021 Term Loan, 8.986%, 3/04/28 |
United States | 2,158,456 | 1,820,809 | |||||||||||
|
|
|
|||||||||||||
| 8,449,240 | ||||||||||||||
|
|
|
|||||||||||||
| Communications Equipment 0.4% | ||||||||||||||
| CommScope, Inc., 2019 Term Loan B, 8.09%, 4/06/26 |
United States | 964,996 | 930,767 | |||||||||||
|
|
|
|||||||||||||
| Computer & Electronics Retail 1.4% | ||||||||||||||
| McAfee LLC, 2022 USD Term Loan, 8.515%, 3/01/29 |
United States | 2,040,924 | 1,925,101 | |||||||||||
| Vision Solutions, Inc., 2021 Incremental Term Loan, 8.818%, 4/24/28 |
United States | 1,083,395 | 966,931 | |||||||||||
|
|
|
|||||||||||||
| 2,892,032 | ||||||||||||||
|
|
|
|||||||||||||
| Construction Materials 1.0% | ||||||||||||||
| Cornerstone Building Brands, Inc., 2021 Term Loan B, 7.934%, 4/12/28 |
United States | 1,371,191 | 1,214,533 | |||||||||||
| Quikrete Holdings, Inc., 2021 Term Loan B1, 7.84%, 3/18/29 |
United States | 792,000 | 783,941 | |||||||||||
|
|
|
|||||||||||||
| 1,998,474 | ||||||||||||||
|
|
|
|||||||||||||
| Containers & Packaging 3.0% | ||||||||||||||
| Charter NEX US, Inc., 2021 Term Loan, 8.672%, 12/01/27 |
United States | 2,156,878 | 2,133,799 | |||||||||||
| Klockner-Pentaplast of America, Inc., 2021 Term Loan B, 10.129%, 2/12/26 . |
Luxembourg | 1,971,598 | 1,824,556 | |||||||||||
| Mauser Packaging Solutions Holding Co., Term Loan B, 8.777%, 8/14/26 |
United States | 700,000 | 695,625 | |||||||||||
| Reynolds Group Holdings, Inc., 2021 Term Loan B, 8.09%, 9/24/28 |
United States | 1,481,947 | 1,464,038 | |||||||||||
|
|
|
|||||||||||||
| 6,118,018 | ||||||||||||||
|
|
|
|||||||||||||
| Diversified Banks 0.6% | ||||||||||||||
| AqGen Island Holdings, Inc., Term Loan, 8.375%, 8/02/28 |
United States | 1,288,045 | 1,254,234 | |||||||||||
|
|
|
|||||||||||||
| Diversified Telecommunication Services 0.8% | ||||||||||||||
| Altice France SA, 2023 USD Term Loan B14, 10.17% to , FRN thereafter, SOFR CME + 5.500%, 8/15/28 |
France | 1,170,459 | 1,114,862 | |||||||||||
| Zayo Group Holdings, Inc., USD Term Loan, 7.84%, 3/09/27 |
United States | 708,194 | 579,271 | |||||||||||
|
|
|
|||||||||||||
| 1,694,133 | ||||||||||||||
|
|
|
|||||||||||||
| Electronic Equipment & Instruments 0.6% | ||||||||||||||
| Magenta Buyer LLC, 2021 USD 1st Lien Term Loan, 9.58%, 7/27/28 |
United States | 1,391,605 | 1,152,548 | |||||||||||
|
|
|
|||||||||||||
| Financial Services 1.2% | ||||||||||||||
| Asurion LLC, |
||||||||||||||
| 2020 Term Loan B8, 8.09%, 12/23/26 |
United States | 583,584 | 542,943 | |||||||||||
| 2021 Second Lien Term Loan B4, 10.09%, 1/20/29 |
United States | 1,997,666 | 1,659,062 | |||||||||||
| Citadel Securities LP, 2022 Incremental Term Loan B, 7.922%, 2/02/28 |
United States | 199,500 | 199,501 | |||||||||||
| Go Daddy Operating Co. LLC, 2022 Term Loan B5, 8.057%, 11/09/29 |
United States | 174,167 | 174,285 | |||||||||||
|
|
|
|||||||||||||
| 2,575,791 | ||||||||||||||
|
|
|
|||||||||||||
| Food Products 0.4% | ||||||||||||||
| Triton Water Holdings, Inc, Term Loan, 8.659%, 3/31/28 |
United States | 812,570 | 732,585 | |||||||||||
|
|
|
|||||||||||||
| Health Care Providers & Services 6.6% | ||||||||||||||
| ADMI Corp., |
||||||||||||||
| 2021 Term Loan B2, 8.215%, 12/23/27 |
United States | 751,770 | 698,361 | |||||||||||
| 2021 Incremental Term Loan B3, 8.59%, 12/23/27 |
United States | 655,771 | 610,483 | |||||||||||
| 164 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Senior Loan ETF (continued)
| Country | Principal Amount | Value | ||||||||||||
| c | Senior Floating Rate Interests (continued) | |||||||||||||
| Health Care Providers & Services (continued) |
||||||||||||||
| Charlotte Buyer, Inc., 1st Lien Term Loan, 10.097%, 2/11/28 |
United States | 973,903 | $ | 933,126 | ||||||||||
| Gainwell Acquisition Corp., Term Loan B, 8.998%, 10/01/27 |
United States | 2,577,997 | 2,468,432 | |||||||||||
| ICON Luxembourg Sarl, LUX Term Loan, 7.41%, 7/03/28 |
Luxembourg | 1,136,750 | 1,135,408 | |||||||||||
| Medical Solutions Holdings, Inc., 2021 1st Lien Term Loan, 8.241%, 11/01/28 |
United States | 1,874,462 | 1,826,428 | |||||||||||
| Medline Borrower LP, USD Term Loan B, 8.09%, 10/23/28 |
United States | 1,639,662 | 1,600,851 | |||||||||||
| National Mentor Holdings, Inc., |
||||||||||||||
| 2021 Term Loan, 8.676%, 3/02/28 |
United States | 796,781 | 613,303 | |||||||||||
| 2021 Term Loan C, 8.748%, 3/02/28 |
United States | 29,688 | 22,851 | |||||||||||
| PRA Health Sciences, Inc., US Term Loan, 7.409%, 7/03/28 |
United States | 301,142 | 300,787 | |||||||||||
| Radiology Partners, Inc., 2018 1st Lien Term Loan B, 9.09%, 7/09/25 |
United States | 1,124,138 | 911,603 | |||||||||||
| U.S. Anesthesia Partners, Inc., 2021 Term Loan, 8.912%, 10/01/28 |
United States | 1,330,957 | 1,285,831 | |||||||||||
| US Radiology Specialists, Inc., 2020 Term Loan, 10.09%, 12/15/27 |
United States | 1,278,416 | 1,204,268 | |||||||||||
|
|
|
|||||||||||||
| 13,611,732 | ||||||||||||||
|
|
|
|||||||||||||
| Health Care Services 1.3% | ||||||||||||||
| CHG Healthcare Services, Inc., 2021 Term Loan, 8.09% to , 1-month USD LIBOR + 3.250%, 9/29/28 |
United States | 1,395,911 | 1,384,569 | |||||||||||
| MedAssets Software Intermediate Holdings, Inc., 2021 Term Loan, 8.84%, 12/18/28 |
United States | 1,397,556 | 1,304,968 | |||||||||||
|
|
|
|||||||||||||
| 2,689,537 | ||||||||||||||
|
|
|
|||||||||||||
| Home Furnishings 0.4% | ||||||||||||||
| d | AI Aqua Merger Sub, Inc., 2021 1st Lien Term Loan B, 8.648%, 7/31/28 |
United States | 920,375 | 891,043 | ||||||||||
|
|
|
|||||||||||||
| Hotels Restaurants & Leisure 1.2% | ||||||||||||||
| Fertitta Entertainment LLC, 2022 Term Loan B, 8.807%, 1/27/29 |
United States | 1,050,987 | 1,037,135 | |||||||||||
| Hilton Grand Vacations Borrower LLC, 2021 Term Loan B, 7.84%, 8/02/28 |
United States | 1,354,202 | 1,355,387 | |||||||||||
|
|
|
|||||||||||||
| 2,392,522 | ||||||||||||||
|
|
|
|||||||||||||
| Household Products 0.1% | ||||||||||||||
| Energizer Holdings, Inc., 2020 Term Loan, 7.116% to , 1-month USD LIBOR + 2.250%, 12/22/27 |
United States | 210,763 | 209,578 | |||||||||||
|
|
|
|||||||||||||
| Insurance 2.2% | ||||||||||||||
| Acrisure LLC, |
||||||||||||||
| 2020 Term Loan B, 8.34%, 2/15/27 |
United States | 1,517,604 | 1,472,706 | |||||||||||
| 2021 First Lien Term Loan B, 9.09%, 2/15/27 |
United States | 241,696 | 237,466 | |||||||||||
| Alliant Holdings Intermediate LLC, 2021 Term Loan B4, 8.279%, 11/06/27 |
United States | 1,047,212 | 1,038,049 | |||||||||||
| d | AssuredPartners, Inc., 2020 Term Loan B, 8.34%, 2/12/27 |
United States | 1,452,278 | 1,440,842 | ||||||||||
| Asurion LLC, |
||||||||||||||
| 2022 Term Loan B10, 8.907%, 8/19/28 |
United States | 298,500 | 276,300 | |||||||||||
| 2023 Term Loan B11, 9.157% to , SOFR CME + 4.250%, 8/19/28 |
United States | 172,413 | 160,344 | |||||||||||
|
|
|
|||||||||||||
| 4,625,707 | ||||||||||||||
|
|
|
|||||||||||||
| Insurance Brokers 1.3% | ||||||||||||||
| AssuredPartners, Inc., 2022 Term Loan B4, 9.057%, 2/12/27 |
United States | 418,947 | 418,424 | |||||||||||
| Hub International Ltd., 2022 Term Loan B, 8.728%, 11/10/29 |
United States | 583,022 | 582,039 | |||||||||||
| Sedgwick Claims Management Services, Inc., 2023 Term Loan B, 8.557%, 2/17/28 |
United States | 1,673,785 | 1,656,353 | |||||||||||
|
|
|
|||||||||||||
| 2,656,816 | ||||||||||||||
|
|
|
|||||||||||||
| Interactive Media & Services 1.0% | ||||||||||||||
| Arches Buyer, Inc., 2021 Term Loan B, 8.157%, 12/06/27 |
United States | 1,080,081 | 1,020,337 | |||||||||||
| Hunter Holdco 3 Ltd., USD Term Loan B, 9.409%, 8/19/28 |
United States | 995,153 | 978,981 | |||||||||||
|
|
|
|||||||||||||
| 1,999,318 | ||||||||||||||
|
|
|
|||||||||||||
| franklintempleton.com | Annual Report | 165 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Senior Loan ETF (continued)
| Country | Principal Amount | Value | ||||||||||||
| c | Senior Floating Rate Interests (continued) | |||||||||||||
| Internet Services & Infrastructure 0.7% | ||||||||||||||
| MH Sub I LLC, |
||||||||||||||
| 2017 1st Lien Term Loan, 8.59%, 9/13/24 |
United States | 488,849 | $ | 481,631 | ||||||||||
| 2020 Incremental Term Loan, 8.59%, 9/13/24 |
United States | 1,021,348 | 1,006,508 | |||||||||||
|
|
|
|||||||||||||
| 1,488,139 | ||||||||||||||
|
|
|
|||||||||||||
| IT Services 2.9% | ||||||||||||||
| Deerfield Dakota Holding LLC, 2020 USD Term Loan B, 8.557%, 4/09/27 |
United States | 1,453,424 | 1,411,035 | |||||||||||
| Dun & Bradstreet Corp., Term Loan, 8.095%, 2/06/26 |
United States | 950,382 | 950,183 | |||||||||||
| Verscend Holding Corp., 2021 Term Loan B, 8.84%, 8/27/25 |
United States | 3,664,406 | 3,665,560 | |||||||||||
|
|
|
|||||||||||||
| 6,026,778 | ||||||||||||||
|
|
|
|||||||||||||
| Leisure Equipment & Products 0.7% | ||||||||||||||
| Playtika Holding Corp., 2021 Term Loan, 7.59%, 3/13/28 |
United States | 1,088,889 | 1,083,248 | |||||||||||
| Varsity Brands, Inc., 2017 Term Loan B, 8.34%, 12/15/24 |
United States | 475,951 | 448,137 | |||||||||||
|
|
|
|||||||||||||
| 1,531,385 | ||||||||||||||
|
|
|
|||||||||||||
| Machinery 0.8% | ||||||||||||||
| Vertical US Newco, Inc., Term Loan B, 8.602%, 7/30/27 |
Germany | 1,696,144 | 1,656,971 | |||||||||||
|
|
|
|||||||||||||
| Media 6.7% | ||||||||||||||
| AMC Entertainment Holdings, Inc., 2019 Term Loan B, 7.684%, 4/22/26 |
United States | 244,898 | 179,235 | |||||||||||
| Cengage Learning, Inc., 2021 Term Loan B, 9.88%, 7/14/26 |
United States | 1,907,956 | 1,775,601 | |||||||||||
| d | Clear Channel Outdoor Holdings, Inc., Term Loan B, 8.325%, 8/21/26 |
United States | 1,418,374 | 1,325,002 | ||||||||||
| CSC Holdings, LLC, 2017 Term Loan B1, 6.934%, 7/17/25 |
United States | 1,866,138 | 1,784,886 | |||||||||||
| Gray Television, Inc., 2021 Term Loan D, 7.662%, 12/01/28 |
United States | 1,086,993 | 1,059,823 | |||||||||||
| McGraw-Hill Global Education Holdings LLC, 2021 Term Loan, 9.703%, 7/28/28 |
United States | 1,283,629 | 1,202,760 | |||||||||||
| Nexstar Broadcasting, Inc., 2019 Term Loan B4, 7.34%, 9/18/26 |
United States | 891,791 | 890,900 | |||||||||||
| Radiate Holdco LLC, 2021 Term Loan B, 8.09%, 9/25/26 |
United States | 2,053,637 | 1,688,840 | |||||||||||
| Univision Communications, Inc., 2021 First Lien Term Loan B, 8.09%, 3/15/26 |
United States | 1,648,910 | 1,643,295 | |||||||||||
| Virgin Media Bristol LLC, 2020 USD Term Loan Q, 7.934%, 1/31/29 |
United States | 1,670,000 | 1,656,022 | |||||||||||
| William Morris Endeavor Entertainment LLC, 2018 1st Lien Term Loan, 7.60%, 5/18/25 |
United States | 584,936 | 581,037 | |||||||||||
|
|
|
|||||||||||||
| 13,787,401 | ||||||||||||||
|
|
|
|||||||||||||
| Office Services & Supplies 1.2% | ||||||||||||||
| Prime Security Services Borrower LLC, 2021 Term Loan, 7.517%, 9/23/26 |
United States | 2,425,520 | 2,421,106 | |||||||||||
|
|
|
|||||||||||||
| Passenger Airlines 3.6% | ||||||||||||||
| Air Canada, 2021 Term Loan B, 8.369%, 8/11/28 |
Canada | 1,950,378 | 1,949,773 | |||||||||||
| American Airlines, Inc., 2021 Term Loan, 9.558%, 4/20/28 |
United States | 1,024,129 | 1,041,483 | |||||||||||
| Kestrel Bidco, Inc., Term Loan B, 7.859%, 12/11/26 |
Canada | 2,042,523 | 1,962,824 | |||||||||||
| United Airlines, Inc., 2021 Term Loan B, 8.568%, 4/21/28 |
United States | 2,470,529 | 2,458,485 | |||||||||||
|
|
|
|||||||||||||
| 7,412,565 | ||||||||||||||
|
|
|
|||||||||||||
| Personal Care Products 1.9% | ||||||||||||||
| Conair Holdings LLC, Term Loan B, 8.909%, 5/17/28 |
United States | 2,047,151 | 1,883,379 | |||||||||||
| Sunshine Luxembourg VII Sarl, 2021 Term Loan B3, 8.909%, 10/01/26 |
Luxembourg | 2,015,511 | 1,999,297 | |||||||||||
|
|
|
|||||||||||||
| 3,882,676 | ||||||||||||||
|
|
|
|||||||||||||
| Pharmaceuticals 3.9% | ||||||||||||||
| Bausch Health Companies, Inc., 2022 Term Loan B, 10.093%, 2/01/27 |
Canada | 992,437 | 742,408 | |||||||||||
| eResearchTechnology, Inc., 2020 1st Lien Term Loan, 9.34%, 2/04/27 |
United States | 1,455,926 | 1,377,677 | |||||||||||
| Grifols Worldwide Operations USA, Inc., USD 2019 Term Loan B, 6.84%, 11/15/27 |
United States | 1,100,000 | 1,079,606 | |||||||||||
| Jazz Financing Lux Sarl, USD Term Loan, 8.34%, 5/05/28 |
United States | 1,966,365 | 1,961,242 | |||||||||||
| Organon & Co, USD Term Loan, 8.00%, 6/02/28 |
United States | 1,282,196 | 1,283,260 | |||||||||||
| 166 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Senior Loan ETF (continued)
| Country | Principal Amount | Value | ||||||||||||
| c | Senior Floating Rate Interests (continued) | |||||||||||||
| Pharmaceuticals (continued) | ||||||||||||||
| Parexel International Corp., 2021 1st Lien Term Loan, 8.09%, 11/15/28 |
United States | 1,577,613 | $ | 1,562,137 | ||||||||||
|
|
|
|||||||||||||
| 8,006,330 | ||||||||||||||
|
|
|
|||||||||||||
| Real Estate Management & Development 0.6% | ||||||||||||||
| Cushman & Wakefield US Borrower LLC, 2020 Term Loan B, 7.59%, 8/21/25 |
United States | 1,244,424 | 1,217,046 | |||||||||||
|
|
|
|||||||||||||
| Retail REITs 1.2% | ||||||||||||||
| Great Outdoors Group LLC, 2021 Term Loan B1, 8.59%, 3/06/28 |
United States | 1,659,589 | 1,640,927 | |||||||||||
| Petco Health and Wellness Co., Inc., 2021 Term Loan B, 8.41%, 3/03/28 |
United States | 777,303 | 765,037 | |||||||||||
|
|
|
|||||||||||||
| 2,405,964 | ||||||||||||||
|
|
|
|||||||||||||
| Semiconductor Materials & Equipment 0.4% | ||||||||||||||
| MKS Instruments, Inc., 2022 USD Term Loan B, 7.609%, 8/17/29 |
United States | 895,500 | 892,236 | |||||||||||
|
|
|
|||||||||||||
| Soft Drinks & Non-alcoholic Beverages 0.2% | ||||||||||||||
| Naked Juice LLC, Term Loan, 8.248%, 1/24/29 |
United States | 555,398 | 492,222 | |||||||||||
|
|
|
|||||||||||||
| Software 13.2% | ||||||||||||||
| Athenahealth Group, Inc., |
||||||||||||||
| 2022 Delayed Draw Term Loan, TBD, 3.50%, 2/15/29 |
United States | 282,375 | 265,080 | |||||||||||
| d 2022 Term Loan B, 8.259%, 2/15/29 |
United States | 2,304,371 | 2,163,228 | |||||||||||
| CDK Global, Inc., 2022 USD Term Loan B, 9.148%, 7/06/29 |
United States | 257,143 | 256,748 | |||||||||||
| Cloudera, Inc., |
||||||||||||||
| 2021 Term Loan, 8.657%, 10/08/28 |
United States | 1,417,759 | 1,357,504 | |||||||||||
| 2021 Second Lien Term Loan, 10.907%, 10/08/29 |
United States | 303,306 | 270,069 | |||||||||||
| Cornerstone OnDemand, Inc., 2021 Term Loan, 8.59%, 10/16/28 |
United States | 796,471 | 737,732 | |||||||||||
| DCert Buyer, Inc., |
||||||||||||||
| 2019 Term Loan B, 8.696%, 10/16/26 |
United States | 2,666,065 | 2,616,503 | |||||||||||
| TBD, 2021 2nd Lien Term Loan, 11.696%, 2/19/29 |
United States | 1,000,000 | 929,720 | |||||||||||
| Epicor Software Corp., 2020 Term Loan, 8.09%, 7/30/27 |
United States | 1,699,100 | 1,672,161 | |||||||||||
| Finastra USA, Inc., USD 1st Lien Term Loan, 8.325%, 6/13/24 |
United States | 930,918 | 873,815 | |||||||||||
| GoTo Group, Inc., Term Loan B, 9.59%, 8/31/27 |
United States | 1,863,118 | 1,073,873 | |||||||||||
| Hyland Software, Inc., |
||||||||||||||
| 2018 1st Lien Term Loan, 8.34%, 7/01/24 |
United States | 2,776,999 | 2,751,534 | |||||||||||
| 2021 2nd Lien Term Loan, 11.09%, 7/07/25 |
United States | 30,303 | 29,091 | |||||||||||
| Idera, Inc., 2021 Term Loan, 8.51%, 3/02/28 |
United States | 1,231,009 | 1,177,922 | |||||||||||
| Ivanti Software, Inc., |
||||||||||||||
| 2021 Add On Term Loan B, 8.984%, 12/01/27 |
United States | 138,943 | 112,197 | |||||||||||
| 2021 Term Loan B, 9.212%, 12/01/27 |
United States | 1,281,555 | 1,056,943 | |||||||||||
| Mitchell International, Inc., 2021 Term Loan B, 8.502%, 10/15/28 |
United States | 879,836 | 834,093 | |||||||||||
| Navicure, Inc., 2019 Term Loan B, 8.84%, 10/22/26 |
United States | 3,166,684 | 3,161,253 | |||||||||||
| Polaris Newco LLC, USD Term Loan B, 9.159%, 6/02/28 |
United States | 1,877,513 | 1,717,399 | |||||||||||
| Quest Software US Holdings, Inc., 2022 Term Loan, 9.076%, 2/01/29 |
United States | 597,000 | 490,370 | |||||||||||
| Roper Industrial Products Investment Co. LLC, TBD, USD Term Loan, 9.398% to , SOFR CME + 4.500%, 11/22/29 |
United States | 751,285 | 746,725 | |||||||||||
| Sovos Compliance LLC, 2021 Term Loan, 9.34%, 8/11/28 |
United States | 1,430,369 | 1,357,956 | |||||||||||
| Ultimate Software Group, Inc., |
||||||||||||||
| 2021 Term Loan, 8.032%, 5/04/26 |
United States | 656,468 | 640,775 | |||||||||||
| Term Loan B, 8.575%, 5/04/26 |
United States | 296,164 | 291,945 | |||||||||||
| TBD, 2021 2nd Lien Term Loan, 10.032%, 5/03/27 |
United States | 570,096 | 549,288 | |||||||||||
|
|
|
|||||||||||||
| 27,133,924 | ||||||||||||||
|
|
|
|||||||||||||
| Specialty Chemicals 0.2% | ||||||||||||||
| d | Ineos US Finance LLC, 2022 USD Term Loan B, 8.556%, 11/08/27 |
United States | 480,000 | 480,000 | ||||||||||
|
|
|
|||||||||||||
| Specialty Retail 2.3% | ||||||||||||||
| IRB Holding Corp., 2022 Term Loan B, 7.737%, 12/15/27 |
United States | 698,237 | 687,714 | |||||||||||
| Michaels Companies, Inc., 2021 Term Loan B, 9.409%, 4/15/28 |
United States | 1,681,793 | 1,548,401 | |||||||||||
| PetSmart, Inc., 2021 Term Loan B, 8.657%, 2/11/28 |
United States | 1,319,675 | 1,311,156 | |||||||||||
| franklintempleton.com | Annual Report | 167 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Senior Loan ETF (continued)
| Country | Principal Amount | Value | ||||||||||||
| c | Senior Floating Rate Interests (continued) | |||||||||||||
| Specialty Retail (continued) | ||||||||||||||
| SRS Distribution, Inc., |
||||||||||||||
| 2022 Incremental Term Loan, 8.157%, 6/02/28 |
United States | 78,250 | $ | 75,649 | ||||||||||
| 2021 Term Loan B, 8.34%, 6/02/28 |
United States | 370,941 | 359,164 | |||||||||||
| Staples, Inc., 7 Year Term Loan, 9.814%, 4/16/26 |
United States | 829,835 | 766,133 | |||||||||||
|
|
|
|||||||||||||
| 4,748,217 | ||||||||||||||
|
|
|
|||||||||||||
| Systems Software 0.2% | ||||||||||||||
| Barracuda Networks, Inc., 2022 Term Loan, 9.176%, 8/15/29 |
United States | 498,750 | 481,451 | |||||||||||
|
|
|
|||||||||||||
| Technology Hardware, Storage & Peripherals 1.6% | ||||||||||||||
| Greeneden U.S. Holdings II, LLC, 2020 USD Term Loan B4, 8.84%, 12/01/27 |
United States | 3,337,134 | 3,294,636 | |||||||||||
|
|
|
|||||||||||||
| Wireless Telecommunication Services 0.7% | ||||||||||||||
| CCI Buyer, Inc., Term Loan, 8.898%, 12/17/27 |
United States | 1,480,111 | 1,463,460 | |||||||||||
|
|
|
|||||||||||||
| Total Floating Rate Loans (Cost $191,014,997) |
183,451,659 | |||||||||||||
|
|
|
|||||||||||||
| Asset-Backed Securities 0.9% |
||||||||||||||
| a,e | BlueMountain CLO Ltd., Series 2018-3A, Class C, 7.018%, 10/25/30 |
United States | 1,000,000 | 940,464 | ||||||||||
| a,e | LCM XVIII LP, Series 2018-A, Class CR, 6.658%, 4/20/31 |
United States | 1,000,000 | 925,452 | ||||||||||
|
|
|
|||||||||||||
| Total Asset-Backed Securities (Cost $1,996,875) |
1,865,916 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments before Short-Term Investments |
194,335,892 | |||||||||||||
|
|
|
|||||||||||||
| Short-Term Investments 1.0% | ||||||||||||||
| U.S. Government & Agency Securities 1.0% | ||||||||||||||
| f | Federal Home Loan Bank Discount Notes, 04/3/23 |
United States | 2,140,000 | 2,140,000 | ||||||||||
|
|
|
|||||||||||||
| Total Short-Term Investments (Cost $2,139,483) |
2,140,000 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments (Cost $204,788,266) 95.3% |
196,475,892 | |||||||||||||
|
|
|
|||||||||||||
| Other Assets, less Liabilities 4.7% |
9,644,379 | |||||||||||||
|
|
|
|||||||||||||
| Net Assets 100.0% |
$ | 206,120,271 | ||||||||||||
|
|
|
|||||||||||||
a 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 March 31, 2023, the value of was $10,741,517, representing 5.2% of net assets.
b See Note 7 regarding defaulted securities.
c The coupon rate shown represents the rate at period end.
d A 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.
e The coupon rate shown represents the rate inclusive of any caps or floors, if applicable, in effect at period end.
f The security was issued on a discount basis with no stated coupon rate.
See Abbreviations on page 246.
| 168 | Annual 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
| Year Ended March 31, | ||||||||||||||||
| 2023 | 2022 | 2021 | 2020b | |||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||
| Net asset value, beginning of year |
$21.25 | $19.55 | $23.16 | $25.00 | ||||||||||||
| Income from investment operationsc: |
||||||||||||||||
| Net investment incomed |
0.26 | 0.14 | 0.23 | 0.11 | ||||||||||||
| Net realized and unrealized gains (losses) |
0.40 | 1.82 | (2.25 | ) | (1.94 | ) | ||||||||||
| Total from investment operations |
0.66 | 1.96 | (2.02 | ) | (1.83 | ) | ||||||||||
| Less distributions from: |
||||||||||||||||
| Net investment income |
(0.46 | ) | (0.26 | ) | (0.05 | ) | (0.01 | ) | ||||||||
| Net realized gains |
— | — | (1.54 | ) | — | |||||||||||
| Total distributions |
(0.46 | ) | (0.26 | ) | (1.59 | ) | (0.01 | ) | ||||||||
| Net asset value, end of year |
$21.45 | $21.25 | $19.55 | $23.16 | ||||||||||||
| Total returne |
3.13% | 10.09% | (8.70)% | (7.34)% | ||||||||||||
| Ratios to average net assetsf | ||||||||||||||||
| Expenses before waiver and payments by affiliates |
0.69% | 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 |
1.21% | 0.69% | 1.08% | 1.67% | ||||||||||||
| Supplemental data | ||||||||||||||||
| Net assets, end of year (000’s) |
$91,146 | $55,258 | $46,927 | $50,948 | ||||||||||||
| Portfolio turnover rateg |
188.38%h | 189.89%h | 171.16%h | 60.95%h | ||||||||||||
a Effective August 1, 2022, Formerly, Franklin Liberty Systematic Style Premia ETF was renamed Franklin Systematic Style Premia ETF.
b For the period December 18, 2019 (commencement of operations) to March 31, 2020.
c The amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
d Based on average daily shares outstanding.
e Total 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.
f Ratios are annualized for periods less than one year.
g Portfolio 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: |
188.38% | 189.89% | 171.16% | 60.95% | ||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 169 | ||
FRANKLIN TEMPLETON ETF TRUST
Consolidated Schedule of Investments, March 31, 2023
Franklin Systematic Style Premia ETF
| Country | Shares | Value | ||||||||||||
| Common Stocks 62.2% | ||||||||||||||
| Aerospace & Defense 0.3% | ||||||||||||||
| BAE Systems PLC |
United Kingdom | 5,167 | $ | 62,776 | ||||||||||
| General Dynamics Corp. |
United States | 315 | 71,886 | |||||||||||
| Textron, Inc. |
United States | 1,625 | 114,774 | |||||||||||
|
|
|
|||||||||||||
| 249,436 | ||||||||||||||
|
|
|
|||||||||||||
| Air Freight & Logistics 0.6% | ||||||||||||||
| Expeditors International of Washington, Inc. |
United States | 1,197 | 131,814 | |||||||||||
| FedEx Corp. |
United States | 1,902 | 434,588 | |||||||||||
|
|
|
|||||||||||||
| 566,402 | ||||||||||||||
|
|
|
|||||||||||||
| Airlines 0.1% | ||||||||||||||
| Singapore Airlines Ltd. |
Singapore | 9,100 | 39,219 | |||||||||||
|
|
|
|||||||||||||
| Automobiles 0.4% | ||||||||||||||
| Stellantis NV |
United States | 17,399 | 316,363 | |||||||||||
|
|
|
|||||||||||||
| Banks 1.5% | ||||||||||||||
| Banco Bilbao Vizcaya Argentaria SA |
Spain | 47,717 | 340,655 | |||||||||||
| Banco Santander SA |
Spain | 85,787 | 319,314 | |||||||||||
| Barclays PLC |
United Kingdom | 123,082 | 221,885 | |||||||||||
| NatWest Group PLC |
United Kingdom | 41,059 | 133,823 | |||||||||||
| Standard Chartered PLC |
United Kingdom | 16,303 | 123,810 | |||||||||||
| UniCredit SpA |
Italy | 12,530 | 237,006 | |||||||||||
|
|
|
|||||||||||||
| 1,376,493 | ||||||||||||||
|
|
|
|||||||||||||
| Beverages 0.1% | ||||||||||||||
| a | Budweiser Brewing Co. APAC Ltd., Class H |
China | 12,800 | 39,052 | ||||||||||
| Coca-Cola HBC AG |
Switzerland | 1,524 | 41,701 | |||||||||||
|
|
|
|||||||||||||
| 80,753 | ||||||||||||||
|
|
|
|||||||||||||
| Biotechnology 4.8% | ||||||||||||||
| AbbVie, Inc. |
United States | 6,366 | 1,014,550 | |||||||||||
| Amgen, Inc. |
United States | 1,841 | 445,062 | |||||||||||
| b | Biogen, Inc. |
United States | 1,078 | 299,716 | ||||||||||
| Gilead Sciences, Inc. |
United States | 9,464 | 785,228 | |||||||||||
| b | Incyte Corp. |
United States | 1,405 | 101,539 | ||||||||||
| b | Moderna, Inc. |
United States | 2,305 | 354,002 | ||||||||||
| b | Regeneron Pharmaceuticals, Inc. |
United States | 803 | 659,801 | ||||||||||
| b | United Therapeutics Corp. |
United States | 351 | 78,610 | ||||||||||
| b | Vertex Pharmaceuticals, Inc. |
United States | 1,896 | 597,373 | ||||||||||
|
|
|
|||||||||||||
| 4,335,881 | ||||||||||||||
|
|
|
|||||||||||||
| Building Products 0.4% | ||||||||||||||
| Carlisle Cos., Inc. |
United States | 338 | 76,412 | |||||||||||
| Cie de Saint-Gobain |
France | 3,775 | 214,582 | |||||||||||
| Owens Corning |
United States | 714 | 68,401 | |||||||||||
|
|
|
|||||||||||||
| 359,395 | ||||||||||||||
|
|
|
|||||||||||||
| Capital Markets 2.1% | ||||||||||||||
| 3i Group PLC |
United Kingdom | 7,496 | 156,173 | |||||||||||
| Ameriprise Financial, Inc. |
United States | 845 | 258,992 | |||||||||||
| Brookfield Corp. |
Canada | 3,469 | 112,861 | |||||||||||
| Carlyle Group, Inc. |
United States | 1,462 | 45,410 | |||||||||||
| Hong Kong Exchanges & Clearing Ltd. |
Hong Kong | 9,000 | 399,213 | |||||||||||
| Invesco Ltd. |
United States | 2,548 | 41,787 | |||||||||||
| LPL Financial Holdings, Inc. |
United States | 298 | 60,315 | |||||||||||
| SEI Investments Co. |
United States | 707 | 40,688 | |||||||||||
| State Street Corp. |
United States | 2,990 | 226,313 | |||||||||||
| 170 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Capital Markets (continued) | ||||||||||||||
| UBS Group AG |
Switzerland | 26,241 | $ | 554,090 | ||||||||||
|
|
|
|||||||||||||
| 1,895,842 | ||||||||||||||
|
|
|
|||||||||||||
| Chemicals 1.9% | ||||||||||||||
| Albemarle Corp. |
United States | 554 | 122,456 | |||||||||||
| CF Industries Holdings, Inc. |
United States | 1,544 | 111,925 | |||||||||||
| Corteva, Inc. |
United States | 5,366 | 323,623 | |||||||||||
| FMC Corp. |
United States | 867 | 105,887 | |||||||||||
| LyondellBasell Industries NV, Class A |
United States | 2,015 | 189,188 | |||||||||||
| Mosaic Co. |
United States | 2,649 | 121,536 | |||||||||||
| Nitto Denko Corp. |
Japan | 800 | 51,394 | |||||||||||
| Nutrien Ltd. |
Canada | 3,500 | 258,126 | |||||||||||
| Shin-Etsu Chemical Co. Ltd. |
Japan | 14,000 | 449,696 | |||||||||||
|
|
|
|||||||||||||
| 1,733,831 | ||||||||||||||
|
|
|
|||||||||||||
| Commercial Services & Supplies 0.6% | ||||||||||||||
| Cintas Corp. |
United States | 650 | 300,742 | |||||||||||
| b | Copart, Inc. |
United States | 2,051 | 154,256 | ||||||||||
| TOPPAN, Inc. |
Japan | 2,100 | 42,050 | |||||||||||
|
|
|
|||||||||||||
| 497,048 | ||||||||||||||
|
|
|
|||||||||||||
| Communications Equipment 0.3% | ||||||||||||||
| b | Arista Networks, Inc. |
United States | 1,252 | 210,161 | ||||||||||
| Cisco Systems, Inc. |
United States | 1,316 | 68,794 | |||||||||||
|
|
|
|||||||||||||
| 278,955 | ||||||||||||||
|
|
|
|||||||||||||
| Computers & Peripherals 0.2% | ||||||||||||||
| Hewlett Packard Enterprise Co. |
United States | 9,928 | 158,153 | |||||||||||
|
|
|
|||||||||||||
| Construction Materials 0.3% | ||||||||||||||
| HeidelbergCement AG |
Germany | 1,131 | 82,647 | |||||||||||
| Holcim AG, Class B |
United States | 3,020 | 194,711 | |||||||||||
|
|
|
|||||||||||||
| 277,358 | ||||||||||||||
|
|
|
|||||||||||||
| Consumer Staples Distribution & Retail 2.2% | ||||||||||||||
| Alimentation Couche-Tard, Inc. |
Canada | 7,500 | 376,566 | |||||||||||
| George Weston Ltd. |
Canada | 500 | 66,169 | |||||||||||
| J Sainsbury PLC |
United Kingdom | 13,335 | 45,952 | |||||||||||
| Koninklijke Ahold Delhaize NV |
Netherlands | 5,201 | 177,938 | |||||||||||
| Kroger Co. |
United States | 5,158 | 254,650 | |||||||||||
| Loblaw Cos. Ltd. |
Canada | 1,000 | 91,011 | |||||||||||
| Walmart, Inc. |
United States | 6,710 | 989,390 | |||||||||||
|
|
|
|||||||||||||
| 2,001,676 | ||||||||||||||
|
|
|
|||||||||||||
| Distributors 0.2% | ||||||||||||||
| Genuine Parts Co. |
United States | 1,011 | 169,150 | |||||||||||
| LKQ Corp. |
United States | 867 | 49,211 | |||||||||||
|
|
|
|||||||||||||
| 218,361 | ||||||||||||||
|
|
|
|||||||||||||
| Diversified REITs 0.9% | ||||||||||||||
| Gaming & Leisure Properties, Inc. |
United States | 1,945 | 101,257 | |||||||||||
| Goodman Group |
Australia | 12,746 | 160,403 | |||||||||||
| GPT Group |
Australia | 14,247 | 40,458 | |||||||||||
| Link REIT |
Hong Kong | 18,500 | 119,014 | |||||||||||
| Public Storage |
United States | 565 | 170,709 | |||||||||||
| b | Unibail-Rodamco-Westfield |
France | 638 | 34,231 | ||||||||||
| VICI Properties, Inc. |
United States | 6,390 | 208,442 | |||||||||||
|
|
|
|||||||||||||
| 834,514 | ||||||||||||||
|
|
|
|||||||||||||
| franklintempleton.com | Annual Report | 171 | ||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Diversified Telecommunication Services 1.9% | ||||||||||||||
| AT&T, Inc. |
United States | 46,888 | $ | 902,594 | ||||||||||
| Deutsche Telekom AG |
Germany | 24,520 | 595,398 | |||||||||||
| Nippon Telegraph & Telephone Corp. |
Japan | 6,600 | 196,478 | |||||||||||
|
|
|
|||||||||||||
| 1,694,470 | ||||||||||||||
|
|
|
|||||||||||||
| Electric Utilities 0.4% | ||||||||||||||
| Endesa SA |
Spain | 2,387 | 51,867 | |||||||||||
| NRG Energy, Inc. |
United States | 1,780 | 61,036 | |||||||||||
| b | PG&E Corp. |
United States | 11,299 | 182,705 | ||||||||||
| Power Assets Holdings Ltd. |
Hong Kong | 9,500 | 50,950 | |||||||||||
|
|
|
|||||||||||||
| 346,558 | ||||||||||||||
|
|
|
|||||||||||||
| Electrical Equipment 0.4% | ||||||||||||||
| AMETEK, Inc. |
United States | 1,344 | 195,323 | |||||||||||
| Mitsubishi Electric Corp. |
Japan | 14,900 | 176,720 | |||||||||||
|
|
|
|||||||||||||
| 372,043 | ||||||||||||||
|
|
|
|||||||||||||
| Electronic Equipment, Instruments & Components 0.4% | ||||||||||||||
| b | Arrow Electronics, Inc. |
United States | 468 | 58,439 | ||||||||||
| b | Keysight Technologies, Inc. |
United States | 1,021 | 164,871 | ||||||||||
| TDK Corp. |
Japan | 3,100 | 110,057 | |||||||||||
|
|
|
|||||||||||||
| 333,367 | ||||||||||||||
|
|
|
|||||||||||||
| Entertainment 1.1% | ||||||||||||||
| b | Netflix, Inc. |
United States | 2,950 | 1,019,166 | ||||||||||
|
|
|
|||||||||||||
| Financial Services 0.1% | ||||||||||||||
| Equitable Holdings, Inc. |
United States | 3,035 | 77,059 | |||||||||||
|
|
|
|||||||||||||
| Food Products 0.1% | ||||||||||||||
| Lamb Weston Holdings, Inc. |
United States | 1,100 | 114,972 | |||||||||||
|
|
|
|||||||||||||
| Gas Utilities 0.1% | ||||||||||||||
| Tokyo Gas Co. Ltd. |
Japan | 3,000 | 56,263 | |||||||||||
| UGI Corp. |
United States | 1,586 | 55,129 | |||||||||||
|
|
|
|||||||||||||
| 111,392 | ||||||||||||||
|
|
|
|||||||||||||
| Ground Transportation 1.1% | ||||||||||||||
| Canadian National Railway Co. |
Canada | 4,100 | 483,117 | |||||||||||
| JB Hunt Transport Services, Inc. |
United States | 632 | 110,891 | |||||||||||
| Knight-Swift Transportation Holdings, Inc. |
United States | 1,208 | 68,349 | |||||||||||
| MTR Corp. Ltd. |
Hong Kong | 11,500 | 55,449 | |||||||||||
| Old Dominion Freight Line, Inc. |
United States | 724 | 246,768 | |||||||||||
| TFI International, Inc. |
Canada | 600 | 71,498 | |||||||||||
|
|
|
|||||||||||||
| 1,036,072 | ||||||||||||||
|
|
|
|||||||||||||
| Health Care Equipment & Supplies 0.2% | ||||||||||||||
| b | Hologic, Inc. |
United States | 1,761 | 142,113 | ||||||||||
|
|
|
|||||||||||||
| Health Care Providers & Services 0.9% | ||||||||||||||
| b | Centene Corp. |
United States | 4,172 | 263,712 | ||||||||||
| Cigna Group |
United States | 2,329 | 595,129 | |||||||||||
|
|
|
|||||||||||||
| 858,841 | ||||||||||||||
|
|
|
|||||||||||||
| Health Care Technology 0.2% | ||||||||||||||
| b | Veeva Systems, Inc., Class A |
United States | 758 | 139,313 | ||||||||||
|
|
|
|||||||||||||
| Hotels, Restaurants & Leisure 1.1% | ||||||||||||||
| b | Booking Holdings, Inc. |
United States | 297 | 787,766 | ||||||||||
| b | Galaxy Entertainment Group Ltd. |
Macau | 15,000 | 100,223 | ||||||||||
| McDonald’s Corp. |
United States | 303 | 84,722 | |||||||||||
| 172 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Hotels, Restaurants & Leisure (continued) | ||||||||||||||
| b | Sands China Ltd. |
Macau | 17,600 | $ | 61,208 | |||||||||
|
|
|
|||||||||||||
| 1,033,919 | ||||||||||||||
|
|
|
|||||||||||||
| Household Durables 0.1% | ||||||||||||||
| Techtronic Industries Co. Ltd. |
Hong Kong | 10,000 | 108,090 | |||||||||||
|
|
|
|||||||||||||
| Independent Power Producers & Energy Traders 0.2% | ||||||||||||||
| AES Corp. |
United States | 4,429 | 106,650 | |||||||||||
| Vistra Corp. |
United States | 2,722 | 65,328 | |||||||||||
|
|
|
|||||||||||||
| 171,978 | ||||||||||||||
|
|
|
|||||||||||||
| Industrial Conglomerates 0.5% | ||||||||||||||
| Hitachi Ltd. |
Japan | 6,400 | 348,732 | |||||||||||
| Jardine Matheson Holdings Ltd. |
Hong Kong | 1,200 | 58,284 | |||||||||||
|
|
|
|||||||||||||
| 407,016 | ||||||||||||||
|
|
|
|||||||||||||
| Insurance 3.4% | ||||||||||||||
| Aflac, Inc. |
United States | 4,591 | 296,211 | |||||||||||
| AIA Group Ltd. |
Hong Kong | 83,400 | 878,096 | |||||||||||
| American International Group, Inc. |
United States | 5,951 | 299,692 | |||||||||||
| b | Arch Capital Group Ltd. |
United States | 2,246 | 152,436 | ||||||||||
| AXA SA |
France | 1,348 | 41,249 | |||||||||||
| Chubb Ltd. |
United States | 1,574 | 305,639 | |||||||||||
| Everest Re Group Ltd. |
United States | 305 | 109,196 | |||||||||||
| Fairfax Financial Holdings Ltd. |
Canada | 200 | 132,831 | |||||||||||
| Fidelity National Financial, Inc. |
United States | 1,716 | 59,940 | |||||||||||
| Hartford Financial Services Group, Inc. |
United States | 2,514 | 175,201 | |||||||||||
| Legal & General Group PLC |
United Kingdom | 45,026 | 133,001 | |||||||||||
| Manulife Financial Corp. |
Canada | 8,400 | 153,929 | |||||||||||
| MetLife, Inc. |
United States | 4,298 | 249,026 | |||||||||||
| Principal Financial Group, Inc. |
United States | 1,934 | 143,735 | |||||||||||
|
|
|
|||||||||||||
| 3,130,182 | ||||||||||||||
|
|
|
|||||||||||||
| Interactive Media & Services 1.6% | ||||||||||||||
| b | Alphabet, Inc., Class C |
United States | 1,260 | 131,040 | ||||||||||
| a | Auto Trader Group PLC |
United Kingdom | 5,384 | 41,021 | ||||||||||
| b | Meta Platforms, Inc., Class A |
United States | 5,927 | 1,256,168 | ||||||||||
|
|
|
|||||||||||||
| 1,428,229 | ||||||||||||||
|
|
|
|||||||||||||
| Internet & Direct Marketing Retail 1.1% | ||||||||||||||
| b | Amazon.com, Inc. |
United States | 2,058 | 212,571 | ||||||||||
| eBay, Inc. |
United States | 4,189 | 185,866 | |||||||||||
| b | Expedia Group, Inc. |
United States | 1,137 | 110,323 | ||||||||||
| b | MercadoLibre, Inc. |
Brazil | 343 | 452,094 | ||||||||||
| a,b | Zalando SE |
Germany | 1,008 | 42,207 | ||||||||||
|
|
|
|||||||||||||
| 1,003,061 | ||||||||||||||
|
|
|
|||||||||||||
| IT Services 3.6% | ||||||||||||||
| Accenture PLC, Class A |
United States | 1,678 | 479,589 | |||||||||||
| b | CGI, Inc., Class A |
Canada | 1,500 | 144,364 | ||||||||||
| b | EPAM Systems, Inc. |
United States | 381 | 113,919 | ||||||||||
| Fujitsu Ltd. |
Japan | 1,500 | 201,011 | |||||||||||
| b | Gartner, Inc. |
United States | 599 | 195,136 | ||||||||||
| Mastercard, Inc., Class A |
United States | 2,879 | 1,046,257 | |||||||||||
| TIS, Inc. |
Japan | 1,700 | 44,579 | |||||||||||
| Visa, Inc., Class A |
United States | 4,817 | 1,086,041 | |||||||||||
|
|
|
|||||||||||||
| 3,310,896 | ||||||||||||||
|
|
|
|||||||||||||
| franklintempleton.com | Annual Report | 173 | ||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Life Sciences Tools & Services 1.2% | ||||||||||||||
| Agilent Technologies, Inc. |
United States | 2,210 | $ | 305,732 | ||||||||||
| b | IQVIA Holdings, Inc. |
United States | 653 | 129,875 | ||||||||||
| b | Mettler-Toledo International, Inc. |
United States | 168 | 257,075 | ||||||||||
| Thermo Fisher Scientific, Inc. |
United States | 590 | 340,058 | |||||||||||
| b | Waters Corp. |
United States | 318 | 98,462 | ||||||||||
|
|
|
|||||||||||||
| 1,131,202 | ||||||||||||||
|
|
|
|||||||||||||
| Machinery 1.1% | ||||||||||||||
| Cummins, Inc. |
United States | 861 | 205,676 | |||||||||||
| Fortive Corp. |
United States | 1,998 | 136,204 | |||||||||||
| Komatsu Ltd. |
Japan | 7,200 | 177,282 | |||||||||||
| Mitsubishi Heavy Industries Ltd. |
Japan | 2,400 | 87,928 | |||||||||||
| PACCAR, Inc. |
United States | 3,986 | 291,775 | |||||||||||
| Snap-on, Inc. |
United States | 405 | 99,990 | |||||||||||
|
|
|
|||||||||||||
| 998,855 | ||||||||||||||
|
|
|
|||||||||||||
| Marine Transportation 0.0%† | ||||||||||||||
| AP Moller - Maersk AS, Class A |
Denmark | 20 | 35,470 | |||||||||||
|
|
|
|||||||||||||
| Metals & Mining 2.2% | ||||||||||||||
| ArcelorMittal SA |
Luxembourg | 4,101 | 124,176 | |||||||||||
| BHP Group Ltd. |
Australia | 24,155 | 764,078 | |||||||||||
| BlueScope Steel Ltd. |
Australia | 3,584 | 48,368 | |||||||||||
| Glencore PLC |
Australia | 20,993 | 120,595 | |||||||||||
| Nippon Steel Corp. |
Japan | 6,300 | 147,689 | |||||||||||
| Nucor Corp. |
United States | 1,979 | 305,696 | |||||||||||
| b | Pilbara Minerals Ltd. |
Australia | 20,738 | 54,724 | ||||||||||
| Reliance Steel & Aluminum Co. |
United States | 445 | 114,249 | |||||||||||
| Steel Dynamics, Inc. |
United States | 1,362 | 153,988 | |||||||||||
| Teck Resources Ltd., Class B |
Canada | 3,500 | 127,628 | |||||||||||
|
|
|
|||||||||||||
| 1,961,191 | ||||||||||||||
|
|
|
|||||||||||||
| Multi-Utilities 0.8% | ||||||||||||||
| Consolidated Edison, Inc. |
United States | 738 | 70,604 | |||||||||||
| E.ON SE |
Germany | 16,999 | 212,389 | |||||||||||
| Engie SA |
France | 13,743 | 217,606 | |||||||||||
| Sempra Energy |
United States | 1,726 | 260,902 | |||||||||||
|
|
|
|||||||||||||
| 761,501 | ||||||||||||||
|
|
|
|||||||||||||
| Oil, Gas & Consumable Fuels 3.7% | ||||||||||||||
| APA Corp. |
United States | 2,526 | 91,088 | |||||||||||
| ARC Resources Ltd. |
Canada | 4,800 | 54,372 | |||||||||||
| BP PLC |
United Kingdom | 49,334 | 311,583 | |||||||||||
| Exxon Mobil Corp. |
United States | 10,348 | 1,134,762 | |||||||||||
| HF Sinclair Corp. |
United States | 1,198 | 57,959 | |||||||||||
| Marathon Petroleum Corp. |
United States | 3,673 | 495,231 | |||||||||||
| Ovintiv, Inc. |
United States | 1,951 | 70,392 | |||||||||||
| Phillips 66 |
United States | 3,779 | 383,115 | |||||||||||
| Shell PLC |
Netherlands | 13,669 | 390,160 | |||||||||||
| Valero Energy Corp. |
United States | 3,002 | 419,079 | |||||||||||
|
|
|
|||||||||||||
| 3,407,741 | ||||||||||||||
|
|
|
|||||||||||||
| Personal Products 0.5% | ||||||||||||||
| Beiersdorf AG |
Germany | 733 | 95,524 | |||||||||||
| Estee Lauder Cos., Inc., Class A |
United States | 795 | 195,936 | |||||||||||
| L’Oreal SA |
France | 444 | 198,380 | |||||||||||
|
|
|
|||||||||||||
| 489,840 | ||||||||||||||
|
|
|
|||||||||||||
| 174 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Pharmaceuticals 0.5% | ||||||||||||||
| Pfizer, Inc. |
United States | 8,745 | $ | 356,796 | ||||||||||
| Viatris, Inc. |
United States | 9,309 | 89,553 | |||||||||||
|
|
|
|||||||||||||
| 446,349 | ||||||||||||||
|
|
|
|||||||||||||
| Professional Services 0.5% | ||||||||||||||
| Adecco Group AG |
Switzerland | 1,206 | 43,762 | |||||||||||
| Randstad NV |
Netherlands | 936 | 55,524 | |||||||||||
| Recruit Holdings Co. Ltd. |
Japan | 11,400 | 312,646 | |||||||||||
| Robert Half International, Inc. |
United States | 820 | 66,067 | |||||||||||
|
|
|
|||||||||||||
| 477,999 | ||||||||||||||
|
|
|
|||||||||||||
| Real Estate Investment Trusts (REITs) 0.4% | ||||||||||||||
| Simon Property Group, Inc. |
United States | 2,469 | 276,454 | |||||||||||
| Stockland |
Australia | 17,771 | 47,371 | |||||||||||
| Vicinity Ltd. |
Australia | 29,535 | 38,474 | |||||||||||
|
|
|
|||||||||||||
| 362,299 | ||||||||||||||
|
|
|
|||||||||||||
| Real Estate Management & Development 0.5% | ||||||||||||||
| CK Asset Holdings Ltd. |
Hong Kong | 14,500 | 88,017 | |||||||||||
| CK Hutchison Holdings Ltd., Class A |
United Kingdom | 19,000 | 117,873 | |||||||||||
| Henderson Land Development Co. Ltd. |
Hong Kong | 9,000 | 31,128 | |||||||||||
| Sun Hung Kai Properties Ltd. |
Hong Kong | 10,000 | 140,128 | |||||||||||
| Wharf Real Estate Investment Co. Ltd. |
Hong Kong | 11,000 | 63,198 | |||||||||||
|
|
|
|||||||||||||
| 440,344 | ||||||||||||||
|
|
|
|||||||||||||
| Semiconductors & Semiconductor Equipment 4.1% | ||||||||||||||
| Broadcom, Inc. |
United States | 1,308 | 839,134 | |||||||||||
| Infineon Technologies AG |
Germany | 9,446 | 386,695 | |||||||||||
| Microchip Technology, Inc. |
United States | 3,570 | 299,095 | |||||||||||
| b | ON Semiconductor Corp. |
United States | 2,936 | 241,692 | ||||||||||
| QUALCOMM, Inc. |
United States | 5,521 | 704,369 | |||||||||||
| b | Renesas Electronics Corp. |
Japan | 9,000 | 129,397 | ||||||||||
| Rohm Co. Ltd. |
Japan | 600 | 49,455 | |||||||||||
| STMicroelectronics NV |
Switzerland | 5,176 | 275,297 | |||||||||||
| Texas Instruments, Inc. |
United States | 4,200 | 781,242 | |||||||||||
|
|
|
|||||||||||||
| 3,706,376 | ||||||||||||||
|
|
|
|||||||||||||
| Software 5.5% | ||||||||||||||
| b | Adobe, Inc. |
United States | 2,723 | 1,049,363 | ||||||||||
| b | Autodesk, Inc. |
United States | 1,384 | 288,093 | ||||||||||
| Bentley Systems, Inc., Class B |
United States | 1,294 | 55,629 | |||||||||||
| b | Cadence Design Systems, Inc. |
United States | 2,064 | 433,626 | ||||||||||
| Constellation Software, Inc. |
Canada | 200 | 375,499 | |||||||||||
| b | Dropbox, Inc., Class A |
United States | 2,093 | 45,251 | ||||||||||
| b | Fair Isaac Corp. |
United States | 192 | 134,916 | ||||||||||
| b | Fortinet, Inc. |
United States | 4,967 | 330,107 | ||||||||||
| Intuit, Inc. |
United States | 506 | 225,590 | |||||||||||
| Microsoft Corp. |
United States | 1,294 | 373,060 | |||||||||||
| Open Text Corp. |
Canada | 1,900 | 73,187 | |||||||||||
| Oracle Corp. |
United States | 10,245 | 951,965 | |||||||||||
| Sage Group PLC |
United Kingdom | 7,169 | 68,697 | |||||||||||
| b | Synopsys, Inc. |
United States | 1,148 | 443,415 | ||||||||||
| b | VMware, Inc., Class A |
United States | 1,625 | 202,881 | ||||||||||
|
|
|
|||||||||||||
| 5,051,279 | ||||||||||||||
|
|
|
|||||||||||||
| Specialty Retail 1.9% | ||||||||||||||
| Best Buy Co., Inc. |
United States | 1,541 | 120,614 | |||||||||||
| Home Depot, Inc. |
United States | 2,232 | 658,708 | |||||||||||
| JD Sports Fashion PLC |
United Kingdom | 19,905 | 43,747 | |||||||||||
| franklintempleton.com | Annual Report | 175 | ||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Specialty Retail (continued) | ||||||||||||||
| Kingfisher PLC |
United Kingdom | 14,758 | $ | 47,662 | ||||||||||
| Lowe’s Cos., Inc. |
United States | 3,353 | 670,499 | |||||||||||
| b | Ulta Beauty, Inc. |
United States | 392 | 213,903 | ||||||||||
|
|
|
|||||||||||||
| 1,755,133 | ||||||||||||||
|
|
|
|||||||||||||
| Textiles, Apparel & Luxury Goods 1.6% | ||||||||||||||
| Burberry Group PLC |
United Kingdom | 2,958 | 94,581 | |||||||||||
| Cie Financiere Richemont SA, Class A |
Switzerland | 2,455 | 392,080 | |||||||||||
| LVMH Moet Hennessy Louis Vuitton SE |
France | 1,101 | 1,010,055 | |||||||||||
|
|
|
|||||||||||||
| 1,496,716 | ||||||||||||||
|
|
|
|||||||||||||
| Tobacco 0.1% | ||||||||||||||
| Imperial Brands PLC |
United Kingdom | 5,641 | 130,011 | |||||||||||
|
|
|
|||||||||||||
| Trading Companies & Distributors 1.8% | ||||||||||||||
| ITOCHU Corp. |
Japan | 9,400 | 303,775 | |||||||||||
| Marubeni Corp. |
Japan | 12,300 | 165,938 | |||||||||||
| Mitsubishi Corp. |
Japan | 9,900 | 353,407 | |||||||||||
| Mitsui & Co. Ltd. |
Japan | 11,500 | 355,654 | |||||||||||
| Sumitomo Corp. |
Japan | 8,800 | 154,788 | |||||||||||
| Toyota Tsusho Corp. |
Japan | 1,700 | 71,786 | |||||||||||
| b | United Rentals, Inc. |
United States | 550 | 217,668 | ||||||||||
|
|
|
|||||||||||||
| 1,623,016 | ||||||||||||||
|
|
|
|||||||||||||
| Water Utilities 0.1% | ||||||||||||||
| Essential Utilities, Inc. |
United States | 1,441 | 62,900 | |||||||||||
|
|
|
|||||||||||||
| Wireless Telecommunication Services 0.3% | ||||||||||||||
| KDDI Corp. |
Japan | 9,900 | 304,461 | |||||||||||
|
|
|
|||||||||||||
| Total Common Stocks (Cost $49,968,011) |
56,701,100 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments before Short-Term Investments |
56,701,100 | |||||||||||||
|
|
|
|||||||||||||
| Short-Term Investments 27.8% | ||||||||||||||
| Money Market Funds 27.8% | ||||||||||||||
| c | State Street Institutional U.S. Government Money Market Fund, 4.70% |
United States | 25,346,244 | 25,346,244 | ||||||||||
|
|
|
|||||||||||||
| Total Short-Term Investments (Cost $25,346,244) | 25,346,244 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments (Cost $75,314,255) 90.0% | 82,047,344 | |||||||||||||
|
|
|
|||||||||||||
| Other Assets, less Liabilities 10.0% | 9,098,596 | |||||||||||||
|
|
|
|||||||||||||
| Net Assets 100.0% | $91,145,940 | |||||||||||||
|
|
|
|||||||||||||
† Rounds to less than 0.1% of net assets.
a 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 March 31, 2023, the value of was $122,280, representing 0.1% of net assets.
b Non-income producing.
c Rate shown is one-day yield as of the end of the reporting period.
| 176 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
At March 31, 2023, the Fund had the following total return swap contracts outstanding. See Note 1(c).
| Total Return Swap Contracts | ||||||||||||||||||||||||
| Underlying Instrument | Financing Rate | Payment Frequency |
Counterparty | Maturity Date |
Notional Value |
Value/Unrealized Appreciation (Depreciation) |
||||||||||||||||||
| OTC Swap Contracts | ||||||||||||||||||||||||
| Equity Contracts - Short | ||||||||||||||||||||||||
| MSFTLSSP |
1-month USD LIBOR | At Maturity | MSCS | April 20, 2023 | 41,080 | — | ||||||||||||||||||
At March 31, 2023 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 | 4,132,242 | $2,757,420 | 6/15/23 | $ — | $ (17,412 | ) | |||||||||||||||||||||
| Australian Dollar |
MSCO | 4,132,242 | 2,752,168 | 6/21/23 | 23,295 | — | ||||||||||||||||||||||
| Brazilian Real |
MSCO | 9,216,005 | 1,718,602 | 6/21/23 | — | (73,403 | ) | |||||||||||||||||||||
| Canadian Dollar |
MSCO | 4,152,872 | 3,026,694 | 6/21/23 | — | (45,776 | ) | |||||||||||||||||||||
| Canadian Dollar |
MSCO | 19,608 | 14,230 | 6/21/23 | — | (277 | ) | |||||||||||||||||||||
| Czech Koruna |
MSCO | 39,573,780 | 1,771,462 | 6/21/23 | 52,790 | — | ||||||||||||||||||||||
| Euro |
MSCO | 1,908,275 | 2,050,316 | 6/21/23 | — | (32,079 | ) | |||||||||||||||||||||
| Great British Pound |
MSCO | 2,258,701 | 2,735,050 | 6/21/23 | 62,044 | — | ||||||||||||||||||||||
| Great British Pound |
MSCO | 2,672,437 | 3,243,713 | 6/21/23 | 65,736 | — | ||||||||||||||||||||||
| Hungarian Forint |
MSCO | 1,303,011,469 | 3,415,076 | 6/21/23 | — | (217,262 | ) | |||||||||||||||||||||
| Hungarian Forint |
MSCO | 1,392,440,594 | 3,706,703 | 6/21/23 | 174,933 | — | ||||||||||||||||||||||
| Israeli Shekel |
MSCO | 30,777,037 | 8,516,594 | 6/21/23 | — | (57,328 | ) | |||||||||||||||||||||
| Japanese Yen |
MSCO | 298,029,597 | 2,284,571 | 6/21/23 | — | (19,588 | ) | |||||||||||||||||||||
| Japanese Yen |
MSCO | 110,718,022 | 845,937 | 6/21/23 | — | (4,495 | ) | |||||||||||||||||||||
| Mexican Peso |
MSCO | 55,870,111 | 2,886,691 | 6/21/23 | 161,337 | — | ||||||||||||||||||||||
| Mexican Peso |
MSCO | 90,548,359 | 4,659,372 | 6/21/23 | 280,549 | — | ||||||||||||||||||||||
| New Zealand Dollar |
MSCO | 211,236 | 130,817 | 6/21/23 | 1,340 | — | ||||||||||||||||||||||
| Norwegian Krone |
MSCO | 40,551,331 | 3,820,533 | 6/21/23 | — | (65,143 | ) | |||||||||||||||||||||
| Polish Zloty |
MSCO | 7,404,899 | 1,674,081 | 6/21/23 | 36,550 | — | ||||||||||||||||||||||
| South African Rand |
MSCO | 52,147,887 | 2,852,122 | 6/21/23 | — | (67,229 | ) | |||||||||||||||||||||
| South African Rand |
MSCO | 43,535,474 | 2,357,063 | 6/21/23 | 80,146 | — | ||||||||||||||||||||||
| South Korean Won |
MSCO | 6,064,618,962 | 4,649,451 | 6/21/23 | — | (31,062 | ) | |||||||||||||||||||||
| Swedish Krona |
MSCO | 1,980,947 | 185,606 | 6/21/23 | — | (6,203 | ) | |||||||||||||||||||||
| Swedish Krona |
MSCO | 1,980,947 | 188,665 | 6/21/23 | 3,144 | — | ||||||||||||||||||||||
| Swedish Krona |
MSCO | 28,853,921 | 2,748,047 | 6/21/23 | 45,797 | — | ||||||||||||||||||||||
| Swiss Franc |
MSCO | 527,580 | 585,781 | 6/21/23 | — | (3,418 | ) | |||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
| Total Forward Exchange Contracts |
$987,661 | $(640,675 | ) | |||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
| Net unrealized appreciation (depreciation) |
|
$ 346,986 | ||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
a May be comprised of multiple contracts with the same counterparty, currency and settlement date.
| franklintempleton.com | Annual Report | 177 | ||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
At March 31, 2023, 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, April |
Long | 14 | $ | 1,118,460 | 4/28/23 | $ | 93,097 | |||||||||||||||||
| Brent Crude, June |
Long | 4 | 317,800 | 6/30/23 | 26,623 | |||||||||||||||||||
| Cocoa, May |
Long | 39 | 1,143,870 | 5/15/23 | 97,774 | |||||||||||||||||||
| Cocoa, September |
Long | 25 | 719,000 | 9/14/23 | 42,306 | |||||||||||||||||||
| Coffee ’C’, September |
Long | 4 | 410,650 | 9/27/23 | 3,840 | |||||||||||||||||||
| Coffee ’C’, September |
Long | 4 | 252,675 | 9/19/23 | (13,043 | ) | ||||||||||||||||||
| Corn, September |
Long | 31 | 894,737 | 9/14/23 | (36,067 | ) | ||||||||||||||||||
| Cotton No. 2, December |
Long | 9 | 375,390 | 12/06/23 | 6,098 | |||||||||||||||||||
| Gasoline Rbob, April |
Long | 9 | 1,013,418 | 4/28/23 | 100,140 | |||||||||||||||||||
| Gasoline Rbob, June |
Long | 3 | 324,261 | 6/30/23 | 30,115 | |||||||||||||||||||
| Gold 100 Ounce, December |
Long | 4 | 815,600 | 12/27/23 | 16,990 | |||||||||||||||||||
| Lean Hog, August |
Long | 15 | 566,550 | 8/14/23 | (38,624 | ) | ||||||||||||||||||
| Live Cattle, August |
Long | 30 | 1,937,100 | 8/31/23 | 48,652 | |||||||||||||||||||
| Low Sulphur Gasoil, July |
Long | 4 | 293,800 | 7/12/23 | 13,993 | |||||||||||||||||||
| Low Sulphur Gasoil, May |
Long | 13 | 977,275 | 5/11/23 | 45,928 | |||||||||||||||||||
| Natural Gas, June |
Long | 4 | 109,280 | 6/28/23 | (10,469 | ) | ||||||||||||||||||
| NY Harbor ULSD, April |
Long | 8 | 880,522 | 4/28/23 | 51,486 | |||||||||||||||||||
| NY Harbor ULSD, June |
Long | 3 | 321,804 | 6/30/23 | 18,095 | |||||||||||||||||||
| Silver, September |
Long | 3 | 368,235 | 9/27/23 | 38,218 | |||||||||||||||||||
| Soybean Meal, December |
Long | 12 | 503,760 | 12/14/23 | 5,294 | |||||||||||||||||||
| Soybean Meal, May |
Long | 29 | 1,351,400 | 5/12/23 | (23,118 | ) | ||||||||||||||||||
| Soybean Oil, December |
Long | 13 | 421,200 | 12/14/23 | (33,878 | ) | ||||||||||||||||||
| Soybean, May |
Long | 23 | 1,731,325 | 5/12/23 | (15,140 | ) | ||||||||||||||||||
| Soybean, November |
Long | 10 | 659,875 | 11/14/23 | (25,367 | ) | ||||||||||||||||||
| Sugar No. 11, September |
Long | 28 | 673,299 | 9/29/23 | 73,550 | |||||||||||||||||||
| Wheat, September |
Long | 13 | 465,887 | 9/14/23 | (36,038 | ) | ||||||||||||||||||
| WTI Crude, April |
Long | 2 | 151,340 | 4/20/23 | 15,755 | |||||||||||||||||||
| WTI Crude, June |
Long | 4 | 302,920 | 6/20/23 | 31,511 | |||||||||||||||||||
| Coffee ’C’, May |
Short | 14 | 895,125 | 5/18/23 | 45,476 | |||||||||||||||||||
| Copper, May |
Short | 16 | 1,637,800 | 5/26/23 | (11,751 | ) | ||||||||||||||||||
| Corn, May |
Short | 38 | 1,254,950 | 5/12/23 | (61,658 | ) | ||||||||||||||||||
| Cotton No. 2, May |
Short | 32 | 1,324,480 | 5/08/23 | (30,690 | ) | ||||||||||||||||||
| Lean Hog, June |
Short | 37 | 1,356,050 | 6/14/23 | 92,081 | |||||||||||||||||||
| Natural Gas, April |
Short | 36 | 797,760 | 4/26/23 | 138,184 | |||||||||||||||||||
| Silver, May |
Short | 14 | 1,690,920 | 5/26/23 | (169,304 | ) | ||||||||||||||||||
| Soybean Oil, May |
Short | 8 | 266,352 | 5/12/23 | 5,496 | |||||||||||||||||||
| Wheat, May |
Short | 80 | 2,769,000 | 5/12/23 | 170,288 | |||||||||||||||||||
| Index Contracts |
||||||||||||||||||||||||
| Australian 10 Yr. Bond |
Long | 55 | 4,526,677 | 6/15/23 | 143,553 | |||||||||||||||||||
| Canada 10 Yr. Bond |
Long | 102 | 9,508,494 | 6/21/23 | 298,270 | |||||||||||||||||||
| FTSE/MIB Index |
Long | 68 | 9,846,539 | 6/16/23 | 308,428 | |||||||||||||||||||
| Hang Seng Index |
Long | 8 | 1,043,624 | 4/27/23 | 35,181 | |||||||||||||||||||
| IBEX 35 Index |
Long | 73 | 7,291,204 | 4/21/23 | 209,530 | |||||||||||||||||||
| Long Gilt |
Long | 14 | 1,789,019 | 6/28/23 | (22,295 | ) | ||||||||||||||||||
| NASDAQ 100 E-Mini |
Long | 39 | 10,375,365 | 6/16/23 | 679,449 | |||||||||||||||||||
| OMXS30 Index |
Long | 166 | 3,548,664 | 4/21/23 | 137,394 | |||||||||||||||||||
| S&P/TSX 60 Index |
Long | 7 | 1,250,881 | 6/15/23 | 24,431 | |||||||||||||||||||
| U.S. Treasury 10 Yr. Note |
Long | 105 | 12,066,797 | 6/21/23 | 348,452 | |||||||||||||||||||
| CAC 40 10 Euro |
Short | 53 | 4,223,053 | 4/21/23 | (180,385 | ) | ||||||||||||||||||
| DAX Index |
Short | 10 | 4,290,662 | 6/16/23 | (123,061 | ) | ||||||||||||||||||
| Euro BTP |
Short | 50 | 6,266,100 | 6/08/23 | (10,732 | ) | ||||||||||||||||||
| Euro-Bund |
Short | 60 | 8,855,001 | 6/08/23 | (320,786 | ) | ||||||||||||||||||
| Euro-OAT |
Short | 14 | 1,980,837 | 6/08/23 | (66,485 | ) | ||||||||||||||||||
| FTSE 100 Index |
Short | 20 | 1,889,048 | 6/16/23 | (13,008 | ) | ||||||||||||||||||
| 178 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
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) |
||||||||||||||||||||||||
| FTSE/JSE Africa Top40 Index |
Short | 86 | $ | 3,452,796 | 6/15/23 | $ | (86,788 | ) | ||||||||||||||||
| Japanese 10 Year Bond |
Short | 4 | 4,451,724 | 6/13/23 | (78,461 | ) | ||||||||||||||||||
| Mex Bolsa Index |
Short | 196 | 5,897,585 | 6/16/23 | (163,410 | ) | ||||||||||||||||||
| Nikkei 225 Mini |
Short | 20 | 4,213,690 | 6/08/23 | (199,204 | ) | ||||||||||||||||||
| S+P500 E-Mini |
Short | 42 | 8,689,275 | 6/16/23 | (427,682 | ) | ||||||||||||||||||
| SGX Nifty 50 |
Short | 225 | 7,837,875 | 4/27/23 | (130,587 | ) | ||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Total Futures Contracts |
$ | 1,067,647 | ||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
* As of year end.
The following table represents the individual short positions and related values of the equity securities underlying the total return swap with Morgan Stanley Capital Services LLC as of March 31, 2023, expiration date 4/20/23:
| Country | Shares | Value | ||||||||||
| Reference Entity – Short 100.00% |
||||||||||||
| Automobiles & Components 5.61% |
||||||||||||
| Aptiv PLC |
United States | (2,260 | ) | $ | (253,549 | ) | ||||||
| Cie Generale des Etablissements Michelin SCA |
France | (5,902 | ) | (180,472 | ) | |||||||
| Continental AG |
Germany | (972 | ) | (72,782 | ) | |||||||
| Ford Motor Co. |
United States | (33,993 | ) | (428,312 | ) | |||||||
| Lear Corp. |
United States | (482 | ) | (67,234 | ) | |||||||
| Porsche Automobil Holding SE |
Germany | (1,365 | ) | (78,481 | ) | |||||||
| Tesla Inc. |
United States | (3,061 | ) | (635,035 | ) | |||||||
| Toyota Motor Corp. |
Japan | (41,600 | ) | (587,632 | ) | |||||||
|
|
|
|||||||||||
| (2,303,497 | ) | |||||||||||
|
|
|
|||||||||||
| Banks 0.82% |
||||||||||||
| DNB Bank ASA |
Norway | (8,032 | ) | (143,682 | ) | |||||||
| Hang Seng Bank Ltd. |
Hong Kong | (6,100 | ) | (86,799 | ) | |||||||
| Signature Bank |
United States | (609 | ) | (111 | ) | |||||||
| SVB Financial Group |
United States | (573 | ) | (519 | ) | |||||||
| Svenska Handelsbanken AB, A |
Sweden | (12,386 | ) | (107,310 | ) | |||||||
|
|
|
|||||||||||
| (338,421 | ) | |||||||||||
|
|
|
|||||||||||
| Capital Goods 8.45% |
||||||||||||
| Airbus SE |
France | (4,274 | ) | (572,449 | ) | |||||||
| Alfa Laval AB |
Sweden | (2,354 | ) | (83,926 | ) | |||||||
| Alstom SA |
France | (2,855 | ) | (77,794 | ) | |||||||
| Assa Abloy AB, B |
Sweden | (8,374 | ) | (200,516 | ) | |||||||
| Atlas Copco AB |
Sweden | (12,979 | ) | (149,171 | ) | |||||||
| Atlas Copco AB, A |
Sweden | (22,040 | ) | (279,582 | ) | |||||||
| Epiroc AB, A |
Sweden | (5,300 | ) | (105,187 | ) | |||||||
| Epiroc AB, B |
Sweden | (3,147 | ) | (53,550 | ) | |||||||
| Ferrovial SA |
Spain | (4,080 | ) | (120,082 | ) | |||||||
| Generac Holdings Inc. |
United States | (539 | ) | (58,217 | ) | |||||||
| IMCD NV |
Netherlands | (481 | ) | (78,596 | ) | |||||||
| Indutrade AB |
Sweden | (2,251 | ) | (47,779 | ) | |||||||
| Kingspan Group PLC |
Ireland | (1,321 | ) | (90,475 | ) | |||||||
| L3Harris Technologies Inc. |
United States | (1,622 | ) | (318,301 | ) | |||||||
| Makita Corp. |
Japan | (1,900 | ) | (46,825 | ) | |||||||
| Melrose Industries PLC |
United Kingdom | (35,382 | ) | (72,841 | ) | |||||||
| Nibe Industrier AB |
Sweden | (12,523 | ) | (142,264 | ) | |||||||
| Plug Power Inc. |
United States | (4,521 | ) | (52,986 | ) | |||||||
| franklintempleton.com | Annual Report | 179 | ||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||
| Reference Entity – Short (continued) |
||||||||||||
| Capital Goods (continued) |
||||||||||||
| Schindler Holding AG |
Switzerland | (336 | ) | $ | (74,332 | ) | ||||||
| Siemens Energy AG |
Germany | (3,733 | ) | (82,088 | ) | |||||||
| Skanska AB, B |
Sweden | (2,879 | ) | (44,020 | ) | |||||||
| Stanley Black & Decker Inc. |
United States | (1,261 | ) | (101,611 | ) | |||||||
| Toshiba Corp. |
Japan | (3,400 | ) | (113,555 | ) | |||||||
| Vestas Wind Systems A/S |
Denmark | (8,349 | ) | (242,316 | ) | |||||||
| Volvo AB |
Sweden | (12,828 | ) | (264,550 | ) | |||||||
|
|
|
|||||||||||
| (3,473,013 | ) | |||||||||||
|
|
|
|||||||||||
| Commercial & Professional Services 0.88% |
||||||||||||
| Equifax Inc. |
United States | (1,012 | ) | (205,274 | ) | |||||||
| Rentokil Initial PLC |
United Kingdom | (21,631 | ) | (158,227 | ) | |||||||
|
|
|
|||||||||||
| (363,501 | ) | |||||||||||
|
|
|
|||||||||||
| Consumer Discretionary Distribution & Retail 2.37% |
||||||||||||
| Advance Auto Parts Inc. |
United States | (529 | ) | (64,332 | ) | |||||||
| CarMax Inc. |
United States | (1,416 | ) | (91,020 | ) | |||||||
| Delivery Hero SE |
South Korea | (1,520 | ) | (51,805 | ) | |||||||
| Doordash Inc. |
United States | (1,465 | ) | (93,115 | ) | |||||||
| H & M AB, B |
Sweden | (6,013 | ) | (85,717 | ) | |||||||
| Target Corp. |
United States | (3,542 | ) | (586,661 | ) | |||||||
|
|
|
|||||||||||
| (972,650 | ) | |||||||||||
|
|
|
|||||||||||
| Consumer Durables & Apparel 1.33% |
||||||||||||
| adidas AG |
Germany | (1,384 | ) | (244,764 | ) | |||||||
| Endeavour Group Ltd. |
Australia | (12,149 | ) | (55,086 | ) | |||||||
| Hasbro Inc. |
United States | (1,163 | ) | (62,442 | ) | |||||||
| Puma SE |
Germany | (900 | ) | (55,598 | ) | |||||||
| VF Corp. |
United States | (2,942 | ) | (67,401 | ) | |||||||
| Whirlpool Corp. |
United States | (460 | ) | (60,729 | ) | |||||||
|
|
|
|||||||||||
| (546,020 | ) | |||||||||||
|
|
|
|||||||||||
| Consumer Services 0.60% |
||||||||||||
| Caesars Entertainment Inc. |
United States | (1,873 | ) | (91,421 | ) | |||||||
| Carnival Corp. |
United States | (9,078 | ) | (92,142 | ) | |||||||
| Whitbread PLC |
United Kingdom | (1,747 | ) | (64,521 | ) | |||||||
|
|
|
|||||||||||
| (248,084 | ) | |||||||||||
|
|
|
|||||||||||
| Consumer Staples Distribution & Retail 0.39% |
||||||||||||
| Aeon Co. Ltd. |
Japan | (5,600 | ) | (107,969 | ) | |||||||
| Kesko OYJ |
Finland | (2,345 | ) | (50,458 | ) | |||||||
|
|
|
|||||||||||
| (158,427 | ) | |||||||||||
|
|
|
|||||||||||
| Energy 6.09% |
||||||||||||
| Aker BP ASA |
Norway | (2,741 | ) | (67,078 | ) | |||||||
| Cameco Corp. |
Canada | (3,700 | ) | (96,755 | ) | |||||||
| Enbridge Inc. |
Canada | (14,700 | ) | (559,715 | ) | |||||||
| ENEOS Holdings Inc. |
Japan | (26,900 | ) | (94,026 | ) | |||||||
| Equinor ASA |
Norway | (8,291 | ) | (236,465 | ) | |||||||
| Kinder Morgan Inc. |
United States | (16,993 | ) | (297,547 | ) | |||||||
| ONEOK Inc. |
United States | (3,794 | ) | (241,071 | ) | |||||||
| Pembina Pipeline Corp. |
Canada | (4,800 | ) | (155,277 | ) | |||||||
| Santos Ltd. |
Australia | (26,895 | ) | (124,289 | ) | |||||||
| TC Energy Corp. |
Canada | (8,400 | ) | (326,293 | ) | |||||||
| Williams Cos Inc. |
United States | (10,215 | ) | (305,020 | ) | |||||||
|
|
|
|||||||||||
| (2,503,536 | ) | |||||||||||
|
|
|
|||||||||||
| 180 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||
| Reference Entity – Short (continued) |
||||||||||||
| Equity Real Estate Investment Trusts (REITs) 6.34% |
||||||||||||
| Alexandria Real Estate Equities Inc. |
United States | (1,325 | ) | $ | (166,407 | ) | ||||||
| Boston Properties Inc. REIT |
United States | (1,358 | ) | (73,495 | ) | |||||||
| Camden Property Trust |
United States | (849 | ) | (89,009 | ) | |||||||
| Digital Realty Trust Inc. REIT |
United States | (2,367 | ) | (232,700 | ) | |||||||
| Equinix Inc. |
United States | (756 | ) | (545,106 | ) | |||||||
| Essex Property Trust Inc. |
United States | (541 | ) | (113,145 | ) | |||||||
| Healthcare Realty Trust Inc. |
United States | (3,092 | ) | (59,768 | ) | |||||||
| Healthpeak Properties Inc. |
United States | (4,531 | ) | (99,546 | ) | |||||||
| Invitation Homes, Inc. |
United States | (5,022 | ) | (156,837 | ) | |||||||
| SBA Communications Corp. REIT |
United States | (877 | ) | (228,958 | ) | |||||||
| Sun Communities Inc. |
United States | (1,016 | ) | (143,134 | ) | |||||||
| Swiss Prime Site AG |
Switzerland | (644 | ) | (53,611 | ) | |||||||
| UDR Inc. |
United States | (2,714 | ) | (111,437 | ) | |||||||
| Ventas Inc. REIT |
United States | (3,283 | ) | (142,318 | ) | |||||||
| Vonovia SE |
Germany | (6,128 | ) | (115,446 | ) | |||||||
| Welltower Inc. |
United States | (3,800 | ) | (272,422 | ) | |||||||
|
|
|
|||||||||||
| (2,603,339 | ) | |||||||||||
|
|
|
|||||||||||
| Financial Services 4.52% |
||||||||||||
| Ally Financial Inc. |
United States | (2,838 | ) | (72,341 | ) | |||||||
| Annaly Capital Management Inc. |
United States | (3,860 | ) | (73,765 | ) | |||||||
| ASX Ltd. |
Australia | (1,651 | ) | (71,896 | ) | |||||||
| Coinebase Global Inc., A |
United States | (906 | ) | (61,218 | ) | |||||||
| Credit Suisse Group AG |
Switzerland | (33,817 | ) | (30,450 | ) | |||||||
| EQT AB |
Sweden | (3,034 | ) | (61,619 | ) | |||||||
| Euronext NV |
Netherlands | (729 | ) | (55,901 | ) | |||||||
| Groupe Bruxelles Lambert SA |
Belgium | (846 | ) | (72,152 | ) | |||||||
| Investor AB |
Sweden | (4,149 | ) | (84,504 | ) | |||||||
| Investor AB, B |
Sweden | (15,161 | ) | (301,259 | ) | |||||||
| Japan Exchange Group Inc. |
Japan | (4,300 | ) | (65,216 | ) | |||||||
| M&G PLC |
United Kingdom | (19,364 | ) | (47,406 | ) | |||||||
| S&P Global Inc. |
United States | (1,637 | ) | (564,389 | ) | |||||||
| Singapore Exchange Ltd. |
Singapore | (7,200 | ) | (50,904 | ) | |||||||
| St James’s Place PLC |
United Kingdom | (4,599 | ) | (68,863 | ) | |||||||
| T Rowe Price Group Inc. |
United States | (913 | ) | (103,078 | ) | |||||||
| Tradeweb Markets Inc. |
United States | (926 | ) | (73,173 | ) | |||||||
|
|
|
|||||||||||
| (1,858,134 | ) | |||||||||||
|
|
|
|||||||||||
| Food, Beverage & Tobacco 2.34% |
||||||||||||
| Barry Callebaut AG |
Switzerland | (30 | ) | (63,675 | ) | |||||||
| Chocoladefabriken Lindt & Spruengli AG |
Switzerland | (7 | ) | (82,754 | ) | |||||||
| Danone SA |
France | (5,467 | ) | (340,400 | ) | |||||||
| Hormel Foods Corp. |
United States | (2,540 | ) | (101,295 | ) | |||||||
| Kerry Group PLC |
Ireland | (1,351 | ) | (134,802 | ) | |||||||
| McCormick & Co Inc. |
United States | (2,100 | ) | (174,741 | ) | |||||||
| Mowi ASA |
Norway | (3,382 | ) | (62,453 | ) | |||||||
|
|
|
|||||||||||
| (960,120 | ) | |||||||||||
|
|
|
|||||||||||
| Health Care Equipment & Services 4.22% |
||||||||||||
| Baxter International Inc. |
United States | (4,131 | ) | (167,553 | ) | |||||||
| Coloplast A/S |
Denmark | (970 | ) | (127,578 | ) | |||||||
| DENTSPLY SIRONA Inc. |
United States | (1,767 | ) | (69,408 | ) | |||||||
| Fresenius Medical Care AG & Co. KGaA |
Germany | (1,726 | ) | (73,321 | ) | |||||||
| Insulet Corp. |
United States | (528 | ) | (168,411 | ) | |||||||
| Koninklijke Philips NV |
Netherlands | (7,446 | ) | (136,198 | ) | |||||||
| Laboratory Corp of America Holdings |
United States | (753 | ) | (172,753 | ) | |||||||
| Masimo Corp. |
United States | (409 | ) | (75,477 | ) | |||||||
| Medtronic PLC |
United States | (6,700 | ) | (540,154 | ) | |||||||
| franklintempleton.com | Annual Report | 181 | ||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||
| Reference Entity – Short (continued) |
||||||||||||
| Health Care Equipment & Services (continued) |
||||||||||||
| Novocure Ltd. |
United States | (789 | ) | $ | (47,451 | ) | ||||||
| Ramsay Health Care Ltd. |
Australia | (1,563 | ) | (69,655 | ) | |||||||
| Sysmex Corp. |
Japan | (1,300 | ) | (84,423 | ) | |||||||
|
|
|
|||||||||||
| (1,732,382 | ) | |||||||||||
|
|
|
|||||||||||
| Household & Personal Products 1.09% |
||||||||||||
| Essity AB, B |
Sweden | (5,044 | ) | (144,176 | ) | |||||||
| Kimberly-Clark Corp. |
United States | (2,252 | ) | (302,264 | ) | |||||||
|
|
|
|||||||||||
| (446,440 | ) | |||||||||||
|
|
|
|||||||||||
| Insurance 1.98% |
||||||||||||
| Ageas SA/NV |
Belgium | (1,414 | ) | (61,234 | ) | |||||||
| Assurant Inc. |
United States | (462 | ) | (55,472 | ) | |||||||
| Insurance Australia Group Ltd. |
Australia | (21,548 | ) | (67,685 | ) | |||||||
| Markel Corp. |
United States | (114 | ) | (145,625 | ) | |||||||
| Medibank Pvt Ltd. |
Australia | (24,120 | ) | (54,279 | ) | |||||||
| Phoenix Group Holdings PLC |
United Kingdom | (6,540 | ) | (44,184 | ) | |||||||
| T&D Holdings Inc. |
Japan | (4,900 | ) | (60,417 | ) | |||||||
| The Allstate Corp. |
United States | (2,326 | ) | (257,744 | ) | |||||||
| Tryg A/S |
Denmark | (3,093 | ) | (67,620 | ) | |||||||
|
|
|
|||||||||||
| (814,260 | ) | |||||||||||
|
|
|
|||||||||||
| Materials 7.74% |
||||||||||||
| Akzo Nobel NV |
Netherlands | (1,537 | ) | (120,197 | ) | |||||||
| Alcoa Corp. |
United States | (1,512 | ) | (64,351 | ) | |||||||
| Ball Corp. |
United States | (2,642 | ) | (145,601 | ) | |||||||
| Chr. Hansen Holding A/S |
Denmark | (895 | ) | (68,007 | ) | |||||||
| Croda International PLC |
United Kingdom | (1,166 | ) | (93,682 | ) | |||||||
| Ecolab Inc. |
United States | (2,141 | ) | (354,400 | ) | |||||||
| First Quantum Minerals Ltd. |
Canada | (5,000 | ) | (114,789 | ) | |||||||
| Givaudan SA |
Switzerland | (75 | ) | (244,075 | ) | |||||||
| International Flavors & Fragrances Inc. |
United States | (2,174 | ) | (199,921 | ) | |||||||
| Koninklijke DSM NV |
Netherlands | (1,453 | ) | (171,595 | ) | |||||||
| Mitsubishi Chemical Holdings Corp. |
Japan | (11,300 | ) | (66,710 | ) | |||||||
| Newmont Corp. |
United States | (6,329 | ) | (310,247 | ) | |||||||
| Novozymes A/S |
Denmark | (1,724 | ) | (88,230 | ) | |||||||
| PPG Industries Inc. |
United States | (1,946 | ) | (259,947 | ) | |||||||
| Sherwin-Williams Co. |
United States | (2,061 | ) | (463,251 | ) | |||||||
| Stora Enso Oyj |
Finland | (4,701 | ) | (61,187 | ) | |||||||
| Svenska Cellulosa AB SCA |
Sweden | (5,105 | ) | (67,175 | ) | |||||||
| Symrise AG |
Germany | (967 | ) | (105,270 | ) | |||||||
| Umicore SA |
Belgium | (1,769 | ) | (59,983 | ) | |||||||
| UPM-Kymmene OYJ |
Finland | (1,710 | ) | (57,500 | ) | |||||||
| Yara International ASA |
Norway | (1,433 | ) | (62,106 | ) | |||||||
|
|
|
|||||||||||
| (3,178,224 | ) | |||||||||||
|
|
|
|||||||||||
| Media & Entertainment 6.31% |
||||||||||||
| Charter Communications Inc., A |
United States | (907 | ) | (324,352 | ) | |||||||
| Liberty Broadband Corp. |
United States | (1,015 | ) | (82,926 | ) | |||||||
| Match Group Inc. |
United States | (2,289 | ) | (87,875 | ) | |||||||
| News Corp., A |
United States | (3,264 | ) | (56,369 | ) | |||||||
| Paramount Global, B |
United States | (5,225 | ) | (116,570 | ) | |||||||
| ROBLOX Corp. |
United States | (2,810 | ) | (126,394 | ) | |||||||
| Roku Inc. |
United States | (1,005 | ) | (66,149 | ) | |||||||
| Sea Ltd. ADR |
Singapore | (2,900 | ) | (250,995 | ) | |||||||
| Snap Inc. |
United States | (9,197 | ) | (103,098 | ) | |||||||
| Take-Two Interactive Software Inc. |
United States | (1,384 | ) | (165,111 | ) | |||||||
| The Walt Disney Co. |
United States | (5,764 | ) | (577,149 | ) | |||||||
| 182 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||
| Reference Entity – Short (continued) |
||||||||||||
| Media & Entertainment (continued) |
||||||||||||
| Trade Desk Inc. |
United States | (3,566 | ) | $ | (217,205 | ) | ||||||
| Vivendi SA |
France | (6,154 | ) | (62,180 | ) | |||||||
| Warner Bros Discovery Inc. |
United States | (19,994 | ) | (301,910 | ) | |||||||
| Zoominfo Technologies Inc. |
United States | (2,200 | ) | (54,362 | ) | |||||||
|
|
|
|||||||||||
| (2,592,645 | ) | |||||||||||
|
|
|
|||||||||||
| Pharmaceuticals, Biotechnology & Life Sciences 7.01% |
||||||||||||
| Alnylam Pharmaceuticals Inc. |
United States | (1,019 | ) | (204,126 | ) | |||||||
| Argenx SE |
Netherlands | (456 | ) | (168,790 | ) | |||||||
| AstraZeneca PLC |
United Kingdom | (4,253 | ) | (590,648 | ) | |||||||
| Catalent Inc. |
United States | (1,401 | ) | (92,060 | ) | |||||||
| Chugai Pharmaceutical Co. Ltd. |
Japan | (5,700 | ) | (140,048 | ) | |||||||
| Illumina Inc. |
United States | (1,147 | ) | (266,735 | ) | |||||||
| Johnson & Johnson |
United States | (3,526 | ) | (546,530 | ) | |||||||
| Seagen Inc. |
United States | (1,021 | ) | (206,722 | ) | |||||||
| UCB SA |
Belgium | (1,064 | ) | (95,299 | ) | |||||||
| Zoetis Inc. |
United States | (3,409 | ) | (567,394 | ) | |||||||
|
|
|
|||||||||||
| (2,878,352 | ) | |||||||||||
|
|
|
|||||||||||
| Semiconductors & Semiconductor Equipment 9.05% |
||||||||||||
| Advanced Micro Devices Inc. |
United States | (6,415 | ) | (628,734 | ) | |||||||
| ASM International NV |
Netherlands | (392 | ) | (158,388 | ) | |||||||
| Enphase Energy Inc. |
United States | (1,138 | ) | (239,299 | ) | |||||||
| Entegris Inc. |
United States | (1,214 | ) | (99,560 | ) | |||||||
| Intel Corp. |
United States | (20,027 | ) | (654,282 | ) | |||||||
| Lam Research Corp. |
United States | (1,122 | ) | (594,795 | ) | |||||||
| Lasertec Corp. |
Japan | (700 | ) | (122,443 | ) | |||||||
| Marvell Technology Inc. |
United States | (7,249 | ) | (313,882 | ) | |||||||
| NVIDIA Corp. |
United States | (2,332 | ) | (647,760 | ) | |||||||
| Qorvo Inc. |
United States | (518 | ) | (52,613 | ) | |||||||
| SolarEdge Technologies Inc. |
United States | (459 | ) | (139,513 | ) | |||||||
| Wolfspeed, Inc. |
United States | (1,013 | ) | (65,794 | ) | |||||||
|
|
|
|||||||||||
| (3,717,063 | ) | |||||||||||
|
|
|
|||||||||||
| Software & Services 9.82% |
||||||||||||
| Adyen NV |
Netherlands | (180 | ) | (285,363 | ) | |||||||
| Amadeus IT Group SA |
Spain | (3,815 | ) | (255,569 | ) | |||||||
| Bill.com Holdings Inc. |
United States | (743 | ) | (60,287 | ) | |||||||
| Cloudflare Inc., A |
United States | (2,092 | ) | (128,993 | ) | |||||||
| Crowdstrike Holdings Inc., A |
United States | (1,620 | ) | (222,361 | ) | |||||||
| Datadog Inc., A |
United States | (2,081 | ) | (151,206 | ) | |||||||
| Fidelity National Information Services Inc. |
United States | (5,403 | ) | (293,545 | ) | |||||||
| Fiserv Inc. |
United States | (2,798 | ) | (316,258 | ) | |||||||
| MongoDB Inc. |
United States | (553 | ) | (128,915 | ) | |||||||
| Okta Inc., A |
United States | (1,277 | ) | (110,129 | ) | |||||||
| Palantir Technologies Inc. |
United States | (13,298 | ) | (112,368 | ) | |||||||
| Shopify Inc., A |
Canada | (9,600 | ) | (459,659 | ) | |||||||
| Snowflake Inc. |
United States | (1,787 | ) | (275,716 | ) | |||||||
| Splunk Inc. |
United States | (1,368 | ) | (131,164 | ) | |||||||
| Square Inc., A |
United States | (4,398 | ) | (301,923 | ) | |||||||
| Twilio Inc., A |
United States | (1,513 | ) | (100,811 | ) | |||||||
| Unity Software Inc. |
United States | (2,089 | ) | (67,767 | ) | |||||||
| Workday Inc., A |
United States | (1,658 | ) | (342,443 | ) | |||||||
| Xero Ltd. |
New Zealand | (1,159 | ) | (69,411 | ) | |||||||
| Zoom Video Communications Inc., A |
United States | (1,826 | ) | (134,832 | ) | |||||||
| Zscaler Inc. |
United States | (718 | ) | (83,884 | ) | |||||||
|
|
|
|||||||||||
| (4,032,604 | ) | |||||||||||
|
|
|
|||||||||||
| franklintempleton.com | Annual Report | 183 | ||
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
| Country | Shares | Value | ||||||||||
| Reference Entity – Short (continued) |
||||||||||||
| Technology Hardware & Equipment 6.22% |
||||||||||||
| Apple Inc. |
United States | (3,676 | ) | $ | (606,173 | ) | ||||||
| Cognex Corp. |
United States | (1,450 | ) | (71,848 | ) | |||||||
| Halma PLC |
United Kingdom | (3,178 | ) | (87,587 | ) | |||||||
| Hexagon AB |
Sweden | (16,460 | ) | (188,655 | ) | |||||||
| Keyence Corp. |
Japan | (1,300 | ) | (629,537 | ) | |||||||
| Logitech International SA |
Switzerland | (1,460 | ) | (84,862 | ) | |||||||
| NetApp Inc. |
United States | (1,878 | ) | (119,910 | ) | |||||||
| Omron Corp. |
Japan | (1,600 | ) | (92,653 | ) | |||||||
| Seagate Technology Holdings PLC |
United States | (1,700 | ) | (112,404 | ) | |||||||
| Teledyne Technologies Inc. |
United States | (395 | ) | (176,707 | ) | |||||||
| Telefonaktiebolaget LM Ericsson |
Sweden | (24,830 | ) | (145,107 | ) | |||||||
| Western Digital Corp. |
United States | (2,754 | ) | (103,743 | ) | |||||||
| Zebra Technologies Corp. |
United States | (432 | ) | (137,376 | ) | |||||||
|
|
|
|||||||||||
| (2,556,562 | ) | |||||||||||
|
|
|
|||||||||||
| Telecommunication Services 2.06% |
||||||||||||
| Cellnex Telecom SA |
Spain | (4,658 | ) | (180,970 | ) | |||||||
| Elisa OYJ |
Finland | (1,189 | ) | (71,772 | ) | |||||||
| Koninklijke KPN NV |
Netherlands | (28,196 | ) | (99,743 | ) | |||||||
| Singapore Telecommunications Ltd. |
Singapore | (69,200 | ) | (128,037 | ) | |||||||
| SoftBank Group Corp. |
Japan | (3,700 | ) | (144,064 | ) | |||||||
| Spark New Zealand Ltd. |
New Zealand | (15,783 | ) | (49,966 | ) | |||||||
| Tele2 AB |
Sweden | (4,740 | ) | (47,196 | ) | |||||||
| Telenor ASA |
Norway | (5,970 | ) | (69,943 | ) | |||||||
| Telia Co. AB |
Sweden | (22,007 | ) | (55,964 | ) | |||||||
|
|
|
|||||||||||
| (847,655 | ) | |||||||||||
|
|
|
|||||||||||
| Transportation 2.31% |
||||||||||||
| Aena SME SA |
Spain | (639 | ) | (103,373 | ) | |||||||
| Kuehne + Nagel International AG |
Switzerland | (450 | ) | (133,934 | ) | |||||||
| Transurban Group |
Australia | (25,933 | ) | (246,808 | ) | |||||||
| Uber Technologies Inc. |
United States | (12,203 | ) | (386,835 | ) | |||||||
| West Japan Railway Co. |
Japan | (1,900 | ) | (77,904 | ) | |||||||
|
|
|
|||||||||||
| (948,854 | ) | |||||||||||
|
|
|
|||||||||||
| Utilities 2.45% |
||||||||||||
| Chubu Electric Power Co. Inc. |
Japan | (5,500 | ) | (57,815 | ) | |||||||
| CLP Holdings Ltd. |
Hong Kong | (13,500 | ) | (97,510 | ) | |||||||
| Dominion Energy Inc. |
United States | (6,878 | ) | (384,549 | ) | |||||||
| Hong Kong & China Gas Co. Ltd. |
Hong Kong | (93,000 | ) | (81,864 | ) | |||||||
| Orsted AS |
Denmark | (1,549 | ) | (131,799 | ) | |||||||
| Public Service Enterprise Group Inc. |
United States | (4,078 | ) | (254,671 | ) | |||||||
|
|
|
|||||||||||
| (1,008,208 | ) | |||||||||||
|
|
|
|||||||||||
| Total Value of Reference Entity — Morgan Stanley Capital Services LLC | $ | (41,081,991 | ) | |||||||||
|
|
|
|||||||||||
See Note 8 regarding other derivative information.
See Abbreviations on page 246.
| 184 | Annual Report l 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
| Year Ended March 31, | ||||||||||||||||
| 2023 | 2022 | 2021 | 2020b | |||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||
| Net asset value, beginning of year |
$23.43 | $25.14 | $25.44 | $25.00 | ||||||||||||
| Income from investment operationsc: |
||||||||||||||||
| Net investment incomed |
0.55 | 0.45 | 0.51 | 0.29 | ||||||||||||
| Net realized and unrealized gains (losses) |
(1.70 | ) | (1.61 | ) | 0.03 | 0.49 | ||||||||||
| Total from investment operations |
(1.15 | ) | (1.16 | ) | 0.54 | 0.78 | ||||||||||
| Less distributions from: |
||||||||||||||||
| Net investment income |
(0.54 | ) | (0.50 | ) | (0.65 | ) | (0.31 | ) | ||||||||
| Net realized gains |
— | (0.05 | ) | (0.19 | ) | (0.03 | ) | |||||||||
| Total distributions |
(0.54 | ) | (0.55 | ) | (0.84 | ) | (0.34 | ) | ||||||||
| Net asset value, end of year |
$21.74 | $23.43 | $25.14 | $25.44 | ||||||||||||
| Total returne |
(4.88)% | (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 |
2.51% | 1.80% | 1.95% | 2.14% | ||||||||||||
| Supplemental data | ||||||||||||||||
| Net assets, end of year (000’s) |
$1,511,691 | $1,509,961 | $1,460,597 | $853,532 | ||||||||||||
| Portfolio turnover rateg |
68.70%h | 69.88%h | 90.99%h | 126.68%h | ||||||||||||
a Effective August 1, 2022, Formerly, Franklin Liberty U.S. Core Bond ETF was renamed Franklin U.S. Core Bond ETF.
b For the period September 17, 2019 (commencement of operations) to March 31, 2020.
c The amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
d Based on average daily shares outstanding.
e Total 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.
f Ratios are annualized for periods less than one year.
g Portfolio 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: | 68.70% | 69.88% | 90.99% | 126.68% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 185 | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin U.S. Core Bond ETF
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes 25.0% | ||||||||||||||
| Aerospace & Defense 0.3% | ||||||||||||||
| Boeing Co., 3.50%, 3/01/39 |
United States | 5,000,000 | $ | 3,935,142 | ||||||||||
|
|
|
|||||||||||||
| Agriculture 0.6% | ||||||||||||||
| Altria Group, Inc., 3.40%, 5/06/30 |
United States | 5,000,000 | 4,450,020 | |||||||||||
| a | Cargill, Inc., 2.125%, 11/10/31 |
United States | 2,000,000 | 1,661,820 | ||||||||||
| a | Imperial Brands Finance PLC, 3.50%, 7/26/26 |
United Kingdom | 4,000,000 | 3,751,959 | ||||||||||
|
|
|
|||||||||||||
| 9,863,799 | ||||||||||||||
|
|
|
|||||||||||||
| Airlines 0.9% | ||||||||||||||
| American Airlines 2016-3 Class A Pass Through Trust, Series 2016-3, 3.25%, 4/15/30 |
United States | 4,256,309 | 3,691,021 | |||||||||||
| a | Delta Air Lines, Inc./SkyMiles IP Ltd., first lien, 4.50%, 10/20/25 |
United States | 7,058,412 | 6,944,337 | ||||||||||
| United Airlines 2019-2 Class A Pass Through Trust, Series A, 2.90%, 11/01/29 |
United States | 878,884 | 751,052 | |||||||||||
| United Airlines 2020-1 Class A Pass Through Trust, Series 20-1, 5.875%, 4/15/29 |
United States | 75,453 | 75,326 | |||||||||||
| United Airlines 2020-1 Class B Pass Through Trust, 2020-1 Class B, 4.875%, 7/15/27 |
United States | 1,736,400 | 1,680,414 | |||||||||||
|
|
|
|||||||||||||
| 13,142,150 | ||||||||||||||
|
|
|
|||||||||||||
| Banks 7.0% |
||||||||||||||
| a | Banco de Chile, 2.99%, 12/09/31 |
Chile | 1,200,000 | 985,238 | ||||||||||
| Bank of America Corp., |
||||||||||||||
| 1.922% to 10/24/30, FRN thereafter, 10/24/31 |
United States | 1,500,000 | 1,197,331 | |||||||||||
| 2.592% to 4/29/30, FRN thereafter, 4/29/31 |
United States | 3,000,000 | 2,542,349 | |||||||||||
| 3.864% to 7/23/23, FRN thereafter, 7/23/24 |
United States | 5,100,000 | 5,071,782 | |||||||||||
| a | BNP Paribas SA, 2.819% to 11/19/24, FRN thereafter, 11/19/25 |
France | 2,200,000 | 2,091,915 | ||||||||||
| a | BPCE SA, 2.045% to 10/19/26, FRN thereafter, 10/19/27 |
France | 3,700,000 | 3,245,150 | ||||||||||
| Citigroup, Inc., |
||||||||||||||
| 4.45%, 9/29/27 |
United States | 1,500,000 | 1,455,677 | |||||||||||
| 4.125%, 7/25/28 |
United States | 2,300,000 | 2,173,656 | |||||||||||
| 3.057% to 1/25/32, FRN thereafter, 1/25/33 |
United States | 1,800,000 | 1,524,594 | |||||||||||
| 4.044% to 6/01/23, FRN thereafter, 6/01/24 |
United States | 5,100,000 | 5,083,088 | |||||||||||
| Credit Suisse Group AG, |
||||||||||||||
| 4.55%, 4/17/26 |
Switzerland | 950,000 | 877,563 | |||||||||||
| a 6.373% to 7/15/25, FRN thereafter, 7/15/26 |
Switzerland | 550,000 | 532,892 | |||||||||||
| Deutsche Bank AG, 5.371%, 9/09/27 |
Germany | 3,700,000 | 3,629,700 | |||||||||||
| Fifth Third Bancorp, 2.375%, 1/28/25 |
United States | 4,400,000 | 4,096,535 | |||||||||||
| Goldman Sachs Group, Inc., |
||||||||||||||
| 1.948% to 10/21/26, FRN thereafter, 10/21/27 |
United States | 5,200,000 | 4,650,661 | |||||||||||
| 3.691% to 6/05/27, FRN thereafter, 6/05/28 |
United States | 2,500,000 | 2,370,566 | |||||||||||
| 2.64% to 2/24/27, FRN thereafter, 2/24/28 |
United States | 5,200,000 | 4,748,084 | |||||||||||
| HSBC Holdings PLC, |
||||||||||||||
| 2.013% to 9/22/27, FRN thereafter, 9/22/28 |
United Kingdom | 4,100,000 | 3,515,545 | |||||||||||
| 2.357% to 8/18/30, FRN thereafter, 8/18/31 |
United Kingdom | 1,300,000 | 1,048,860 | |||||||||||
| 0.976% to 5/24/24, FRN thereafter, 5/24/25 |
United Kingdom | 4,800,000 | 4,519,620 | |||||||||||
| JPMorgan Chase & Co., |
||||||||||||||
| 2.956% to 5/13/30, FRN thereafter, 5/13/31 |
United States | 5,000,000 | 4,325,106 | |||||||||||
| 2.522% to 4/22/30, FRN thereafter, 4/22/31 |
United States | 2,000,000 | 1,710,946 | |||||||||||
| 1.953% to 2/04/31, FRN thereafter, 2/04/32 |
United States | 2,000,000 | 1,610,272 | |||||||||||
| KeyBank NA, 4.15%, 8/08/25 |
United States | 2,500,000 | 2,365,900 | |||||||||||
| Mitsubishi UFJ Financial Group, Inc., 5.063% to 9/12/25, FRN thereafter, 9/12/25 |
Japan | 4,500,000 | 4,471,726 | |||||||||||
| Morgan Stanley, |
||||||||||||||
| 3.622% to 4/01/30, FRN thereafter, 4/01/31 |
United States | 4,300,000 | 3,935,148 | |||||||||||
| 3.95%, 4/23/27 |
United States | 3,600,000 | 3,484,135 | |||||||||||
| 186 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Bond ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) |
||||||||||||||
| Banks (continued) | ||||||||||||||
| a | Nordea Bank Abp, 4.75%, 9/22/25 |
Finland | 2,200,000 | $ | 2,191,281 | |||||||||
| Santander U.K. Group Holdings PLC, 1.673% to 6/14/26, FRN thereafter, 6/14/27 |
United Kingdom | 3,200,000 | 2,788,663 | |||||||||||
| a | Societe Generale SA, 1.792% to 6/09/27, FRN thereafter, 6/09/27 |
France | 4,300,000 | 3,732,475 | ||||||||||
| Toronto-Dominion Bank, 4.693%, 9/15/27 |
Canada | 4,700,000 | 4,655,471 | |||||||||||
| Truist Bank, 2.25%, 3/11/30 |
United States | 4,300,000 | 3,536,804 | |||||||||||
| Truist Financial Corp., 5.90% to 10/28/25, FRN thereafter, 10/28/26 |
United States | 3,850,000 | 3,842,007 | |||||||||||
| Wells Fargo & Co., |
||||||||||||||
| 2.879% to 10/30/29, FRN thereafter, 10/30/30 |
United States | 7,700,000 | 6,696,550 | |||||||||||
| 4.54% to 8/15/25, FRN thereafter, 8/15/26 |
United States | 1,600,000 | 1,571,991 | |||||||||||
|
|
|
|||||||||||||
| 106,279,281 | ||||||||||||||
|
|
|
|||||||||||||
| Banks 0.1% |
||||||||||||||
| U.S. Bancorp, 5.727% to 10/21/25, FRN thereafter, 10/21/26 |
United States | 1,700,000 | 1,708,946 | |||||||||||
|
|
|
|||||||||||||
| Beverages 0.7% |
||||||||||||||
| Anheuser-Busch Cos. LLC/Anheuser-Busch InBev Worldwide, Inc., 4.70%, 2/01/36 |
Belgium | 1,800,000 | 1,793,641 | |||||||||||
| Anheuser-Busch InBev Worldwide, Inc., 3.50%, 6/01/30 |
United States | 3,900,000 | 3,679,443 | |||||||||||
| PepsiCo, Inc., 3.90%, 7/18/32 |
United States | 6,000,000 | 5,867,740 | |||||||||||
|
|
|
|||||||||||||
| 11,340,824 | ||||||||||||||
|
|
|
|||||||||||||
| Biotechnology 0.7% | ||||||||||||||
| Amgen, Inc., 5.25%, 3/02/33 |
United States | 3,400,000 | 3,495,016 | |||||||||||
| Bio-Rad Laboratories, Inc., 3.30%, 3/15/27 |
United States | 500,000 | 471,922 | |||||||||||
| Illumina, Inc., 5.80%, 12/12/25 |
United States | 3,000,000 | 3,029,976 | |||||||||||
| Royalty Pharma PLC, 2.20%, 9/02/30 |
United Kingdom | 5,000,000 | 4,087,223 | |||||||||||
|
|
|
|||||||||||||
| 11,084,137 | ||||||||||||||
|
|
|
|||||||||||||
| Building Products 0.1% | ||||||||||||||
| NVR, Inc., 3.00%, 5/15/30 |
United States | 2,500,000 | 2,200,936 | |||||||||||
|
|
|
|||||||||||||
| Commercial Services & Supplies 0.6% | ||||||||||||||
| Boardwalk Pipelines LP, 4.80%, 5/03/29 |
United States | 3,950,000 | 3,876,762 | |||||||||||
| Rockefeller University, Series 2020, 3.75%, 7/01/51 |
United States | 7,000,000 | 5,815,217 | |||||||||||
|
|
|
|||||||||||||
| 9,691,979 | ||||||||||||||
|
|
|
|||||||||||||
| Diversified Telecommunication Services 0.9% | ||||||||||||||
| America Movil SAB de CV, 2.875%, 5/07/30 |
Mexico | 3,800,000 | 3,354,967 | |||||||||||
| Orange SA, 9.00%, 3/01/31 |
France | 3,000,000 | 3,768,221 | |||||||||||
| Verizon Communications, Inc., |
||||||||||||||
| 1.75%, 1/20/31 |
United States | 5,000,000 | 4,035,141 | |||||||||||
| 2.85%, 9/03/41 |
United States | 3,900,000 | 2,859,733 | |||||||||||
|
|
|
|||||||||||||
| 14,018,062 | ||||||||||||||
|
|
|
|||||||||||||
| Electric 0.1% |
||||||||||||||
| Duke Energy Ohio, Inc., 5.25%, 4/01/33 |
United States | 500,000 | 514,828 | |||||||||||
| NextEra Energy Capital Holdings, Inc., 6.051%, 3/01/25 |
United States | 1,500,000 | 1,526,731 | |||||||||||
|
|
|
|||||||||||||
| 2,041,559 | ||||||||||||||
|
|
|
|||||||||||||
| Electric Utilities 2.0% |
||||||||||||||
| Baltimore Gas & Electric Co., 3.50%, 8/15/46 |
United States | 1,400,000 | 1,084,019 | |||||||||||
| a | Comision Federal de Electricidad, 3.348%, 2/09/31 |
Mexico | 3,800,000 | 3,017,317 | ||||||||||
| Duke Energy Corp., 3.75%, 9/01/46 |
United States | 5,000,000 | 3,895,922 | |||||||||||
| a | EDP Finance BV, 1.71%, 1/24/28 |
Netherlands | 4,500,000 | 3,833,996 | ||||||||||
| Enel Finance International NV, |
||||||||||||||
| a 3.50%, 4/06/28 |
Netherlands | 2,700,000 | 2,485,965 | |||||||||||
| a 2.25%, 7/12/31 |
Netherlands | 3,500,000 | 2,743,164 | |||||||||||
| franklintempleton.com | Annual Report | 187 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Bond ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) | ||||||||||||||
| Electric Utilities (continued) |
||||||||||||||
| Exelon Corp., 4.05%, 4/15/30 |
United States | 3,000,000 | $ | 2,865,690 | ||||||||||
| Georgia Power Co., Series 2010-C, 4.75%, 9/01/40 |
United States | 1,400,000 | 1,290,177 | |||||||||||
| MidAmerican Energy Co., 3.65%, 8/01/48 |
United States | 1,100,000 | 892,733 | |||||||||||
| a | Perusahaan Perseroan Persero PT Perusahaan Listrik Negara, 4.875%, 7/17/49 |
Indonesia | 750,000 | 612,825 | ||||||||||
| Southern Co., Series A, 3.70%, 4/30/30 |
United States | 3,000,000 | 2,809,932 | |||||||||||
| Virginia Electric & Power Co., 3.80%, 9/15/47 |
United States | 5,100,000 | 4,084,862 | |||||||||||
|
|
|
|||||||||||||
| 29,616,602 | ||||||||||||||
|
|
|
|||||||||||||
| Electronic Equipment, Instruments & Components 0.4% |
||||||||||||||
| Flex Ltd., 4.875%, 5/12/30 |
Singapore | 3,000,000 | 2,921,080 | |||||||||||
| Teledyne FLIR LLC, 2.50%, 8/01/30 |
United States | 3,000,000 | 2,526,492 | |||||||||||
|
|
|
|||||||||||||
| 5,447,572 | ||||||||||||||
|
|
|
|||||||||||||
| Energy Equipment & Services 0.5% |
||||||||||||||
| Kinder Morgan, Inc., 2.00%, 2/15/31 |
United States | 4,100,000 | 3,312,560 | |||||||||||
| MPLX LP, 2.65%, 8/15/30 |
United States | 2,500,000 | 2,121,549 | |||||||||||
| a | Schlumberger Holdings Corp., 3.90%, 5/17/28 |
United States | 1,950,000 | 1,876,412 | ||||||||||
|
|
|
|||||||||||||
| 7,310,521 | ||||||||||||||
|
|
|
|||||||||||||
| Entertainment 0.1% |
||||||||||||||
| a | Warnermedia Holdings, Inc., 4.054%, 3/15/29 |
United States | 900,000 | 837,829 | ||||||||||
|
|
|
|||||||||||||
| Financial Services 0.4% |
||||||||||||||
| AerCap Ireland Capital DAC/AerCap Global Aviation Trust, 3.40%, 10/29/33 |
Ireland | 3,500,000 | 2,846,605 | |||||||||||
| Capital One Financial Corp., 4.985% to 7/24/25, FRN thereafter, 7/24/26 |
United States | 4,000,000 | 3,859,081 | |||||||||||
|
|
|
|||||||||||||
| 6,705,686 | ||||||||||||||
|
|
|
|||||||||||||
| Food 0.1% |
||||||||||||||
| General Mills, Inc., 5.241%, 11/18/25 |
United States | 800,000 | 802,550 | |||||||||||
|
|
|
|||||||||||||
| Food Products 0.4% |
||||||||||||||
| Kraft Heinz Foods Co., |
||||||||||||||
| 3.00%, 6/01/26 |
United States | 4,100,000 | 3,919,146 | |||||||||||
| 3.75%, 4/01/30 |
United States | 2,000,000 | 1,893,476 | |||||||||||
|
|
|
|||||||||||||
| 5,812,622 | ||||||||||||||
|
|
|
|||||||||||||
| Ground Transportation 0.3% |
||||||||||||||
| Burlington Northern Santa Fe LLC, |
||||||||||||||
| 4.90%, 4/01/44 |
United States | 1,100,000 | 1,081,980 | |||||||||||
| 4.15%, 4/01/45 |
United States | 2,300,000 | 2,057,528 | |||||||||||
| CSX Corp., 4.25%, 11/01/66 |
United States | 1,000,000 | 831,463 | |||||||||||
|
|
|
|||||||||||||
| 3,970,971 | ||||||||||||||
|
|
|
|||||||||||||
| Health Care Providers & Services 1.1% |
||||||||||||||
| CVS Health Corp., |
||||||||||||||
| 4.875%, 7/20/35 |
United States | 1,400,000 | 1,367,231 | |||||||||||
| 4.30%, 3/25/28 |
United States | 1,117,000 | 1,097,595 | |||||||||||
| Elevance Health, Inc., 5.10%, 1/15/44 |
United States | 2,000,000 | 1,959,127 | |||||||||||
| Quest Diagnostics, Inc., 2.80%, 6/30/31 |
United States | 6,800,000 | 5,949,929 | |||||||||||
| STERIS Irish FinCo UnLtd Co., 2.70%, 3/15/31 |
Ireland | 5,000,000 | 4,188,847 | |||||||||||
| UnitedHealth Group, Inc., 3.05%, 5/15/41 |
United States | 2,500,000 | 1,973,097 | |||||||||||
|
|
|
|||||||||||||
| 16,535,826 | ||||||||||||||
|
|
|
|||||||||||||
| Healthcare-Products 0.2% |
||||||||||||||
| a | GE HealthCare Technologies, Inc., 5.60%, 11/15/25 |
United States | 2,300,000 | 2,329,106 | ||||||||||
|
|
|
|||||||||||||
| Independent Power Producers & Energy Traders 0.3% |
||||||||||||||
| a | Colbun SA, 3.95%, 10/11/27 |
Chile | 5,550,000 | 5,193,412 | ||||||||||
|
|
|
|||||||||||||
| 188 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Bond ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) |
||||||||||||||
| Insurance 1.7% |
||||||||||||||
| a | AIA Group Ltd., 4.95%, 4/04/33 |
Hong Kong | 1,600,000 | $ | 1,611,508 | |||||||||
| Aon Corp./Aon Global Holdings PLC, 5.35%, 2/28/33 |
United States | 2,000,000 | 2,073,802 | |||||||||||
| Berkshire Hathaway Finance Corp., 3.85%, 3/15/52 |
United States | 1,200,000 | 1,007,065 | |||||||||||
| a | Five Corners Funding Trust II, 2.85%, 5/15/30 |
United States | 4,000,000 | 3,439,322 | ||||||||||
| a | MassMutual Global Funding II, 5.05%, 12/07/27 |
United States | 5,100,000 | 5,166,872 | ||||||||||
| MetLife, Inc., 5.875%, 2/06/41 |
United States | 1,100,000 | 1,148,586 | |||||||||||
| Metropolitan Life Global Funding I, |
||||||||||||||
| a 4.30%, 8/25/29 |
United States | 1,400,000 | 1,362,468 | |||||||||||
| a 5.05%, 1/06/28 |
United States | 2,500,000 | 2,532,811 | |||||||||||
| a | New York Life Global Funding, 4.85%, 1/09/28 |
United States | 5,200,000 | 5,281,617 | ||||||||||
| Reinsurance Group of America, Inc., 3.90%, 5/15/29 |
United States | 2,250,000 | 2,124,667 | |||||||||||
|
|
|
|||||||||||||
| 25,748,718 | ||||||||||||||
|
|
|
|||||||||||||
| Internet Software & Services 0.1% |
||||||||||||||
| a | Tencent Holdings Ltd., 3.925%, 1/19/38 |
Cayman Islands | 2,000,000 | 1,667,910 | ||||||||||
|
|
|
|||||||||||||
| IT Services 0.8% |
||||||||||||||
| Apple, Inc., 2.65%, 5/11/50 |
United States | 2,000,000 | 1,411,740 | |||||||||||
| Fidelity National Information Services, Inc., 2.25%, 3/01/31 |
United States | 4,500,000 | 3,602,842 | |||||||||||
| Fiserv, Inc., 2.65%, 6/01/30 |
United States | 4,700,000 | 4,059,997 | |||||||||||
| Hewlett Packard Enterprise Co., 5.90%, 10/01/24 |
United States | 3,300,000 | 3,342,618 | |||||||||||
|
|
|
|||||||||||||
| 12,417,197 | ||||||||||||||
|
|
|
|||||||||||||
| Media 0.9% |
||||||||||||||
| Charter Communications Operating LLC/Charter Communications Operating Capital, |
||||||||||||||
| 2.80%, 4/01/31 |
United States | 5,000,000 | 4,027,291 | |||||||||||
| 3.50%, 3/01/42 |
United States | 1,500,000 | 1,014,740 | |||||||||||
| Comcast Corp., 4.25%, 1/15/33 |
United States | 4,000,000 | 3,898,102 | |||||||||||
| NBCUniversal Media LLC, 4.45%, 1/15/43 |
United States | 1,100,000 | 1,005,985 | |||||||||||
| Walt Disney Co., 2.75%, 9/01/49 |
United States | 5,000,000 | 3,482,198 | |||||||||||
|
|
|
|||||||||||||
| 13,428,316 | ||||||||||||||
|
|
|
|||||||||||||
| Metals & Mining 0.1% |
||||||||||||||
| a | Corp. Nacional del Cobre de Chile, 4.50%, 8/01/47 |
Chile | 1,160,000 | 997,671 | ||||||||||
|
|
|
|||||||||||||
| Oil, Gas & Consumable Fuels 1.1% |
||||||||||||||
| a | Aker BP ASA, 3.10%, 7/15/31 |
Norway | 4,700,000 | 3,978,276 | ||||||||||
| Canadian Natural Resources Ltd., 3.85%, 6/01/27 |
Canada | 600,000 | 575,082 | |||||||||||
| Cheniere Corpus Christi Holdings LLC, 5.875%, 3/31/25 |
United States | 2,200,000 | 2,216,747 | |||||||||||
| Equinor ASA, 2.375%, 5/22/30 |
Norway | 3,000,000 | 2,650,963 | |||||||||||
| Exxon Mobil Corp., 2.61%, 10/15/30 |
United States | 3,000,000 | 2,697,457 | |||||||||||
| a | Pertamina Persero PT, 4.70%, 7/30/49 |
Indonesia | 1,000,000 | 830,253 | ||||||||||
| Sabine Pass Liquefaction LLC, first lien, 4.20%, 3/15/28 |
United States | 4,000,000 | 3,845,493 | |||||||||||
|
|
|
|||||||||||||
| 16,794,271 | ||||||||||||||
|
|
|
|||||||||||||
| Packaging & Containers 0.2% |
||||||||||||||
| Amcor Flexibles North America, Inc., 2.63%, 6/19/30 |
United States | 3,500,000 | 2,938,958 | |||||||||||
|
|
|
|||||||||||||
| Paper & Forest Products 0.1% |
||||||||||||||
| Suzano Austria GmbH, 3.125%, 1/15/32 |
Austria | 1,300,000 | 1,064,722 | |||||||||||
|
|
|
|||||||||||||
| Personal Products 0.3% |
||||||||||||||
| a | Kenvue, Inc., 5.05%, 3/22/28 |
United States | 4,500,000 | 4,653,141 | ||||||||||
|
|
|
|||||||||||||
| Pharmaceuticals 0.6% |
||||||||||||||
| AbbVie, Inc., 4.75%, 3/15/45 |
United States | 1,000,000 | 944,460 | |||||||||||
| Bristol-Myers Squibb Co., 4.125%, 6/15/39 |
United States | 3,200,000 | 2,983,477 | |||||||||||
| franklintempleton.com | Annual Report | 189 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Bond ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes (continued) |
||||||||||||||
| Pharmaceuticals (continued) |
||||||||||||||
| Takeda Pharmaceutical Co. Ltd., |
||||||||||||||
| 2.05%, 3/31/30 |
Japan | 2,600,000 | $ | 2,196,421 | ||||||||||
| 5.00%, 11/26/28 |
Japan | 2,500,000 | 2,528,064 | |||||||||||
|
|
|
|||||||||||||
| 8,652,422 | ||||||||||||||
|
|
|
|||||||||||||
| Pipelines 0.2% |
||||||||||||||
| Energy Transfer LP, 3.90%, 5/15/24 |
United States | 2,650,000 | 2,595,181 | |||||||||||
|
|
|
|||||||||||||
| Real Estate Management & Development 0.1% |
||||||||||||||
| Simon Property Group LP, 2.20%, 2/01/31 |
United States | 2,000,000 | 1,609,600 | |||||||||||
|
|
|
|||||||||||||
| Retail 0.2% |
||||||||||||||
| Advance Auto Parts, Inc., |
||||||||||||||
| 5.90%, 3/09/26 |
United States | 350,000 | 357,350 | |||||||||||
| 5.95%, 3/09/28 |
United States | 300,000 | 309,454 | |||||||||||
| Target Corp., 4.40%, 1/15/33 |
United States | 2,000,000 | 1,989,710 | |||||||||||
|
|
|
|||||||||||||
| 2,656,514 | ||||||||||||||
|
|
|
|||||||||||||
| Software 0.4% |
||||||||||||||
| Salesforce, Inc., 1.95%, 7/15/31 |
United States | 2,000,000 | 1,675,825 | |||||||||||
| ServiceNow, Inc., 1.40%, 9/01/30 |
United States | 6,000,000 | 4,836,208 | |||||||||||
|
|
|
|||||||||||||
| 6,512,033 | ||||||||||||||
|
|
|
|||||||||||||
| Wireless Telecommunication Services 0.4% |
||||||||||||||
| T-Mobile USA, Inc., |
||||||||||||||
| 3.75%, 4/15/27 |
United States | 5,000,000 | 4,809,554 | |||||||||||
| 3.875%, 4/15/30 |
United States | 1,000,000 | 939,102 | |||||||||||
| Vodafone Group PLC, 4.875%, 6/19/49 |
United Kingdom | 1,000,000 | 904,263 | |||||||||||
|
|
|
|||||||||||||
| 6,652,919 | ||||||||||||||
|
|
|
|||||||||||||
| Total Corporate Bonds & Notes (Cost $415,614,816) |
378,259,085 | |||||||||||||
|
|
|
|||||||||||||
| U.S. Government & Agency Securities 46.7% |
||||||||||||||
| Federal Farm Credit Banks Funding Corp., 2.10%, 2/25/36 |
United States | 4,000,000 | 3,015,463 | |||||||||||
| Federal Home Loan Mortgage Corp., |
||||||||||||||
| 2.00%, 7/01/37 |
United States | 1,564,123 | 1,412,916 | |||||||||||
| 2.00%, 4/01/52 |
United States | 5,159,519 | 4,274,014 | |||||||||||
| 2.50%, 4/01/37 |
United States | 4,865,131 | 4,520,016 | |||||||||||
| 2.50%, 12/01/51 |
United States | 761,049 | 656,961 | |||||||||||
| 2.50%, 4/01/52 |
United States | 17,442,030 | 15,058,287 | |||||||||||
| 3.00%, 4/01/37 |
United States | 514,297 | 488,149 | |||||||||||
| 3.00%, 7/01/37 |
United States | 715,261 | 678,896 | |||||||||||
| 3.00%, 8/01/37 |
United States | 547,949 | 520,090 | |||||||||||
| 3.00%, 9/01/37 |
United States | 726,375 | 689,445 | |||||||||||
| 3.50%, 4/01/52 |
United States | 3,198,840 | 2,975,561 | |||||||||||
| 3.50%, 5/01/52 |
United States | 7,248,687 | 6,742,737 | |||||||||||
| 4.00%, 11/01/37 |
United States | 5,845,513 | 5,760,322 | |||||||||||
| 6.00%, 4/01/53 |
United States | 3,687,000 | 3,767,000 | |||||||||||
| Federal National Mortgage Association, |
||||||||||||||
| 1.50%, 9/01/51 |
United States | 4,358,504 | 3,433,928 | |||||||||||
| 2.00%, 4/01/37 |
United States | 474,271 | 428,422 | |||||||||||
| 3.00%, 5/01/37 |
United States | 680,971 | 646,349 | |||||||||||
| 3.00%, 10/01/37 |
United States | 4,762,030 | 4,519,919 | |||||||||||
| 3.00%, 12/01/51 |
United States | 5,293,110 | 4,763,656 | |||||||||||
| 3.00%, 3/01/52 |
United States | 879,104 | 790,734 | |||||||||||
| 3.50%, 6/01/49 |
United States | 626,965 | 591,880 | |||||||||||
| 3.50%, 11/01/52 |
United States | 4,724,331 | 4,394,576 | |||||||||||
| 4.50%, 1/01/53 |
United States | 710,327 | 696,592 | |||||||||||
| 5.00%, 2/01/53 |
United States | 8,323,095 | 8,307,970 | |||||||||||
| 190 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Bond ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| U.S. Government & Agency Securities (continued) |
||||||||||||||
| U.S. Treasury Bonds, |
||||||||||||||
| 1.125%, 8/15/40 |
United States | 3,350,000 | $ | 2,217,150 | ||||||||||
| 1.25%, 5/15/50 |
United States | 21,500,000 | 12,511,992 | |||||||||||
| 1.375%, 8/15/50 |
United States | 50,750,000 | 30,507,490 | |||||||||||
| 2.00%, 11/15/41 |
United States | 29,950,000 | 22,628,044 | |||||||||||
| 2.00%, 2/15/50 |
United States | 11,100,000 | 7,874,062 | |||||||||||
| 2.25%, 8/15/46 |
United States | 25,354,000 | 19,154,155 | |||||||||||
| 2.25%, 8/15/49 |
United States | 2,050,000 | 1,542,785 | |||||||||||
| 2.75%, 8/15/42 |
United States | 17,450,000 | 14,861,811 | |||||||||||
| 2.75%, 11/15/42 |
United States | 12,950,000 | 10,992,577 | |||||||||||
| 3.00%, 11/15/44 |
United States | 12,595,000 | 10,996,025 | |||||||||||
| 3.00%, 2/15/49 |
United States | 7,293,000 | 6,389,352 | |||||||||||
| U.S. Treasury Notes, |
||||||||||||||
| 0.375%, 11/30/25 |
United States | 75,400,000 | 68,801,027 | |||||||||||
| 0.375%, 1/31/26 |
United States | 54,000,000 | 49,034,532 | |||||||||||
| 0.875%, 6/30/26 |
United States | 24,500,000 | 22,347,158 | |||||||||||
| 1.25%, 12/31/26 |
United States | 88,200,000 | 80,589,305 | |||||||||||
| 1.25%, 8/15/31 |
United States | 10,900,000 | 9,146,207 | |||||||||||
| 2.125%, 2/29/24 |
United States | 71,000,000 | 69,372,282 | |||||||||||
| 2.125%, 3/31/24 |
United States | 28,000,000 | 27,327,568 | |||||||||||
| 2.75%, 8/15/32 |
United States | 39,000,000 | 36,711,797 | |||||||||||
| 2.875%, 5/15/32 |
United States | 5,100,000 | 4,854,562 | |||||||||||
| 3.25%, 6/30/27 |
United States | 103,700,000 | 101,937,910 | |||||||||||
| 4.00%, 10/31/29 |
United States | 4,700,000 | 4,814,562 | |||||||||||
| Uniform Mortgage-Backed Security, TBA, 5.50%, 4/13/23 |
United States | 12,040,000 | 12,162,516 | |||||||||||
|
|
|
|||||||||||||
| Total U.S. Government & Agency Securities |
705,908,752 | |||||||||||||
|
|
|
|||||||||||||
| Municipal Bonds 3.0% |
||||||||||||||
| Alabama 0.3% |
||||||||||||||
| b | Southeast Alabama Gas Supply District, Series 2018B, Monthly, VRDN, 3.974%, 6/01/49 |
United States | 5,000,000 | 5,007,712 | ||||||||||
|
|
|
|||||||||||||
| California 2.3% |
||||||||||||||
| California Health Facilities Financing Authority, State of California Personal Income Tax Revenue, 2.934%, 6/01/32 |
United States | 530,000 | 458,741 | |||||||||||
| Clovis Unified School District, Refunding, Series 2021B, 3.067%, 8/01/39 . |
United States | 12,580,000 | 9,893,337 | |||||||||||
| Contra Costa Community College District, Refunding, 2.926%, 8/01/38 |
United States | 4,000,000 | 3,258,587 | |||||||||||
| Golden State Tobacco Securitization Corp., Subordinate Bond, Refunding, Series 2021, 3.85%, 6/01/50 |
United States | 7,200,000 | 6,515,090 | |||||||||||
| San Bernardino Community College District, |
||||||||||||||
| Refunding, 2.686%, 8/01/41 |
United States | 6,140,000 | 4,545,662 | |||||||||||
| Refunding, 2.856%, 8/01/49 |
United States | 3,575,000 | 2,418,459 | |||||||||||
| State of California, 4.00%, 3/01/46 |
United States | 2,500,000 | 2,505,250 | |||||||||||
| Whittier City School District, Refunding, 3.306%, 8/01/43 |
United States | 7,500,000 | 5,970,016 | |||||||||||
|
|
|
|||||||||||||
| 35,565,142 | ||||||||||||||
|
|
|
|||||||||||||
| Ohio 0.1% |
||||||||||||||
| Greenville City School District, Refunding, 3.541%, 1/01/51 |
United States | 1,295,000 | 1,006,561 | |||||||||||
|
|
|
|||||||||||||
| Texas 0.3% |
||||||||||||||
| City of Austin Electric Utility Revenue, Electric Utility Revenue, Refunding, 6.262%, 11/15/32 |
United States | 880,000 | 954,964 | |||||||||||
| Texas Water Development Board, Series 2019A, 4.00%, 10/15/44 |
United States | 3,750,000 | 3,759,749 | |||||||||||
|
|
|
|||||||||||||
| 4,714,713 | ||||||||||||||
|
|
|
|||||||||||||
| Total Municipals (Cost $55,690,460) |
46,294,128 | |||||||||||||
|
|
|
|||||||||||||
| franklintempleton.com | Annual Report | 191 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Bond ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Mortgage-Backed Securities 19.8% |
||||||||||||||
| Fannie Mae 6.3% | ||||||||||||||
| Federal Home Loan Mortgage Corp., |
||||||||||||||
| 3.50%, 2/1/47 |
United States | 1,469,311 | $ | 1,397,730 | ||||||||||
| 3.50%, 3/1/48 |
United States | 1,779,149 | 1,679,411 | |||||||||||
| 4.00%, 11/1/45 |
United States | 2,517,635 | 2,458,222 | |||||||||||
| 3.50%, 2/1/47 |
United States | 2,791,299 | 2,637,874 | |||||||||||
| 3.50%, 3/1/48 |
United States | 3,614,619 | 3,402,111 | |||||||||||
| 3.00%, 6/1/37 |
United States | 4,332,818 | 4,112,529 | |||||||||||
| 2.50%, 4/1/37 |
United States | 4,865,936 | 4,520,429 | |||||||||||
| 4.00%, 5/1/50 |
United States | 5,728,691 | 5,574,442 | |||||||||||
| 4.00%, 6/1/48 |
United States | 5,262,654 | 5,143,832 | |||||||||||
| 3.00%, 3/1/50 |
United States | 14,835,609 | 13,457,914 | |||||||||||
| 3.00%, 3/1/50 |
United States | 5,720,617 | 5,196,438 | |||||||||||
| 2.00%, 1/1/52 |
United States | 12,895,517 | 10,683,770 | |||||||||||
| 2.00%, 2/1/52 |
United States | 573,752 | 475,384 | |||||||||||
| 2.50%, 5/1/37 |
United States | 4,103,600 | 3,812,216 | |||||||||||
| 4.50%, 8/1/52 |
United States | 715,249 | 701,451 | |||||||||||
| 4.00%, 10/1/52 |
United States | 3,662,579 | 3,506,314 | |||||||||||
| 3.00%, 7/1/52 |
United States | 8,869,366 | 7,972,533 | |||||||||||
| 2.50%, 3/1/52 |
United States | 7,017,611 | 6,059,825 | |||||||||||
| 4.50%, 10/1/52 |
United States | 6,190,742 | 6,071,159 | |||||||||||
| 3.50%, 8/1/52 |
United States | 2,063,356 | 1,919,328 | |||||||||||
| 2.00%, 4/1/37 |
United States | 5,060,226 | 4,571,044 | |||||||||||
|
|
|
|||||||||||||
| 95,353,956 | ||||||||||||||
|
|
|
|||||||||||||
| Freddie Mac 11.4% | ||||||||||||||
| Federal National Mortgage Association, |
||||||||||||||
| 2.00%, 7/1/51 |
United States | 22,086,978 | 18,322,420 | |||||||||||
| 2.50%, 7/1/51 |
United States | 7,300,073 | 6,308,767 | |||||||||||
| 2.50%, 12/1/51 |
United States | 16,151,860 | 13,950,940 | |||||||||||
| 2.50%, 2/1/52 |
United States | 1,639,309 | 1,415,956 | |||||||||||
| 2.50%, 8/1/51 |
United States | 4,552,413 | 3,933,809 | |||||||||||
| 4.50%, 7/1/47 |
United States | 5,543,748 | 5,530,791 | |||||||||||
| 4.50%, 12/1/48 |
United States | 3,930,559 | 3,918,146 | |||||||||||
| 4.50%, 5/1/48 |
United States | 2,749,076 | 2,752,597 | |||||||||||
| 3.50%, 8/1/49 |
United States | 10,217,060 | 9,636,508 | |||||||||||
| 4.50%, 2/1/50 |
United States | 1,638,030 | 1,629,168 | |||||||||||
| 3.00%, 9/1/50 |
United States | 4,926,116 | 4,461,136 | |||||||||||
| 4.00%, 2/1/49 |
United States | 416,335 | 406,552 | |||||||||||
| 3.00%, 4/1/50 |
United States | 6,085,097 | 5,527,988 | |||||||||||
| 2.00%, 8/1/51 |
United States | 14,517,464 | 12,046,526 | |||||||||||
| 3.00%, 11/1/51 |
United States | 5,573,351 | 5,016,873 | |||||||||||
| 2.00%, 5/1/36 |
United States | 10,884,326 | 9,832,776 | |||||||||||
| 2.00%, 3/1/52 |
United States | 19,882,173 | 16,469,898 | |||||||||||
| 2.00%, 4/1/37 |
United States | 4,913,223 | 4,438,282 | |||||||||||
| 3.00%, 5/1/52 |
United States | 5,339,878 | 4,800,424 | |||||||||||
| 2.00%, 1/1/52 |
United States | 5,532,370 | 4,586,619 | |||||||||||
| 2.00%, 2/1/52 |
United States | 5,586,279 | 4,629,933 | |||||||||||
| 2.00%, 2/1/52 |
United States | 5,580,253 | 4,623,532 | |||||||||||
| 2.00%, 6/1/37 |
United States | 1,511,302 | 1,365,198 | |||||||||||
| 3.00%, 7/1/52 |
United States | 1,883,643 | 1,692,988 | |||||||||||
| 5.00%, 10/1/52 |
United States | 3,631,819 | 3,625,215 | |||||||||||
| 3.00%, 4/1/52 |
United States | 5,331,251 | 4,792,795 | |||||||||||
| 3.50%, 8/1/52 |
United States | 1,033,330 | 961,201 | |||||||||||
| 3.50%, 6/1/52 |
United States | 5,160,334 | 4,800,145 | |||||||||||
| 2.50%, 3/1/52 |
United States | 11,751,014 | 10,145,080 | |||||||||||
| 3.00%, 9/1/37 |
United States | 556,645 | 528,344 | |||||||||||
|
|
|
|||||||||||||
| 172,150,607 | ||||||||||||||
|
|
|
|||||||||||||
| 192 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Bond ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Mortgage-Backed Securities (continued) |
||||||||||||||
| Ginnie Mae 2.1% |
||||||||||||||
| Government National Mortgage Association, |
||||||||||||||
| 2.50%, 4/20/52 |
United States | 9,534,701 | $ | 8,400,617 | ||||||||||
| 2.00%, 4/20/52 |
United States | 5,366,756 | 4,565,330 | |||||||||||
| 2.00%, 5/20/52 |
United States | 11,236,578 | 9,558,178 | |||||||||||
| 2.00%, 6/20/52 |
United States | 5,407,402 | 4,599,717 | |||||||||||
| 2.50%, 6/20/52 |
United States | 5,464,686 | 4,814,701 | |||||||||||
|
|
|
|||||||||||||
| 31,938,543 | ||||||||||||||
|
|
|
|||||||||||||
| Total Mortgage-Backed Securities (Cost $322,441,293) |
. | 299,443,106 | ||||||||||||
|
|
|
|||||||||||||
| Foreign Government and Agency Securities 1.2% |
||||||||||||||
| Chile 0.1% |
||||||||||||||
| Chile Government International Bonds, 3.500%, 1/25/50 |
Chile | 1,100,000 | 826,138 | |||||||||||
|
|
|
|||||||||||||
| Peru 0.3% |
||||||||||||||
| Peruvian Government International Bonds, 2.783%, 1/23/31 |
Peru | 5,850,000 | 5,007,704 | |||||||||||
|
|
|
|||||||||||||
| Romania 0.1% |
||||||||||||||
| a | Romania Government International Bonds, 5.125%, 6/15/48 |
Romania | 2,270,000 | 1,903,450 | ||||||||||
|
|
|
|||||||||||||
| South Korea 0.1% |
||||||||||||||
| a | Korea Electric Power Corp., 5.375%, 4/06/26 |
South Korea | 1,600,000 | 1,623,747 | ||||||||||
|
|
|
|||||||||||||
| Supranational 0.6% |
||||||||||||||
| a | African Export-Import Bank, 3.994%, 9/21/29 |
Supranational | 6,100,000 | 5,151,755 | ||||||||||
| a | Banque Ouest Africaine de Developpement, 5.000%, 7/27/27 |
Supranational | 3,800,000 | 3,504,892 | ||||||||||
|
|
|
|||||||||||||
| 8,656,647 | ||||||||||||||
|
|
|
|||||||||||||
| Total Foreign Government and Agency Securities |
18,017,686 | |||||||||||||
|
|
|
|||||||||||||
| Asset-Backed Securities 2.8% |
||||||||||||||
| Bank, |
||||||||||||||
| Series 2021-BN33, Class A5, 2.556%, 5/15/64 |
United States | 2,780,000 | 2,309,548 | |||||||||||
| b Series 2022-BN40, Class A4, 3.394%, 3/15/64 |
United States | 2,800,000 | 2,462,804 | |||||||||||
| Benchmark Mortgage Trust, |
||||||||||||||
| Series 2021-B31, Class A5, 2.669%, 12/15/54 |
United States | 2,780,000 | 2,297,051 | |||||||||||
| b Series 2022-B32, Class A5, 3.002%, 1/15/55 |
United States | 5,560,000 | 4,680,301 | |||||||||||
| BX Commercial Mortgage Trust, |
||||||||||||||
| a,b Series 2019-XL, Class A, 5.862%, 10/15/36 |
United States | 3,778,349 | 3,737,920 | |||||||||||
| a,b Series 2021-VOLT, Class B, 5.634%, 9/15/36 |
United States | 3,190,000 | 3,032,041 | |||||||||||
| a,b Series 2022-LP2, CLass A, 5.84%, 2/15/39 |
United States | 2,970,848 | 2,865,124 | |||||||||||
| a,b | BX Mortgage Trust, Series 2021-PAC, Class A, 5.374%, 10/15/36 |
United States | 3,090,000 | 2,966,254 | ||||||||||
| a,b | BX Trust, Series 2022-IND, Class A, 6.318%, 4/15/37 |
United States | 4,770,628 | 4,670,209 | ||||||||||
| a,b | DBCG Mortgage Trust, Series 2017-BBG, Class A, 5.385%, 6/15/34 |
United States | 7,190,000 | 7,086,011 | ||||||||||
| a | New Economy Assets Phase 1 Sponsor LLC, Series 2021-1, Class A1, 1.91%, 10/20/61 |
United States | 6,660,000 | 5,755,045 | ||||||||||
|
|
|
|||||||||||||
| Total Asset-Backed Securities (Cost $45,172,414) |
41,862,308 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments before Short-Term Investments |
1,489,785,065 | |||||||||||||
|
|
|
|||||||||||||
| franklintempleton.com | Annual Report | 193 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Bond ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Short-Term Investments 1.2% |
||||||||||||||
| Money Market Funds 1.2% |
||||||||||||||
| c,d | Institutional Fiduciary Trust - Money Market Portfolio, 4.47% |
United States | 17,621,864 | $ | 17,621,864 | |||||||||
|
|
|
|||||||||||||
| Total Short-Term Investments (Cost $17,621,864) |
17,621,864 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments (Cost $1,633,754,312) 99.7% |
1,507,406,929 | |||||||||||||
|
|
|
|||||||||||||
| Other Assets, less Liabilities 0.3% |
4,283,928 | |||||||||||||
|
|
|
|||||||||||||
| Net Assets 100.0% |
$ | 1,511,690,857 | ||||||||||||
|
|
|
|||||||||||||
*The principal amount is stated in U.S. dollars unless otherwise indicated.
a 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 March 31, 2023, the value of was $121,885,390, representing 8.1% of net assets.
b Variable rate security. The rate shown represents the yield at period end.
c The rate shown is the annualized seven-day effective yield at period end.
d See Note 3(d) regarding investments in affiliated management investment companies.
At March 31, 2023, the Fund had the following credit default swap contracts outstanding.
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: 25995201 CDS USD R F 1.00000 Mexico Government International Bond |
1% | Quarterly | 12/20/27 | $15,000,000 | $170,320 | $92,953 | $77,367 | |||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||
| $77,367 | ||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||
a Performance 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.
b The Fund enters contracts to sell protection to create a long credit position.
At March 31, 2023, 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 2 Yr. Note |
Long | 65 | $13,419,453 | 6/30/23 | $231,988 | |||||||||||||||||||
| U.S. Treasury 5 Yr. Note |
Long | 208 | 22,777,625 | 6/30/23 | 529,525 | |||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Total Futures Contracts |
$761,513 | |||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
* As of year end.
See Note 8 regarding other derivative information.
See Abbreviations on page 246.
| 194 | Annual Report l The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Low Volatility ETFa
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$49.07 | $43.69 | $30.93 | $33.61 | $30.03 | |||||||||||||||
| Income from investment operationsb: |
||||||||||||||||||||
| Net investment incomec |
0.76 | 0.70 | 0.67 | 0.64 | 0.52 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(1.89 | ) | 5.39 | 12.73 | (2.84 | ) | 3.88 | |||||||||||||
| Total from investment operations |
(1.13 | ) | 6.09 | 13.40 | (2.20 | ) | 4.40 | |||||||||||||
| Less distributions from: |
||||||||||||||||||||
| Net investment income |
(0.78 | ) | (0.71 | ) | (0.64 | ) | (0.48 | ) | (0.47 | ) | ||||||||||
| Net realized gains |
— | — | — | — | (0.35 | ) | ||||||||||||||
| Total distributions |
(0.78 | ) | (0.71 | ) | (0.64 | ) | (0.48 | ) | (0.82 | ) | ||||||||||
| Net asset value, end of year |
$47.16 | $49.07 | $43.69 | $30.93 | $33.61 | |||||||||||||||
| Total returnd |
(2.22 | )% | 13.98% | 43.52% | (6.74 | )% | 14.98% | |||||||||||||
| Ratios to average net assetse |
||||||||||||||||||||
| Expenses before waiver and payments by affiliates |
0.29% | 0.33% | 0.37% | 0.57% | 1.12% | |||||||||||||||
| Expenses net of waiver and payments by affiliates |
0.29% | 0.29% | 0.29% | 0.33% | 0.50% | |||||||||||||||
| Net investment income |
1.66% | 1.47% | 1.71% | 1.75% | 1.64% | |||||||||||||||
| Supplemental data |
||||||||||||||||||||
| Net assets, end of year (000’s) |
$155,613 | $134,935 | $139,822 | $74,223 | $13,443 | |||||||||||||||
| Portfolio turnover ratef |
32.13%g | 21.90%g | 40.54%g | 32.61%g | 46.90% | |||||||||||||||
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: | 32.13% | 21.90% | 40.54% | 32.61% | — |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 195 | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin U.S. Low Volatility ETF
| Shares | Value | |||||||||
| Common Stocks 99.2% | ||||||||||
| Communication Services 7.9% | ||||||||||
| a | Alphabet, Inc., Class A |
19,081 | $ | 1,979,272 | ||||||
| Comcast Corp., Class A |
54,056 | 2,049,263 | ||||||||
| a | Liberty Broadband Corp., Class C |
25,000 | 2,042,500 | |||||||
| TELUS Corp. |
100,934 | 2,004,549 | ||||||||
| Verizon Communications, Inc. |
52,930 | 2,058,448 | ||||||||
| a | Walt Disney Co. |
20,720 | 2,074,694 | |||||||
|
|
|
|||||||||
| 12,208,726 | ||||||||||
|
|
|
|||||||||
| Consumer Discretionary 12.1% | ||||||||||
| a | Amazon.com, Inc. |
19,120 | 1,974,905 | |||||||
| a | AutoZone, Inc. |
800 | 1,966,520 | |||||||
| Dollar General Corp. |
7,202 | 1,515,733 | ||||||||
| Home Depot, Inc. |
6,624 | 1,954,875 | ||||||||
| McDonald’s Corp. |
7,104 | 1,986,349 | ||||||||
| a | NVR, Inc. |
349 | 1,944,694 | |||||||
| Starbucks Corp. |
19,098 | 1,988,675 | ||||||||
| Target Corp. |
9,337 | 1,546,487 | ||||||||
| TJX Cos., Inc. |
25,132 | 1,969,344 | ||||||||
| Tractor Supply Co. |
8,156 | 1,916,986 | ||||||||
|
|
|
|||||||||
| 18,764,568 | ||||||||||
|
|
|
|||||||||
| Consumer Staples 5.0% | ||||||||||
| Coca-Cola Co. |
25,249 | 1,566,195 | ||||||||
| Colgate-Palmolive Co. |
21,028 | 1,580,254 | ||||||||
| Mondelez International, Inc., Class A |
22,490 | 1,568,003 | ||||||||
| PepsiCo, Inc. |
8,559 | 1,560,306 | ||||||||
| Procter & Gamble Co. |
10,572 | 1,571,951 | ||||||||
|
|
|
|||||||||
| 7,846,709 | ||||||||||
|
|
|
|||||||||
| Energy 4.5% | ||||||||||
| Chevron Corp. |
10,759 | 1,755,438 | ||||||||
| a | DT Midstream, Inc. |
35,129 | 1,734,319 | |||||||
| Exxon Mobil Corp. |
16,035 | 1,758,398 | ||||||||
| Williams Cos., Inc. |
58,699 | 1,752,752 | ||||||||
|
|
|
|||||||||
| 7,000,907 | ||||||||||
|
|
|
|||||||||
| Financials 10.1% | ||||||||||
| Arthur J Gallagher & Co. |
8,507 | 1,627,474 | ||||||||
| BlackRock, Inc. |
2,360 | 1,579,123 | ||||||||
| Intercontinental Exchange, Inc. |
15,688 | 1,636,102 | ||||||||
| JPMorgan Chase & Co. |
11,986 | 1,561,896 | ||||||||
| MetLife, Inc. |
26,651 | 1,544,159 | ||||||||
| Nasdaq, Inc. |
28,917 | 1,580,892 | ||||||||
| Progressive Corp. |
11,177 | 1,598,982 | ||||||||
| S&P Global, Inc. |
4,581 | 1,579,391 | ||||||||
| Travelers Cos., Inc. |
9,099 | 1,559,660 | ||||||||
| U.S. Bancorp |
41,626 | 1,500,617 | ||||||||
|
|
|
|||||||||
| 15,768,296 | ||||||||||
|
|
|
|||||||||
| Health Care 13.9% | ||||||||||
| Abbott Laboratories |
19,741 | 1,998,974 | ||||||||
| AbbVie, Inc. |
12,388 | 1,974,275 | ||||||||
| Amgen, Inc. |
8,324 | 2,012,327 | ||||||||
| Becton Dickinson & Co. |
8,083 | 2,000,866 | ||||||||
| Bristol-Myers Squibb Co. |
28,767 | 1,993,841 | ||||||||
| CVS Health Corp. |
25,624 | 1,904,119 | ||||||||
| Danaher Corp. |
7,817 | 1,970,197 | ||||||||
| Johnson & Johnson |
12,600 | 1,953,000 | ||||||||
| 196 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Low Volatility ETF (continued)
| Shares | Value | |||||||||
| Health Care (continued) |
||||||||||
| Medtronic PLC |
23,849 | $ | 1,922,706 | |||||||
| Merck & Co., Inc. |
18,401 | 1,957,682 | ||||||||
| UnitedHealth Group, Inc. |
4,040 | 1,909,264 | ||||||||
|
|
|
|||||||||
| 21,597,251 | ||||||||||
|
|
|
|||||||||
| Industrials 10.2% | ||||||||||
| AMETEK, Inc. |
10,299 | 1,496,754 | ||||||||
| General Dynamics Corp. |
6,388 | 1,457,805 | ||||||||
| Honeywell International, Inc. |
7,468 | 1,427,284 | ||||||||
| IDEX Corp. |
6,479 | 1,496,843 | ||||||||
| Illinois Tool Works, Inc. |
6,140 | 1,494,783 | ||||||||
| Lockheed Martin Corp. |
3,037 | 1,435,681 | ||||||||
| Republic Services, Inc. |
11,043 | 1,493,234 | ||||||||
| Roper Technologies, Inc. |
5,621 | 2,477,119 | ||||||||
| Union Pacific Corp. |
7,598 | 1,529,174 | ||||||||
| Verisk Analytics, Inc. |
7,758 | 1,488,450 | ||||||||
|
|
|
|||||||||
| 15,797,127 | ||||||||||
|
|
|
|||||||||
| Information Technology 26.8% | ||||||||||
| Accenture PLC, Class A |
9,390 | 2,683,756 | ||||||||
| Amphenol Corp., Class A |
30,880 | 2,523,514 | ||||||||
| Analog Devices, Inc. |
12,862 | 2,536,644 | ||||||||
| a | ANSYS, Inc. |
7,725 | 2,570,880 | |||||||
| Apple, Inc. |
15,225 | 2,510,602 | ||||||||
| Automatic Data Processing, Inc. |
6,626 | 1,475,146 | ||||||||
| a | Black Knight, Inc. |
43,475 | 2,502,421 | |||||||
| Cisco Systems, Inc. |
47,786 | 2,498,013 | ||||||||
| a | Fiserv, Inc. |
13,906 | 1,571,795 | |||||||
| International Business Machines Corp. |
19,092 | 2,502,770 | ||||||||
| Intuit, Inc. |
5,738 | 2,558,173 | ||||||||
| a | Keysight Technologies, Inc. |
15,366 | 2,481,302 | |||||||
| Mastercard, Inc., Class A |
4,426 | 1,608,453 | ||||||||
| Microsoft Corp. |
8,851 | 2,551,743 | ||||||||
| Oracle Corp. |
27,652 | 2,569,424 | ||||||||
| a | Synopsys, Inc. |
6,474 | 2,500,582 | |||||||
| Texas Instruments, Inc. |
13,569 | 2,523,970 | ||||||||
| Visa, Inc., Class A |
7,077 | 1,595,580 | ||||||||
|
|
|
|||||||||
| 41,764,768 | ||||||||||
|
|
|
|||||||||
| Materials 2.9% | ||||||||||
| Air Products & Chemicals, Inc. |
5,158 | 1,481,429 | ||||||||
| Ecolab, Inc. |
9,147 | 1,514,103 | ||||||||
| Linde PLC |
4,224 | 1,501,379 | ||||||||
|
|
|
|||||||||
| 4,496,911 | ||||||||||
|
|
|
|||||||||
| Real Estate 3.0% | ||||||||||
| Crown Castle, Inc. |
11,708 | 1,566,999 | ||||||||
| First Industrial Realty Trust, Inc. |
29,620 | 1,575,784 | ||||||||
| Public Storage |
5,180 | 1,565,085 | ||||||||
|
|
|
|||||||||
| 4,707,868 | ||||||||||
|
|
|
|||||||||
| Utilities 2.8% | ||||||||||
| American Electric Power Co., Inc. |
11,941 | 1,086,512 | ||||||||
| Duke Energy Corp. |
11,200 | 1,080,464 | ||||||||
| NextEra Energy, Inc. |
14,077 | 1,085,055 | ||||||||
| franklintempleton.com | Annual Report | 197 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Low Volatility ETF (continued)
| Shares | Value | |||||||
| Utilities (continued) | ||||||||
| Southern Co. |
15,817 | $ | 1,100,547 | |||||
|
|
|
|||||||
| 4,352,578 | ||||||||
|
|
|
|||||||
| Total Common Stocks (Cost $139,487,991) |
154,305,709 | |||||||
|
|
|
|||||||
| Total Investments before Short-Term Investments (Cost $139,487,991) |
154,305,709 | |||||||
|
|
|
|||||||
| Country | Principal Amount* | |||||||||||||
| Short-Term Investments 0.5% | ||||||||||||||
| U.S. Government & Agency Securities 0.5% | ||||||||||||||
| b | Federal Home Loan Bank Discount Notes, 4/03/23 | United States | $870,000 | 870,000 | ||||||||||
|
|
|
|||||||||||||
| Total Short-Term Investments (Cost $869,790) | 870,000 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments (Cost $140,357,781) 99.7% | 155,175,709 | |||||||||||||
| Other Assets, less Liabilities 0.3% | 436,960 | |||||||||||||
|
|
|
|||||||||||||
| Net Assets 100.0% | $155,612,669 | |||||||||||||
|
|
|
|||||||||||||
*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 Note 8 regarding other derivative information.
See Abbreviations on page 246.
| 198 | Annual Report l The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Treasury Bond ETFa
| Year Ended March 31, | ||||||||||||
| 2023 | 2022 | 2021b | ||||||||||
| Per share operating performance |
||||||||||||
| (for a share outstanding throughout the year) |
||||||||||||
| Net asset value, beginning of year |
$22.67 | $23.83 | $25.00 | |||||||||
| Income from investment operationsc: |
||||||||||||
| Net investment incomed |
0.46 | 0.18 | 0.11 | |||||||||
| Net realized and unrealized gains (losses) |
(1.36 | ) | (0.96 | ) | (0.94 | ) | ||||||
| Total from investment operations |
(0.90 | ) | (0.78 | ) | (0.83 | ) | ||||||
| Less distributions from net investment income |
(0.54 | ) | (0.38 | ) | (0.34 | ) | ||||||
| Net asset value, end of year |
$21.23 | $22.67 | $23.83 | |||||||||
| Total returne |
(3.95)% | (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 |
2.16% | 0.77% | 0.54% | |||||||||
| Supplemental data |
||||||||||||
| Net assets, end of year (000’s) |
$428,756 | $403,543 | $418,199 | |||||||||
| Portfolio turnover rateg |
148.40%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”).
| h Portfolio turnover rate excluding cash creations was as follows: | 148.40% | 13.86% | 102.09% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 199 | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin U.S. Treasury Bond ETF
| Country | Principal Amount* | Value | ||||||||||||
|
|
U.S. Government & Agency Securities 98.7% | |||||||||||||
| U.S. Treasury Bonds, |
||||||||||||||
| 1.875%, 11/15/51 |
United States | 43,098,000 | $ | 29,366,405 | ||||||||||
| 3.00%, 5/15/42 |
United States | 20,024,000 | 17,797,503 | |||||||||||
| 3.125%, 11/15/41 |
United States | 17,000,000 | 15,510,508 | |||||||||||
| 3.125%, 8/15/44 |
United States | 12,360,000 | 11,037,577 | |||||||||||
| 3.625%, 2/15/44 |
United States | 6,380,000 | 6,176,887 | |||||||||||
| U.S. Treasury Floating Rate Notes, |
||||||||||||||
| a 4.768%, 7/31/24 |
United States | 16,000,000 | 15,986,813 | |||||||||||
| a 4.931%, 1/31/25 |
United States | 14,000,000 | 14,009,518 | |||||||||||
| U.S. Treasury Inflation-Indexed Notes, |
||||||||||||||
| 0.125%, 1/15/32 |
United States | 1,618,455 | 1,479,469 | |||||||||||
| 0.50%, 1/15/28 |
United States | 9,148,690 | 8,832,878 | |||||||||||
| U.S. Treasury Notes, |
||||||||||||||
| 0.25%, 7/31/25 |
United States | 24,200,000 | 22,231,387 | |||||||||||
| 0.375%, 1/31/26 |
United States | 15,900,000 | 14,437,945 | |||||||||||
| 0.375%, 9/30/27 |
United States | 16,151,000 | 13,970,615 | |||||||||||
| 0.50%, 6/30/27 |
United States | 14,175,000 | 12,419,736 | |||||||||||
| 0.625%, 12/31/27 |
United States | 11,300,000 | 9,830,779 | |||||||||||
| 0.625%, 8/15/30 |
United States | 5,450,000 | 4,442,921 | |||||||||||
| 0.75%, 5/31/26 |
United States | 37,590,000 | 34,202,495 | |||||||||||
| 0.75%, 8/31/26 |
United States | 3,395,000 | 3,069,292 | |||||||||||
| 0.75%, 1/31/28 |
United States | 10,000,000 | 8,737,305 | |||||||||||
| 1.125%, 2/29/28 |
United States | 7,018,000 | 6,234,643 | |||||||||||
| 1.125%, 2/15/31 |
United States | 10,875,000 | 9,161,125 | |||||||||||
| 1.25%, 8/31/24 |
United States | 2,670,000 | 2,557,411 | |||||||||||
| 1.25%, 8/15/31 |
United States | 5,900,000 | 4,950,699 | |||||||||||
| 1.375%, 11/15/31 |
United States | 2,330,000 | 1,967,303 | |||||||||||
| 1.50%, 9/30/24 |
United States | 41,530,000 | 39,859,066 | |||||||||||
| 1.50%, 11/30/24 |
United States | 14,631,000 | 13,997,466 | |||||||||||
| 1.625%, 8/15/29 |
United States | 2,600,000 | 2,319,891 | |||||||||||
| 1.75%, 7/31/24 |
United States | 7,080,000 | 6,839,944 | |||||||||||
| 1.875%, 7/31/26 |
United States | 6,500,000 | 6,117,109 | |||||||||||
| 1.875%, 2/15/32 |
United States | 11,041,000 | 9,693,222 | |||||||||||
| 2.125%, 9/30/24 |
United States | 9,390,000 | 9,097,113 | |||||||||||
| 2.25%, 10/31/24 |
United States | 10,600,000 | 10,275,582 | |||||||||||
| 2.375%, 5/15/27 |
United States | 11,000,000 | 10,451,934 | |||||||||||
| 2.75%, 5/31/29 |
United States | 8,180,000 | 7,798,799 | |||||||||||
| 2.875%, 8/15/28 |
United States | 9,764,000 | 9,407,194 | |||||||||||
| 2.875%, 4/30/29 |
United States | 13,250,000 | 12,724,917 | |||||||||||
| 3.25%, 6/30/29 |
United States | 9,350,000 | 9,169,209 | |||||||||||
| 4.125%, 11/15/32 |
United States | 6,470,000 | 6,799,566 | |||||||||||
|
|
|
|||||||||||||
| Total U.S. Government & Agency Securities (Cost $429,349,741) |
422,962,226 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments before Short-Term Investments (Cost $429,349,741) |
422,962,226 | |||||||||||||
|
|
|
|||||||||||||
| 200 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Treasury Bond ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Short-Term Investments 0.9% | ||||||||||||||
| Money Market Funds 0.9% | ||||||||||||||
| United States 0.9% | ||||||||||||||
| b,c | Institutional Fiduciary Trust - Money Market Portfolio, 4.47% | United States | 4,054,622 | $ | 4,054,622 | |||||||||
|
|
|
|||||||||||||
| Total Short-Term Investments (Cost $4,054,622) | 4,054,622 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments (Cost $433,404,363) 99.6% | 427,016,848 | |||||||||||||
| Other Assets, less Liabilities 0.4% | 1,739,107 | |||||||||||||
|
|
|
|||||||||||||
| Net Assets 100.0% | $ | 428,72 55,955 | ||||||||||||
|
|
|
|||||||||||||
*The principal amount is stated in U.S. dollars unless otherwise indicated.
(a)Variable rate security. The rate shown represents the yield at period end.
(b)The rate shown is the annualized seven-day effective yield at period end.
(c)See Note 3
(d) regarding investments in affiliated management investment companies.
See Note 8 regarding other derivative information.
See Abbreviations on page 246.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 201 | ||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Ultra Short Bond ETFa
| Year Ended March 31, | ||||||||||||
| 2023 | 2022 | 2021b | ||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||
| Net asset value, beginning of year |
$24.55 | $24.88 | $25.00 | |||||||||
|
|
|
|||||||||||
| Income from investment operationsc: |
||||||||||||
| Net investment incomed |
0.61 | 0.14 | 0.10 | |||||||||
| Net realized and unrealized gains (losses) |
(0.12 | ) | (0.33 | ) | 0.13 | |||||||
|
|
|
|||||||||||
| Total from investment operations |
0.49 | (0.19 | ) | 0.23 | ||||||||
|
|
|
|||||||||||
| Less distributions from: |
||||||||||||
| Net investment income |
(0.46 | ) | (0.14 | ) | (0.33 | ) | ||||||
|
|
|
|||||||||||
| Net realized gains |
— | — | (0.02 | ) | ||||||||
|
|
|
|||||||||||
| Total distributions |
(0.46 | ) | (0.14 | ) | (0.35 | ) | ||||||
|
|
|
|||||||||||
| Net asset value, end of year |
$24.58 | $24.55 | $24.88 | |||||||||
|
|
|
|||||||||||
| Total returne |
2.00% | (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 |
0.10% | 0.15% | 0.15% | |||||||||
| Net investment income |
2.47% | 0.55% | 0.58% | |||||||||
| Supplemental data |
||||||||||||
| Net assets, end of year (000’s) |
$2,458 | $3,682 | $2,488 | |||||||||
| Portfolio turnover rateg |
48.71%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”).
| hPortfolioturnover rate excluding cash creations was as follows: |
48.71 | % | 24.17 | % | 10.49% |
| 202 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | |||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin Ultra Short Bond ETF
| Country | Principal Amount* | Value | ||||||||||||
| Corporate Bonds & Notes 83.7% | ||||||||||||||
| Auto Manufacturers 4.0% | ||||||||||||||
| General Motors Financial Co., Inc., 1.70%, 8/18/23 | United States | 100,000 | $ | 98,474 | ||||||||||
|
|
|
|||||||||||||
| Banks 38.4% | ||||||||||||||
| Bank of America Corp., 5.334%, 4/22/25 | United States | 150,000 | 148,477 | |||||||||||
| Citigroup, Inc., 5.977%, 5/17/24 | United States | 150,000 | 150,005 | |||||||||||
| JPMorgan Chase & Co., 5.705% to , FRN thereafter, 7/23/24 | United States | 150,000 | 149,934 | |||||||||||
| Morgan Stanley, 0.731% to 4/05/23, FRN thereafter, 4/05/24 | United States | 150,000 | 149,957 | |||||||||||
| Toronto-Dominion Bank, 4.285%, 9/13/24 | Canada | 100,000 | 98,884 | |||||||||||
| Truist Financial Corp., 5.202%, 6/09/25 | United States | 100,000 | 95,786 | |||||||||||
| Westpac Banking Corp., 5.728% to , FRN thereafter, 2/26/24 | Australia | 150,000 | 149,258 | |||||||||||
|
|
|
|||||||||||||
| 942,301 | ||||||||||||||
|
|
|
|||||||||||||
| Biotechnology 2.0% | ||||||||||||||
| Royalty Pharma PLC, 0.75%, 9/02/23 | United States | 50,000 | 48,761 | |||||||||||
|
|
|
|||||||||||||
| Chemicals 1.1% | ||||||||||||||
| LYB International Finance BV, 4.00%, 7/15/23 | Netherlands | 28,000 | 27,824 | |||||||||||
|
|
|
|||||||||||||
| Electric Utilities 2.0% | ||||||||||||||
| a Vistra Operations Co. LLC, senior secured note, first lien, 3.55%, 7/15/24 | United States | 50,000 | 48,300 | |||||||||||
|
|
|
|||||||||||||
| Entertainment 2.0% | ||||||||||||||
| a Warnermedia Holdings, Inc., 3.428%, 3/15/24 | United States | 50,000 | 48,865 | |||||||||||
|
|
|
|||||||||||||
| Financial Services 8.1% | ||||||||||||||
| American Express Co., 5.546%, 8/03/23 | United States | 150,000 | 149,981 | |||||||||||
| Capital One Financial Corp., 2.60%, 5/11/23 | United States | 50,000 | 49,803 | |||||||||||
|
|
|
|||||||||||||
| 199,784 | ||||||||||||||
|
|
|
|||||||||||||
| Healthcare-Products 4.0% | ||||||||||||||
| Thermo Fisher Scientific, Inc., 0.797%, 10/18/23 | United States | 100,000 | 97,724 | |||||||||||
|
|
|
|||||||||||||
| Insurance 3.9% | ||||||||||||||
| a Brighthouse Financial Global Funding, secured note, 1.20%, 12/15/23 | United States | 100,000 | 96,745 | |||||||||||
|
|
|
|||||||||||||
| Miscellaneous Manufacturing 4.0% | ||||||||||||||
| Parker-Hannifin Corp., 3.65%, 6/15/24 | United States | 100,000 | 98,528 | |||||||||||
|
|
|
|||||||||||||
| Pipelines 2.0% | ||||||||||||||
| a Kinder Morgan, Inc., 5.625%, 11/15/23 | United States | 50,000 | 49,964 | |||||||||||
|
|
|
|||||||||||||
| Retail 2.0% | ||||||||||||||
| Walgreens Boots Alliance, Inc., 0.95%, 11/17/23 | United States | 50,000 | 48,664 | |||||||||||
|
|
|
|||||||||||||
| Telecommunications 10.2% | ||||||||||||||
| AT&T, Inc., 6.334%, 6/12/24 | United States | 100,000 | 100,424 | |||||||||||
| Verizon Communications, Inc., 5.964% to , FRN, 5/15/25 | United States | 150,000 | 150,352 | |||||||||||
|
|
|
|||||||||||||
| 250,776 | ||||||||||||||
|
|
|
|||||||||||||
| Total Corporate Bonds & Notes (Cost $2,079,312) | 2,056,710 | |||||||||||||
|
|
|
|||||||||||||
| Asset-Backed Securities 8.1% | ||||||||||||||
| Citibank Credit Card Issuance Trust, Series 2017-A5, Class A5, 5.372%, 4/22/26 | United States | 100,000 | 100,095 | |||||||||||
| Discover Card Execution Note Trust, Series 2017-A5, Class A5, 5.284%, 12/15/26 | United States | 100,000 | 99,991 | |||||||||||
|
|
|
|||||||||||||
| Total Asset-Backed Securities (Cost $200,922) | 200,086 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments before Short-Term Investments (Cost $2,280,234) |
2,256,796 | |||||||||||||
|
|
|
|||||||||||||
| franklintempleton.com | | Annual Report | 203 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Ultra Short Bond ETF (continued)
| Country | Principal Amount* | Value | ||||||||||||
| Short-Term Investments 7.6% | ||||||||||||||
| Money Market Funds 7.6% | ||||||||||||||
| United States 7.6% | ||||||||||||||
| b.c | Institutional Fiduciary Trust - Money Market Portfolio, 4.47% | United States | 187,218 | $ | 187,218 | |||||||||
|
|
|
|||||||||||||
| Total Short-Term Investments (Cost $187,218) | 187,218 | |||||||||||||
| Total Investments (Cost $2,467,452) 99.4% | 2,444,014 | |||||||||||||
| Other Assets, less Liabilities 0.6% | 13,632 | |||||||||||||
|
|
|
|||||||||||||
| Net Assets 100.0% | $ | 2,457,646 | ||||||||||||
|
|
|
|||||||||||||
* The principal amount is stated in U.S. dollars unless otherwise indicated.
a 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 March 31, 2023, the value of was $243,874, representing 9.9% of net assets.
b The rate shown is the annualized seven-day effective yield at period end.
c See Note 3(d) regarding investments in affiliated management investment companies.
See Abbreviations on page 246.
| 204 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities
March 31, 2023
| Franklin Disruptive Commerce ETF |
Franklin Dynamic Municipal Bond ETF |
Franklin Exponential Data ETF |
Franklin Genomic Advancements ETF |
|||||||||||||||||||||
|
|
||||||||||||||||||||||||
| Assets: |
||||||||||||||||||||||||
| Investments in securities: |
||||||||||||||||||||||||
| Cost – Unaffiliated issuers |
$ | 10,805,227 | $ | 102,964,295 | $ | 3,617,774 | $ | 13,251,505 | ||||||||||||||||
| Cost – Non-controlled affiliates (Note 3d) |
— | — | 38,455 | — | ||||||||||||||||||||
| Value – Unaffiliated issuers |
$ | 9,379,237 | $ | 99,618,121 | $ | 3,331,712 | $ | 10,496,375 | ||||||||||||||||
| Value – Non-controlled affiliates (Note 3d) |
— | — | 38,455 | — | ||||||||||||||||||||
| Cash |
242,282 | 1,320,585 | 1,302 | 145,255 | ||||||||||||||||||||
| Foreign currency, at value (cost $1,925) |
— | — | 1,969 | — | ||||||||||||||||||||
| Receivables: |
||||||||||||||||||||||||
| Dividends and interest |
1,465 | 1,161,540 | 191 | 4,264 | ||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Total assets |
9,622,984 | 102,100,246 | 3,373,629 | 10,645,894 | ||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Liabilities: |
||||||||||||||||||||||||
| Payables: |
||||||||||||||||||||||||
| Investment securities purchased |
— | 577,810 | 138 | — | ||||||||||||||||||||
| Management fees |
3,909 | 25,196 | 1,355 | 4,420 | ||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Total liabilities |
3,909 | 603,006 | 1,493 | 4,420 | ||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Net assets, at value |
$ | 9,619,075 | $ | 101,497,240 | $ | 3,372,136 | $ | 10,641,474 | ||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Net assets consist of: |
||||||||||||||||||||||||
| Paid-in capital |
$ | 21,047,819 | $ | 108,145,893 | $ | 4,576,263 | $ | 21,641,366 | ||||||||||||||||
| Total distributable earnings (loss) |
(11,428,744 | ) | (6,648,653 | ) | (1,204,127 | ) | (10,999,892 | ) | ||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Net assets, at value |
$ | 9,619,075 | $ | 101,497,240 | $ | 3,372,136 | $ | 10,641,474 | ||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Shares outstanding |
400,000 | 4,250,000 | 200,000 | 350,000 | ||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Net asset value per share |
$ | 24.05 | $ | 23.88 | $ | 16.86 | $ | 30.40 | ||||||||||||||||
|
|
|
|||||||||||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
205 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
March 31, 2023
| Franklin High Yield Corporate ETF |
Franklin Intelligent Machines ETF |
Franklin International Aggregate Bond ETF |
Franklin Investment Grade Corporate ETF |
|||||||||||||||||
|
|
||||||||||||||||||||
| Assets: |
||||||||||||||||||||
| Investments in securities: |
||||||||||||||||||||
| Cost – Unaffiliated issuers |
$ | 221,125,965 | $ | 7,424,171 | $ | 284,641,467 | $ | 705,421,110 | ||||||||||||
| Value – Unaffiliated issuers |
$ | 201,185,218 | $ | 8,711,141 | $ | 260,162,638 | $ | 634,145,207 | ||||||||||||
| Cash |
2,023,071 | 121,445 | 4,431,294 | 3,379,652 | ||||||||||||||||
| Foreign currency, at value (cost $6,376,428) |
— | — | 7,132,438 | — | ||||||||||||||||
| Receivables: |
||||||||||||||||||||
| Capital shares sold |
3,393,986 | — | 979,301 | 5,360,744 | ||||||||||||||||
| Dividends and interest |
2,978,075 | 3,701 | 1,403,534 | 6,138,820 | ||||||||||||||||
| Investment securities sold |
12,000 | — | — | — | ||||||||||||||||
| Deposits with brokers for: |
||||||||||||||||||||
| Futures contracts |
— | — | — | 314,150 | ||||||||||||||||
| Unrealized appreciation on OTC forward exchange contracts |
— | — | 3,283,935 | — | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Total assets |
209,592,350 | 8,836,287 | 277,393,140 | 649,338,573 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Liabilities: |
||||||||||||||||||||
| Payables: |
||||||||||||||||||||
| Investment securities purchased |
1,356,700 | — | — | 4,737,974 | ||||||||||||||||
| Management fees |
68,286 | 3,548 | 57,693 | 186,762 | ||||||||||||||||
| Variation margin on futures contracts |
— | — | — | 51,248 | ||||||||||||||||
| Foreign currency advanced by custodian |
— | 541 | — | — | ||||||||||||||||
| Unrealized depreciation on OTC forward exchange contracts |
— | — | 1,171,703 | — | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Total liabilities |
1,424,986 | 4,089 | 1,229,396 | 4,975,984 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Net assets, at value |
$ | 208,167,364 | $ | 8,832,198 | $ | 276,163,744 | $ | 644,362,589 | ||||||||||||
|
|
|
|||||||||||||||||||
| Net assets consist of: |
||||||||||||||||||||
| Paid-in capital |
$ | 232,879,519 | $ | 8,660,307 | $ | 324,963,760 | $ | 759,503,398 | ||||||||||||
| Total distributable earnings (loss) |
(24,712,155 | ) | 171,891 | (48,800,016 | ) | (115,140,809 | ) | |||||||||||||
|
|
|
|||||||||||||||||||
| Net assets, at value |
$ | 208,167,364 | $ | 8,832,198 | $ | 276,163,744 | $ | 644,362,589 | ||||||||||||
|
|
|
|||||||||||||||||||
| Shares outstanding |
9,200,000 | 200,000 | 14,100,000 | 30,050,000 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Net asset value per share |
$ | 22.63 | $ | 44.16 | $ | 19.59 | $ | 21.44 | ||||||||||||
|
|
|
|||||||||||||||||||
| 206 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
March 31, 2023
| Franklin Municipal Green Bond ETF |
Franklin Senior Loan ETF |
Franklin Systematic Style Premia ETF* |
Franklin U.S. Core Bond ETF |
|||||||||||||
|
|
||||||||||||||||
| Assets: |
||||||||||||||||
| Investments in securities: |
||||||||||||||||
| Cost – Unaffiliated issuers |
$114,556,326 | $204,788,266 | $ 75,314,255 | $1,616,132,448 | ||||||||||||
| Cost – Non-controlled affiliates (Note 3d) |
— | — | — | 17,621,864 | ||||||||||||
| Value – Unaffiliated issuers |
$111,307,899 | $196,475,892 | $ 82,047,344 | $1,489,785,065 | ||||||||||||
| Value – Non-controlled affiliates (Note 3d) |
— | — | — | 17,621,864 | ||||||||||||
| Cash |
84,656 | 1,722,412 | 547,127 | 28,561 | ||||||||||||
| Foreign currency, at value (cost $294,287) |
— | — | 293,272 | — | ||||||||||||
| Receivables: |
||||||||||||||||
| Capital shares sold |
— | — | — | 29,342,470 | ||||||||||||
| Dividends and interest |
1,231,613 | 1,659,210 | 289,837 | 7,946,195 | ||||||||||||
| Investment securities sold |
— | 7,979,307 | — | 14,794,054 | ||||||||||||
| Closed swap contracts |
— | — | 80,730,016 | 7,588,060 | ||||||||||||
| Variation margin on futures contracts |
— | — | 144,723 | 59,513 | ||||||||||||
| Deposits with brokers for: |
||||||||||||||||
| Futures contracts |
— | — | 8,148,319 | 444,600 | ||||||||||||
| Swap contracts |
— | — | 860,000 | 389,019 | ||||||||||||
| OTC swap contracts premiums paid |
— | — | — | 92,953 | ||||||||||||
| Unrealized appreciation on OTC forward exchange contracts |
— | — | 987,661 | — | ||||||||||||
| Unrealized appreciation on OTC swap contracts |
— | — | — | 77,367 | ||||||||||||
|
|
|
|||||||||||||||
| Total assets |
112,624,168 | 207,836,821 | 174,048,299 | 1,568,169,721 | ||||||||||||
|
|
|
|||||||||||||||
| Liabilities: |
||||||||||||||||
| Payables: |
||||||||||||||||
| Closed swap contracts |
— | — | 82,205,524 | 7,500,000 | ||||||||||||
| Investment securities purchased |
247,110 | 1,352,859 | 22 | 48,796,929 | ||||||||||||
| Management fees |
28,128 | 81,316 | 51,419 | 181,935 | ||||||||||||
| Transfer agent fees |
— | — | 3,125 | — | ||||||||||||
| Custodian fees |
— | — | 490 | — | ||||||||||||
| Professional fees |
— | — | 333 | — | ||||||||||||
| Unrealized depreciation on OTC forward exchange contracts |
— | — | 640,675 | — | ||||||||||||
| Accrued expenses and other liabilities |
— | 282,375 | 771 | — | ||||||||||||
|
|
|
|||||||||||||||
| Total liabilities |
275,238 | 1,716,550 | 82,902,359 | 56,478,864 | ||||||||||||
|
|
|
|||||||||||||||
| Net assets, at value |
$112,348,930 | $206,120,271 | $ 91,145,940 | $1,511,690,857 | ||||||||||||
|
|
|
|||||||||||||||
| Net assets consist of: |
||||||||||||||||
| Paid-in capital |
$124,558,436 | $220,833,635 | $ 97,799,052 | $1,751,863,262 | ||||||||||||
| Total distributable earnings (loss) |
(12,209,506 | ) | (14,713,364 | ) | (6,653,112 | ) | (240,172,405 | ) | ||||||||
|
|
|
|||||||||||||||
| Net assets, at value |
$112,348,930 | $206,120,271 | $ 91,145,940 | $1,511,690,857 | ||||||||||||
|
|
|
|||||||||||||||
| Shares outstanding |
4,700,000 | 8,650,000 | 4,250,000 | 69,550,000 | ||||||||||||
|
|
|
|||||||||||||||
| Net asset value per share |
$ 23.90 | $23.83 | $ 21.45 | $ 21.74 | ||||||||||||
|
|
|
|||||||||||||||
aConsolidated financial statements. Note 10.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
207 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
March 31, 2023
| Franklin U.S. Low Volatility ETF |
Franklin U.S. Treasury Bond ETF |
Franklin Ultra Short Bond ETF |
||||||||||||||||||
|
|
||||||||||||||||||||
| Assets: |
||||||||||||||||||||
| Investments in securities: |
||||||||||||||||||||
| Cost – Unaffiliated issuers |
$ | 140,357,781 | $ | 429,349,741 | $ | 2,280,234 | ||||||||||||||
| Cost – Non-controlled affiliates (Note 3d) |
— | 4,054,622 | 187,218 | |||||||||||||||||
| Value – Unaffiliated issuers |
$ | 155,175,709 | $ | 422,962,226 | $ | 2,256,796 | ||||||||||||||
| Value – Non-controlled affiliates (Note 3d) |
— | 4,054,622 | 187,218 | |||||||||||||||||
| Cash |
278,629 | — | 71 | |||||||||||||||||
| Receivables: |
||||||||||||||||||||
| Capital shares sold |
2,357,767 | 7,428,883 | — | |||||||||||||||||
| Dividends and interest |
166,026 | 2,081,035 | 17,695 | |||||||||||||||||
|
|
|
|||||||||||||||||||
| Total assets |
157,978,131 | 436,526,766 | 2,461,780 | |||||||||||||||||
|
|
|
|||||||||||||||||||
| Liabilities: |
||||||||||||||||||||
| Payables: |
||||||||||||||||||||
| Investment securities purchased |
2,329,979 | 7,741,089 | 3,932 | |||||||||||||||||
| Management fees |
35,483 | 29,104 | 202 | |||||||||||||||||
| Funds advanced by custodian |
— | 618 | — | |||||||||||||||||
|
|
|
|||||||||||||||||||
| Total liabilities |
2,365,462 | 7,770,811 | 4,134 | |||||||||||||||||
|
|
|
|||||||||||||||||||
| Net assets, at value |
$ | 155,612,669 | $ | 428,755,955 | $ | 2,457,646 | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net assets consist of: |
||||||||||||||||||||
| Paid-in capital |
$ | 143,712,423 | $ | 494,290,877 | $ | 2,514,957 | ||||||||||||||
| Total distributable earnings (loss) |
11,900,246 | (65,534,922 | ) | (57,311 | ) | |||||||||||||||
|
|
|
|||||||||||||||||||
| Net assets, at value |
$ | 155,612,669 | $ | 428,755,955 | $ | 2,457,646 | ||||||||||||||
|
|
|
|||||||||||||||||||
| Shares outstanding |
3,300,000 | 20,200,000 | 100,000 | |||||||||||||||||
|
|
|
|||||||||||||||||||
| Net asset value per share |
$ | 47.16 | $ | 21.23 | $ | 24.58 | ||||||||||||||
|
|
|
|||||||||||||||||||
| 208 | Annual 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 year ended March 31, 2023
| 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 |
$ | 54,016 | $ | — | $ | 11,016 | $ | 39,120 | ||||||||||||||||
| Non-cash dividends |
6,543 | — | — | — | ||||||||||||||||||||
| Interest: |
||||||||||||||||||||||||
| Unaffiliated issuers |
— | 3,118,576 | — | — | ||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Total investment income |
60,559 | 3,118,576 | 11,016 | 39,120 | ||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Expenses: |
||||||||||||||||||||||||
| Management fees (Note 3a) |
53,079 | 465,409 | 12,984 | 57,575 | ||||||||||||||||||||
| Transfer agent fees |
— | 8,022 | — | — | ||||||||||||||||||||
| Custodian fees |
— | 1,067 | — | — | ||||||||||||||||||||
| Reports to shareholders |
— | 2,725 | — | — | ||||||||||||||||||||
| Registration and filing fees |
— | 7,806 | — | — | ||||||||||||||||||||
| Professional fees |
— | 21,535 | — | — | ||||||||||||||||||||
| Trustee fees |
— | 1,893 | — | — | ||||||||||||||||||||
| Other |
— | 8,718 | — | — | ||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Total expenses |
53,079 | 517,175 | 12,984 | 57,575 | ||||||||||||||||||||
| Expenses waived/paid by affiliates (Note 3c) |
— | (243,934 | ) | (126 | ) | — | ||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Net expenses |
53,079 | 273,241 | 12,858 | 57,575 | ||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Net investment income |
7,480 | 2,845,335 | (1,842 | ) | (18,455 | ) | ||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Realized and unrealized gains (losses): |
||||||||||||||||||||||||
| Net realized gain (loss) from: |
||||||||||||||||||||||||
| Investments: |
||||||||||||||||||||||||
| Unaffiliated issuers |
(3,771,582 | ) | (3,251,657 | ) | (366,963 | ) | (2,260,023 | ) | ||||||||||||||||
| In-kind redemptions |
(1,618,133 | ) | — | — | (364,779 | ) | ||||||||||||||||||
| Foreign currency transactions |
(944 | ) | — | (127 | ) | 289 | ||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Net realized gain (loss) |
(5,390,659 | ) | (3,251,657 | ) | (367,090 | ) | (2,624,513 | ) | ||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||||||||||
| Investments: |
||||||||||||||||||||||||
| Unaffiliated issuers |
731,214 | 334,040 | (476,143 | ) | 41,299 | |||||||||||||||||||
| Translation of other assets and liabilities denominated in foreign currencies |
(34 | ) | — | 34 | 16 | |||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Net change in unrealized appreciation (depreciation) |
731,180 | 334,040 | (476,109 | ) | 41,315 | |||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Net realized and unrealized gain (loss) |
(4,659,479 | ) | (2,917,617 | ) | (843,199 | ) | (2,583,198 | ) | ||||||||||||||||
|
|
|
|||||||||||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
$ | (4,651,999 | ) | $ | (72,282 | ) | $ | (845,041 | ) | $ | (2,601,653 | ) | ||||||||||||
|
|
|
|||||||||||||||||||||||
| aForeign taxes withheld on dividends |
$83 | $— | $103 | $931 | ||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
209 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the year ended March 31, 2023
| Franklin High Yield |
Franklin Machines ETF |
Franklin International Aggregate Bond ETF |
Franklin Investment Grade Corporate ETF |
|||||||||||||||||
|
|
||||||||||||||||||||
| Investment income: |
||||||||||||||||||||
| Dividends: (net of foreign taxes)a |
||||||||||||||||||||
| Unaffiliated issuers |
$ — | $ 37,351 | $ — | $ — | ||||||||||||||||
| Non-cash dividends |
— | 3,123 | — | — | ||||||||||||||||
| Interest: (net of foreign taxes)b |
||||||||||||||||||||
| Unaffiliated issuers |
13,498,200 | — | 2,247,218 | 24,484,112 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Total investment income |
13,498,200 | 40,474 | 2,247,218 | 24,484,112 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Expenses: |
| |||||||||||||||||||
| Management fees (Note 3a) |
913,409 | 40,308 | 505,738 | 2,459,090 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Total expenses |
913,409 | 40,308 | 505,738 | 2,459,090 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Net investment income |
12,584,791 | 166 | 1,741,480 | 22,025,022 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Realized and unrealized gains (losses): |
||||||||||||||||||||
| Net realized gain (loss) from: |
||||||||||||||||||||
| Investments: |
||||||||||||||||||||
| Unaffiliated issuers |
(3,004,480 | ) | (450,318 | ) | (7,684,809 | ) | (35,675,080 | ) | ||||||||||||
| In-kind redemptions |
(17,063,901 | ) | 453,481 | — | (52,533,763 | ) | ||||||||||||||
| Foreign currency transactions |
— | (159 | ) | (2,663,707 | ) | — | ||||||||||||||
| Forward exchange contracts |
— | — | 14,179,290 | — | ||||||||||||||||
| Futures contracts |
— | — | — | 3,238,401 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Net realized gain (loss) |
(20,068,381 | ) | 3,004 | 3,830,774 | (84,970,442 | ) | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||||||
| Investments: |
||||||||||||||||||||
| Unaffiliated issuers |
(3,626,857 | ) | (810,953 | ) | (8,824,723 | ) | 680,051 | |||||||||||||
| Translation of other assets and liabilities denominated in foreign currencies |
— | — | 1,366,497 | — | ||||||||||||||||
| Futures contracts |
— | — | — | (1,363,186 | ) | |||||||||||||||
| Forward exchange contracts |
— | — | (2,641,891 | ) | — | |||||||||||||||
| Change in deferred taxes on unrealized appreciation |
— | — | 1,629 | — | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Net change in unrealized appreciation (depreciation) |
(3,626,857 | ) | (810,953 | ) | (10,098,488 | ) | (683,135 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| Net realized and unrealized gain (loss) |
(23,695,238 | ) | (807,949 | ) | (6,267,714 | ) | (85,653,577 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
$(11,110,447 | ) | $(807,783 | ) | $ (4,526,234 | ) | $(63,628,555 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| aForeign taxes withheld on dividends |
$— | $3,392 | $ — | $ — | ||||||||||||||||
| b Foreign taxes withheld on interest |
$— | $ — | $612 | $(223 | ) | |||||||||||||||
|
|
|
|||||||||||||||||||
| 210 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the year ended March 31, 2023
| 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 |
$ — | $ — | $ 1,236,987 | $ 610,379 | ||||||||||||||||
| Interest: |
||||||||||||||||||||
| Unaffiliated issuers |
3,066,572 | 15,389,179 | 399,015 | 38,707,695 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Total investment income |
3,066,572 | 15,389,179 | 1,636,002 | 39,318,074 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Expenses: |
||||||||||||||||||||
| Management fees (Note 3a) |
544,505 | 1,029,023 | 595,131 | 2,221,846 | ||||||||||||||||
| Transfer agent fees |
8,022 | — | 7,500 | — | ||||||||||||||||
| Custodian fees |
1,189 | — | 1,199 | — | ||||||||||||||||
| Reports to shareholders |
3,155 | — | — | — | ||||||||||||||||
| Registration and filing fees |
6,450 | — | — | — | ||||||||||||||||
| Professional fees |
67,989 | — | — | — | ||||||||||||||||
| Trustee fees |
3,598 | — | — | — | ||||||||||||||||
| Other |
8,859 | 7,589 | — | — | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Total expenses |
643,767 | 1,036,612 | 603,830 | 2,221,846 | ||||||||||||||||
| Expenses waived/paid by affiliates (Note 3c) |
(323,254 | ) | — | (31,738 | ) | (104,052 | ) | |||||||||||||
|
|
|
|||||||||||||||||||
| Net expenses |
320,513 | 1,036,612 | 572,092 | 2,117,794 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Net investment income |
2,746,059 | 14,352,567 | 1,063,910 | 37,200,280 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Realized and unrealized gains (losses): |
||||||||||||||||||||
| Net realized gain (loss) from: |
||||||||||||||||||||
| Investments: |
||||||||||||||||||||
| Unaffiliated issuers |
(6,701,880 | ) | (6,257,273 | ) | (1,637,216 | ) | (77,479,533 | ) | ||||||||||||
| Foreign currency transactions |
— | — | (2,633 | ) | — | |||||||||||||||
| Forward exchange contracts |
— | — | 374,378 | — | ||||||||||||||||
| Futures contracts |
— | — | (2,669,219 | ) | 181,750 | |||||||||||||||
| Swap contracts |
— | — | — | 73,718 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Net realized gain (loss) |
(6,701,880 | ) | (6,257,273 | ) | (3,934,690 | ) | (77,224,065 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||||||
| Investments: |
||||||||||||||||||||
| Unaffiliated issuers |
2,723,264 | (5,069,428 | ) | 3,260,854 | (35,416,037 | ) | ||||||||||||||
| Translation of other assets and liabilities denominated in foreign currencies |
— | — | 21,359 | — | ||||||||||||||||
| Futures contracts |
— | — | 1,417,435 | 645,531 | ||||||||||||||||
| Swap contracts |
— | — | (878 | ) | 95,395 | |||||||||||||||
| Forward exchange contracts |
— | — | 73,504 | — | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Net change in unrealized appreciation (depreciation) |
2,723,264 | (5,069,428 | ) | 4,772,274 | (34,675,111 | ) | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net realized and unrealized gain (loss) |
(3,978,616 | ) | (11,326,701 | ) | 837,584 | (111,899,176 | ) | |||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
$(1,232,557 | ) | $ 3,025,866 | $ 1,901,494 | $ (74,698,896 | ) | ||||||||||||||
|
|
|
|||||||||||||||||||
| aForeign taxes withheld on dividends |
$— | $— | $53,270 | $— | ||||||||||||||||
|
|
|
|||||||||||||||||||
*Consolidated financial statements. Note 10.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
211 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the year ended March 31, 2023
| 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 |
$ 2,564,789 | $ 170,598 | $ 18,480 | |||||||||||||
| Interest: |
||||||||||||||||
| Unaffiliated issuers |
30,228 | 7,906,225 | 60,007 | |||||||||||||
| Inflation principle adjustments |
— | 365,091 | — | |||||||||||||
|
|
|
|||||||||||||||
| Total investment income |
2,595,017 | 8,441,914 | 78,487 | |||||||||||||
|
|
|
|||||||||||||||
| Expenses: |
||||||||||||||||
| Management fees (Note 3a) |
386,374 | 339,123 | 4,585 | |||||||||||||
|
|
|
|||||||||||||||
| Total expenses |
386,374 | 339,123 | 4,585 | |||||||||||||
| Expenses waived/paid by affiliates (Note 3c) |
— | (29,670 | ) | (1,625 | ) | |||||||||||
|
|
|
|||||||||||||||
| Net expenses |
386,374 | 309,453 | 2,960 | |||||||||||||
|
|
|
|||||||||||||||
| Net investment income |
2,208,643 | 8,132,461 | 75,527 | |||||||||||||
|
|
|
|||||||||||||||
| Realized and unrealized gains (losses): |
||||||||||||||||
| Net realized gain (loss) from: |
||||||||||||||||
| Investments: |
||||||||||||||||
| Unaffiliated issuers |
(2,430,085 | ) | (45,689,019 | ) | (23,277 | ) | ||||||||||
| In-kind redemptions |
654,149 | — | — | |||||||||||||
| Foreign currency transactions |
(701 | ) | — | — | ||||||||||||
|
|
|
|||||||||||||||
| Net realized gain (loss) |
(1,776,637 | ) | (45,689,019 | ) | (23,277 | ) | ||||||||||
|
|
|
|||||||||||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||
| Investments: |
||||||||||||||||
| Unaffiliated issuers |
(3,376,825 | ) | 24,120,884 | 18,440 | ||||||||||||
| Translation of other assets and liabilities denominated in foreign currencies |
(69 | ) | — | — | ||||||||||||
|
|
|
|||||||||||||||
| Net change in unrealized appreciation (depreciation) |
(3,376,894 | ) | 24,120,884 | 18,440 | ||||||||||||
|
|
|
|||||||||||||||
| Net realized and unrealized gain (loss) |
(5,153,531 | ) | (21,568,135 | ) | (4,837 | ) | ||||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
$(2,944,888 | ) | $(13,435,674 | ) | $ 70,690 | |||||||||||
|
|
|
|||||||||||||||
| aForeign taxes withheld on dividends |
$10,238 | $— | $— | |||||||||||||
|
|
|
|||||||||||||||
| 212 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
| Franklin Disruptive Commerce ETF | Franklin Dynamic Municipal Bond ETF |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||
|
|
||||||||||||||||||||
| Increase (decrease) in net assets: |
||||||||||||||||||||
| Operations: |
||||||||||||||||||||
| Net investment income (loss) |
$ | 7,480 | $ | (136,756 | ) | $ | 2,845,335 | $ | 1,338,701 | |||||||||||
| Net realized loss |
(5,390,659 | ) | (3,530,248 | ) | (3,251,657 | ) | (4,924 | ) | ||||||||||||
| Net change in unrealized appreciation (depreciation) |
731,180 | (8,910,981 | ) | 334,040 | (5,026,347 | ) | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
(4,651,999 | ) | (12,577,985 | ) | (72,282 | ) | (3,692,570 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| Distributions to shareholders (Note 1g) |
— | (222,554 | ) | (2,738,207 | ) | (1,204,849 | ) | |||||||||||||
|
|
|
|||||||||||||||||||
| Capital share transactions: (Note 2) |
(4,312,705 | ) | (10,442,439 | ) | 27,399,308 | 39,693,714 | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) in net assets |
(8,964,704 | ) | (23,242,978 | ) | 24,588,819 | 34,796,295 | ||||||||||||||
| Net assets: |
||||||||||||||||||||
| Beginning of year |
18,583,779 | 41,826,757 | 76,908,421 | 42,112,126 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| End of year |
$ | 9,619,075 | $ | 18,583,779 | $ | 101,497,240 | $ | 76,908,421 | ||||||||||||
|
|
|
|||||||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
213 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin Exponential Data ETF | Franklin Genomic Advancements ETF | |||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||
|
|
||||||||||||||||||||
| Increase (decrease) in net assets: |
||||||||||||||||||||
| Operations: |
||||||||||||||||||||
| Net investment income loss |
$ (1,842 | ) | $ (7,332 | ) | $ (18,455 | ) | $ (69,697 | ) | ||||||||||||
| Net realized loss |
(367,090 | ) | (487,396 | ) | (2,624,513 | ) | (1,268,783 | ) | ||||||||||||
| Net change in unrealized appreciation (depreciation) |
(476,109 | ) | 292,285 | 41,315 | (5,044,128 | ) | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
(845,041 | ) | (202,443 | ) | (2,601,653 | ) | (6,382,608 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| Distributions to shareholders (Note 1g) |
— | — | — | (64,946 | ) | |||||||||||||||
|
|
|
|||||||||||||||||||
| Capital share transactions: (Note 2) |
800,051 | 1,286,009 | (1,555,550 | ) | 6,106,586 | |||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) in net assets |
(44,990 | ) | 1,083,566 | (4,157,203 | ) | (340,968 | ) | |||||||||||||
| Net assets: |
||||||||||||||||||||
| Beginning of year |
3,417,126 | 2,333,560 | 14,798,677 | 15,139,645 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| End of year |
$3,372,136 | $3,417,126 | $10,641,474 | $14,798,677 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| 214 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin High Yield Corporate ETF |
Franklin Intelligent Machines ETF | |||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||
|
|
||||||||||||||||||||
| Increase (decrease) in net assets: |
||||||||||||||||||||
| Operations: |
||||||||||||||||||||
| Net investment income (loss) |
$ | 12,584,791 | $ | 16,556,505 | $ | 166 | $ | (25,737 | ) | |||||||||||
| Net realized gain (loss) |
(20,068,381 | ) | 371,679 | 3,004 | (667,586 | ) | ||||||||||||||
| Net change in unrealized appreciation (depreciation) |
(3,626,857 | ) | (21,274,898 | ) | (810,953 | ) | 1,481,764 | |||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
(11,110,447 | ) | (4,346,714 | ) | (807,783 | ) | 788,441 | |||||||||||||
|
|
|
|||||||||||||||||||
| Distributions to shareholders (Note 1g) |
(14,565,851 | ) | (17,355,367 | ) | — | (23,504 | ) | |||||||||||||
|
|
|
|||||||||||||||||||
| Capital share transactions: (Note 2) |
(100,442,169 | ) | 9,401,694 | (1,933,835 | ) | — | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) in net assets |
(126,118,467 | ) | (12,300,387 | ) | (2,741,618 | ) | 764,937 | |||||||||||||
| Net assets: |
||||||||||||||||||||
| Beginning of year |
334,285,831 | 346,586,218 | 11,573,816 | 10,808,879 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| End of year |
$ | 208,167,364 | $ | 334,285,831 | $ | 8,832,198 | $ | 11,573,816 | ||||||||||||
|
|
|
|||||||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
215 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin International Aggregate Bond ETF |
Franklin Investment Grade Corporate ETF |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||
|
|
||||||||||||||||||||
| Increase (decrease) in net assets: |
||||||||||||||||||||
| Operations: |
||||||||||||||||||||
| Net investment income |
$ 1,741,480 | $ 406,482 | $ 22,025,022 | $ 23,268,333 | ||||||||||||||||
| Net realized gain (loss) |
3,830,774 | 10,960,307 | (84,970,442 | ) | 5,999,435 | |||||||||||||||
| Net change in unrealized appreciation (depreciation) |
(10,098,488 | ) | (18,640,042 | ) | (683,135 | ) | (69,996,857 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
(4,526,234 | ) | (7,273,253 | ) | (63,628,555 | ) | (40,729,089 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| Distributions to shareholders (Note 1g) |
(30,078,202 | ) | (4,976,496 | ) | (24,150,574 | ) | (28,480,201 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| Capital share transactions: (Note 2) |
116,800,375 | 24,812,593 | (249,460,109 | ) | 32,171,961 | |||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) in net assets |
82,195,939 | 12,562,844 | (337,239,238 | ) | (37,037,329 | ) | ||||||||||||||
| Net assets: |
||||||||||||||||||||
| Beginning of year |
193,967,805 | 181,404,961 | 981,601,827 | 1,018,639,156 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| End of year |
$276,163,744 | $193,967,805 | $644,362,589 | $ 981,601,827 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| 216 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin Municipal Green Bond ETF | Franklin Senior Loan ETF | |||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||
|
|
||||||||||||||||||||
| Increase (decrease) in net assets: |
||||||||||||||||||||
| Operations: |
||||||||||||||||||||
| Net investment income |
$ 2,746,059 | $ 1,675,014 | $ 14,352,567 | $ 7,866,054 | ||||||||||||||||
| Net realized loss |
(6,701,880 | ) | (413,327 | ) | (6,257,273 | ) | (374,967 | ) | ||||||||||||
| Net change in unrealized appreciation (depreciation) . |
2,723,264 | (7,422,486 | ) | (5,069,428 | ) | (2,789,129 | ) | |||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
(1,232,557 | ) | (6,160,799 | ) | 3,025,866 | 4,701,958 | ||||||||||||||
|
|
|
|||||||||||||||||||
| Distributions to shareholders (Note 1g) |
(2,942,579 | ) | (2,038,684 | ) | (13,839,060 | ) | (6,696,117 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| Capital share transactions: (Note 2) |
11,585,524 | (13,082,950 | ) | (75,788,778 | ) | 93,615,229 | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) in net assets |
7,410,388 | (21,282,433 | ) | (86,601,972 | ) | 91,621,070 | ||||||||||||||
| Net assets: |
||||||||||||||||||||
| Beginning of year |
104,938,542 | 126,220,975 | 292,722,243 | 201,101,173 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| End of year |
$112,348,930 | $104,938,542 | $206,120,271 | $292,722,243 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
217 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin Systematic Style Premia ETF |
Franklin U.S. Core Bond ETF | |||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||
|
|
||||||||||||||||||||
| Increase (decrease) in net assets: |
||||||||||||||||||||
| Operations: |
||||||||||||||||||||
| Net investment income |
$ 1,063,910 | $ 375,343 | $ 37,200,280 | $ 28,834,509 | ||||||||||||||||
| Net realized gain (loss) |
(3,934,690 | ) | 4,711,707 | (77,224,065 | ) | (24,963,931 | ) | |||||||||||||
| Net change in unrealized appreciation (depreciation) |
4,772,274 | 61,304 | (34,675,111 | ) | (78,870,127 | ) | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
1,901,494 | 5,148,354 | (74,698,896 | ) | (74,999,549 | ) | ||||||||||||||
|
|
|
|||||||||||||||||||
| Distributions to shareholders (Note 1g) |
(2,011,501 | ) | (697,021 | ) | (36,861,021 | ) | (35,701,883 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| Capital share transactions: (Note 2) |
35,997,633 | 3,879,642 | 113,289,466 | 160,065,825 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) in net assets |
35,887,626 | 8,330,975 | 1,729,549 | 49,364,393 | ||||||||||||||||
| Net assets: |
||||||||||||||||||||
| Beginning of year |
55,258,314 | 46,927,339 | 1,509,961,308 | 1,460,596,915 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| End of year |
$91,145,940 | $55,258,314 | $1,511,690,857 | $1,509,961,308 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| 218 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin U.S. Low Volatility ETF | Franklin U.S. Treasury Bond ETF | |||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||
|
|
||||||||||||||||||||
| Increase (decrease) in net assets: |
||||||||||||||||||||
| Operations: |
||||||||||||||||||||
| Net investment income |
$ 2,208,643 | $ 2,051,655 | $ 8,132,461 | $ 3,222,981 | ||||||||||||||||
| Net realized gain (loss) |
(1,776,637 | ) | 17,449,280 | (45,689,019 | ) | (939,252 | ) | |||||||||||||
| Net change in unrealized appreciation (depreciation) |
(3,376,894 | ) | (1,376,584 | ) | 24,120,884 | (15,335,003 | ) | |||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
(2,944,888 | ) | 18,124,351 | (13,435,674 | ) | (13,051,274 | ) | |||||||||||||
|
|
|
|||||||||||||||||||
| Distributions to shareholders (Note 1g) |
(2,283,102 | ) | (2,063,975 | ) | (9,684,869 | ) | (6,661,686 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| Capital share transactions: (Note 2) |
25,905,244 | (20,946,579 | ) | 48,333,781 | 5,056,701 | |||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) in net assets |
20,677,254 | (4,886,203 | ) | 25,213,238 | (14,656,259 | ) | ||||||||||||||
| Net assets: |
||||||||||||||||||||
| Beginning of year |
134,935,415 | 139,821,618 | 403,542,717 | 418,198,976 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| End of year |
$155,612,669 | $134,935,415 | $428,755,955 | $403,542,717 | ||||||||||||||||
|
|
|
|||||||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
219 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin Ultra Short Bond ETF | ||||||||||||
|
|
|
|||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||
|
|
||||||||||||
| Increase (decrease) in net assets: |
||||||||||||
| Operations: |
||||||||||||
| Net investment income |
$ 75,527 | $ 17,705 | ||||||||||
| Net realized gain (loss) |
(23,277 | ) | 1,348 | |||||||||
| Net change in unrealized appreciation (depreciation) |
18,440 | (51,611 | ) | |||||||||
|
|
|
|||||||||||
| Net increase (decrease) in net assets resulting from operations |
70,690 | (32,558 | ) | |||||||||
|
|
|
|||||||||||
| Distributions to shareholders (Note 1g) |
(62,292 | ) | (17,586 | ) | ||||||||
|
|
|
|||||||||||
| Capital share transactions: (Note 2) |
(1,232,733 | ) | 1,244,484 | |||||||||
|
|
|
|||||||||||
| Net increase (decrease) in net assets |
(1,224,335 | ) | 1,194,340 | |||||||||
| Net assets: |
||||||||||||
| Beginning of year |
3,681,981 | 2,487,641 | ||||||||||
|
|
|
|||||||||||
| End of year |
$ 2,457,646 | $3,681,981 | ||||||||||
|
|
|
|||||||||||
| 220 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
1. Organization and Significant Accounting Policies
Franklin Templeton ETF Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company consisting of forty-eight separate funds, fifteen of which are included in this report (Funds). The Funds follow the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standard 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 Funds are exchange traded funds (“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.
On May 25, 2022, the Board of Trustees approved a proposal to change the names of the below ETFs, effective August 1, 2022:
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 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 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
| franklintempleton.com | Annual Report | 221 | ||
NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
a. Financial Instrument Valuation (continued)
sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value. Securities denominated in a foreign currency are converted into their U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the date that the values of the foreign debt securities are determined.
The Funds have procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Funds primarily employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, As per standards minutes, 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 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. 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 does 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
| 222 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting
Policies (continued)
b. Foreign Currency Translation (continued)
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 Statement of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statement of Operations.
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.
Each Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of March 31, 2023, 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.
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 Funds 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 8 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
| franklintempleton.com | Annual Report | 223 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
d. Securities Purchased on a When-Issued and Delayed Delivery Basis (continued)
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, the Secured Overnight Financing Rate (SOFR) 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.
f. Income and Deferred Taxes
It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
The 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 Fund invests. 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 records an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.
Each Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of March 31, 2023, each Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any
open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.
g. Security Transactions, Investment Income, Expenses and Distributions
Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Dividend income and capital gain distributions are recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Funds. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.
Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Funds 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.
| 224 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
h. Insurance (continued)
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 statement 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 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 Funds are issued and redeemed at their respective NAV only in aggregations of a specific number of shares or multiples thereof (Creation Units). Only certain large institutional investors (Authorized Participants) may engage in creation or redemption transactions directly with the Funds. Once created, shares of the Funds generally trade in the secondary market in amounts less than one Creation Unit. The market price of the Funds’ shares will be based on the price in the secondary market which may be at, above or below the most recent NAV. Creation Units may be issued and redeemed in exchange for a designated portfolio of securities and/or cash (which may include cash in lieu of certain securities).
Authorized Participants pay a standard transaction fee to the shareholder servicing agent when purchasing or redeeming Creation Units of the Funds regardless of the number of Creation Units that are being created or redeemed on the same day by the Authorized Participant. The standard transaction fee is imposed to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units and is not charged to or paid by the Funds.
In addition, for cash Creation Unit transactions, a variable fee for creation transactions and redemption transactions may be charged to the Authorized Participant to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades. Variable fees, if any, are included in capital share transactions in the Statements of Changes in Net Assets.
At March 31, 2023, there were an unlimited number of shares authorized (without par value). Transactions in the Funds’ shares were as follows:
| Franklin Disruptive Commerce ETF | ||||||||||||||||||||||||||||
| Year Ended | Year Ended | |||||||||||||||||||||||||||
| March 31, 2023 | 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 | ) | ||||||||||||||||||
| franklintempleton.com | Annual Report | 225 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
2. Shares of Beneficial Interest (continued)
| Franklin Dynamic Municipal Bond ETF | ||||||||||||||||
| Year Ended | Year Ended | |||||||||||||||
| March 31, 2023 | March 31, 2022 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Shares sold |
2,300,000 | $ | 54,522,182 | 1,550,000 | $ | 40,942,801 | ||||||||||
| Shares redeemed |
(1,150,000 | ) | (27,122,874 | ) | (50,000 | ) | (1,249,087 | ) | ||||||||
| Net increase (decrease) |
1,150,000 | $ | 27,399,308 | 1,500,000 | $ | 39,693,714 | ||||||||||
| Franklin Exponential Data ETF | ||||||||||||||||
| Year Ended | Year Ended | |||||||||||||||
| March 31, 2023 | March 31, 2022 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Shares sold |
50,000 | $ | 800,051 | 50,000 | $ | 1,286,009 | ||||||||||
| Net increase (decrease) |
50,000 | $ | 800,051 | 50,000 | $ | 1,286,009 | ||||||||||
| Franklin Genomic Advancements ETF | ||||||||||||||||
| Year Ended | Year Ended | |||||||||||||||
| March 31, 2023 | 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 | ||||||||||||||||
| Year Ended | Year Ended | |||||||||||||||
| March 31, 2023 | March 31, 2022 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Shares sold |
4,100,000 | $ | 91,766,853 | 4,500,000 | $ | 117,942,112 | ||||||||||
| Shares redeemed |
(8,400,000 | ) | (192,209,022 | ) | (4,250,000 | ) | (108,540,418 | ) | ||||||||
| Net increase (decrease) |
(4,300,000 | ) | $ | (100,442,169 | ) | 250,000 | $ | 9,401,694 | ||||||||
| Franklin Intelligent Machines ETF | ||||||||||||||||
| Year Ended | Year Ended | |||||||||||||||
| March 31, 2023 | 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 | ) | — | $ | — | ||||||||
| 226 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
2. Shares of Beneficial Interest (continued)
| Franklin International Aggregate Bond ETF | ||||||||||||||||
| Year Ended | Year Ended | |||||||||||||||
| March 31, 2023 | March 31, 2022 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Shares sold |
6,650,000 | $ | 133,652,517 | 2,400,000 | $ | 60,490,312 | ||||||||||
| Shares redeemed |
(750,000 | ) | (16,852,142 | ) | (1,450,000 | ) | (35,677,719 | ) | ||||||||
| Net increase (decrease) |
5,900,000 | $ | 116,800,375 | 950,000 | $ | 24,812,593 | ||||||||||
| Franklin Investment Grade Corporate ETF | ||||||||||||||||
| Year Ended | Year Ended | |||||||||||||||
| March 31, 2023 | March 31, 2022 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Shares sold |
5,450,000 | $ | 117,743,152 | 4,300,000 | $ | 107,793,585 | ||||||||||
| Shares redeemed |
(16,800,000 | ) | (367,203,261 | ) | (2,900,000 | ) | (75,621,624 | ) | ||||||||
| Net increase (decrease) |
(11,350,000 | ) | $ | (249,460,109 | ) | 1,400,000 | $ | 32,171,961 | ||||||||
| Franklin Municipal Green Bond ETF | ||||||||||||||||
| Year Ended | Year Ended | |||||||||||||||
| March 31, 2023 | March 31, 2022 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Shares sold |
1,150,000 | $ | 27,070,685 | 1,200,000 | $ | 32,661,307 | ||||||||||
| Shares redeemed |
(650,000 | ) | (15,485,161 | ) | (1,700,000 | ) | (45,744,257 | ) | ||||||||
| Net increase (decrease) |
500,000 | $ | 11,585,524 | (500,000 | ) | $ | (13,082,950 | ) | ||||||||
| Franklin Senior Loan ETF | ||||||||||||||||
| Year Ended | Year Ended | |||||||||||||||
| March 31, 2023 | March 31, 2022 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Shares sold |
2,200,000 | $ | 54,475,982 | 5,300,000 | $ | 132,222,340 | ||||||||||
| Shares redeemed |
(5,400,000 | ) | (130,264,760 | ) | (1,550,000 | ) | (38,607,111 | ) | ||||||||
| Net increase (decrease) |
(3,200,000 | ) | $ | (75,788,778 | ) | 3,750,000 | $ | 93,615,229 | ||||||||
| Franklin Systematic Style Premia ETF | ||||||||||||||||
| Year Ended | Year Ended | |||||||||||||||
| March 31, 2023 | March 31, 2022 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Shares sold |
2,350,000 | $ | 50,962,500 | 300,000 | $ | 6,039,974 | ||||||||||
| Shares redeemed |
(700,000 | ) | (14,964,867 | ) | (100,000 | ) | (2,160,332 | ) | ||||||||
| Net increase (decrease) |
1,650,000 | $ | 35,997,633 | 200,000 | $ | 3,879,642 | ||||||||||
| franklintempleton.com | Annual Report | 227 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
2. Shares of Beneficial Interest (continued)
| Franklin U.S. Core Bond ETF | ||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Shares sold |
13,950,000 | $ | 306,613,085 | 14,950,000 | $ | 373,614,883 | ||||||||||
| Shares redeemed |
(8,850,000 | ) | (193,323,619 | ) | (8,600,000 | ) | (213,549,058 | ) | ||||||||
| Net increase (decrease) |
5,100,000 | $ | 113,289,466 | 6,350,000 | $ | 160,065,825 | ||||||||||
| Franklin U.S. Low Volatility ETF | ||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Shares sold |
650,000 | $ | 30,177,151 | 850,000 | $ | 39,828,368 | ||||||||||
| Shares redeemed |
(100,000 | ) | (4,271,907 | ) | (1,300,000 | ) | (60,774,947 | ) | ||||||||
| Net increase (decrease) |
550,000 | $ | 25,905,244 | (450,000 | ) | $ | (20,946,579 | ) | ||||||||
| Franklin U.S. Treasury Bond ETF | ||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Shares sold |
9,700,000 | $ | 206,895,275 | 1,850,000 | $ | 43,376,401 | ||||||||||
| Shares redeemed |
(7,300,000 | ) | (158,561,494 | ) | (1,600,000 | ) | (38,319,700 | ) | ||||||||
| Net increase (decrease) |
2,400,000 | $ | 48,333,781 | 250,000 | $ | 5,056,701 | ||||||||||
| Franklin Ultra Short Bond ETF | ||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Shares sold |
50,000 | $ | 1,219,162 | 50,000 | $ | 1,244,484 | ||||||||||
| Shares redeemed |
(100,000 | ) | (2,451,895 | ) | — | — | ||||||||||
| Net increase (decrease) |
(50,000 | ) | $ | (1,232,733 | ) | 50,000 | $ | 1,244,484 | ||||||||
| 228 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Funds are also officers and/or directors of the following subsidiaries:
| Subsidiary | Affiliation | |
| Franklin Advisers, Inc. (Advisers) |
Investment manager | |
| Franklin 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 Distributors, LLC (Distributors) |
Principal underwriter | |
a. Management Fees
For the period April 1, 2022 to November 30, 2022, Franklin Dynamic Municipal Bond ETF and Franklin Municipal Green Bond ETF Funds pay an investment management fee, calculated daily and paid monthly, to Advisers based on the daily net assets of each of the Funds as follows:
| Annualized Fee Rate | Net Assets | |||
| 0.625% |
Up to and including $100 million |
| ||
| 0.500% |
Over $100 million, up to and including $250 million |
|||
| 0.450% |
Over $250 million, up to and including $7.5 billion |
|||
| 0.440% |
Over $7.5 billion, up to and including $10 billion |
|||
| 0.430% |
Over $10 billion, up to and including $12.5 billion |
|||
| 0.420% |
Over $12.5 billion, up to and including $15 billion |
|||
| 0.400% |
Over $15 billion, up to and including $17.5 billion |
|||
| 0.380% |
Over $17.5 billion, up to and including $20 billion |
|||
| 0.360% |
In excess of $50 billion |
|||
| franklintempleton.com | Annual Report | 229 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates (continued)
a. Management Fees (continued)
Effective December 1, 2022, Franklin Dynamic Municipal Bond ETF and Franklin Municipal Green Bond ETF Funds pay Advisers a unified management fee for managing the Fund’s assets, as approved by the Board. Pursuant to the investment management agreement with the Trust on behalf of the Fund effective December 1, 2022, Advisers reimburses the Fund for all acquired fund fees and expenses (such as those associated with the Fund’s investment in a Franklin Templeton money fund) and pays all of the ordinary operating expenses of the Fund, except for (i) the Fund’s management fee, (ii) payments under the Fund’s Rule 12b-1 plan (if any), (iii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments), (iv) taxes, (v) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), (vi) litigation expenses (including litigation to which the Trust or the Fund may be a party and indemnification of the Trustees and officers with respect thereto), and (vii) other non-routine or extraordinary expenses. The Funds pays 0.30% and 0.30% respectively per year of the average daily net assets of the Fund.
For the year ended March 31, 2023, 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.
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 Islands based company that is wholly-owned by the Fund (Subsidiary).
For the Franklin Dynamic Municipal Bond ETF and Franklin Municipal Green Bond ETF, prior to December 1, 2022, 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.
| 230 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates (continued)
c. Waiver and Expense Reimbursements (continued)
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 year ended March 31, 2023, investments in affiliated management investment companies were as follows:
| Value at Beginning of Year |
Purchases | Sales | Realized Gain (Loss) |
Net Change in Unrealized Appreciation (Depreciation) |
Value at End of Year |
Number of Shares Held at End of Year |
Investment Income | |||||||||||||||||||||||
| Franklin Exponential Data ETF | Income from | |||||||||||||||||||||||||||||
| Non-Controlled Affiliates | Securities loaned | |||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||
| Institutional Fiduciary Trust Money Market Portfolio 4.47% |
$ | 591 | $ | 232,016 | $ | (194,152 | ) | $— | $— | $ | 38,455 | 38,455 | $— | |||||||||||||||||
|
|
| |||||||||||||||||||||||||||||
| Franklin U.S. Core Bond ETF | Income from | |||||||||||||||||||||||||||||
| Non-Controlled Affiliates | Securities loaned | |||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||
| Institutional Fiduciary Trust Money Market Portfolio 4.47% |
$ | 48,548,641 | $ | 604,035,820 | $ | (634,962,597 | ) | $— | $— | $ | 17,621,864 | 17,621,864 | $— | |||||||||||||||||
|
|
| |||||||||||||||||||||||||||||
| Franklin U.S. Treasury Bond ETF | Income from | |||||||||||||||||||||||||||||
| Non-Controlled Affiliates | Securities loaned | |||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||
| Institutional Fiduciary Trust Money Market Portfolio 4.47% |
$ | 4,633,381 | $ | 174,859,654 | $ | (175,438,413 | ) | $— | $— | $ | 4,054,622 | 4,054,622 | $— | |||||||||||||||||
|
|
| |||||||||||||||||||||||||||||
| Franklin Ultra Short Bond ETF | Income from | |||||||||||||||||||||||||||||
| Non-Controlled Affiliates | Securities loaned | |||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||
| Institutional Fiduciary Trust Money Market Portfolio 4.47% |
$ | 81,009 | $ | 6,945,361 | $ | (6,839,152 | ) | $— | $— | $ | 187,218 | 187,218 | $— | |||||||||||||||||
|
|
| |||||||||||||||||||||||||||||
| franklintempleton.com | Annual Report | 231 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates (continued)
e. Other Affiliated Transactions
At March 31, 2023, 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 High Yield Corporate ETF | ||||||||
| Franklin Conservative Allocation Fund |
875,658 | 9.5% | ||||||
| Franklin Moderate Allocation Fund |
955,970 | 10.4% | ||||||
| Franklin 529 Portfolios |
3,278,196 | 35.6% | ||||||
|
|
|
|||||||
| 5,109,824 | 55.5% | |||||||
|
|
|
|||||||
| Franklin Intelligent Machines ETF | ||||||||
| Franklin Resources Inc. |
20,000 | 10.0% | ||||||
|
|
|
|||||||
| Franklin International Aggregate Bond ETF | ||||||||
| Franklin Conservative Allocation Fund |
982,641 | 7.0% | ||||||
| Franklin Moderate Allocation Fund |
984,438 | 7.0% | ||||||
| Franklin 529 Portfolios |
6,629,878 | 47.0% | ||||||
|
|
|
|||||||
| 8,596,957 | 61.0% | |||||||
|
|
|
|||||||
| Franklin Investment Grade Corporate ETF | ||||||||
| Franklin Total Return Fund |
16,060,000 | 53.4% | ||||||
| Franklin 529 Portfolios |
4,441,132 | 14.8% | ||||||
|
|
|
|||||||
| 20,501,132 | 68.2% | |||||||
|
|
|
|||||||
| Franklin Senior Loan ETF | ||||||||
| Franklin Total Return Fund |
1,737,400 | 20.1% | ||||||
|
|
|
|||||||
| Franklin Systematic Style Premia ETF | ||||||||
| Franklin Conservative Allocation Fund |
455,101 | 10.7% | ||||||
| Franklin Moderate Allocation Fund |
759,948 | 17.9% | ||||||
| Franklin Growth Allocation Fund |
561,832 | 13.2% | ||||||
| Franklin Managed Income Fund |
880,000 | 20.7% | ||||||
| Franklin LifeSmart™ 2020 – 2055 Retirement Target Funds |
246,120 | 5.8% | ||||||
|
|
|
|||||||
| 2,903,001 | 68.3% | |||||||
|
|
|
|||||||
| Franklin U.S. Core Bond ETF | ||||||||
| Franklin Conservative Allocation Fund |
8,926,541 | 12.8% | ||||||
| Franklin Moderate Allocation Fund |
9,744,991 | 14.0% | ||||||
| Franklin 529 Portfolios |
33,924,676 | 48.8% | ||||||
|
|
|
|||||||
| 52,596,208 | 75.6% | |||||||
|
|
|
|||||||
| Franklin U.S. Low Volatility ETF | ||||||||
| Franklin Managed Income Fund |
840,000 | 25.5% | ||||||
|
|
|
|||||||
| Franklin U.S. Treasury Bond ETF | ||||||||
| Franklin Conservative Allocation Fund |
2,590,137 | 12.8% | ||||||
| Franklin Moderate Allocation Fund |
2,827,622 | 14.0% | ||||||
| Franklin 529 Portfolios |
9,773,633 | 48.4% | ||||||
|
|
|
|||||||
| 15,191,392 | 75.2% | |||||||
|
|
|
|||||||
aInvestment activities of significant shareholders could have a material impact on the Funds.
| 232 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains. At March 31, 2023, the capital loss carryforwards were as follows:
| Franklin Disruptive Commerce ETF |
Franklin Dynamic Bond ETF |
Franklin Data ETF |
Franklin Genomic Advancements ETF |
|||||||||||||
| Capital loss carryforwards not subject to expiration: | ||||||||||||||||
| Long term |
$1,307,460 | $ 1,815,701 | $ 233,288 | $ 1,530,395 | ||||||||||||
| Short term |
8,555,411 | 1,849,778 | 646,629 | 6,702,473 | ||||||||||||
|
|
|
|||||||||||||||
| Total capital loss carryforwards |
$9,862,871 | $ 3,665,479 | $ 879,917 | $ 8,232,868 | ||||||||||||
|
|
|
|||||||||||||||
| Franklin High Yield |
Franklin Intelligent Machines ETF |
Franklin International Aggregate Bond ETF |
Franklin Investment Grade Corporate ETF |
|||||||||||||
| Capital loss carryforwards not subject to expiration: | ||||||||||||||||
| Long term |
$3,817,363 | $ 276,820 | $ 4,975,582 | $ 31,860,991 | ||||||||||||
| Short term |
1,526,464 | 841,327 | 1,744,765 | 7,812,255 | ||||||||||||
|
|
|
|||||||||||||||
| Total capital loss carryforwards |
$5,343,827 | $ 1,118,147 | $ 6,720,347 | $ 39,673,246 | ||||||||||||
|
|
|
|||||||||||||||
| Franklin Municipal 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 |
$6,754,006 | $ 5,689,793 | $ — | $ 59,494,905 | ||||||||||||
| Short term |
2,361,637 | 2,348,730 | 12,545,844 | 42,337,283 | ||||||||||||
|
|
|
|||||||||||||||
| Total capital loss carryforwards |
$9,115,643 | $ 8,038,523 | $12,545,844 | $101,832,188 | ||||||||||||
|
|
|
|||||||||||||||
| 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 |
$1,297,978 | $46,176,769 | $ 11,610 | |||||||||||||
| Short term |
1,732,318 | 11,995,030 | 35,267 | |||||||||||||
|
|
|
|||||||||||||||
| Total capital loss carryforwards |
$3,030,296 | $58,171,799 | $ 46,877 | |||||||||||||
|
|
|
|||||||||||||||
| For tax purposes, the Funds may elect to defer any portion of late-year ordinary loss to the first day of the following year. At March 31, 2023, the deferred losses were as follows: |
| |||||||||||||||
| Franklin Disruptive Commerce ETF |
Franklin Genomic Advancements ETF |
Franklin International Aggregate Bond ETF |
||||||||||||||
| Post October capital losses | $ — | $ — | $ — | |||||||||||||
| Late-year ordinary losses |
$693 | $3,503 | $14,879,157 | |||||||||||||
| franklintempleton.com | Annual Report | 233 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
The tax character of distributions paid during the period ended March 31, 2023 and 2022, were as follows:
| Franklin Disruptive | ||||||||
| Commerce ETF | ||||||||
| 2023 | 2022 | |||||||
| Distributions paid from: |
||||||||
| Ordinary income |
$— | $206,803 | ||||||
| Long-term Capital Gain |
— | 15,751 | ||||||
| $— | $222,554 | |||||||
| Franklin Dynamic Municipal | ||||||||
| Bond ETF | ||||||||
| 2023 | 2022 | |||||||
| Distributions paid from: |
||||||||
| Tax exempt income |
$2,737,527 | $1,204,849 | ||||||
| Ordinary income |
680 | — | ||||||
| $2,738,207 | $1,204,849 | |||||||
| Franklin Genomic Advance- |
||||||||
| ments ETF | ||||||||
| 2023 | 2022 | |||||||
| Distributions paid from Ordinary income |
$— | $64,946 | ||||||
| Franklin High Yield | ||||||||
| Corporate ETF | ||||||||
| 2023 | 2022 | |||||||
| Distributions paid from: |
||||||||
| Ordinary income |
$14,565,851 | $16,174,896 | ||||||
| Long-term Capital Gain |
— | 1,180,471 | ||||||
| $14,565,851 | $17,355,367 | |||||||
| Franklin Intelligent | ||||||||
| Machines ETF | ||||||||
| 2023 | 2022 | |||||||
| Distributions paid from: |
||||||||
| Ordinary income |
$— | $ 7,989 | ||||||
| Long-term Capital Gain |
— | 15,515 | ||||||
| $— | $23,504 | |||||||
| Franklin International | ||||||||
| Aggregate Bond ETF | ||||||||
| 2023 | 2022 | |||||||
| Distributions paid from: |
||||||||
| Ordinary income |
$30,078,202 | $4,976,042 | ||||||
| Long-term Capital Gain |
— | 454 | ||||||
| $30,078,202 | $4,976,496 | |||||||
| 234 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
| Franklin Investment Grade | ||||||||
| Corporate ETF | ||||||||
| 2023 | 2022 | |||||||
| Distributions paid from: |
||||||||
| Ordinary income |
$ | 24,150,574 | $ | 26,432,804 | ||||
| Long-term Capital Gain |
— | 2,047,397 | ||||||
| $24,150,574 | $28,480,201 | |||||||
| Franklin Municipal Green | ||||||||
| Bond ETF | ||||||||
| 2023 | 2022 | |||||||
| Distributions paid from Tax exempt income |
$2,942,579 | $2,038,684 | ||||||
| Franklin Senior Loan ETF | ||||||||
| 2023 | 2022 | |||||||
| Distributions paid from Ordinary income |
$13,839,060 | $6,696,117 | ||||||
| Franklin Systematic Style | ||||||||
| Premia ETF | ||||||||
| 2023 | 2022 | |||||||
| Distributions paid from Ordinary income |
$2,011,501 | $697,021 | ||||||
| Franklin U.S. Core Bond ETF | ||||||||
| 2023 | 2022 | |||||||
| Distributions paid from: |
||||||||
| Ordinary income |
$ | 36,861,021 | $ | 32,245,500 | ||||
| Long-term Capital Gain |
— | 3,456,383 | ||||||
| $36,861,021 | $35,701,883 | |||||||
| Franklin U.S. Low Vola- | ||||||||
| tility ETF | ||||||||
| 2023 | 2022 | |||||||
| Distributions paid from Ordinary income |
$2,283,102 | $2,063,975 | ||||||
| Franklin U.S. Treasury | ||||||||
| Bond ETF | ||||||||
| 2023 | 2022 | |||||||
| Distributions paid from Ordinary income |
$9,684,869 | $6,661,686 | ||||||
| Franklin Ultra Short Bond ETF |
||||||||
| 2023 | 2022 | |||||||
| Distributions paid from Ordinary income |
$62,292 | $17,586 | ||||||
| franklintempleton.com | Annual Report | 235 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
At March 31, 2023, the cost of investments, net unrealized appreciation (depreciation) and undistributed ordinary income for income tax purposes were as follows:
| Franklin Disruptive Commerce ETF |
Franklin Dynamic Bond ETF |
Franklin Exponential Data ETF |
Franklin Genomic Advancements ETF |
|||||||||||||
| Cost of investments |
$ | 10,944,376 | $ | 102,988,225 | $ | 3,694,422 | $ | 13,259,905 | ||||||||
| Unrealized appreciation |
$ | 608,274 | $ | 1,046,051 | $ | 279,789 | $ | 400,534 | ||||||||
| Unrealized depreciation |
(2,173,413 | ) | (4,416,155 | ) | (604,044 | ) | (3,164,064 | ) | ||||||||
| Net unrealized appreciation (depreciation) . |
$ | (1,565,139 | ) | $ | (3,370,104 | ) | $ | (324,255 | ) | $ | (2,763,530 | ) | ||||
| Distributable earnings – undistributed ordinary income |
$ | — | $ | 3,789 | $ | — | $ | — | ||||||||
| Distributions earning – undistributed tax except income |
$ | — | $ | 383,140 | $ | — | $ | — | ||||||||
| Franklin High Yield Corporate ETF |
Franklin Intelligent Machines ETF |
Franklin International Aggregate Bond ETF |
Franklin Investment Grade Corporate ETF |
|||||||||||||
| Cost of investments |
$ | 222,738,518 | $ | 7,424,171 | $ | 288,136,362 | $ | 711,860,264 | ||||||||
| Unrealized appreciation |
$ | 2,276,268 | $ | 1,529,662 | $ | 3,120,376 | $ | 6,660,372 | ||||||||
| Unrealized depreciation |
(23,829,568 | ) | (242,692 | ) | (31,094,100 | ) | (84,375,429 | ) | ||||||||
| Net unrealized appreciation (depreciation) . |
$ | (21,553,300 | ) | $ | 1,286,970 | $ | (27,973,724 | ) | $ | (77,715,057 | ) | |||||
| Distributable earnings – undistributed ordinary income |
$ | 1,665,677 | $ | — | $ | — | $ | 2,247,494 | ||||||||
| Franklin Municipal ETF |
Franklin Senior Loan ETF |
Franklin Systematic Style Premia ETF |
Franklin U.S. Core Bond ETF |
|||||||||||||
| Cost of investments |
$ | 114,800,028 | $ | 205,144,303 | $ | 77,815,802 | $ | 1,650,731,221 | ||||||||
| Unrealized appreciation |
$ | 1,052,715 | $ | 371,302 | $ | 7,366,994 | $ | 13,540,759 | ||||||||
| Unrealized depreciation |
(4,544,844 | ) | (9,039,713 | ) | (3,135,452 | ) | (156,865,051 | ) | ||||||||
| Net unrealized appreciation (depreciation) . |
$ | (3,492,129 | ) | $ | (8,668,411 | ) | $ | 4,231,542 | $ | (143,324,292 | ) | |||||
| Distributable earnings – undistributed ordinary income |
$ | 641 | $ | 1,993,569 | $ | 1,644,062 | $ | 4,401,235 | ||||||||
| Distributions earning – undistributed tax except income |
$ | 397,625 | $ | — | $ | — | $ | — | ||||||||
| 236 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
| Franklin U.S. Low Volatility ETF |
Franklin U.S. Treasury Bond ETF |
Franklin Ultra Short Bond ETF |
||||||||||||||
| Cost of investments |
$ | 140,357,781 | $ | 435,673,402 | $ | 2,468,277 | ||||||||||
| Unrealized appreciation |
$ | 19,674,900 | $ | 3,835,677 | $ | 720 | ||||||||||
| Unrealized depreciation |
(4,856,972 | ) | (12,492,231 | ) | (24,983 | ) | ||||||||||
| Net unrealized appreciation (depreciation) |
$ | 14,817,928 | $ | (8,656,554 | ) | $ | (24,263 | ) | ||||||||
| Distributable earnings – undistributed ordinary income |
$ | 112,309 | $ | 1,293,431 | $ | 13,829 | ||||||||||
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of foreign currency transactions, financial futures transactions, passive foreign investment company shares and gains/losses realized on in-kind shareholder redemptions, bond discounts and premiums, investments in FLSP Holdings Corporation and wash sales.
5. Investment Transactions
Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the year ended March 31, 2023, were as follows:
| Franklin Disruptive Commerce ETF |
Franklin Dynamic Municipal Bond ETF |
Franklin Exponential Data ETF |
Franklin Genomic Advancements ETF |
|||||||||||||
| Purchases |
$ | 4,965,595 | $ | 86,954,924 | $ | 1,297,374 | $ | 3,919,168 | ||||||||
| Sales |
$ | 5,108,946 | $ | 57,972,235 | $ | 556,787 | $ | 3,719,988 | ||||||||
| Franklin High Yield |
Franklin Intelligent Machines ETF |
Franklin International Aggregate Bond ETF |
Franklin Investment Grade Corporate ETF |
|||||||||||||
| Purchases |
$ | 37,502,325 | $ | 1,657,044 | $ | 147,893,832 | $ | 219,727,188 | ||||||||
| Sales |
$ | 40,578,510 | $ | 1,607,251 | $ | 54,669,063 | $ | 188,612,463 | ||||||||
| Franklin Municipal ETF |
Franklin Senior Loan ETF |
Franklin Systematic Style Premia ETF |
Franklin U.S. Core Bond ETF |
|||||||||||||
| Purchases |
$ | 82,241,169 | $ | 56,459,185 | $ | 117,814,899 | $ | 1,136,886,010 | ||||||||
| Sales |
$ | 70,040,799 | $ | 128,901,083 | $ | 96,332,748 | $ | 994,173,598 | ||||||||
| Franklin U.S. Low Volatility ETF |
Franklin U.S. Treasury Bond ETF |
Franklin Ultra Short Bond ETF |
||||||||||||||
| Purchases |
$ | 43,127,809 | $ | 601,640,535 | $ | 1,198,399 | ||||||||||
| Sales |
$ | 42,789,197 | $ | 553,401,416 | $ | 2,682,818 | ||||||||||
In-kind transactions associated with creation and redemptions for the year ended March 31, 2023, were as follows:
| Franklin Disruptive Commerce ETF |
Franklin Dynamic Bond ETF |
Franklin Exponential Data ETF |
Franklin Genomic Advancements ETF |
|||||||||||||
| Cost of Securities Received |
$ | — | $ | — | $ | 787,615 | $ | 1,581,290 | ||||||||
| franklintempleton.com | Annual Report | 237 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
5. Investment Transactions (continued)
| Franklin Disruptive Commerce ETF |
Franklin Dynamic Bond ETF |
Franklin Data ETF |
Franklin Genomic Advancements ETF |
|||||||||||||
| Value of Securities Delivereda |
$ | 3,964,085 | $ | — | $ | — | $ | 3,042,537 | ||||||||
| Franklin High Yield |
Franklin Intelligent Machines ETF |
Franklin International Aggregate Bond ETF |
Franklin Investment Grade Corporate ETF |
|||||||||||||
| Cost of Securities Received |
$ | 85,836,198 | $ | — | $ | — | $ | 103,388,964 | ||||||||
| Value of Securities Delivereda |
$ | 187,073,192 | $ | 1,816,647 | $ | — | $ | 360,119,827 | ||||||||
| Franklin Municipal ETF |
Franklin Senior Loan ETF |
Franklin Systematic Style Premia ETF |
Franklin U.S. Core Bond ETF |
|||||||||||||
| Cost of Securities Received |
$ | 1,008,638 | $ | — | $ | — | $ | — | ||||||||
| 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 |
$ | 29,744,478 | $ | — | $ | — | ||||||||||
| Value of Securities Delivereda |
$ | 4,208,915 | $ | — | $ | — | ||||||||||
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 2, 2024. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests.
Under the terms of the Global Credit Facility, the Funds shall, in addition to interest charged on any borrowings made by the Funds and other costs incurred by the Funds, pay its/their share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon their relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statement of Operations.
During the reporting year ended March 31, 2023, 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. Credit Risk and Defaulted Securities
At March 31, 2023, 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 33.99%, 7.11%, 86.59%, 2.26% and 93.33%, 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
| 238 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
7. Credit Risk and Defaulted Securities (continued)
distributions in restructuring are less than anticipated, either or both of which may result in unfavorable consequences to the Fund. If it becomes probable that the income on debt securities, including those distressed companies, will not be collected, the Fund discontinues accruing income and recognizes an adjustment for uncollectible interest. At March 31, 2023, 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 0.08%, 0.85% and 0.33% of the Fund’s net assets respectively. For information as to specific securities, see the accompanying Schedule of Investments.
8. Other Derivative Information
At March 31, 2023, the Funds’ investments in derivative contracts are reflected in the Statements of Asset 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 |
$3,283,935 | Unrealized depreciation on OTC forward exchange contracts |
$1,171,703 | ||||||||
|
|
|
|
|
|||||||||
| Franklin Investment Grade Corporate ETF |
||||||||||||
| Interest rate contracts |
Variation margin on futures contracts |
$ — | Variation margin on futures contracts |
$ 492,300 | ||||||||
|
|
|
|
|
|||||||||
| Franklin Systematic Style Premia ETF |
||||||||||||
| Foreign exchange contracts |
Unrealized appreciation on OTC forward exchange contracts |
$987,661 | Unrealized depreciation on OTC forward exchange contracts |
$ 640,675 | ||||||||
| Equity contracts |
Variation margin on futures contracts |
3,395,687 | Variation margin on futures contracts |
2,328,031 | ||||||||
|
|
|
|
|
|||||||||
| Totals |
$4,383,348 | $2,968,706 | ||||||||||
|
|
|
|
|
|||||||||
| Franklin U.S. Core Bond ETF |
||||||||||||
| Equity contracts |
Variation margin on futures contracts |
$ 761,513 | Variation margin on futures contracts |
$ — | ||||||||
| Equity contracts |
Swap contracts |
77,367 | Swap contracts |
— | ||||||||
|
|
|
|
|
|||||||||
| Totals |
$ 838,880 | $ — | ||||||||||
|
|
|
|
|
|||||||||
For the year ended March 31, 2023, 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 |
| ||||||||||||||||||
| Foreign exchange contracts |
Forward exchange contracts |
$14,179,290 | Forward exchange contracts |
$(2,641,891 | ) | |||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Franklin Investment Grade Corporate ETF |
||||||||||||||||||||
| Net realized gain (loss) from: | Net change in unrealized |
| ||||||||||||||||||
| Equity contracts |
Futures contracts |
$ 3,238,401 | Futures contracts |
$(1,363,186 | ) | |||||||||||||||
|
|
|
|
|
|||||||||||||||||
| franklintempleton.com | Annual Report | 239 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
8. Other Derivative Information (continued)
| Derivative Contracts Not Accounted for as Hedging Instruments |
Statements of Operations Locations |
Net Realized Gain (Loss) for the Period |
Statements of Operations Locations |
Net Change in Unrealized Appreciation (Depreciation) for the Period |
||||||||||||||||
| Franklin Systematic Style Premia ETF |
||||||||||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized |
| ||||||||||||||||||
| Foreign exchange contracts |
Forward exchange contracts |
$ 374,378 | Forward exchange contracts |
$ 73,504 | ||||||||||||||||
| Equity contracts |
Futures contracts |
(2,669,219 | ) | Futures contracts |
1,417,435 | |||||||||||||||
| Equity contracts |
Swap contracts |
— | Swap contracts |
(878 | ) | |||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Totals |
$(2,294,841 | ) | $1,490,061 | |||||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Franklin U.S. Core Bond ETF |
||||||||||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized |
| ||||||||||||||||||
| Equity contracts |
Futures contracts |
$ 181,750 | Futures contracts |
$ 645,531 | ||||||||||||||||
| Interest rate contracts |
Swap contracts |
73,718 | Swap contracts |
95,395 | ||||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Totals |
$ 255,468 | $ 740,926 | ||||||||||||||||||
|
|
|
|
|
|||||||||||||||||
For the year ended March 31, 2023, 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 |
$ — | $22,805,155 | $85,016,241 | |||||||||
| Forward exchange contracts |
$229,679,068 | $ — | $49,806,970 | |||||||||
| Franklin U.S. Core Bond ETF |
||||||||||||
| Credit default contracts |
$ 6,355,384 | |||||||||||
| Futures contracts |
$14,760,233 | |||||||||||
| 240 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
8. Other Derivative Information (continued)
At March 31, 2023, 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 International Aggregate Bond ETF |
||||||||
| Foreign exchange contracts |
$3,283,935 | $1,171,703 | ||||||
| Franklin Systematic Style Premia ETF |
||||||||
| Foreign exchange contracts |
$987,661 | $640,675 | ||||||
| Franklin U.S. Core Bond ETF |
||||||||
| Equity contracts |
$77,367 | $— | ||||||
aAbsent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statements of Assets and Liabilities.
At March 31, 2023, 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 Received |
Net Amount (Not less than zero) |
||||||||||||||||
| Franklin International Aggregate Bond ETF |
||||||||||||||||||||
| Counterparty | ||||||||||||||||||||
| CITI |
$3,283,935 | $(1,171,703 | ) | $ — | $ — | $2,112,232 | ||||||||||||||
|
|
|
|||||||||||||||||||
| Franklin Systematic Style Premia ETF |
||||||||||||||||||||
| Counterparty | ||||||||||||||||||||
| MSCO |
$ 987,661 | $ (640,675 | ) | $ — | $ — | $ 346,986 | ||||||||||||||
| MSCS |
— | — | — | — | — | |||||||||||||||
|
|
|
|||||||||||||||||||
| Total |
$ 987,661 | $ (640,675 | ) | $ — | $ — | $ 346,986 | ||||||||||||||
|
|
|
|||||||||||||||||||
| Franklin U.S. Core Bond ETF |
||||||||||||||||||||
| Counterparty | ||||||||||||||||||||
| BrCd C5279 |
$ 77,367 | $ — | $ — | $ — | $ 77,367 | |||||||||||||||
|
|
|
|||||||||||||||||||
| franklintempleton.com | Annual Report | 241 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
8. Other Derivative Information (continued)
At March 31, 2023, 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 the Statements of Assets and Liabilities |
Financial Instruments Available for Offset |
Financial Pledged |
Cash Pledged |
Net Amount (Not less than zero) |
||||||||||||||||
| Franklin International Aggregate Bond ETF |
||||||||||||||||||||
| Counterparty |
||||||||||||||||||||
| CITI |
$1,171,703 | $(1,171,703 | ) | $— | $— | $— | ||||||||||||||
|
|
|
|||||||||||||||||||
| Franklin Systematic Style Premia ETF |
||||||||||||||||||||
| Counterparty |
||||||||||||||||||||
| MSCO |
$ 640,675 | $ (640,675 | ) | $— | $— | $— | ||||||||||||||
|
|
|
|||||||||||||||||||
aIn some instances, the collateral amounts disclosed in the table above were adjusted due to the requirement to limit collateral amounts to avoid the effect of overcollateralization. Actual collateral received and/or pledged may be more than the amounts disclosed herein.
See Note 1(c) regarding derivative financial instruments.
9. Fair Value Measurements
The Funds follow a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Funds’ own market assumptions (unobservable inputs). These inputs are used in determining the value of the Funds’ financial instruments and are summarized in the following fair value hierarchy:
| • | Level 1 – quoted prices in active markets for identical financial instruments |
| • | Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.) |
| • | Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of financial instruments) |
The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.
A summary of inputs used as of March 31, 2023, in valuing the Funds’ assets and liabilities carried at fair value, is as follows:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Franklin Disruptive Commerce ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Equity Investmentsb |
$ | 9,379,237 | $ | — | $ | — | $ | 9,379,237 | ||||||||
|
|
|
|||||||||||||||
| Franklin Dynamic Municipal Bond ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Senior Floating Rate Interest |
$ | — | $ | — | $ | 512,502 | $ | 512,502 | ||||||||
| Municipal Bonds |
— | 99,105,619 | — | 99,105,619 | ||||||||||||
|
|
|
|||||||||||||||
| Total Investments in Securities |
$ | — | $ | 99,105,619 | $ | 512,502 | $ | 99,618,121 | ||||||||
|
|
|
|||||||||||||||
| 242 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
9. Fair Value Measurements (continued)
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Franklin Exponential Data ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Equity Investmentsb |
$ | 3,331,712 | $ | — | $ | — | $ | 3,331,712 | ||||||||
| Short-Term Investments |
38,455 | — | — | 38,455 | ||||||||||||
|
|
|
|||||||||||||||
| Total Investments in Securities |
$ | 3,370,167 | $ | — | $ | — | $ | 3,370,167 | ||||||||
|
|
|
|||||||||||||||
| Franklin Genomic Advancements ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Equity Investmentsb |
$ | 10,496,375 | $ | — | $ | —c | $ | 10,496,375 | ||||||||
|
|
|
|||||||||||||||
| Franklin High Yield Corporate ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Corporate Bonds & Notes |
$ | — | $ | 186,671,340 | $ | —c | $ | 186,671,340 | ||||||||
| Senior Floating Rate Interests |
— | 8,218,878 | — | 8,218,878 | ||||||||||||
| U.S. Government & Agency Securities |
— | 6,295,000 | — | 6,295,000 | ||||||||||||
|
|
|
|||||||||||||||
| Total Investments in Securities |
$ | — | $ | 201,185,218 | $ | — | $ | 201,185,218 | ||||||||
|
|
|
|||||||||||||||
| Franklin Intelligent Machines ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Equity Investmentsb |
$ | 8,711,141 | $ | — | $ | — | $ | 8,711,141 | ||||||||
|
|
|
|||||||||||||||
| Franklin International Aggregate Bond ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Foreign Government and Agency Securities |
$ | — | $ | 235,227,863 | $ | — | $ | 235,227,863 | ||||||||
| Corporate Bonds & Notes |
— | 10,924,775 | — | 10,924,775 | ||||||||||||
| U.S. Government & Agency Securities |
— | 14,010,000 | — | 14,010,000 | ||||||||||||
|
|
|
|||||||||||||||
| Total Investments in Securities |
$ | — | $ | 260,162,638 | $ | — | $ | 260,162,638 | ||||||||
|
|
|
|||||||||||||||
| Other Financial Instruments: |
||||||||||||||||
| Forward Exchange Contracts |
$ | — | $ | 3,283,935 | $ | — | $ | 3,283,935 | ||||||||
|
|
|
|||||||||||||||
| Liabilities: | ||||||||||||||||
| Other Financial Instruments: |
||||||||||||||||
| Forward Exchange Contracts |
$ | — | $ | 1,171,703 | $ | — | $ | 1,171,703 | ||||||||
|
|
|
|||||||||||||||
| Franklin Investment Grade Corporate ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Corporate Bonds & Notes |
$ | — | $ | 621,523,828 | $ | — | $ | 621,523,828 | ||||||||
| U.S. Government & Agency Securities |
— | 12,621,379 | — | 12,621,379 | ||||||||||||
|
|
|
|||||||||||||||
| Total Investments in Securities |
$ | — | $ | 634,145,207 | $ | — | $ | 634,145,207 | ||||||||
|
|
|
|||||||||||||||
| Liabilities: | ||||||||||||||||
| Other Financial Instruments: |
||||||||||||||||
| Futures Contracts |
$ | 492,300 | $ | — | $ | — | $ | 492,300 | ||||||||
|
|
|
|||||||||||||||
| Franklin Municipal Green Bond ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Municipal Bonds |
$ | — | $ | 111,307,899 | $ | — | $ | 111,307,899 | ||||||||
|
|
|
|||||||||||||||
| franklintempleton.com | Annual Report | 243 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
9. Fair Value Measurements (continued)
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Franklin Senior Loan ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Corporate Bonds & Notes |
$ | — | $ | 9,018,317 | $ | — | $ | 9,018,317 | ||||||||
| Senior Floating Rate Interests |
— | 183,451,659 | — | 183,451,659 | ||||||||||||
| Asset-Backed Securities |
— | 1,865,916 | — | 1,865,916 | ||||||||||||
| U.S. Government & Agency Securities |
— | 2,140,000 | — | 2,140,000 | ||||||||||||
|
|
|
|||||||||||||||
| Total Investments in Securities |
$ | — | $ | 196,475,892 | $ | — | $ | 196,475,892 | ||||||||
|
|
|
|||||||||||||||
| Franklin Systematic Style Premia ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Equity Investments |
$ | 56,701,100 | $ | — | $ | — | $ | 56,701,100 | ||||||||
| Short-Term Investments |
25,346,244 | — | — | 25,346,244 | ||||||||||||
|
|
|
|||||||||||||||
| Total Investments in Securities |
$ | 82,047,344 | $ | — | $ | — | $ | 82,047,344 | ||||||||
|
|
|
|||||||||||||||
| Other Financial Instruments: |
||||||||||||||||
| Forward Exchange Contracts |
$ | — | $ | 987,661 | $ | — | $ | 987,661 | ||||||||
| Futures Contracts |
3,395,678 | — | — | 3,395,678 | ||||||||||||
|
|
|
|||||||||||||||
| Total Other Financial Instruments |
$ | 3,395,678 | $ | 987,661 | $ | — | $ | 4,383,339 | ||||||||
|
|
|
|||||||||||||||
| Liabilities: | ||||||||||||||||
| Other Financial Instruments: |
||||||||||||||||
| Forward Exchange Contracts |
$ | — | $ | 640,675 | $ | — | $ | 640,675 | ||||||||
| Futures Contracts |
2,328,031 | — | — | 2,328,031 | ||||||||||||
|
|
|
|||||||||||||||
| Total Other Financial Instruments |
$ | 2,328,031 | $ | 640,675 | $ | — | $ | 2,968,706 | ||||||||
|
|
|
|||||||||||||||
| Franklin U.S. Core Bond ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Corporate Bonds & Notes |
$ | — | $ | 378,259,085 | $ | — | $ | 378,259,085 | ||||||||
| Municipal Bonds |
— | 46,294,128 | — | 46,294,128 | ||||||||||||
| Mortgage-Backed Securities |
— | 299,443,106 | — | 299,443,106 | ||||||||||||
| Foreign Government and Agency Securities |
— | 18,017,686 | — | 18,017,686 | ||||||||||||
| Asset-Backed Securities |
— | 41,862,308 | — | 41,862,308 | ||||||||||||
| U.S. Government & Agency Securities |
— | 705,908,752 | — | 705,908,752 | ||||||||||||
| Short-Term Investments |
17,621,864 | — | — | 17,621,864 | ||||||||||||
|
|
|
|||||||||||||||
| Total Investments in Securities |
$ | 17,621,864 | $ | 1,489,785,065 | $ | — | $ | 1,507,406,929 | ||||||||
|
|
|
|||||||||||||||
| Other Financial Instruments: |
||||||||||||||||
| Futures Contracts |
$ | 761,513 | $ | — | $ | — | $ | 761,513 | ||||||||
| Credit Default Swap Contracts |
— | 77,367 | — | 77,367 | ||||||||||||
|
|
|
|||||||||||||||
| Total Other Financial Instruments |
$ | 761,513 | $ | 77,367 | $ | — | $ | 838,880 | ||||||||
|
|
|
|||||||||||||||
| Franklin U.S. Low Volatility ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Equity Investmentsb |
$ | 154,305,709 | $ | — | $ | — | $ | 154,305,709 | ||||||||
| U.S. Government & Agency Securities |
— | 870,000 | — | 870,000 | ||||||||||||
|
|
|
|||||||||||||||
| Total Investments in Securities |
$ | 154,305,709 | $ | 870,000 | $ | — | $ | 155,175,709 | ||||||||
|
|
|
|||||||||||||||
| 244 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
9. Fair Value Measurements (continued)
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Franklin U.S. Treasury Bond ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| U.S. Government & Agency Securities |
$ | — | $ | 422,962,226 | $ | — | $ | 422,962,226 | ||||||||
| Short-Term Investments |
4,054,622 | — | — | 4,054,622 | ||||||||||||
|
|
|
|||||||||||||||
| Total Investments in Securities |
$ | 4,054,622 | $ | 422,962,226 | $ | — | $ | 427,016,848 | ||||||||
|
|
|
|||||||||||||||
| Franklin Ultra Short Bond ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Corporate Bonds & Notes |
$ | — | $ | 2,056,710 | $ | — | $ | 2,056,710 | ||||||||
| Asset-Backed Securities |
— | 200,086 | — | 200,086 | ||||||||||||
| Short-Term Investments |
187,218 | — | — | 187,218 | ||||||||||||
|
|
|
|||||||||||||||
| Total Investments in Securities |
$ | 187,218 | $ | 2,256,796 | $ | — | $ | 2,444,014 | ||||||||
|
|
|
|||||||||||||||
aFor detailed categories, see the accompanying Schedules of Investments.
bIncludes common and convertible preferred stocks.
cIncludes securities determined to have no value at March 31, 2023.
10. 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 March 31, 2023, the Franklin Systematic Style Premia ETF investment(s) FLSP Holdings Corporation is reflected in the Fund’s Consolidated Schedule of Investments. At March 31, 2023, the net assets of the FLSP Holdings Corporation were $1,921,896, representing 2.11% of the Fund’s consolidated net assets. The Fund’s investment(s) in the FLSP Holdings Corporation is limited to 25% of consolidated assets.
11. 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 and December 2022, the FASB issued ASU No. 2021-01 and ASU No. 2022-06, with further amendments to Topic 848. The amendments in the ASUs provide optional temporary accounting recognition and financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021 for certain LIBOR settings and 2023 for the remainder. The ASUs are effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2024. Management has reviewed the requirements and believes the adoption of these ASUs will not have a material impact on the financial statements.
In June 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-03, Fair Value Measurement (Topic 820) – Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in the ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, should not be considered in measuring fair value. The ASU is effective for interim and annual reporting periods beginning after December 15, 2023, with the option of early adoption. Management has reviewed the requirements and believes that the adoption of the ASU will not have a material impact on the financial statements.
12. 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.
| franklintempleton.com | Annual Report | 245 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
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 | |||||||||
| USD | Unified/Union School District | |||||||||
| 246 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Franklin Templeton ETF Trust and Shareholders of Franklin Disruptive Commerce ETF, Franklin 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 Senior Loan ETF, Franklin Systematic Style Premia ETF, Franklin U.S. Core Bond ETF, Franklin U.S. Low Volatility ETF, Franklin U.S. Treasury Bond ETF and Franklin Ultra Short Bond ETF
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of each of the funds listed in the table below (fifteen of the funds constituting Franklin Templeton ETF Trust, hereafter collectively referred to as the (“Funds”) as of March 31, 2023, the related statements of operations and of changes in net assets for each of the periods indicated in the table below, including the related notes, and the financial highlights for each of the periods indicated in the table below (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of March 31, 2023, the results of each of their operations and the changes in each of their net assets for each of the periods indicated in the table below, and each of the financial highlights for each of the periods indicated in the table below in conformity with accounting principles generally accepted in the United States of America.
| Franklin Disruptive Commerce ETF(1) |
| Franklin Dynamic Municipal Bond ETF(1) |
| Franklin Exponential Data ETF(1) |
| Franklin Genomic Advancements ETF(1) |
| Franklin High Yield Corporate ETF(1) |
| Franklin Intelligent Machines ETF(1) |
| Franklin International Aggregate Bond ETF(1) |
| Franklin Investment Grade Corporate ETF(1) |
| Franklin Municipal Green Bond ETF(1) |
| Franklin Senior Loan ETF(1) |
| Franklin Systematic Style Premia ETF(2) |
| Franklin U.S. Core Bond ETF(1) |
| Franklin U.S. Low Volatility ETF(1) |
| Franklin U.S. Treasury Bond ETF(1) |
| Franklin Ultra Short Bond ETF(1) |
(1) Statement of assets and liabilities, including the schedule of investments as of March 31, 2023, statement of operations for the year ended March 31, 2023, the statements of changes in net assets for the years ended March 31, 2023 and 2022, and the financial highlights for each of the periods indicated therein.
(2) Consolidated statement of assets and liabilities, including the consolidated schedule of investments as of March 31, 2023, consolidated statement of operations for the year ended March 31, 2023, the consolidated statements of changes in net assets for the years ended March 31, 2023 and 2022, and the consolidated financial highlights for the years ended March 31, 2023, 2022 and 2021, and the period December 18, 2019 (commencement of operations) to March 31, 2020.
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FRANKLIN TEMPLETON ETF TRUST
Report of Independent Registered Public Accounting Firm (continued)
Basis for Opinions
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of March 31, 2023 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.
PricewaterhouseCoopers LLP
San Francisco, California
May 23, 2023
We have served as the auditor of one or more investment companies in the Franklin Templeton funds since 1948.
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FRANKLIN TEMPLETON ETF TRUST
By mid-February, tax information related to a shareholder’s proportionate share of distributions paid during the preceding calendar year will be received, if applicable. Please also refer to www.franklintempleton.com for per share tax information related to any distributions paid during the preceding calendar year. Shareholders are advised to consult with their tax advisors for further information on the treatment of these amounts on their tax returns.
The following tax information for the Funds is required to be furnished to shareholders with respect to the income earned and distributions paid during their fiscal year.
The Funds below hereby report the following amounts, or if subsequently determined to be different, the maximum allowable amounts, for the fiscal year ended March 31, 2023:
| Pursuant to: | Franklin Disruptive Commerce ETF |
Franklin Dynamic Municipal Bond ETF |
Franklin ETF |
Franklin Genomic Advancements ETF |
||||||||||||||||
| Exempt-Interest Dividends |
§852(b)(5)(A) | $— | $2,737,527 | $— | $— | |||||||||||||||
| Pursuant to: | Franklin High Yield Corporate ETF |
Franklin ETF |
Franklin ETF |
Franklin ETF |
||||||||||||||||
| Interest-Related Dividends |
§871(k)(1)(C) | $11,206,691 | $— | $ 306,110 | $20,101,451 | |||||||||||||||
| Short-Term Capital Gain Dividends |
§871(k)(2)(C) | $ 1,017,525 | $— | $ — | $ — | |||||||||||||||
| Section 163(j) Interest Dividends |
§163(j) | $13,195,158 | $— | $3,386,220 | $24,150,574 | |||||||||||||||
| Pursuant to: | Franklin Municipal Green Bond ETF |
Franklin Senior Loan ETF |
Franklin Systematic Style Premia ETF |
Franklin U.S. Core Bond ETF |
||||||||||||||||
| Exempt-Interest Dividends |
§852(b)(5)(A) | $2,942,579 | $ — | $ — | $ — | |||||||||||||||
| Dividends Received Deduction (DRD) |
§854(b)(1)(A) | $ — | $ — | $ 534,002 | $ — | |||||||||||||||
| Qualified Dividend Income (QDI) |
§854(b)(1)(B) | $ — | $ — | $1,049,667 | $ — | |||||||||||||||
| Interest-Related Dividends |
§871(k)(1)(C) | $ — | $13,839,060 | $ — | $33,786,810 | |||||||||||||||
| Section 163(j) Interest Dividends |
§163(j) | $ — | $13,839,060 | $ — | $36,861,021 | |||||||||||||||
| Pursuant to: | Franklin U.S. Low Volatility ETF |
Franklin ETF |
Franklin Bond ETF |
|||||||||||||||||
| Dividends Received Deduction (DRD) |
§854(b)(1)(A) | $2,283,102 | $ — | $ — | ||||||||||||||||
| Qualified Dividend Income (QDI) |
§854(b)(1)(B) | $2,283,102 | $ — | $ — | ||||||||||||||||
| Interest-Related Dividends |
§871(k)(1)(C) | $ — | $9,684,869 | $38,006 | ||||||||||||||||
| Section 163(j) Interest Dividends |
§163(j) | $ — | $9,684,869 | $42,350 | ||||||||||||||||
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FRANKLIN TEMPLETON ETF TRUST
Tax information (unaudited) (continued)
Under Section 853 of the Internal Revenue Code, the Funds below intend to elect to pass through to their shareholders the following amounts, or amounts as finally determined, of foreign taxes paid and foreign source income earned by the Funds during the fiscal year ended March 31, 2023:
| Franklin International Aggregate Bond ETF |
||||||||
| Foreign Taxes Paid |
$ | 1,092 | ||||||
| Foreign Source Income |
$ | 2,684,736 | ||||||
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FRANKLIN TEMPLETON ETF TRUST
The name, year of birth and address of the officers and board members, as well as their affiliations, positions held with the Trust, principal occupations during at least the past five years and number of U.S. registered portfolios overseen in the Franklin Templeton/Legg Mason fund complex, are shown below. Generally, each board member serves until that person’s successor is elected and qualified.
Independent Board Members
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| Rohit Bhagat (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Lead Independent Trustee | Since 2016 | 59 | AssetMark Financial Holdings, Inc. (investment solutions) (2018-present) and PhonePe (2020-present) (payment and financial services); formerly, Axis Bank (financial) (2013- 2021), FlipKart Limited (2019-2020) (eCommerce company); CapFloat Financial Services Pvt., Ltd. (non-banking finance company) (2018) and Zentific Investment Management (hedge fund) (2015-2018). | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Managing Member, Mukt Capital, LLC (private investment firm) (2014-present); Advisor, Optimal Asset Management (investment technology and advisory services company) (2015-present); Chief Executive Officer and Director, FinTech Evolution Acquisition (eCommerce company) (February 2021-present); and formerly, Chairman, Asia Pacific, BlackRock (2009-2012); Global Chief Operating Officer, Barclays Global Investors (investment management) (2005-2009); and Senior Partner, The Boston Consulting Group (management consulting) (1992-2005). | ||||||||
| Deborah D. McWhinney (1955) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee | Since 2020 | 59 | S&P Global, Inc. (financial information services) (February 2022), Borg Warner (automotive) (2018-present), LegalShield (consumer services) (2020-present); and formerly, IHS Markit (information services) (2015-2022), Fluor Corporation (construction and engineering) (2014-2020) and Focus Financial Partner, LLC (financial services) (2018-2020). | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Director of various companies; and formerly, Board Member, Lloyds Banking Group (2015-2018) (financial institution) and Fresenius Medical Group (2016-2018) (healthcare); Chief Executive Officer (2013-2014) and Chief Operating Officer (2011-2013), CitiGroup Global Enterprise Payments (financial services); and President, Citi’s Personal Banking and Wealth Management (2009-2011). | ||||||||
| Anantha K. Pradeep (1963) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee | Since 2016 | 59 | None | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Chief Executive Officer, Smilable, Inc. (technology company) (2014-present); Chief Executive Officer, MachineVantage (technology company) (2018-present); Founder and Managing Partner, Consult Meridian, LLC (consulting company) (2009-present); and formerly, Founder, BoardVantage (board portal solutions provider delivering paperless process for boards and leadership) (2000-2002). | ||||||||
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FRANKLIN TEMPLETON ETF TRUST
Interested Board Members and Officers
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| **Jennifer M. Johnson (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee and Chairperson of the Board | Since 2016 | 70 | None | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Chief Executive Officer, President and Director, Franklin Resources, Inc.; officer and/or director or trustee, of some of the other subsidiaries of Franklin Resources, Inc. and of certain funds in the Franklin Templeton/Legg Mason fund complex; and formerly, Chief Operating Officer and Executive Vice President, Franklin Resources, Inc. (1994-2015); Executive Vice President of Operations and Technology, Franklin Resources, Inc. (2005-2010); and Senior Vice President, Franklin Resources, Inc. (2003-2005). | ||||||||
| Alison E. Baur (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President | Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Deputy General Counsel, Franklin Templeton; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Steven J. Gray (1955) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President | Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Distributors, LLC; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Matthew T. Hinkle (1971) One Franklin Parkway San Mateo, CA 94403-1906 |
Chief Executive Officer – Finance and Administration | Since 2017 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Vice President, Franklin Templeton Services, LLC; officer of certain funds in the Franklin Templeton/Legg Mason fund complex; andformerly, Vice President, Global Tax (2012-April 2017) and Treasurer/Assistant Treasurer, Franklin Templeton (2009-2017). | ||||||||
| Fred Jensen (1963) 620 Eighth Avenue, 47th Floor New York, NY 10018 |
Chief Compliance Officer | Since 2021 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Director - Global Compliance of Franklin Templeton; Managing Director of Legg Mason & Co.; Director of Compliance, Legg Mason Office of the Chief Compliance Officer; Chief Compliance Officer, Franklin Advisory Services, LLC; Compliance Officer, Franklin Advisers, Inc.; officer of certain funds in the Franklin Templeton/Legg Mason fund complex; formerly, Chief Compliance Officer of Legg Mason Global Asset Allocation; Chief Compliance Officer, Legg Mason Private Portfolio; Chief Compliance Officer to The Reserves Funds (investment adviser, funds and broker-dealer) and Ambac Financial Group (investment adviser, funds and broker-dealer). | ||||||||
| Susan Kerr (1949) 620 Eighth Avenue New York, NY 10018 |
Vice President - AML Compliance | Since 2021 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Compliance Analyst, Franklin Templeton; Chief Anti-Money Laundering Compliance Officer, Legg Mason & Co., or its affiliates; Anti Money Laundering Compliance Officer; Senior Compliance Officer, LMIS; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Todd Mathias (1983) One Franklin Parkway, San Mateo, Ca 94403-1906 |
Vice President | Since March 2022 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Head of US ETF Product Strategy, Franklin Templeton; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
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FRANKLIN TEMPLETON ETF TRUST
Interested Board Members and Officers (continued)
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| Patrick O’Connor (1967) One Franklin Parkway San Mateo, CA 94403-1906 |
President and Chief Executive Officer – Investment Management | Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| President and Chief Investment Officer, Franklin Advisory Services, LLC; Senior Vice President, Franklin Advisers, Inc.; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Vivek Pai (1970) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 |
Treasurer, Chief Financial Officer and Chief Accounting Officer | Since 2019 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Treasurer, U.S. Fund Administration & Reporting and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Navid J. Tofigh (1972) One Franklin Parkway, San Mateo, Ca 94403-1906 |
Vice President and Secretary | Since 2015 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Lori A. Weber (1964) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 |
Vice President and Secretary | Vice President since 2011 and Secretary since 2013 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Resources, Inc.; Vice President and Secretary, Templeton Investment Counsel, LLC; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
*We base the number of portfolios on each separate series of the U.S. registered investment companies within the Franklin Templeton fund complex. These portfolios have a common investment manager or affiliated investment managers.
**Jennifer M. Johnson is considered to be an interested person of the Fund under the federal securities laws due to her position as an officer and director of Franklin Resources, Inc. (Resources), which is the parent company of the Fund’s investment manager and distributor.
Note 1: Officer information is current as of the date of this report. It is possible that after this date, information about officers may change.
The Sarbanes-Oxley Act of 2002 and Rules adopted by the Securities and Exchange Commission require the Fund to disclose whether the Fund’s Audit Committee includes at least one member who is an audit committee financial expert within the meaning of such Act and Rules. The Fund’s Board has determined that there is at least one such financial expert on the Audit Committee and has designated Rohit Bhagat and Deboarah D. McWhinney as its audit committee financial experts. The Board believes that Mr. Bhagat and Ms. McWhinney qualify as such an expert in view of their extensive business background and experience, including extensive experience in the asset management and financial services industries. Mr. Bhagat has been a Member and Chairman of the Fund’s Audit Committee since 2017. Ms. McWhinney has been a member of the Fund Audit Committee since 2020. As a result of such background and experience, the Board believes that Mr. Bhagat and Ms. McWhinney have acquired an understanding of generally accepted accounting principles and financial statements, the general application of such principles in connection with the accounting estimates, accruals and reserves, and analyzing and evaluating financial statements that presents a breadth and level of complexity of accounting issues generally comparable to those of the Fund, as well as an understanding of internal controls and procedures for financial reporting and an understanding of audit committee functions. Mr. Bhagat and Ms. McWhinney are independent Board members as that term is defined under the relevant Securities and Exchange Commission Rules and Releases.
The Statement of Additional Information (SAI) includes additional information about the board members and is available, without charge, upon request. Shareholders may call (800) DIAL BEN/342-5236 to request the SAI.
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FRANKLIN TEMPLETON ETF TRUST
Board Approval of Investment
Management Agreements
FRANKLIN TEMPLETON ETF TRUST
Franklin Dynamic Municipal Bond ETF
Franklin Municipal Green Bond ETF
(each a Fund)
At a meeting held on November 18, 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 an amended and restated investment management agreement between Franklin Advisers, Inc. (Manager) and the Trust, on behalf of each Fund (each an Amended Management Agreement) to adopt a unified management fee (Unified Fee) effective on or about December 1, 2022. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve each Amended Management Agreement.
In considering the approval of each Amended Management Agreement, the Board reviewed and considered information provided by the Manager at the Meeting, and throughout the year at meetings of the Board and its committees. The Board reviewed and considered all of the factors it deemed relevant in approving each Amended Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services provided by the Manager; and (ii) the costs of the services to be provided by the Manager. The Board also reviewed and considered the form of Amended Management Agreement and the terms of each Amended Management Agreement, which were explained at the Meeting, noting that, with the exception of the proposed unified fee structure, the form of Amended Management Agreement was substantially the same as each Fund’s current investment management agreement, and that the Unified Fee is consistent with the unified fee structure of other series of the Trust. The Board noted management’s explanation that it was relying on and had complied with the conditions of prior no-action relief that had been granted to another fund complex and investment adviser confirming that the Securities and Exchange Commission would not recommend enforcement action if an investment advisory agreement was amended without a shareholder vote to establish a unified fee.
In approving each Amended Management Agreement, the Board, including a majority of the Independent Trustees,
determined that the terms of the Amended Management Agreement are fair and reasonable and that such Amended Management Agreement is in the best interests of each respective Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.
Nature, Extent and Quality of Services
The Board reviewed and considered information regarding the nature, extent and quality of investment management services to be provided by the Manager to each Fund and its shareholders. This information included, among other things, management’s representation that each Amended Management Agreement will not reduce or modify in any way the nature, extent and quality of the services currently provided to each Fund. Following consideration of such information, the Board was satisfied with the nature, extent and quality of services to be provided by the Manager to each Fund and its shareholders under the Fund’s Amended Management Agreement.
Fund Performance
The Board noted its review and consideration of and conclusions made regarding the performance results of each Fund in connection with the May 2022 annual contract renewal (Annual Contract Renewal) of the Fund’s investment management agreement and at regular Board meetings throughout the year
Comparative Fees and Expenses
The Board reviewed and considered information regarding the proposed Unified Fee. In particular, the Board noted management’s representation that the total advisory fee paid to the Manager pursuant to the Amended Management Agreement would not exceed the advisory fee payable under the Fund’s current investment management agreement. The Board also noted management’s representation that each Fund’s net operating expenses under the Unified Fee are expected to be the same as such Fund’s current net operating expenses after expense waivers and reimbursements because the Manager has capped ordinary expenses at the same rate as the Fund’s management fee. The Board considered that pursuant to each Fund’s Amended Management Agreement, the Manager shall reimburse each Fund for all of its acquired fund fees and expenses (if any) and pay 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 (including any costs incidental to transactions in portfolio securities or instruments), (iv) taxes, (v) interest (including borrowing costs and dividend expenses on securities sold
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
short and overdraft charges), (vi) litigation expenses (including litigation to which the Trust or the Fund may be a party and indemnification of the Trustees and officers with respect thereto), and (vii) other non-routine or extraordinary expenses (such arrangement, the Unified Fee). The Board concluded that the proposed Unified Fee for each Fund is reasonable.
Management Profitability and Economies of Scale
The Board noted management’s representation that changing to the Unified Fee would not result in any increase to the management fee the Manager receives from each Fund. The Board determined that its conclusions regarding profitability and economies of scale reached in connection with each Fund’s Annual Contract Renewal of the investment management agreement with the Manager had not changed as a result of the proposal to approve each Amended Management Agreement.
Conclusion
Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved each Amended Management Agreement for the respective Fund for an initial two-year period.
Board Approval of Investment
Management Agreements
FRANKLIN TEMPLETON ETF TRUST
Franklin U.S. Core Bond ETF
(Fund)
At a meeting held on March 3, 2023 (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 a new investment sub-advisory agreement between Franklin Advisers, Inc. (Manager), the Fund’s investment manager, and Franklin Templeton Institutional, LLC (Sub-Adviser), an affiliate of the Manager, on behalf of the Fund (Sub-Advisory Agreement), for an initial two-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the Sub-Advisory Agreement.
The Board reviewed and considered information provided by the Manager at the Meeting with respect to the Sub-Advisory Agreement. The Board also reviewed and considered the factors it deemed relevant in approving the Sub-Advisory
Agreement, including, but not limited to: (i) the nature, extent, and quality of the services to be provided by the Sub-Adviser; and (ii) the costs of the services to be provided by the Sub-Adviser. The Board further reviewed and considered information provided by management showing the expected impact of hiring the Sub-Adviser on the Manager’s profitability consistent with the Order (as defined below). The Board also considered that management proposed that the Board approve the Sub-Advisory Agreement in order to facilitate portfolio management team changes, effective March 2023. The Board reviewed and further considered the form of Sub-Advisory Agreement and the terms of the Sub-Advisory Agreement, which were discussed at the Meeting, noting that the terms and conditions of the Sub-Advisory Agreement were substantially identical to the terms and conditions of sub-advisory agreements for other Franklin Templeton (“FT”) mutual funds.
In approving the Sub-Advisory Agreement, the Board, including a majority of the Independent Trustees, determined that the hiring of the Sub-Adviser is in the best interests of the Fund and its shareholders and does not involve a conflict of interest from which the Manager or Sub-Adviser derives an inappropriate advantage. The Board also determined that the terms of the Sub-Advisory Agreement are fair and reasonable. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.
Nature, Extent and Quality of Services
The Board reviewed and considered information regarding the nature, extent and quality of investment management services to be provided by the Sub-Adviser and currently being provided by the Manager and its affiliates to the Fund and its shareholders. In doing so, the Board noted that the Fund employs a “manager of managers” structure pursuant to an exemptive order (Order) granted to the Manager by the U.S. Securities and Exchange Commission, whereby the Manager and the Fund may, without shareholder approval, enter into sub-advisory agreements with sub-advisers that are indirect or direct wholly owned subsidiaries of Franklin Resources, Inc. (FRI). In particular, with respect to the Sub-Adviser, the Board took into account that the new portfolio manager proposed to serve as a portfolio manager for the Fund is an employee of the Sub-Adviser. The Board reviewed and considered information regarding the nature, quality and extent of investment sub-advisory services to be provided by the Sub-Adviser to the Fund and its shareholders under the Sub-Advisory Agreement; the Sub-Adviser’s experience as a manager of other funds and
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FRANKLIN TEMPLETON ETF TRUST
SHAREHOLDER INFORMATION
accounts, including those within the FT organization; the personnel, operations, financial condition, and investment management capabilities, methodologies and resources of the Sub-Adviser and the Sub-Adviser’s capabilities, as demonstrated by, among other things, its policies and procedures reasonably designed to prevent violations of the federal securities laws.
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 FRI, the parent of the Manager and the Sub-Adviser, and its commitment to the mutual fund business as evidenced by its reassessment of fund offerings in response to the market environment and project initiatives and capital investments relating to the services provided to the Fund by the FT organization. The Board specifically noted FT’s commitment to being a global leader in stewardship and sustainability.
Following consideration of such information, the Board was satisfied with the nature, extent and quality of services to be provided by the Sub-Adviser to the Fund and its shareholders.
Fund Performance
The Board noted its review and consideration of and conclusions made regarding the performance results of the Fund in connection with the May 2022 annual contract renewal (Annual Contract Renewal) of the Fund’s investment management agreement and at regular Board meetings throughout the year. The Board further noted that there was no performance of the Sub-Adviser to evaluate with respect to the Fund as the Sub-Adviser had not yet provided any services to the Fund.
Comparative Fees and Expenses
The Board reviewed and considered information regarding the investment sub-advisory fee to be charged by the Sub-Adviser. The Board noted that the addition of the Sub-Adviser will have no impact on the amount of management fees that are currently paid by the Fund as the Sub-Adviser will be paid by the Manager out of the management fee that the Manager receives from the Fund. The Board further noted that the allocation of the fee between the Manager and the Sub-Adviser reflected the services to be provided by the Sub-Adviser. The Board concluded that the proposed investment sub-advisory fee to be paid to the Sub-Adviser is reasonable.
Management Profitability and Economies of Scale
The Board noted management’s belief that the Manager’s profitability is not expected to materially change as a result of the addition of the Sub-Adviser. The Board determined that its conclusions regarding profitability and economies of scale reached in connection with the Annual Contract Renewal of the investment management agreement with the Manager had not changed as a result of the proposal to approve the Sub-Advisory Agreement.
Conclusion
Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved the Sub-Advisory Agreement for an initial two-year period.
Proxy Voting Policies and Procedures
The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.
Quarterly 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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Annual Report Franklin Templeton ETF Trust | |||||
| Investment Managers
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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 North Quincy, MA 02171 | ||||
| © 2023 Franklin Templeton Investments. All rights reserved. | ETF2 A 05/23 | |||||
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ANNUAL REPORT
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FRANKLIN TEMPLETON ETF TRUST
March 31, 2023
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| Franklin FTSE Asia ex Japan ETF |
Franklin FTSE Italy ETF | |
| Franklin FTSE Australia ETF |
Franklin FTSE Japan ETF | |
| Franklin FTSE Brazil ETF |
Franklin FTSE Japan Hedged ETF | |
| Franklin FTSE Canada ETF |
Franklin FTSE Latin America ETF | |
| Franklin FTSE China ETF |
Franklin FTSE Mexico 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 | |
| Visit franklintempleton.com for fund updates and documents, or to find helpful financial planning tools. |
| Not FDIC Insured | | | May Lose Value | | | No Bank Guarantee | ||||||
| franklintempleton.com | Annual Report |
1 | ||||||||
Global developed and emerging market equities, as measured by the MSCI All Country World Index-NR (net of tax withholding when dividends are paid), posted a -7.44% total return for the 12 months ended March 31, 2023.1 Inflation increased substantially in most parts of the world and remained elevated despite some signs of slowing in the second half of the period. This inflationary pressure led many of the world’s central banks to tighten monetary policy, which pressured stocks and negatively impacted the outlook for economic growth. Russia’s ongoing invasion of Ukraine and related disruptions to the global economy also increased investor uncertainty and led to substantial volatility in commodity markets. In China, COVID-19-related lockdowns sharply restricted economic activity prior to the government easing controls in December 2022.
In the U.S., gross domestic product (GDP) recovered from a slight contraction during the first half of the year, expanding in the second half of 2022 amid rising government spending and private investment. The labor market remained strong, as hiring continued at a brisk pace and unemployment reached its lowest level in over 50 years. In an effort to control inflation, the U.S. Federal Reserve (Fed) raised the federal funds target rate at each of its eight meetings during the period to end at a range of 4.75%–5.00%, a full 450 basis points higher than at the beginning of the period. Furthermore, the Fed indicated it would continue to reduce its U.S. Treasury and agency debt and mortgage-backed security holdings.
Economic growth in the eurozone was tepid during 2022, ending with zero growth in the fourth quarter. The ongoing war in Ukraine disrupted supply chains, weakened the economic outlook and contributed to record high inflation across the eurozone, as energy prices soared in the first half of the period. However, governments spent significant sums to subsidize consumers and find alternative supplies. Consequently, the price of natural gas in Europe declined notably in the period’s second half, providing a tailwind for European stocks. The European Central Bank increased interest rates in July 2022 for the first time in 11 years to curtail growing inflation and further raised rates in five subsequent meetings. In this environment, European developed market equities, as measured by the MSCI Europe Index-NR, posted a +1.38% total return for the 12 months under review.1
Asian developed and emerging market equities, as measured by the MSCI All Country Asia Index-NR, posted a -7.61% total return for the 12-month period.1 Economic activity in Japan remained slow, alternating between positive quarterly GDP growth and contraction before stalling in 2022’s fourth quarter with zero growth. On an annual basis, China’s economic growth slowed, hindered by investor concerns about the solvency of several large property developers and a period of strict COVID-19 lockdowns.
Global emerging market stocks, as measured by the MSCI Emerging Markets Index-NR, posted a -10.70% total return for the 12 months under review.1 Central bank tightening, the threat of recession, and a U.S. dollar that strengthened relative to many emerging market currencies contributed to the downturn. While most of the commodity price increases related to the war in Ukraine moderated by period-end, this volatility disrupted some emerging market economies that are dependent on energy and food imports.
The foregoing information reflects our analysis and opinions as of March 31, 2023. 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.
| 2 | Annual Report |
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Franklin FTSE Asia ex Japan ETF
This annual report for Franklin FTSE Asia ex Japan ETF covers the fiscal year ended March 31, 2023.
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.
| Top 10 Sectors/Industries | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
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| Banks |
11.4% | |||
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| Semiconductors & Semiconductor Equipment |
10.0% | |||
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| Interactive Media & Services |
6.4% | |||
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| Technology Hardware, Storage & Peripherals |
5.8% | |||
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| Insurance |
4.4% | |||
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| Oil, Gas & Consumable Fuels |
3.8% | |||
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| Internet & Direct Marketing Retail |
3.5% | |||
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| Hotels, Restaurants & Leisure |
3.4% | |||
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| Real Estate Management & Development |
3.4% | |||
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| Electronic Equipment, Instruments & Components |
3.3% | |||
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Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -8.16% based on market price and -9.10% based on net asset value. In comparison, the FTSE Asia ex Japan Capped Index posted a -9.08% 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 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 137.
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3 | ||||||||
FRANKLIN FTSE ASIA EX JAPAN ETF
| Top 10 Holdings | ||||
| 3/31/23 | ||||
| Company Sector/Industry, Country |
% of Total Net Assets |
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| Taiwan Semiconductor Manufacturing Co. Ltd. Semiconductors & Semiconductor Equipment, Taiwan |
6.7% | |||
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| Tencent Holdings Ltd. Interactive Media & Services, China |
4.7% | |||
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| Samsung Electronics Co. Ltd. Technology Hardware, Storage & Peripherals, |
4.3% | |||
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| Alibaba Group Holding Ltd., Class A Internet & Direct Marketing Retail, China |
3.0% | |||
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| AIA Group Ltd. Insurance, Hong Kong |
2.0% | |||
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| Reliance Industries Ltd. Oil, Gas & Consumable Fuels, India |
1.5% | |||
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| Meituan, Class B Hotels, Restaurants & Leisure, China |
1.4% | |||
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| Infosys Ltd. IT Services, India |
1.0% | |||
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| China Construction Bank Corp., Class H Banks, China |
1.0% | |||
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| Housing Development Finance Corp. Ltd. Financial Services, India |
0.9% | |||
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| Top 10 Countries | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
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| China |
35.4% | |||
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| Taiwan |
16.4% | |||
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| India |
15.8% | |||
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| South Korea |
13.1% | |||
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| Hong Kong |
7.4% | |||
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| Singapore |
3.6% | |||
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| Thailand |
2.6% | |||
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| Indonesia |
2.3% | |||
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| Malaysia |
1.8% | |||
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| Philippines |
0.9% | |||
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Manager’s Discussion
For the fiscal year ended March 31, 2023, the only sector that contributed to the Fund’s absolute performance was consumer staples. Individual holdings that lifted the Fund’s absolute return included Tencent Holdings, PDD Holdings and Trip.com Group.
CFA® is a trademark owned by CFA Institute.
For the same period, the sectors that detracted most from the Fund’s absolute performance were information technology, financials and consumer discretionary. Individual holdings that hindered the Fund’s absolute return included Taiwan Semiconductor Manufacturing Co., Alibaba Group Holding and JD.com.
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 March 31, 2023, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
| 4 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN FTSE ASIA EX JAPAN ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (2/9/18), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
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| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
| 1-Year |
-9.10% | -8.16% | -9.10% | -8.16% | ||||||||||||
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| 3-Year |
+24.58% | +25.35% | +7.60% | +7.82% | ||||||||||||
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| 5-Year |
+1.72% | -0.62% | +0.34% | -0.12% | ||||||||||||
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| Since Inception (2/6/18) |
+1.50% | +1.40% | +0.29% | +0.27% | ||||||||||||
|
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Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 7 for Performance Summary footnotes.
| franklintempleton.com | Annual Report |
5 | ||||||||
FRANKLIN FTSE ASIA EX JAPAN ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
See page 7 for Performance Summary footnotes.
| 6 | Annual Report |
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FRANKLIN FTSE ASIA EX JAPAN ETF
PERFORMANCE SUMMARY
| Distributions (4/1/22–3/31/23) | ||
| Net Investment | ||
| Income | ||
| $0.587567 |
||
| Total Annual Operating Expenses6 | ||
| 0.19% |
||
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. China may be subject to considerable degrees of economic, political and social instability. Investments in securities of 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.
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 as of 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. Source: FactSet. The FTSE Asia ex Japan Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Asia ex Japan Capped Index is based on the FTSE Asia ex Japan Index and is designed to measure the performance of large- and mid-capitalization stocks from developed and emerging Asian countries, excluding Japan. The Chinese constituents in the FTSE Asia ex Japan Capped Index are represented by H-shares, B-shares, N-shares, Red Chips, P-Chips and S-Chips.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
| franklintempleton.com | Annual Report |
7 | ||||||||
FRANKLIN FTSE ASIA EX JAPAN ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||
| Beginning Account Value 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||
| $1,000.00 | $1,157.00 | $1.02 | $1,023.98 | $0.96 | 0.19 | % | ||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
| 8 | Annual Report |
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This annual report for Franklin FTSE Australia ETF covers the fiscal year ended March 31, 2023.
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.
| Top 10 Sectors/Industries | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| Metals & Mining |
23.5% | |
| Banks |
20.9% | |
| Biotechnology |
7.1% | |
| Oil, Gas & Consumable Fuels |
6.3% | |
| Consumer Staples Distribution & Retail |
4.2% | |
| Capital Markets |
4.1% | |
| Diversified REITs |
3.4% | |
| Insurance |
3.3% | |
| Broadline Retail |
3.0% | |
| Transportation Infrastructure |
3.0% | |
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -8.94% based on market price and -9.90% based on net asset value. In comparison, the FTSE Australia Capped Index posted a -9.86% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 11.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Australia Capped Index. 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.
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 174.
| franklintempleton.com | Annual Report |
9 | ||||||||
FRANKLIN FTSE AUSTRALIA ETF
| Top 10 Holdings | ||
| 3/31/23 | ||
| Company Sector/Industry, Country |
% of Total Net Assets | |
| BHP Group Ltd. Metals & Mining, Australia |
12.2% | |
| Commonwealth Bank of Australia Banks, Australia |
8.5% | |
| CSL Ltd. Biotechnology, Australia |
7.1% | |
| National Australia Bank Ltd. Banks, Australia |
4.5% | |
| Westpac Banking Corp. Banks, Australia |
3.9% | |
| ANZ Group Holdings Ltd. Banks, Australia |
3.5% | |
| Woodside Energy Group Ltd. Oil, Gas & Consumable Fuels, Australia |
3.2% | |
| Macquarie Group Ltd. Capital Markets, Australia |
3.1% | |
| Wesfarmers Ltd. Broadline Retail, Australia |
2.9% | |
| Woolworths Group Ltd. Consumer Staples Distribution & Retail, Australia |
2.4% | |
Manager’s Discussion
For the fiscal year ended March 31, 2023, the sectors that contributed to the Fund’s absolute performance were energy and utilities. Individual holdings that lifted the Fund’s absolute return included Woodside Petroleum, Mineral Resources and Brambles.
For the same period, the sectors that detracted most from the Fund’s absolute performance were financials, materials and real estate. Individual holdings that hindered the Fund’s absolute return included Commonwealth Bank of Australia, National Australia Bank and Macquarie Group.
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 March 31, 2023, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
| 10 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN FTSE AUSTRALIA ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (11/6/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
|
1-Year |
-9.90% | -8.94% | -9.90% | -8.94% | ||||||||||||
|
3-Year |
+76.27% | +73.00% | +20.80% | +20.05% | ||||||||||||
|
5-Year |
+35.24% | +34.40% | +6.22% | +6.09% | ||||||||||||
| Since Inception (11/2/17) |
+32.48% | +32.99% | +5.34% | +5.41% | ||||||||||||
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 13 for Performance Summary footnotes.
| franklintempleton.com | Annual Report |
11 | ||||||||
FRANKLIN FTSE AUSTRALIA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
11/2/17-3/31/23
See page 13 for Performance Summary footnotes.
| 12 | Annual Report |
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FRANKLIN FTSE AUSTRALIA ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $1.548986 |
Total Annual Operating Expenses6
| 0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Australian issuers involve risks that are specific to Australia, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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. Source: FactSet. The FTSE Australia Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Australia Capped Index is based on the FTSE Australia Index and is designed to measure the performance of Australian large- and mid-capitalization stocks.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
| franklintempleton.com | Annual Report |
13 | ||||||||
FRANKLIN FTSE AUSTRALIA ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
| Beginning Account Value 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,175.80 | $0.49 | $1,024.48 | $0.45 | 0.09 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
| 14 | Annual Report |
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This annual report for Franklin FTSE Brazil ETF covers the fiscal year ended March 31, 2023.
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.
| Top 10 Sectors/Industries | ||
| 3/31/23
|
||
| % of Total Net Assets | ||
| Metals & Mining |
20.5% | |
| Banks |
16.6% | |
| Oil, Gas & Consumable Fuels |
15.7% | |
| Electric Utilities |
8.2% | |
| Capital Markets |
4.7% | |
| Ground Transportation |
3.9% | |
| Beverages |
3.4% | |
| Machinery |
3.3% | |
| Consumer Staples Distribution & Retail |
2.9% | |
| Food Products |
2.4% | |
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -19.39% based on market price and -19.57% based on net asset value. In comparison, the FTSE Brazil Capped Index posted a -19.21% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 17.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
| Top 10 Holdings | ||
| 3/31/23
| ||
| Company Sector/Industry, Country |
% of Total Net Assets | |
| Vale SA Metals & Mining, Brazil |
17.2% | |
| Petroleo Brasileiro SA, 43.945%, pfd. Oil, Gas & Consumable Fuels, Brazil |
12.6% | |
| Itau Unibanco Holding SA, 4.349%, pfd. Banks, Brazil |
7.1% | |
| Banco Bradesco SA, 6.492%, pfd. Banks, Brazil |
4.8% | |
| B3 SA - Brasil Bolsa Balcao Capital Markets, Brazil |
3.5% | |
| Ambev SA Beverages, Brazil |
3.5% | |
| WEG SA Machinery, Brazil |
3.3% | |
| Centrais Eletricas Brasileiras SA Electric Utilities, Brazil |
2.4% | |
| Itausa SA, 4.745%, pfd. Banks, Brazil |
2.4% | |
| Localiza Rent a Car SA Ground Transportation, Brazil |
2.3% | |
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 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
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 178.
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15 | ||||||||
FRANKLIN FTSE BRAZIL ETF
(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.
Manager’s Discussion
For the fiscal year ended March 31, 2023, the sectors that contributed to the Fund’s absolute performance were energy and industrials. Individual holdings that lifted the Fund’s absolute return included Petroleo Brasileiro (Petrobras), WEG and Banco do Brasil.
For the same period, the sectors that detracted most from the Fund’s absolute performance were materials, financials and consumer staples. Individual holdings that hindered the Fund’s absolute return included Vale, Hapvida Participacoes e Investimentos and Banco Bradesco.
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 March 31, 2023, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
| 16 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN FTSE BRAZIL ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (11/7/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
|
1-Year |
-19.57% | -19.39% | -19.57% | -19.39% | ||||||||||||
|
3-Year |
+45.30% | +45.43% | +13.26% | +13.30% | ||||||||||||
|
5-Year |
-18.64% | -19.26% | -4.04% | -4.19% | ||||||||||||
| Since Inception (11/3/17) |
-6.56% | -6.33% | -1.25% | -1.20% | ||||||||||||
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 19 for Performance Summary footnotes.
| franklintempleton.com | Annual Report |
17 | ||||||||
FRANKLIN FTSE BRAZIL ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
11/3/17-3/31/23
See page 19 for Performance Summary footnotes.
| 18 | Annual Report |
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FRANKLIN FTSE BRAZIL ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $2.065896 |
Total Annual Operating Expenses6
| 0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. 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.
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. Source: FactSet. The FTSE Brazil Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Brazil Capped Index is based on the FTSE Brazil Index and is designed to measure the performance of Brazilian large and mid-capitalization stocks.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
| franklintempleton.com | Annual Report |
19 | ||||||||
FRANKLIN FTSE BRAZIL ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
|
|
Beginning Account Value 10/1/22 |
|
|
Ending Account Value 3/31/23 |
|
|
Expenses Paid During Period 10/1/22–3/31/231 |
|
|
Ending Account Value 3/31/23 |
|
|
Expenses Paid During Period 10/1/22–3/31/231 |
|
|
Net Annualized Expense Ratio |
| |||||
| $1,000.00 | $989.40 | $0.94 | $1,023.98 | $0.96 | 0.19 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
| 20 | Annual Report |
franklintempleton.com | ||||||||
This annual report for Franklin FTSE Canada ETF covers the fiscal year ended March 31, 2023.
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.
| Top 10 Sectors/Industries | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| Banks |
27.1% | |
| Oil, Gas & Consumable Fuels |
18.0% | |
| Ground Transportation |
9.1% | |
| Insurance |
7.8% | |
| Metals & Mining |
7.8% | |
| IT Services |
4.8% | |
| Consumer Staples Distribution & Retail |
4.8% | |
| Capital Markets |
3.5% | |
| Chemicals |
2.5% | |
| Software |
2.3% | |
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -13.44% based on market price and -12.82% based on net asset value. In comparison, the FTSE Canada Capped Index posted a -13.05% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 23.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Canada Capped Index. 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.
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 182.
| franklintempleton.com | Annual Report |
21 | ||||||||
FRANKLIN FTSE CANADA ETF
| Top 10 Holdings | ||
| 3/31/23 | ||
| Company Sector/Industry, Country |
% of Total Net Assets | |
| Royal Bank of Canada Banks, Canada |
8.6% | |
| Toronto-Dominion Bank Banks, Canada |
7.0% | |
| Enbridge, Inc. Oil, Gas & Consumable Fuels, Canada |
4.9% | |
| Canadian Pacific Railway Ltd. Ground Transportation, Canada |
4.6% | |
| Canadian National Railway Co. Ground Transportation, Canada |
4.5% | |
| Canadian Natural Resources Ltd. Oil, Gas & Consumable Fuels, Canada |
3.8% | |
| Bank of Nova Scotia Banks, Canada |
3.8% | |
| Bank of Montreal Banks, Canada |
3.8% | |
| Shopify, Inc., Class A IT Services, Canada |
3.5% | |
| Brookfield Corp. Capital Markets, Canada |
2.8% | |
Manager’s Discussion
For the fiscal year ended March 31, 2023, the sectors that contributed to the Fund’s absolute performance were consumer staples and consumer discretionary. Individual holdings that lifted the Fund’s absolute return included Alimentation Couche-Tard, Constellation Software and Thomson Reuters.
For the same period, the sectors that detracted most from the Fund’s absolute performance were financials, energy and materials. Individual holdings that hindered the Fund’s absolute return included The Toronto-Dominion Bank, Bank of Nova Scotia and Brookfield Asset Management.
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 March 31, 2023, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
| 22 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN FTSE CANADA ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (11/6/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
|
1-Year |
-12.82% | -13.44% | -12.82% | -13.44% | ||||||||||||
|
3-Year |
+69.14% | +68.07% | +19.15% | +18.90% | ||||||||||||
|
5-Year |
+46.24% | +45.89% | +7.90% | +7.85% | ||||||||||||
| Since Inception (11/2/17) |
+40.30% | +40.26% | +6.46% | +6.46% | ||||||||||||
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 25 for Performance Summary footnotes.
| franklintempleton.com | Annual Report |
23 | ||||||||
FRANKLIN FTSE CANADA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
11/2/17-3/31/23LP12
See page 25 for Performance Summary footnotes.
| 24 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN FTSE CANADA ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $0.654492 |
Total Annual Operating Expenses6
| 0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Canadian issuers involve risks that are specific to Canada, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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. Source: FactSet. The FTSE Canada Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Canada Capped Index is based on the FTSE Canada Index and is designed to measure the performance of Canadian large- and mid-capitalization stocks.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
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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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,115.50 | $0.47 | $1,024.48 | $0.45 | 0.09 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
| 26 | Annual Report |
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This annual report for Franklin FTSE China ETF covers the fiscal year ended March 31, 2023.
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.
| Top 10 Sectors/Industries | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| Interactive Media & Services |
16.0% | |
| Internet & Direct Marketing Retail |
9.9% | |
| Banks |
9.8% | |
| Hotels, Restaurants & Leisure |
7.0% | |
| Automobiles |
3.9% | |
| Insurance |
3.8% | |
| Beverages |
3.5% | |
| Real Estate Management & Development |
3.3% | |
| Oil, Gas & Consumable Fuels |
2.8% | |
| Broadline Retail |
2.6% | |
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -4.34% based on market price and -5.68% based on net asset value. In comparison, the FTSE China Capped Index posted a -5.70% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 29.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE China Capped Index. 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.
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 185.
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FRANKLIN FTSE CHINA ETF
| Top 10 Holdings | ||
| 3/31/23 | ||
| Company Sector/Industry, Country |
% of Total Net Assets | |
| Tencent Holdings Ltd. Interactive Media & Services, China |
13.2% | |
| Alibaba Group Holding Ltd., Class A Internet & Direct Marketing Retail, China |
8.4% | |
| Meituan, Class B Hotels, Restaurants & Leisure, China |
3.9% | |
| China Construction Bank Corp., Class H Banks, China |
2.7% | |
| JD.com, Inc., Class A Broadline Retail, China |
2.3% | |
| Baidu, Inc., Class A Interactive Media & Services, China |
1.9% | |
| Industrial & Commercial Bank of China Ltd., Class H Banks, China |
1.9% | |
| Ping An Insurance Group Co. of China Ltd., Class H Insurance, China |
1.8% | |
| PDD Holdings, Inc., ADR Internet & Direct Marketing Retail, China |
1.5% | |
| NetEase, Inc. Entertainment, China |
1.4% | |
Manager’s Discussion
For the fiscal year ended March 31, 2023, the sectors that contributed to the Fund’s absolute performance were communication services and energy. Individual holdings that lifted the Fund’s absolute return included Tencent Holdings, PDD Holdings and Trip.com Group.
For the same period, the sectors that detracted most from the Fund’s absolute performance were consumer discretionary, financials and real estate. Individual holdings that hindered the Fund’s absolute return included Alibaba Group Holding, JD.com and NIO.
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 March 31, 2023, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
| 28 | Annual Report |
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FRANKLIN FTSE CHINA ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (11/6/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
|
1-Year |
-5.68% | -4.34% | -5.68% | -4.34% | ||||||||||||
|
3-Year |
-6.71% | -6.75% | -2.29% | -2.30% | ||||||||||||
|
5-Year |
-17.19% | -18.88% | -3.70% | -4.10% | ||||||||||||
| Since Inception (11/2/17) |
-13.74% | -13.94% | -2.70% | -2.74% | ||||||||||||
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 31 for Performance Summary footnotes.
| franklintempleton.com | Annual Report |
29 | ||||||||
FRANKLIN FTSE CHINA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
11/2/17-3/31/23
See page 31 for Performance Summary footnotes.
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FRANKLIN FTSE CHINA ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $0.502096 |
Total Annual Operating Expenses6
| 0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. China may be subject to considerable degrees of economic, political and social instability. Investments in securities of Chinese issuers involve risks that are specific to China, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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. Source: FactSet. The FTSE China Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE China Capped Index is based on the FTSE China Index and is designed to measure the performance of Chinese large and mid-capitalization stocks, as represented by H-shares, B-shares, N-shares, Red Chips, P-Chips and S-Chips.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
| franklintempleton.com | Annual Report |
31 | ||||||||
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 10/1/22 |
Ending Account |
Expenses Paid During 10/1/22–3/31/231 |
Ending Account |
Expenses Paid During 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $795.80 | $0.85 | $1,023.98 | $0.96 | 0.19 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
| 32 | Annual Report |
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This annual report for Franklin FTSE Europe ETF covers the fiscal year ended March 31, 2023.
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.
| Top 10 Sectors/Industries | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| Pharmaceuticals |
11.1% | |
| Banks |
7.6% | |
| Oil, Gas & Consumable Fuels |
5.5% | |
| Textiles, Apparel & Luxury Goods |
5.4% | |
| Insurance |
5.2% | |
| Food Products |
4.4% | |
| Semiconductors & Semiconductor Equipment |
3.8% | |
| Chemicals |
3.3% | |
| Machinery |
3.0% | |
| Beverages |
2.7% | |
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +2.18% based on market price and +1.31% based on net asset value. In comparison, the FTSE Developed Europe Capped Index posted a +0.68% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 35.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Investment Strategy
The Fund, using a “passive” or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Developed Europe Capped Index. 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.
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 209.
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FRANKLIN FTSE EUROPE ETF
| Top 10 Holdings | ||
| 3/31/23 | ||
| Company Sector/Industry, Country |
% of Total Net Assets | |
| Nestle SA Food Products, Switzerland |
3.2% | |
| ASML Holding NV Semiconductors & Semiconductor Equipment, Netherlands |
2.6% | |
| Novo Nordisk AS, Class B Pharmaceuticals, Denmark |
2.4% | |
| LVMH Moet Hennessy Louis Vuitton SE Textiles, Apparel & Luxury Goods, France |
2.2% | |
| AstraZeneca PLC Pharmaceuticals, United Kingdom |
2.0% | |
| Roche Holding AG Pharmaceuticals, Switzerland |
2.0% | |
| Shell PLC Oil, Gas & Consumable Fuels, Netherlands |
1.9% | |
| Novartis AG Pharmaceuticals, Switzerland |
1.8% | |
| SAP SE Software, Germany |
1.4% | |
| HSBC Holdings PLC Banks, United Kingdom |
1.3% | |
Manager’s Discussion
For the fiscal year ended March 31, 2023, the sectors that contributed most to the Fund’s absolute performance were consumer discretionary, industrials and energy. Individual holdings that lifted the Fund’s absolute return included Novo Nordisk, LVMH Moet Hennessy Louis Vuitton and Total Energies.
For the same period, the sectors that detracted most from the Fund’s absolute performance were real estate, materials and health care. Individual holdings that hindered the Fund’s absolute return included Roche Holding, Deutsche Annington Immobilien and Anglo American.
| Top 10 Countries | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| United Kingdom |
19.2% | |
| France |
17.3% | |
| Switzerland |
14.5% | |
| Germany |
12.8% | |
| Netherlands |
9.0% | |
| Sweden |
4.8% | |
| Denmark |
4.4% | |
| Spain |
3.9% | |
| Italy |
3.4% | |
| Finland |
1.9% | |
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 March 31, 2023, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
| 34 | Annual Report |
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FRANKLIN FTSE EUROPE ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (11/6/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
|
1-Year |
+1.31% | +2.18% | +1.31% | +2.18% | ||||||||||||
|
3-Year |
+53.04% | +52.80% | +15.24% | +15.18% | ||||||||||||
|
5-Year |
+24.64% | +24.00% | +4.50% | +4.40% | ||||||||||||
| Since Inception (11/2/17) |
+24.32% | +24.37% | +4.11% | +4.12% | ||||||||||||
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 37 for Performance Summary footnotes.
| franklintempleton.com | Annual Report |
35 | ||||||||
FRANKLIN FTSE EUROPE ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
11/2/17-3/31/23
See page 37 for Performance Summary footnotes.
| 36 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN FTSE EUROPE ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $0.836887 |
Total Annual Operating Expenses6
| 0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of issuers in European countries involve risks that are specific to Europe, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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. Source: FactSet. The FTSE Developed Europe Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Developed Europe Capped Index is based on the FTSE Developed Europe Index and is designed to measure the performance of large- and mid-capitalization stocks from developed European countries.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
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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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231,2 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231,2 |
Net Annualized Expense Ratio2 |
|||||||||||||||||
| $1,000.00 | $1,325.50 | $1.68 | $1,023.49 | $1.46 | 0.29 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
2. Included in the expense ratio are “Other fees” described in Note 1 under Income and Deferred Taxes which are not annualized. Without these expenses, the expense ratio would have been 0.09% and the actual and hypothetical expenses paid during the period would have been $0.52 and $0.45, respectively.
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Franklin FTSE Europe Hedged ETF
This annual report for Franklin FTSE Europe Hedged ETF covers the fiscal year ended March 31, 2023.
On May 11, 2023, the Board of Trustees of the Trust approved changes to the Fund’s (i) name and ticker symbol, (ii) underlying index, including the designation of the primary benchmark index, (iii) investment goal, strategies and policies, and (iv) other related changes. Effective on or about August 1, 2023, the Fund will be renamed the Franklin FTSE Eurozone ETF (Ticker: FLEU). The Fund’s investment goal will change to seek to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Developed Eurozone Index (the “Underlying Index”). Under normal market conditions, the Fund will invest at least 80% of its assets in the component securities of the Underlying Index and in depositary receipts representing such securities. The Underlying Index will also serve as the Fund’s primary benchmark.
The Underlying Index is a free float-adjusted market capitalization weighted index maintained and calculated by FTSE Russell (Index Provider). The Underlying Index is designed to measure the performance of large- and mid-capitalization stocks from developed Eurozone countries. The Eurozone is a geographic and economic region that consists of all the European Union countries that have fully incorporated the euro as their national currency. The Underlying Index currently consists of securities from the following ten developed market countries: Austria, Belgium, Finland, France, Germany, Ireland, Italy, the Netherlands, Portugal and Spain. FTSE Russell conducts a semi-annual review of the Underlying Index.
The Fund may make a special distribution of capital gains in connection with the investment strategy change so that new investors in the Fund would not be subject to the undistributed capital gains attributable to the old currency hedged investment strategy.
The Fund will change its non-fundamental investment policy in accordance with Rule 35d-1 under the Investment Company Act of 1940 (the “Names Rule”) to invest, under
normal market conditions, at least 80% of its assets in equity securities or investments, such as depositary receipts, that are economically tied to the particular country or geographic region suggested by the Fund’s name. For purposes of this Names Rule policy, the Fund considers the securities or investments that are economically tied to the particular country or geographic region suggested by the Fund’s name to be those securities or investments that comprise the Underlying Index.
For more information, please see the Fund’s current prospectus and SAI, as supplemented.
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).
| Top 10 Sectors/Industries | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| Pharmaceuticals |
11.1% | |
| Banks |
7.7% | |
| Oil, Gas & Consumable Fuels |
5.5% | |
| Textiles, Apparel & Luxury Goods |
5.3% | |
| Insurance |
5.2% | |
| Food Products |
4.4% | |
| Semiconductors & Semiconductor Equipment |
3.8% | |
| Chemicals |
3.3% | |
| Machinery |
3.0% | |
| Beverages |
2.6% | |
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.
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 222.
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FRANKLIN FTSE EUROPE HEDGED ETF
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +7.21% based on market price and +7.53% 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 42.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
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 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 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.
| Top 10 Holdings | ||
| 3/31/23 | ||
| Company Sector/Industry, Country |
% of Total Net Assets | |
| Nestle SA Food Products, Switzerland |
3.2% | |
| ASML Holding NV Semiconductors & Semiconductor Equipment, Netherlands |
2.6% | |
| Novo Nordisk AS, Class B Pharmaceuticals, Denmark |
2.4% | |
| LVMH Moet Hennessy Louis Vuitton SE Textiles, Apparel & Luxury Goods, France |
2.2% | |
| AstraZeneca PLC Pharmaceuticals, United Kingdom |
2.0% | |
| Roche Holding AG Pharmaceuticals, Switzerland |
2.0% | |
| Shell PLC Oil, Gas & Consumable Fuels, Netherlands |
1.9% | |
| Novartis AG Pharmaceuticals, Switzerland |
1.8% | |
| SAP SE Software, Germany |
1.4% | |
| HSBC Holdings PLC Banks, United Kingdom |
1.3% | |
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.
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FRANKLIN FTSE EUROPE HEDGED ETF
Manager’s Discussion
For the fiscal year ended March 31, 2023, the sectors that contributed most to the Fund’s absolute performance were consumer discretionary, industrials and energy. Individual holdings that lifted the Fund’s absolute return included Novo Nordisk, LVMH Moet Hennessy Louis Vuitton and Total Energies.
For the same period, the sectors that detracted most from the Fund’s absolute performance were real estate, materials and health care. Individual holdings that hindered the Fund’s absolute return included Roche Holding, Deutsche Annington Immobilien and Anglo American.
| Top 10 Countries | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| United Kingdom | 19.2% | |
| France | 17.3% | |
| Switzerland | 14.5% | |
| Germany | 12.8% | |
| Netherlands | 9.0% | |
| Sweden | 4.9% | |
| Denmark | 4.4% | |
| Spain | 3.9% | |
| Italy | 3.4% | |
| Finland | 1.9% | |
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 March 31, 2023, 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 EUROPE HEDGED ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (11/6/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
|
1-Year |
+7.53% | +7.21% | +7.53% | +7.21% | ||||||||||||
|
3-Year |
+60.11% | +61.33% | +16.99% | +17.28% | ||||||||||||
|
5-Year |
+53.01% | +50.10% | +8.88% | +8.46% | ||||||||||||
| Since Inception (11/2/17) |
+45.96% | +45.65% | +7.24% | +7.20% | ||||||||||||
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 44 for Performance Summary footnotes.
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FRANKLIN FTSE EUROPE HEDGED ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
11/2/17-3/31/23
See page 44 for Performance Summary footnotes.
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FRANKLIN FTSE EUROPE HEDGED ETF
PERFORMANCE SUMMARY
| Distributions (4/1/22–3/31/23) | ||||||
| Net Investment Income |
Short-Term Capital Gain |
Long-Term Capital Gain |
Total | |||
|
| ||||||
| $0.639769 |
$1.897174 | $2.490279 | $5.027222 | |||
|
| ||||||
| Total Annual Operating Expenses6 | ||
|
0.09% |
||
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of issuers in European countries involve risks that are specific to Europe, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. Derivatives, including currency management strategies, involve costs and can create economic leverage in the portfolio which may result in significant volatility and cause the Fund to participate in losses on an amount that exceeds the Fund’s initial investment. The Fund may not achieve the anticipated benefits, and may realize losses when a counterparty fails to perform as promised. While the Fund’s currency hedging approach is designed to minimize the impact of currency fluctuations on Fund returns, it does not necessarily eliminate the Fund’s exposure to the currencies. The return of the currency-related derivatives will not perfectly offset the actual fluctuations between the currencies and the U.S. dollar. The Fund’s exposure to the currencies may not be hedged at all times. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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. Source: FactSet. The FTSE Developed Europe Capped Hedged Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Developed Europe Capped Hedged Index is based on the FTSE Developed Europe Hedged to USD Index and is designed to measure the performance of large- and mid-capitalization stocks from developed European countries. The FTSE Developed Europe Capped Hedged Index incorporates a hedge against non-U.S. currency fluctuations by reflecting the impact of rolling monthly currency forward contracts on the currencies represented in the FTSE Developed Europe Capped Hedged Index.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional 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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231,2 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231,2 |
Net Annualized Expense Ratio2 |
|||||||||||||||
|
$1,000.00 |
$1,219.60 | $0.89 | $1,024.13 | $0.81 | 0.16 | % | ||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
2. Included in the expense ratio are “Other fees” described in Note 1 under Income and Deferred Taxes which are not annualized. Without these expenses, the expense ratio would have been 0.09% and the actual and hypothetical expenses paid during the period would have been $0.50 and $0.45, respectively.
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This annual report for Franklin FTSE France ETF covers the fiscal year ended March 31, 2023.
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.
| Top 10 Sectors/Industries | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| Textiles, Apparel & Luxury Goods |
20.8% | |
| Aerospace & Defense |
7.8% | |
| Oil, Gas & Consumable Fuels |
7.2% | |
| Pharmaceuticals |
6.5% | |
| Electrical Equipment |
6.1% | |
| Personal Products |
5.9% | |
| Banks |
5.2% | |
| Chemicals |
4.9% | |
| Construction & Engineering |
3.8% | |
| Insurance |
3.2% | |
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +9.97% based on market price and +9.84% based on net asset value. In comparison, the FTSE France Capped Index posted a +8.54% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 48.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
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 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 236.
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FRANKLIN FTSE FRANCE ETF
| Top 10 Holdings | ||
| 3/31/23 | ||
| Company Sector/Industry, Country |
% of Total Net Assets | |
| LVMH Moet Hennessy Louis Vuitton SE Textiles, Apparel & Luxury Goods, France |
12.1% | |
| Total Energies SE Oil, Gas & Consumable Fuels, France |
7.2% | |
| Sanofi Pharmaceuticals, France |
6.3% | |
| L’Oreal SA Personal Products, France |
5.9% | |
| Schneider Electric SE Electrical Equipment, France |
4.7% | |
| Air Liquide SA Chemicals, France |
4.6% | |
| Airbus SE Aerospace & Defense, France |
4.0% | |
| BNP Paribas SA Banks, France |
3.5% | |
| Hermes International Textiles, Apparel & Luxury Goods, France |
3.4% | |
| AXA SA Insurance, France |
3.1% | |
Manager’s Discussion
For the fiscal year ended March 31, 2023, the sectors that contributed most to the Fund’s absolute performance were consumer discretionary, energy and industrials. Individual holdings that lifted the Fund’s absolute return included LVMH Moet Hennessy Louis Vuitton, TotalEnergies and Hermes International.
For the same period, the sectors that detracted from the Fund’s absolute performance were information technology and real estate. Individual holdings that hindered the Fund’s absolute return included Teleperformance, Dassault Systemes and Capgemini.
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 March 31, 2023, 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 FRANCE ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (11/6/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 | |||||||||||
|
1-Year |
+9.84% | +9.97% | +9.84% | +9.97% | ||||||||||
|
3-Year |
+71.13% | +71.36% | +19.61% | +19.66% | ||||||||||
|
5-Year |
+37.55% | +34.38% | +6.58% | +6.09% | ||||||||||
| Since Inception (11/2/17) |
+37.91% | +36.70% | +6.12% | +5.95% | ||||||||||
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 50 for Performance Summary footnotes.
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FRANKLIN FTSE FRANCE ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
11/2/17-3/3/23
See page 50 for Performance Summary footnotes.
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FRANKLIN FTSE FRANCE ETF
PERFORMANCE SUMMARY
| Distributions (4/1/22–3/31/23) | ||
| Net Investment Income |
||
| $0.794457 |
||
| Total Annual Operating Expenses6 | ||
| 0.09% |
||
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of French issuers involve risks that are specific to France, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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. Source: FactSet. The FTSE France Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE France Capped Index is based on the FTSE France Index and is designed to measure the performance of French large- and mid-capitalization stocks.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
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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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231,2 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231,2 |
Net Annualized Expense Ratio2 |
|||||||||||||||||
| $1,000.00 | $1,414.70 | $2.71 | $1,022.69 | $2.27 | 0.45 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
2. Included in the expense ratio are “Other fees” described in Note 1 under Income and Deferred Taxes which are not annualized. Without these expenses, the expense ratio would have been 0.09% and the actual and hypothetical expenses paid during the period would have been $0.54 and $0.45, respectively.
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This annual report for Franklin FTSE Germany ETF covers the fiscal year ended March 31, 2023.
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.
| Top 10 Sectors/Industries | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| Insurance |
11.6% | |
| Software |
10.7% | |
| Automobiles |
10.3% | |
| Industrial Conglomerates |
10.0% | |
| Pharmaceuticals |
6.5% | |
| Diversified Telecommunication Services |
6.4% | |
| Chemicals |
6.2% | |
| Capital Markets |
4.3% | |
| Multi-Utilities |
4.1% | |
| Semiconductors & Semiconductor Equipment |
4.0% | |
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +3.60% based on market price and +2.41% based on net asset value. In comparison, the FTSE Germany Capped Index posted a +2.02% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 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.
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 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 239.
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FRANKLIN FTSE GERMANY ETF
| Top 10 Holdings | ||
| 3/31/23 | ||
| Company Sector/Industry, Country |
% of Total Net Assets | |
| SAP SE Software, Germany |
10.4% | |
| Siemens AG Industrial Conglomerates, Germany |
9.0% | |
| Allianz SE Insurance, Germany |
6.9% | |
| Deutsche Telekom AG Diversified Telecommunication Services, Germany |
6.1% | |
| Mercedes-Benz Group AG Automobiles, Germany |
4.8% | |
| Bayer AG Pharmaceuticals, Germany |
4.7% | |
| Infineon Technologies AG Semiconductors & Semiconductor Equipment, Germany |
4.0% | |
| Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen Insurance, Germany |
3.6% | |
| BASF SE Chemicals, Germany |
3.6% | |
| Deutsche Post AG Air Freight & Logistics, Germany |
3.4% | |
Manager’s Discussion
For the fiscal year ended March 31, 2023, the sectors that contributed most to the Fund’s absolute performance were industrials, information technology and financials. Individual holdings that lifted the Fund’s absolute return included Siemens, SAP and Deutsche Telekom.
For the same period, the sectors that detracted most from the Fund’s absolute performance were real estate, health care and consumer discretionary. Individual holdings that hindered the Fund’s absolute return included Deutsche Annington Immobilien, Adidas and Bayer.
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 March 31, 2023, 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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53 | ||||||||
FRANKLIN FTSE GERMANY ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (11/6/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||||||
|
1-Year |
+2.41% | +3.60% | +2.41% | +3.60% | ||||||||||||||||
|
3-Year |
+44.54% | +45.50% | +13.06% | +13.32% | ||||||||||||||||
|
5-Year |
+3.50% | +3.14% | +0.69% | +0.62% | ||||||||||||||||
| Since Inception (11/2/17) |
-0.35% | -0.41% | -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 56 for Performance Summary footnotes.
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FRANKLIN FTSE GERMANY ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
11/2/17-3/31/23
See page 56 for Performance Summary footnotes.
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FRANKLIN FTSE GERMANY ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $0.673099 |
Total Annual Operating Expenses6
| 0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of German issuers involve risks that are specific to Germany, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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. Source: FactSet. The FTSE Germany Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Germany Capped Index is based on the FTSE Germany Index and is designed to measure the performance of German large- and mid-capitalization stocks.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional 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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,432.70 | $0.55 | $1,024.48 | $0.45 | 0.09 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
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This annual report for Franklin FTSE Hong Kong ETF covers the fiscal year ended March 31, 2023.
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.
| Top 10 Sectors/Industries | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| Real Estate Management & Development |
21.9% | |
| Insurance |
19.7% | |
| Capital Markets |
12.9% | |
| Hotels, Restaurants & Leisure |
7.0% | |
| Banks |
5.3% | |
| Electric Utilities |
5.1% | |
| Diversified REITs |
3.9% | |
| Household Durables |
3.8% | |
| Industrial Conglomerates |
2.5% | |
| Gas Utilities |
2.2% | |
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -5.24% based on market price and -5.39% based on net asset value. In comparison, the FTSE Hong Kong Capped Index posted a -5.37% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 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 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 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 242.
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| Top 10 Holdings | ||
| 3/31/23 | ||
| Company Sector/Industry, Country |
% of Total Net Assets | |
| AIA Group Ltd. Insurance, Hong Kong |
19.7% | |
| Hong Kong Exchanges & Clearing Ltd. Capital Markets, Hong Kong |
12.8% | |
| Sun Hung Kai Properties Ltd. Real Estate Management & Development, Hong Kong |
4.5% | |
| CK Hutchison Holdings Ltd., Class A Real Estate Management & Development, United Kingdom |
3.7% | |
| Link REIT Diversified REITs, Hong Kong |
3.7% | |
| 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 |
2.7% | |
| CK Asset Holdings Ltd. Real Estate Management & Development, Hong Kong |
2.7% | |
| BOC Hong Kong Holdings Ltd. Banks, China |
2.6% | |
Manager’s Discussion
For the fiscal year ended March 31, 2023, the sectors that contributed to the Fund’s absolute performance were consumer discretionary and information technology. Individual holdings that lifted the Fund’s absolute return included AIA Group, Sun Hung Kai Properties and Sands China.
For the same period, the sectors that detracted most from the Fund’s absolute performance were industrials, utilities and real estate. Individual holdings that hindered the Fund’s absolute return included Techtronic Industries, CLP Holdings and Link REIT.
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 March 31, 2023, 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 March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (11/6/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
|
1-Year |
-5.39% | -5.24% | -5.39% | -5.24% | ||||||||||||
|
3-Year |
+14.30% | +14.84% | +4.56% | +4.72% | ||||||||||||
|
5-Year |
-5.10% | -6.77% | -1.04% | -1.39% | ||||||||||||
| Since Inception (11/2/17) |
-1.58% | -1.43% | -0.29% | -0.27% | ||||||||||||
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 62 for Performance Summary footnotes.
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FRANKLIN FTSE HONG KONG ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
11/2/17-3/31/23
See page 62 for Performance Summary footnotes.
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FRANKLIN FTSE HONG KONG ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $0.825229 |
Total Annual Operating Expenses6
| 0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Hong Kong issuers involve risks that are specific to Hong Kong, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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. Source: FactSet. The FTSE Hong Kong Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Hong Kong Capped Index is based on the FTSE Hong Kong Index and is designed to measure the performance of Hong Kong large- and mid-capitalization stocks.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
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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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,159.20 | $0.48 | $1,024.48 | $0.45 | 0.09 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
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This annual report for Franklin FTSE India ETF covers the fiscal year ended March 31, 2023.
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.
| Top 10 Sectors/Industries | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| IT Services |
14.5% | |
| Oil, Gas & Consumable Fuels |
12.0% | |
| Banks |
7.5% | |
| Financial Services |
7.2% | |
| Automobiles |
5.3% | |
| Chemicals |
4.6% | |
| Metals & Mining |
3.9% | |
| Pharmaceuticals |
3.9% | |
| Construction Materials |
3.0% | |
| Consumer Finance |
3.0% | |
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -10.43% based on market price and -11.65% based on net asset value. In comparison, the FTSE India Capped Index posted a -12.28% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 66.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
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 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 246.
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FRANKLIN FTSE INDIA ETF
| Top 10 Holdings | ||
| 3/31/23 | ||
| Company Sector/Industry, Country |
% of Total Net Assets | |
| Reliance Industries Ltd. Oil, Gas & Consumable Fuels, India |
9.4% | |
| Infosys Ltd. IT Services, India |
6.3% | |
| Housing Development Finance Corp. Ltd. Financial Services, India |
5.7% | |
| Tata Consultancy Services Ltd. IT Services, India |
4.0% | |
| Hindustan Unilever Ltd. Household Products, India |
2.8% | |
| Axis Bank Ltd. Banks, India |
2.4% | |
| Bharti Airtel Ltd. Wireless Telecommunication Services, India |
2.2% | |
| Larsen & Toubro Ltd. Construction & Engineering, India |
1.8% | |
| ICICI Bank Ltd. Banks, India |
1.7% | |
| Bajaj Finance Ltd. Consumer Finance, India |
1.6% | |
Manager’s Discussion
For the fiscal year ended March 31, 2023, the only sector that contributed to the Fund’s absolute performance was consumer staples. Individual holdings that lifted the Fund’s absolute return included ITC, Hindustan Unilever and Mahindra & Mahindra.
For the same period, the sectors that detracted most from the Fund’s absolute performance were information technology, energy and utilities. Individual holdings that hindered the Fund’s absolute return included Infosys, Reliance Industries and Tata Consultancy Services.
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 March 31, 2023, 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 March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (2/9/18), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
|
1-Year |
-11.65% | -10.43% | -11.65% | -10.43% | ||||||||||||
|
3-Year |
+78.83% | +82.25% | +21.38% | +22.15% | ||||||||||||
|
5-Year |
+27.94% | +26.71% | +5.05% | +4.85% | ||||||||||||
| Since Inception (2/6/18) |
+22.66% | +23.67% | +4.05% | +4.21% | ||||||||||||
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 68 for Performance Summary footnotes.
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FRANKLIN FTSE INDIA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
2/6/18-3/31/23
See page 68 for Performance Summary footnotes.
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FRANKLIN FTSE INDIA ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $0.212110 |
Total Annual Operating Expenses6
| 0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. There are special risks associated with investments in India, including exposure to currency fluctuations, less liquidity, expropriation, confiscatory taxation, and exchange control regulations (including currency blockage). Investments in securities of Indian issuers involve risks that are specific to India, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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. Source: FactSet. The FTSE India Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE India Capped Index is based on the FTSE India Index and is designed to measure the performance of Indian large-and mid-capitalization stocks.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional 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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $960.80 | $0.93 | $1,023.98 | $0.96 | 0.19 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
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This annual report for Franklin FTSE Italy ETF covers the fiscal year ended March 31, 2023.
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.
| Top 10 Sectors/Industries | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| Banks |
23.0% | |
| Automobiles |
15.0% | |
| Electric Utilities |
13.2% | |
| Oil, Gas & Consumable Fuels |
6.7% | |
| Insurance |
6.4% | |
| Machinery |
4.9% | |
| Gas Utilities |
4.4% | |
| Textiles, Apparel & Luxury Goods |
3.6% | |
| Diversified Telecommunication Services |
3.3% | |
| Electrical Equipment |
3.3% | |
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +8.58% based on market price and +7.51% based on net asset value. In comparison, the FTSE Italy Capped Index posted a +7.13% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 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.
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 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 251.
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FRANKLIN FTSE ITALY ETF
| Top 10 Holdings | ||
| 3/31/23 | ||
| Company Sector/Industry, Country |
% of Total Net Assets | |
| Enel SpA Electric Utilities, Italy |
9.8% | |
| Intesa Sanpaolo SpA Banks, Italy |
8.6% | |
| Stellantis NV Automobiles, United States |
8.0% | |
| UniCredit SpA Banks, Italy |
7.5% | |
| Ferrari NV Automobiles, Italy |
7.1% | |
| Eni SpA Oil, Gas & Consumable Fuels, Italy |
6.7% | |
| Assicurazioni Generali SpA Insurance, Italy |
4.5% | |
| Moncler SpA Textiles, Apparel & Luxury Goods, Italy |
3.6% | |
| CNH Industrial NV Machinery, United Kingdom |
3.4% | |
| Snam SpA Gas Utilities, Italy |
3.4% | |
Manager’s Discussion
For the fiscal year ended March 31, 2023, the sectors that contributed most to the Fund’s absolute performance were financials, consumer discretionary and industrials. Individual holdings that lifted the Fund’s absolute return included UniCredit, Intesa Sanpaolo and Ferrari.
For the same period, the sectors that detracted most from the Fund’s absolute performance were utilities, information technology and health care. Individual holdings that hindered the Fund’s absolute return included Enel, Assicurazioni Generali and Nexi.
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 March 31, 2023, 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 March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (11/6/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
|
1-Year |
+7.51% | +8.58% | +7.51% | +8.58% | ||||||||||||
|
3-Year |
+61.02% | +61.85% | +17.21% | +17.41% | ||||||||||||
|
5-Year |
+15.13% | +17.38% | +2.86% | +3.26% | ||||||||||||
| Since Inception (11/2/17) |
+18.80% | +19.00% | +3.24% | +3.27% | ||||||||||||
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 74 for Performance Summary footnotes.
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FRANKLIN FTSE ITALY ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
11/2/17-3/31/23
See page 74 for Performance Summary footnotes.
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FRANKLIN FTSE ITALY ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $1.071052 |
Total Annual Operating Expenses6
| 0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Italian issuers involve risks that are specific to Italy, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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. Source: FactSet. The FTSE Italy Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Italy Capped Index is based on the FTSE Italy Index and is designed to measure the performance of Italian large-and mid-capitalization stocks.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional 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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,442.00 | $0.55 | $1,024.48 | $0.45 | 0.09 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
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This annual report for Franklin FTSE Japan ETF covers the fiscal year ended March 31, 2023.
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.
| Top 10 Sectors/Industries | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| Automobiles |
6.9% | |
| Banks |
5.9% | |
| Pharmaceuticals |
5.9% | |
| Electronic Equipment, Instruments & Components |
5.5% | |
| Machinery |
5.2% | |
| Trading Companies & Distributors |
5.0% | |
| Chemicals |
4.3% | |
| Household Durables |
4.3% | |
| Semiconductors & Semiconductor Equipment |
3.4% | |
| Wireless Telecommunication Services |
3.1% | |
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -2.73% based on market price and -4.61% based on net asset value. In comparison, the FTSE Japan Capped Index posted a -4.66% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 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.
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 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 253.
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FRANKLIN FTSE JAPAN ETF
| Top 10 Holdings | ||
| 3/31/23 | ||
| Company Sector/Industry, Country |
% of Total Net Assets | |
| Toyota Motor Corp. Automobiles, Japan |
4.4% | |
| Sony Group Corp. Household Durables, Japan |
2.9% | |
| Keyence Corp. Electronic Equipment, Instruments & Components, Japan |
2.5% | |
| Mitsubishi UFJ Financial Group, Inc. Banks, Japan |
1.9% | |
| Daiichi Sankyo Co. Ltd. Pharmaceuticals, Japan |
1.8% | |
| Shin-Etsu Chemical Co. Ltd. Chemicals, Japan |
1.6% | |
| Tokyo Electron Ltd. Semiconductors & Semiconductor Equipment, Japan |
1.4% | |
| Sumitomo Mitsui Financial Group, Inc. Banks, Japan |
1.3% | |
| KDDI Corp. Wireless Telecommunication Services, Japan |
1.3% | |
| Hitachi Ltd. Industrial Conglomerates, Japan |
1.3% | |
Manager’s Discussion
For the fiscal year ended March 31, 2023, the sectors that contributed most to the Fund’s absolute performance were financials, consumer staples and health care. Individual holdings that lifted the Fund’s absolute return included Daiichi Sankyo, Sumitomo Mitsui Financial Group and Takeda Pharmaceutical.
For the same period, the sectors that detracted most from the Fund’s absolute performance were consumer discretionary, industrials and information technology. Individual holdings that hindered the Fund’s absolute return included Toyota Motor, Recruit Holdings and Tokyo Electron.
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 March 31, 2023, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
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FRANKLIN FTSE JAPAN ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (11/6/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
|
1-Year |
-4.61% | -2.73% | -4.61% | -2.73% | ||||||||||||
|
3-Year |
+24.12% | +26.22% | +7.47% | +8.07% | ||||||||||||
|
5-Year |
+6.71% | +6.04% | +1.31% | +1.18% | ||||||||||||
| Since Inception (11/2/17) |
+9.20% | +10.08% | +1.64% | +1.79% | ||||||||||||
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 80 for Performance Summary footnotes.
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FRANKLIN FTSE JAPAN ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
11/2/17-3/31/23
See page 80 for Performance Summary footnotes.
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79 | ||||||||
FRANKLIN FTSE JAPAN ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $0.460631 |
Total Annual Operating Expenses6
| 0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Japanese issuers involve risks that are specific to Japan, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of 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. Source: FactSet. The FTSE Japan Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Japan Capped Index is based on the FTSE Japan Index and is designed to measure the performance of Japanese large and mid-capitalization stocks.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional 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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,197.00 | $0.49 | $1,024.48 | $0.45 | 0.09 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
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Franklin FTSE Japan Hedged ETF
This annual report for Franklin FTSE Japan Hedged ETF covers the fiscal year ended March 31, 2023.
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).
| Top 10 Sectors/Industries | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| Automobiles |
6.9% | |
| Banks |
5.9% | |
| Pharmaceuticals |
5.8% | |
| Electronic Equipment, Instruments & Components |
5.4% | |
| Machinery |
5.2% | |
| Trading Companies & Distributors |
4.9% | |
| Chemicals |
4.3% | |
| Household Durables |
4.3% | |
| Semiconductors & Semiconductor Equipment |
3.4% | |
| Wireless Telecommunication Services |
3.0% | |
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +9.47% based on market price and +8.15% based on net asset value. In comparison, the FTSE Japan Capped Hedged Index posted a +8.38% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 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.
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 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 264.
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FRANKLIN FTSE JAPAN HEDGED ETF
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.
| Top 10 Holdings | ||
| 3/31/23 | ||
| Company Sector/Industry, Country |
% of Total Net Assets | |
| Toyota Motor Corp. Automobiles, Japan |
4.4% | |
| Sony Group Corp. Household Durables, Japan |
2.9% | |
| Keyence Corp. Electronic Equipment, Instruments & Components, Japan |
2.4% | |
| Mitsubishi UFJ Financial Group, Inc. Banks, Japan |
1.9% | |
| Daiichi Sankyo Co. Ltd. Pharmaceuticals, Japan |
1.7% | |
| Shin-Etsu Chemical Co. Ltd. Chemicals, Japan |
1.6% | |
| Tokyo Electron Ltd. Semiconductors & Semiconductor Equipment, Japan |
1.4% | |
| Sumitomo Mitsui Financial Group, Inc. Banks, Japan |
1.3% | |
| Hitachi Ltd. Industrial Conglomerates, Japan |
1.3% | |
| Takeda Pharmaceutical Co. Ltd. Pharmaceuticals, Japan |
1.3% | |
Manager’s Discussion
For the fiscal year ended March 31, 2023, the sectors that contributed most to the Fund’s absolute performance were financials, consumer staples and health care. Individual holdings that lifted the Fund’s absolute return included Daiichi Sankyo, Sumitomo Mitsui Financial Group and Takeda Pharmaceutical.
For the same period, the sectors that detracted most from the Fund’s absolute performance were consumer discretionary, industrials and information technology. Individual holdings that hindered the Fund’s absolute return included Toyota Motor, Recruit Holdings and Tokyo Electron.
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 March 31, 2023, 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 March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (11/6/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 | |||||||||||
| 1-Year |
+8.15% | +9.47% | +8.15% | +9.47% | ||||||||||
| 3-Year |
+58.58% | +61.52% | +16.61% | +17.33% | ||||||||||
| 5-Year |
+43.73% | +44.99% | +7.52% | +7.71% | ||||||||||
| Since Inception (11/2/17) |
+38.30% | +39.13% | +6.18% | +6.30% | ||||||||||
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 86 for Performance Summary footnotes.
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FRANKLIN FTSE JAPAN HEDGED ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
11/2/17-3/31/23
See page 86 for Performance Summary footnotes.
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FRANKLIN FTSE JAPAN HEDGED ETF
PERFORMANCE SUMMARY
| Distributions (4/1/22–3/31/23) |
|
|||||||||
| Net Investment Income |
Short-Term Capital Gain |
Long-Term Capital Gain |
Total | |||||||
| $0.924931 |
$2.106927 | $3.446187 | $6.478045 | |||||||
| Total Annual Operating Expenses6 | ||
|
0.09% |
||
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Japanese issuers involve risks that are specific to Japan, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. Derivatives, including currency management strategies, involve costs and can create economic leverage in the portfolio, which may result in significant volatility and cause the Fund to participate in losses on an amount that exceeds the Fund’s initial investment. The Fund may not achieve the anticipated benefits, and may realize losses when a counterparty fails to perform as promised. While the Fund’s currency hedging approach is designed to minimize the impact of currency fluctuations on Fund returns, it does not necessarily eliminate the Fund’s exposure to the currencies. The return of currency-related derivatives will not perfectly offset the actual fluctuations between the currencies and the U.S. dollar. The Fund’s exposure to the currencies may not be hedged at all times. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of 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. Source: FactSet. The FTSE Japan Capped Hedged Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Japan Capped Hedged Index is based on the FTSE Japan Hedged to USD Index and is designed to measure the performance of Japanese large- and mid-capitalization stocks. The FTSE Japan Capped Hedged Index incorporates a hedge against fluctuations of the Japanese yen by reflecting the impact of rolling monthly currency forward contracts on the Japanese yen.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional 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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||
| $1,000.00 |
$1,120.70 | $0.48 | $1,024.48 | $0.45 | 0.09% | |||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
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Franklin FTSE Latin America ETF
This annual report for Franklin FTSE Latin America ETF covers the fiscal year ended March 31, 2023.
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.
| Top 10 Sectors/Industries | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| Banks |
18.3% | |
| Metals & Mining |
15.0% | |
| Oil, Gas & Consumable Fuels |
10.2% | |
| Beverages |
6.8% | |
| Consumer Staples Distribution & Retail |
6.0% | |
| Electric Utilities |
5.7% | |
| Wireless Telecommunication Services |
5.2% | |
| Food Products |
3.8% | |
| Transportation Infrastructure |
3.4% | |
| Capital Markets |
2.8% | |
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -11.38% based on market price and -11.05% based on net asset value. In comparison, the FTSE Latin America Capped Index posted a -10.75% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 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 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 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 276.
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FRANKLIN FTSE MEXICO ETF
| Top 10 Holdings | ||
| 3/31/23 | ||
| Company Sector/Industry, Country |
% of Total Net Assets | |
| Vale SA Metals & Mining, Brazil |
10.2% | |
| Petroleo Brasileiro SA, 43.945%, pfd. Oil, Gas & Consumable Fuels, Brazil |
7.5% | |
| America Movil SAB de CV Wireless Telecommunication Services, Mexico |
4.9% | |
| Itau Unibanco Holding SA, 4.349%, pfd. Banks, Brazil |
4.2% | |
| Grupo Financiero Banorte SAB de CV, Class O Banks, Mexico |
4.0% | |
| Wal-Mart de Mexico SAB de CV, Class V Consumer Staples Distribution & Retail, Mexico |
3.4% | |
| Fomento Economico Mexicano SAB de CV Beverages, Mexico |
2.9% | |
| Banco Bradesco SA, 6.492%, pfd. Banks, Brazil |
2.8% | |
| Grupo Mexico SAB de CV,Class B Metals & Mining, Mexico |
2.5% | |
| B3 SA - Brasil Bolsa Balcao Capital Markets, Brazil |
2.1% | |
| Country Composition | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| Brazil |
57.8% | |
| Mexico |
32.4% | |
| Chile |
6.9% | |
| Colombia |
1.6% | |
| United States |
1.0% | |
Manager’s Discussion
For the fiscal year ended March 31, 2023, the sectors that contributed most to the Fund’s absolute performance were energy, industrials and real estate. Individual holdings that lifted the Fund’s absolute return included Petroleo Brasileiro, Grupo Financiero Banorte and Grupo Bimbo.
For the same period, the sectors that detracted most from the Fund’s absolute performance were materials, financials and consumer discretionary. Individual holdings that hindered the Fund’s absolute return included Vale, Hapvida Participacoes e Investimentos and Banco Bradesco.
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 March 31, 2023, 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 March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (10/11/18), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
|
1-Year |
-11.05% | -11.38% | -11.05% | -11.38% | ||||||||||||
|
3-Year |
+62.47% | +61.31% | +17.56% | +17.28% | ||||||||||||
| Since Inception (10/9/18) |
-1.94% | -2.08% | -0.44% | -0.47% | ||||||||||||
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 92 for Performance Summary footnotes.
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FRANKLIN FTSE LATIN AMERICA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
10/9/18-3/31/23
See page 92 for Performance Summary footnotes.
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FRANKLIN FTSE LATIN AMERICA ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $1.874424 |
Total Annual Operating Expenses6
| 0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in securities of issuers in Latin American countries involve risks that are specific to Latin America, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of 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. Source: FactSet. The FTSE Latin America Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Latin America Capped Index is based on the FTSE Latin America Index and is designed to measure the performance of Latin American large-and mid-capitalization stocks.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional 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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,096.90 | $0.99 | $1,023.98 | $0.96 | 0.19 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
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This annual report for Franklin FTSE Mexico ETF covers the fiscal year ended March 31, 2023.
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.
| Top 10 Sectors/Industries | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| Banks |
18.3% | |
| Beverages |
14.0% | |
| Wireless Telecommunication Services |
12.7% | |
| Consumer Staples Distribution & Retail |
10.8% | |
| Transportation Infrastructure |
10.1% | |
| Metals & Mining |
8.1% | |
| Food Products |
6.9% | |
| Construction Materials |
4.8% | |
| Diversified REITs |
4.0% | |
| Industrial Conglomerates |
2.9% | |
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of +11.15% based on market price and +11.15% based on net asset value. In comparison, the FTSE Mexico Capped Index posted a +11.23% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 96.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
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 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 281.
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| Top 10 Holdings | ||
| 3/31/23 | ||
| Company Sector/Industry, Country |
% of Total Net Assets | |
| America Movil SAB de CV Wireless Telecommunication Services, Mexico |
12.7% | |
| Grupo Financiero Banorte SAB de CV, Class O Banks, Mexico |
10.6% | |
| Wal-Mart de Mexico SAB de CV, Class V Consumer Staples Distribution & Retail, Mexico |
9.1% | |
| Fomento Economico Mexicano SAB de CV Beverages, Mexico |
7.9% | |
| Grupo Mexico SAB de CV, Class B Metals & Mining, Mexico |
6.9% | |
| Grupo Bimbo SAB de CV Food Products, Mexico |
4.8% | |
| Cemex SAB de CV Construction Materials, Mexico |
4.0% | |
| Grupo Aeroportuario del Pacifico SAB de CV, Class B Transportation Infrastructure, Mexico |
3.5% | |
| Grupo Aeroportuario del Sureste SAB de CV, Class B Transportation Infrastructure, Mexico |
3.3% | |
| Grupo Financiero Inbursa SAB de CV, Class O Banks, Mexico |
2.7% | |
Manager’s Discussion
For the fiscal year ended March 31, 2023, the sectors that contributed most to the Fund’s absolute performance were consumer staples, financials and industrials. Individual holdings that lifted the Fund’s absolute return included Grupo Financiero Banorte, Grupo Bimbo and Fomento Economico Mexicano.
For the same period, the sectors that detracted from the Fund’s absolute performance were communication services and materials. Individual holdings that hindered the Fund’s absolute return included Grupo Mexico, Grupo Televisa and Controladora Vuela Cia de Aviacion.
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 March 31, 2023, 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.
| franklintempleton.com | Annual Report |
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FRANKLIN FTSE MEXICO ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (11/7/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 | |||||||||||
|
1-Year |
+11.15% | +11.15% | +11.15% | +11.15% | ||||||||||
|
3-Year |
+123.85% | +126.03% | +30.81% | +31.24% | ||||||||||
|
5-Year |
+35.79% | +33.63% | +6.31% | +5.97% | ||||||||||
| Since Inception (11/3/17) |
+36.65% | +36.90% | +5.95% | +5.98% | ||||||||||
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 98 for Performance Summary footnotes.
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PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
11/3/17-3/31/23
See page 98 for Performance Summary footnotes.
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FRANKLIN FTSE MEXICO ETF
PERFORMANCE SUMMARY
| Distributions (4/1/22–3/31/23) | ||
| Net Investment Income |
||
| $1.033231 |
||
| Total Annual Operating Expenses6 | ||
|
0.19% |
||
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risk related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in Mexican issuers involve risks that are specific to Mexico, including certain legal, regulatory, political, currency, security and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of 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. Source: FactSet. The FTSE Mexico Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Mexico Capped Index is based on the FTSE Mexico Index and is designed to measure the performance of Mexican large- and mid-capitalization stocks.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional 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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||
| $1,000.00 | $1,362.30 | $1.12 | $1,023.98 | $0.96 | 0.19 | % | ||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
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Franklin FTSE Saudi Arabia ETF
This annual report for Franklin FTSE Saudi Arabia ETF covers the fiscal year ended March 31, 2023.
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.
| Top 10 Sectors/Industries | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| Banks |
39.2% | |
| Chemicals |
15.7% | |
| Oil, Gas & Consumable Fuels |
8.3% | |
| Diversified Telecommunication Services |
6.4% | |
| Metals & Mining |
4.8% | |
| Health Care Providers & Services |
4.5% | |
| Food Products |
2.6% | |
| Wireless Telecommunication Services |
2.2% | |
| Insurance |
1.9% | |
| Independent Power Producers & Energy Traders |
1.9% | |
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -16.62% based on market price and -17.04% based on net asset value. In comparison, the FTSE Saudi Arabia Capped Index posted a -16.89% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 102.
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 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.
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FRANKLIN FTSE SAUDI ARABIA ETF
| Top 10 Holdings | ||
| 3/31/23 | ||
| Company Sector/Industry, Country |
% of Total Net Assets | |
| Al Rajhi Bank Banks, Saudi Arabia |
12.0% | |
| Saudi National Bank Banks, Saudi Arabia |
8.6% | |
| Saudi Arabian Oil Co. Oil, Gas & Consumable Fuels, Saudi Arabia |
7.8% | |
| Saudi Basic Industries Corp. Chemicals, Saudi Arabia |
7.1% | |
| Saudi Telecom Co. Diversified Telecommunication Services, Saudi Arabia |
6.4% | |
| Saudi Arabian Mining Co. Metals & Mining, Saudi Arabia |
4.8% | |
| Riyad Bank Banks, Saudi Arabia |
4.5% | |
| Saudi British Bank Banks, Saudi Arabia |
3.6% | |
| SABIC Agri-Nutrients Co. Chemicals, Saudi Arabia |
3.1% | |
| Alinma Bank Banks, Saudi Arabia |
3.0% | |
Manager’s Discussion
For the fiscal year ended March 31, 2023, the sectors that contributed most to the Fund’s absolute performance were health care, information technology and real estate. Individual holdings that lifted the Fund’s absolute return included Dr. Sulaiman Al Habib Medical Services Group, Elm and Dar Al Arkan Real Estate Development.
For the same period, the sectors that detracted most from the Fund’s absolute performance were financials, materials and energy. Individual holdings that hindered the Fund’s absolute return included Al Rajhi Bank, Saudi National Bank and Saudi Basic Industries.
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 March 31, 2023, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
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FRANKLIN FTSE SAUDI ARABIA ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (10/11/18), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
| 1-Year |
-17.04% | -16.62% | -17.04% | -16.62% | ||||||||||||
| 3-Year |
+77.70% | +75.62% | +21.12% | +20.65% | ||||||||||||
| Since Inception (10/9/18) |
+49.41% | +50.17% | +9.39% | +9.51% | ||||||||||||
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 104 for Performance Summary footnotes.
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FRANKLIN FTSE SAUDI ARABIA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
10/9/18-3/31/23
See page 104 for Performance Summary footnotes.
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FRANKLIN FTSE SAUDI ARABIA ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $0.631727 |
Total Annual Operating Expenses6
| 0.39% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in securities of Saudi Arabian issuers involve risks that are specific to Saudi Arabia, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of 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. Source: FactSet. The FTSE Saudi Arabia Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Saudi Arabia Capped Index is based on the FTSE Saudi Arabia Index and is designed to measure the performance of Saudi Arabian large- and mid-capitalization stocks.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional 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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $933.10 | $1.88 | $1,022.99 | $1.97 | 0.39 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
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Franklin FTSE South Africa ETF
This annual report for Franklin FTSE South Africa ETF covers the fiscal year ended March 31, 2023.
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.
| Top 10 Sectors/Industries | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| Metals & Mining |
19.6% | |
| Internet & Direct Marketing Retail |
15.0% | |
| Banks |
14.6% | |
| Financial Services |
8.7% | |
| Consumer Staples Distribution & Retail |
7.7% | |
| Wireless Telecommunication Services |
7.2% | |
| Insurance |
6.8% | |
| Chemicals |
3.2% | |
| Specialty Retail |
2.4% | |
| Industrial Conglomerates |
2.0% | |
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -21.29% based on market price and -20.97% based on net asset value. In comparison, the FTSE/JSE South Africa Capped Index posted a -20.98% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 108.
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 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 286.
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| Top 10 Holdings | ||||
| 3/31/23 | ||||
| Company Sector/Industry, Country |
% of Total Net Assets |
|||
| Naspers Ltd., Class N Internet & Direct Marketing Retail, South Africa |
15.0% | |||
| FirstRand Ltd. Financial Services, South Africa |
7.1% | |||
| Standard Bank Group Ltd. Banks, South Africa |
5.4% | |||
| MTN Group Ltd. Wireless Telecommunication Services, South Africa |
5.4% | |||
| Gold Fields Ltd. Metals & Mining, South Africa |
4.9% | |||
| AngloGold Ashanti Ltd. Metals & Mining, South Africa |
4.3% | |||
| Absa Group Ltd. Banks, South Africa |
3.6% | |||
| Capitec Bank Holdings Ltd. Banks, South Africa |
3.4% | |||
| Sasol Ltd. Chemicals, South Africa |
3.2% | |||
| Impala Platinum Holdings Ltd. Metals & Mining, South Africa |
3.2% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2023, the only sector that contributed to the Fund’s absolute performance was consumer discretionary. Individual holdings that lifted the Fund’s absolute return included Naspers, AngloGold Ashanti and Gold Fields.
For the same period, the sectors that detracted most from the Fund’s absolute performance were financials, materials and communication services. Individual holdings that hindered the Fund’s absolute return included MTN Group, FirstRand and Sasol.
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 March 31, 2023, 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.
| franklintempleton.com | Annual Report |
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FRANKLIN FTSE SOUTH AFRICA ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (10/11/18), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||||||
| Based on NAV3 |
Based on market price4 |
|
Based on NAV3 |
Based on market price4 |
||||||||||||||||
| 1-Year |
-20.97% | -21.29% | -20.97% | -21.29% | ||||||||||||||||
| 3-Year |
+71.02% | +72.38% | +19.59% | +19.90% | ||||||||||||||||
| Since Inception (10/10/18) |
+15.00% | +14.45% | +3.17% | +3.06% | ||||||||||||||||
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 110 for Performance Summary footnotes.
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FRANKLIN FTSE SOUTH AFRICA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
10/10/18-3/31/23
See page 110 for Performance Summary footnotes.
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FRANKLIN FTSE SOUTH AFRICA ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $1.079778 |
Total Annual Operating Expenses6
| 0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in securities of South African issuers involve risks that are specific to South Africa, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of 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. Source: FactSet. The FTSE/JSE South Africa Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE/JSE South Africa Capped Index is based on the FTSE South Africa Index and is designed to measure the performance of South African large- and mid-capitalization stocks.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional 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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,166.10 | $1.03 | $1,023.98 | $0.96 | 0.19 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
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This annual report for Franklin FTSE South Korea ETF covers the fiscal year ended March 31, 2023.
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.
| Top 10 Sectors/Industries 3/31/23 |
||
| % of Total Net Assets | ||
| Technology Hardware, Storage & Peripherals |
20.5% | |
| Banks |
7.1% | |
| Electronic Equipment, Instruments & Components |
7.1% | |
| Chemicals |
6.0% | |
| Automobiles |
5.7% | |
| Semiconductors & Semiconductor Equipment |
5.7% | |
| Interactive Media & Services |
5.2% | |
| Electrical Equipment |
4.1% | |
| Metals & Mining |
3.9% | |
| Industrial Conglomerates |
2.9% | |
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -14.50% based on market price and -15.00% based on net asset value. In comparison, the FTSE South Korea Capped Index posted a -15.05% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 114.
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 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 289.
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FRANKLIN FTSE SOUTH KOREA ETF
| Top 10 Holdings | ||
| 3/31/23 | ||
| Company Sector/Industry, Country |
% of Total Net Assets | |
| Samsung Electronics Co. Ltd. Technology Hardware, Storage & Peripherals, South Korea |
20.4% | |
| SK Hynix, Inc. Semiconductors & Semiconductor Equipment, South Korea |
5.3% | |
| Samsung SDI Co. Ltd. Electronic Equipment, Instruments & Components, South Korea |
4.3% | |
| LG Chem Ltd. Chemicals, South Korea |
3.9% | |
| Hyundai Motor Co. Automobiles, South Korea |
3.4% | |
| NAVER Corp. Interactive Media & Services, South Korea |
3.2% | |
| POSCO Holdings, Inc. Metals & Mining, South Korea |
3.0% | |
| Kia Corp. Automobiles, South Korea |
2.3% | |
| LG Energy Solution Ltd. Electrical Equipment, South Korea |
2.2% | |
| KB Financial Group, Inc. Banks, South Korea |
2.0% | |
Manager’s Discussion
For the fiscal year ended March 31, 2023, the only sector that contributed to the Fund’s absolute performance was materials. Individual holdings that lifted the Fund’s absolute return included LG Chem, Samsung SDI and POSCO.
For the same period, the sectors that detracted most from the Fund’s absolute performance were communication services, information technology and financials. Individual holdings that hindered the Fund’s absolute return included NAVER, SK Hynix and Kakao.
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 March 31, 2023, 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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113 | ||||||||
FRANKLIN FTSE SOUTH KOREA ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (11/6/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
| 1-Year |
-15.00% | -14.50% | -15.00% | -14.50% | ||||||||||||
| 3-Year |
+35.60% | +35.09% | +10.69% | +10.55% | ||||||||||||
| 5-Year |
-10.04% | -11.95% | -2.09% | -2.51% | ||||||||||||
| Since Inception (11/2/17) |
-8.39% | -8.65% | -1.61% | -1.66% | ||||||||||||
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 116 for Performance Summary footnotes.
| 114 | Annual Report |
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FRANKLIN FTSE SOUTH KOREA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
11/2/17-3/31/23
See page 116 for Performance Summary footnotes.
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115 | ||||||||
FRANKLIN FTSE SOUTH KOREA ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $0.610881 |
Total Annual Operating Expenses6
| 0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of South Korean issuers involve risks that are specific to South Korea, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of 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. Source: FactSet. The FTSE South Korea Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE South Korea Capped Index is based on the FTSE South Korea Index and is designed to measure the performance of South Korean large- and mid-capitalization stocks.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional 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 10/1/22 |
Ending |
Expenses Paid During 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,282.30 | $0.51 | $1,024.48 | $0.45 | 0.09 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
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This annual report for Franklin FTSE Switzerland ETF covers the fiscal year ended March 31, 2023.
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.
| Top 10 Sectors/Industries | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| Pharmaceuticals |
23.4% | |
| Food Products |
21.9% | |
| Insurance |
8.9% | |
| Capital Markets |
6.7% | |
| Textiles, Apparel & Luxury Goods |
6.2% | |
| Chemicals |
5.5% | |
| Health Care Equipment & Supplies |
4.8% | |
| Life Sciences Tools & Services |
3.7% | |
| Electrical Equipment |
3.4% | |
| Construction Materials |
2.6% | |
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -5.59% based on market price and -6.23% based on net asset value. In comparison, the FTSE Switzerland Capped Index posted a -6.57% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 120.
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 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 294.
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FRANKLIN FTSE SWITZERLAND ETF
| Top 10 Holdings | ||||
| 3/31/23 | ||||
| Company Sector/Industry, Country |
% of Total Net Assets |
|||
| Nestle SA Food Products, Switzerland |
19.3% | |||
| Roche Holding AG Pharmaceuticals, Switzerland |
12.3% | |||
| Novartis AG Pharmaceuticals, Switzerland |
11.0% | |||
| Cie Financiere Richemont SA, Class A Textiles, Apparel & Luxury Goods, Switzerland |
5.2% | |||
| Zurich Insurance Group AG Insurance, Switzerland |
4.3% | |||
| UBS Group AG Capital Markets, Switzerland |
3.8% | |||
| ABB Ltd. Electrical Equipment, Switzerland |
3.4% | |||
| Lonza Group AG Life Sciences Tools & Services, Switzerland |
3.1% | |||
| Sika AG Chemicals, Switzerland |
2.8% | |||
| Holcim AG, Class B Construction Materials, United States |
2.6% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2023, the sectors that contributed most to the Fund’s absolute performance were consumer discretionary, industrials and communication services. Individual holdings that lifted the Fund’s absolute return included Cie Financiere Richemont, Novartis and Holcim.
For the same period, the sectors that detracted most from the Fund’s absolute performance were health care, consumer staples and financials. Individual holdings that hindered the Fund’s absolute return included Roche Holding, Credit Suisse Group and Nestle.
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 March 31, 2023, 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 March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (2/9/18), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
| 1-Year |
-6.23% | -5.59% | -6.23% | -5.59% | ||||||||||||
| 3-Year |
+36.60% | +37.36% | +10.96% | +11.16% | ||||||||||||
| 5-Year |
+50.33% | +50.75% | +8.50% | +8.56% | ||||||||||||
| Since Inception (2/6/18) |
+47.46% | +47.62% | +7.84% | +7.86% | ||||||||||||
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 122 for Performance Summary footnotes.
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franklintempleton.com | ||||||||
FRANKLIN FTSE SWITZERLAND ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
2/6/18-3/31/23
See page 122 for Performance Summary footnotes.
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FRANKLIN FTSE SWITZERLAND ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
|
Net Investment Income |
| $0.588120 |
Total Annual Operating Expenses6
| 0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of Swiss issuers involve risks that are specific to Switzerland, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of 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. Source: FactSet. The FTSE Switzerland Capped Index is a free float-adjusted market-capitalization weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Switzerland Capped Index is based on the FTSE Switzerland Index and is designed to measure the performance of Swiss large- and mid-capitalization stocks.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional 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 | Hypothetical | |||||||||||||||||||||
| (actual return after expenses) | (5% annual return before expenses) | |||||||||||||||||||||
| Beginning Account Value 10/1/22 |
Ending Account |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,186.70 | $0.49 | $1,024.48 | $0.45 | 0.09 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
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This annual report for Franklin FTSE Taiwan ETF covers the fiscal year ended March 31, 2023.
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.
| Top 10 Sectors/Industries | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| Semiconductors & Semiconductor Equipment |
36.3% | |
| Electronic Equipment, Instruments & Components |
13.6% | |
| Banks |
12.0% | |
| Technology Hardware, Storage & Peripherals |
7.6% | |
| Chemicals |
4.6% | |
| Insurance |
3.9% | |
| Diversified Telecommunication Services |
1.9% | |
| Metals & Mining |
1.6% | |
| Electrical Equipment |
1.6% | |
| Marine Transportation |
1.5% | |
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -11.29% based on market price and -12.55% based on net asset value. In comparison, the FTSE Taiwan Capped Index posted a -12.38% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 126.
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 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 297.
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FRANKLIN FTSE TAIWAN ETF
| Top 10 Holdings | ||
| 3/31/23 | ||
| Company Sector/Industry, Country |
% of Total Net Assets | |
| Taiwan Semiconductor Manufacturing Co. Ltd. Semiconductors & Semiconductor Equipment, Taiwan |
20.3% | |
| Hon Hai Precision Industry Co. Ltd. Electronic Equipment, Instruments & Components, Taiwan |
5.2% | |
| MediaTek, Inc. Semiconductors & Semiconductor Equipment, Taiwan |
5.0% | |
| Delta Electronics, Inc., Class A Electronic Equipment, Instruments & Components, Taiwan |
2.8% | |
| United Microelectronics Corp. Semiconductors & Semiconductor Equipment, Taiwan |
2.6% | |
| Chunghwa Telecom Co. Ltd. Diversified Telecommunication Services, Taiwan |
1.9% | |
| Nan Ya Plastics Corp. Chemicals, Taiwan |
1.9% | |
| Fubon Financial Holding Co. Ltd. Insurance, Taiwan |
1.8% | |
| CTBC Financial Holding Co. Ltd., Class A Banks, Taiwan |
1.7% | |
| Cathay Financial Holding Co. Ltd., Class A Insurance, Taiwan |
1.6% | |
Manager’s Discussion
For the fiscal year ended March 31, 2023, the sectors that contributed most to the Fund’s absolute performance were consumer staples, consumer discretionary and health care. Individual holdings that lifted the Fund’s absolute return included Delta Electronics, Walsin Lihwa and Largan Precision.
For the same period, the sectors that detracted most from the Fund’s absolute performance were information technology, financials and materials. Individual holdings that hindered the Fund’s absolute return included Taiwan Semiconductor Manufacturing, Evergreen Marine and Cathay Financial Holding.
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 March 31, 2023, 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 TAIWAN ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (11/6/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
| 1-Year |
-12.55% | -11.29% | -12.55% | -11.29% | ||||||||||||
| 3-Year |
+72.42% | +72.96% | +19.91% | +20.04% | ||||||||||||
| 5-Year |
+59.18% | +57.75% | +9.74% | +9.55% | ||||||||||||
| Since Inception (11/2/17) |
+62.79% | +63.05% | +9.43% | +9.46% | ||||||||||||
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 128 for Performance Summary footnotes.
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FRANKLIN FTSE TAIWAN ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
11/2/17-3/31/23
See page 128 for Performance Summary footnotes.
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127 | ||||||||
FRANKLIN FTSE TAIWAN ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $1.034683 |
Total Annual Operating Expenses6
| 0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in securities of Taiwanese issuers involve risks that are specific to Taiwan, including certain legal, regulatory, political and economic risks. 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.
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 as of 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. Source: FactSet. The FTSE Taiwan Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Taiwan Capped Index is based on the FTSE Taiwan Index and is designed to measure the performance of Taiwanese large- and mid-capitalization stocks.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
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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 |
Ending Account |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,236.10 | $1.06 | $1,023.98 | $0.96 | 0.19 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
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Franklin FTSE United Kingdom ETF
This annual report for Franklin FTSE United Kingdom ETF covers the fiscal year ended March 31, 2023.
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.
| Top 10 Sectors/Industries | ||
| 3/31/23 | ||
| % of Total Net Assets | ||
| Oil, Gas & Consumable Fuels |
12.5% | |
| Pharmaceuticals |
11.4% | |
| Banks |
9.7% | |
| Metals & Mining |
8.0% | |
| Personal Products |
6.0% | |
| Beverages |
4.2% | |
| Hotels, Restaurants & Leisure |
4.2% | |
| Professional Services |
4.0% | |
| Tobacco |
4.0% | |
| Insurance |
3.7% | |
Performance Overview
For the 12-month period, the Fund posted cumulative total returns of -0.13% based on market price and -0.71% based on net asset value. In comparison, the FTSE UK Capped Index posted a -0.64% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 132.
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 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 301.
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FRANKLIN FTSE UNITED KINGDOM ETF
| Top 10 Holdings | ||
| 3/31/23 | ||
| Company Sector/Industry, Country |
% of Total Net Assets | |
| AstraZeneca PLC Pharmaceuticals, United Kingdom |
8.3% | |
| Shell PLC Oil, Gas & Consumable Fuels, Netherlands |
8.0% | |
| HSBC Holdings PLC Banks, United Kingdom |
5.5% | |
| Unilever PLC Personal Products, United Kingdom |
5.2% | |
| BP PLC Oil, Gas & Consumable Fuels, United Kingdom |
4.5% | |
| Diageo PLC Beverages, United Kingdom |
4.0% | |
| British American Tobacco PLC Tobacco, United Kingdom |
3.2% | |
| Rio Tinto PLC Metals & Mining, Australia |
3.0% | |
| Glencore PLC Metals & Mining, Australia |
2.9% | |
| GSK PLC Pharmaceuticals, United Kingdom |
2.8% | |
Manager’s Discussion
For the fiscal year ended March 31, 2023, the sectors that contributed most to the Fund’s absolute performance were energy, industrials and consumer discretionary. Individual holdings that lifted the Fund’s absolute return included BP, Unilever and AstraZeneca.
For the same period, the sectors that detracted most from the Fund’s absolute performance were materials, communication services and financials. Individual holdings that hindered the Fund’s absolute return included Anglo American, GSK PLC and Vodafone Group.
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 March 31, 2023, 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 March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (11/6/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||||||
| Based on NAV3 |
Based on market price4 |
|
Based on NAV3 |
Based on market price4 |
||||||||||||||||
| 1-Year |
-0.71% | -0.13% | -0.71% | -0.13% | ||||||||||||||||
| 3-Year |
+49.12% | +51.09% | +14.25% | +14.75% | ||||||||||||||||
| 5-Year |
+15.10% | +14.56% | +2.85% | +2.76% | ||||||||||||||||
| Since Inception (11/2/17) |
+17.18% | +17.19% | +2.97% | +2.98% | ||||||||||||||||
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 134 for Performance Summary footnotes.
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FRANKLIN FTSE UNITED KINGDOM ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
11/2/17-3/31/23
See page 134 for Performance Summary footnotes.
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FRANKLIN FTSE UNITED KINGDOM ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $0.968227 |
Total Annual Operating Expenses6
| 0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in securities of issuers in U.K. countries involve risks that are specific to the U.K., including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of 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. Source: FactSet. The FTSE UK Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE UK Capped Index is based on the FTSE UK Index and is designed to measure the performance of U.K. large- and mid-capitalization stocks.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
| 134 | Annual Report |
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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 (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
| Beginning Account Value 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $1,250.70 | $0.51 | $1,024.48 | $0.45 | 0.09 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
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Financial Highlights
Franklin FTSE Asia ex Japan ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$24.22 | $28.60 | $18.39 | $21.86 | $23.63 | |||||||||||||||
|
|
|
| ||||||||||||||||||
| Income from investment operationsa: | ||||||||||||||||||||
| Net investment incomeb |
0.57 | 0.55 | 0.44 | 0.49 | 0.51 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(2.79 | ) | (4.31 | ) | 10.21 | (3.46 | ) | (1.82 | ) | |||||||||||
|
|
|
| ||||||||||||||||||
| Total from investment operations |
(2.22 | ) | (3.76 | ) | 10.65 | (2.97 | ) | (1.31 | ) | |||||||||||
|
|
|
| ||||||||||||||||||
| Less distributions from net investment income |
(0.59 | ) | (0.62 | ) | (0.44 | ) | (0.50 | ) | (0.46 | ) | ||||||||||
|
|
|
| ||||||||||||||||||
| Net asset value, end of year |
$21.41 | $24.22 | $28.60 | $18.39 | $21.86 | |||||||||||||||
|
|
|
| ||||||||||||||||||
| Total returnc |
(9.10)% | (13.34)% | 58.16% | (13.88)% | (5.34)% | |||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||
| 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% | —% | |||||||||||||||
| Net investment income |
2.67% | 2.01% | 1.78% | 2.32% | 2.34% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$29,980 | $38,751 | $34,317 | $14,712 | $17,488 | |||||||||||||||
| Portfolio turnover ratee |
5.85%f | 10.09%f | 11.45%f | 11.42%f | 7.11% | |||||||||||||||
| aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
dRatios are annualized for periods less than one year.
ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
|
| |||||||||||||||||||
| fPortfolio turnover rate excluding cash creations was as follows: | 5.85% | 9.63% | 11.45% | 11.42% | — | |||||||||||||||
| 136 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE Asia ex Japan ETF
| Industry | Shares | Value | ||||||||
| Common Stocks 99.5% |
||||||||||
| Cambodia 0.0%† |
||||||||||
| aNagaCorp Ltd. |
Hotels, Restaurants & Leisure | 8,075 | $ | 6,295 | ||||||
|
|
|
|||||||||
| China 35.4% | ||||||||||
| 360 DigiTech, Inc., ADR |
Consumer Finance | 532 | 10,321 | |||||||
| 360 Security Technology, Inc., Class A |
Software | 2,500 | 6,353 | |||||||
| b3SBio, Inc., Class A |
Biotechnology | 7,000 | 6,973 | |||||||
| aAAC Technologies Holdings, Inc., Class H |
Electronic Equipment, Instruments & Components | 3,500 | 8,632 | |||||||
| ADAMA Ltd., Class A |
Chemicals | 400 | 531 | |||||||
| Addsino Co. Ltd., Class A |
Communications Equipment | 700 | 1,147 | |||||||
| aAdvanced Micro-Fabrication Equipment, Inc. China, Class A |
Semiconductors & Semiconductor Equipment | 175 | 3,759 | |||||||
| AECC Aero-Engine Control Co. Ltd., Class A |
Aerospace & Defense | 400 | 1,419 | |||||||
| AECC Aviation Power Co. Ltd., Class A |
Aerospace & Defense | 900 | 5,655 | |||||||
| aAgile Group Holdings Ltd. |
Real Estate Management & Development | 8,000 | 1,783 | |||||||
| Agricultural Bank of China Ltd., Class A |
Banks | 33,300 | 15,081 | |||||||
| Agricultural Bank of China Ltd., Class H |
Banks | 147,000 | 54,493 | |||||||
| Aier Eye Hospital Group Co. Ltd., Class A |
Health Care Providers & Services | 2,504 | 11,329 | |||||||
| aAir China Ltd., Class A |
Airlines | 2,100 | 3,272 | |||||||
| aAir China Ltd., Class H |
Airlines | 8,000 | 7,154 | |||||||
| Airtac International Group, Class A |
Machinery | 770 | 29,968 | |||||||
| a,bAkeso, Inc. |
Biotechnology | 2,000 | 10,293 | |||||||
| aAlibaba Group Holding Ltd., Class A |
Internet & Direct Marketing Retail | 70,600 | 902,966 | |||||||
| bA-Living Smart City Services Co. Ltd., Class H |
Commercial Services & Supplies | 3,500 | 3,036 | |||||||
| All Winner Technology Co. Ltd., Class A, A |
Semiconductors & Semiconductor Equipment | 400 | 1,590 | |||||||
| aAlpha Group, Class A |
Leisure Products | 400 | 369 | |||||||
| Aluminum Corp. of China Ltd., Class A |
Metals & Mining | 4,200 | 3,376 | |||||||
| Aluminum Corp. of China Ltd., Class H |
Metals & Mining | 20,000 | 10,140 | |||||||
| aAmlogic Shanghai Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 175 | 2,144 | |||||||
| aAn Hui Wenergy Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 1,100 | 790 | |||||||
| Angang Steel Co. Ltd., Class A |
Metals & Mining | 1,800 | 778 | |||||||
| Angang Steel Co. Ltd., Class H |
Metals & Mining | 8,000 | 2,558 | |||||||
| Angel Yeast Co. Ltd., Class A |
Food Products | 400 | 2,432 | |||||||
| bAngelalign Technology, Inc. |
Health Care Equipment & Supplies | 200 | 2,973 | |||||||
| Anhui Anke Biotechnology Group Co. Ltd., Class A |
Pharmaceuticals | 532 | 856 | |||||||
| Anhui Conch Cement Co. Ltd., Class A |
Construction Materials | 1,400 | 5,759 | |||||||
| Anhui Conch Cement Co. Ltd., Class H |
Construction Materials | 5,690 | 19,716 | |||||||
| Anhui Expressway Co. Ltd., Class A |
Transportation Infrastructure | 400 | 520 | |||||||
| Anhui Expressway Co. Ltd., Class H |
Transportation Infrastructure | 2,000 | 2,015 | |||||||
| Anhui Gujing Distillery Co. Ltd., Class A |
Beverages | 100 | 4,310 | |||||||
| Anhui Gujing Distillery Co. Ltd., Class B |
Beverages | 600 | 10,708 | |||||||
| Anhui Zhongding Sealing Parts Co. Ltd., Class A |
Automobile Components | 400 | 740 | |||||||
| Anjoy Foods Group Co. Ltd., Class A |
Food Products | 100 | 2,383 | |||||||
| Anker Innovations Technology Co. Ltd., Class A, A |
Technology Hardware, Storage & Peripherals | 100 | 967 | |||||||
| ANTA Sports Products Ltd., Class A |
Textiles, Apparel & Luxury Goods | 5,600 | 81,325 | |||||||
| Apeloa Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 400 | 1,241 | |||||||
| Asymchem Laboratories Tianjin Co. Ltd., Class A |
Pharmaceuticals | 40 | 777 | |||||||
| Autohome, Inc., ADR |
Software | 301 | 10,074 | |||||||
| Avary Holding Shenzhen Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 400 | 1,807 | |||||||
| AVIC Industry-Finance Holdings Co. Ltd., Class A |
Financial Services | 3,200 | 1,910 | |||||||
| AviChina Industry & Technology Co. Ltd., Class H |
Aerospace & Defense | 13,000 | 6,823 | |||||||
| AVICOPTER PLC, Class A |
Aerospace & Defense | 200 | 1,232 | |||||||
| bBAIC Motor Corp. Ltd., Class H |
Automobiles | 12,500 | 3,471 | |||||||
| aBaidu, Inc., Class A |
Interactive Media & Services | 10,850 | 205,529 | |||||||
| Bank of Beijing Co. Ltd., Class A |
Banks | 7,000 | 4,485 | |||||||
| Bank of Changsha Co. Ltd., Class A |
Banks | 1,100 | 1,267 | |||||||
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137 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| Bank of Chengdu Co. Ltd., Class A |
Banks | 400 | $ | 790 | ||||||
| Bank of China Ltd., Class A |
Banks | 15,800 | 7,777 | |||||||
| Bank of China Ltd., Class H |
Banks | 371,000 | 142,257 | |||||||
| Bank of Communications Co. Ltd., Class A |
Banks | 14,000 | 10,417 | |||||||
| Bank of Communications Co. Ltd., Class H |
Banks | 37,000 | 23,284 | |||||||
| Bank of Guiyang Co. Ltd., Class A |
Banks | 1,100 | 883 | |||||||
| Bank of Hangzhou Co. Ltd., Class A |
Banks | 2,100 | 3,550 | |||||||
| Bank of Jiangsu Co. Ltd., Class A |
Banks | 2,080 | 2,126 | |||||||
| Bank of Nanjing Co. Ltd., Class A |
Banks | 3,200 | 4,175 | |||||||
| Bank of Ningbo Co. Ltd., Class A |
Banks | 2,480 | 9,862 | |||||||
| Bank of Qingdao Co. Ltd., Class A |
Banks | 1,400 | 669 | |||||||
| Bank of Shanghai Co. Ltd., Class A |
Banks | 5,380 | 4,693 | |||||||
| aBank of Zhengzhou Co. Ltd., Class A |
Banks | 3,084 | 1,019 | |||||||
| Baoshan Iron & Steel Co. Ltd., Class A |
Metals & Mining | 6,300 | 5,725 | |||||||
| BBMG Corp., Class A |
Construction Materials | 2,100 | 749 | |||||||
| BBMG Corp., Class H |
Construction Materials | 14,000 | 1,819 | |||||||
| aBeiGene Ltd. |
Biotechnology | 3,000 | 49,453 | |||||||
| Beijing Capital Development Co. Ltd., Class A |
Real Estate Management & Development | 700 | 465 | |||||||
| Beijing Capital Eco-Environment Protection Group Co. Ltd., Class A |
Water Utilities | 2,800 | 1,211 | |||||||
| aBeijing Capital International Airport Co. Ltd., Class H |
Transportation Infrastructure | 10,000 | 7,363 | |||||||
| aBeijing Dabeinong Technology Group Co. Ltd., Class A |
Food Products | 1,100 | 1,251 | |||||||
| Beijing Easpring Material Technology Co. Ltd., Class A |
Chemicals | 200 | 1,675 | |||||||
| aBeijing E-Hualu Information Technology Co. Ltd., Class A |
Software | 400 | 2,203 | |||||||
| Beijing Enlight Media Co. Ltd., Class A |
Entertainment | 1,100 | 1,424 | |||||||
| Beijing Enterprises Holdings Ltd., Class H |
Industrial Conglomerates | 2,500 | 8,997 | |||||||
| Beijing Haixin Energy Technology Co. Ltd., Class A |
Chemicals | 700 | 408 | |||||||
| aBeijing Jetsen Technology Co. Ltd., Class A, A |
Software | 1,100 | 1,075 | |||||||
| Beijing Jingneng Clean Energy Co. Ltd., Class H |
Independent Power Producers & Energy Traders | 10,000 | 2,382 | |||||||
| Beijing Kingsoft Office Software, Inc., Class A |
Software | 124 | 8,541 | |||||||
| Beijing New Building Materials PLC, Class A |
Building Products | 700 | 2,736 | |||||||
| aBeijing Orient National Communication Science & Technology Co. Ltd., Class A |
Software | 400 | 878 | |||||||
| Beijing Originwater Technology Co. Ltd., Class A |
Commercial Services & Supplies | 247 | 182 | |||||||
| Beijing Shiji Information Technology Co. Ltd., Class A |
Software | 700 | 2,616 | |||||||
| Beijing Shougang Co. Ltd., Class A |
Metals & Mining | 1,800 | 999 | |||||||
| Beijing Shunxin Agriculture Co. Ltd., Class A |
Beverages | 400 | 2,068 | |||||||
| Beijing Sinnet Technology Co. Ltd., Class A |
IT Services | 700 | 1,367 | |||||||
| Beijing SL Pharmaceutical Co. Ltd., Class A |
Biotechnology | 400 | 502 | |||||||
| Beijing Tongrentang Co. Ltd., Class A |
Pharmaceuticals | 500 | 4,015 | |||||||
| Beijing Ultrapower Software Co. Ltd., Class A |
IT Services | 700 | 960 | |||||||
| Beijing United Information Technology Co. Ltd., Class A, A |
Trading Companies & Distributors | 145 | 1,751 | |||||||
| Beijing Wantai Biological Pharmacy Enterprise Co. Ltd., Class A |
Biotechnology | 145 | 2,452 | |||||||
| Beijing Yanjing Brewery Co. Ltd., Class A |
Beverages | 700 | 1,428 | |||||||
| Beijing Yuanliu Hongyuan Electronic Technology Co. Ltd., Class A, A |
Electronic Equipment, Instruments & Components | 100 | 1,121 | |||||||
| Beijing Zhong Ke San Huan High-Tech Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 445 | 849 | |||||||
| BGI Genomics Co. Ltd., Class A, A |
Biotechnology | 100 | 1,005 | |||||||
| 138 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| aBilibili, Inc., Class Z |
Entertainment | 1,120 | $ | 27,051 | ||||||
| bBlue Moon Group Holdings Ltd. |
Household Products | 3,500 | 2,234 | |||||||
| aBlue Sail Medical Co. Ltd., Class A |
Health Care Equipment & Supplies | 400 | 458 | |||||||
| Bluefocus Intelligent Communications Group Co. Ltd., Class A |
Media | 700 | 974 | |||||||
| Bluestar Adisseo Co., Class A |
Chemicals | 400 | 514 | |||||||
| BOC Hong Kong Holdings Ltd. |
Banks | 17,000 | 52,949 | |||||||
| BOC International China Co. Ltd., Class A |
Capital Markets | 400 | 626 | |||||||
| BOE Technology Group Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 13,000 | 8,405 | |||||||
| BOE Technology Group Co. Ltd., Class B |
Electronic Equipment, Instruments & Components | 4,900 | 2,210 | |||||||
| Bright Dairy & Food Co. Ltd., Class A |
Food Products | 400 | 623 | |||||||
| BTG Hotels Group Co. Ltd., Class A |
Hotels, Restaurants & Leisure | 400 | 1,359 | |||||||
| bBudweiser Brewing Co. APAC Ltd., Class H |
Beverages | 8,400 | 25,628 | |||||||
| BYD Co. Ltd., Class A |
Automobiles | 600 | 22,369 | |||||||
| BYD Co. Ltd., Class H |
Automobiles | 4,500 | 131,733 | |||||||
| BYD Electronic International Co. Ltd. |
Communications Equipment | 3,500 | 10,879 | |||||||
| By-health Co. Ltd., Class A |
Personal Products | 700 | 2,176 | |||||||
| C&D International Investment Group Ltd. |
Real Estate Management & Development | 3,000 | 9,841 | |||||||
| C&S Paper Co. Ltd., Class A |
Household Products | 400 | 705 | |||||||
| Caitong Securities Co. Ltd., Class A |
Capital Markets | 1,820 | 1,990 | |||||||
| Camel Group Co. Ltd., Class A |
Electrical Equipment | 460 | 660 | |||||||
| Canmax Technologies Co. Ltd., Class A, A |
Chemicals | 200 | 1,491 | |||||||
| CanSino Biologics, Inc., Class A |
Pharmaceuticals | 23 | 381 | |||||||
| bCanSino Biologics, Inc., Class H |
Pharmaceuticals | 400 | 2,140 | |||||||
| CECEP Solar Energy Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 1,100 | 1,097 | |||||||
| CECEP Wind-Power Corp., Class A |
Independent Power Producers & Energy Traders | 2,340 | 1,319 | |||||||
| Central China Securities Co. Ltd., Class A |
Capital Markets | 1,100 | 596 | |||||||
| Central China Securities Co. Ltd., Class H |
Capital Markets | 4,000 | 591 | |||||||
| CETC Cyberspace Security Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 400 | 2,269 | |||||||
| CGN Power Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 2,800 | 1,170 | |||||||
| bCGN Power Co. Ltd., Class H |
Independent Power Producers & Energy Traders | 56,000 | 13,412 | |||||||
| Changchun High & New Technology Industry Group, Inc., Class A |
Pharmaceuticals | 100 | 2,378 | |||||||
| Changjiang Securities Co. Ltd., Class A |
Capital Markets | 2,100 | 1,703 | |||||||
| Changzhou Xingyu Automotive Lighting Systems Co. Ltd., Class A |
Automobile Components | 100 | 1,746 | |||||||
| Chaozhou Three-Circle Group Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 700 | 3,068 | |||||||
| Chengdu Xingrong Environment Co. Ltd., Class A |
Water Utilities | 1,400 | 1,040 | |||||||
| Chengxin Lithium Group Co. Ltd., Class A, A |
Paper & Forest Products | 400 | 2,011 | |||||||
| China Baoan Group Co. Ltd., Class A |
Industrial Conglomerates | 1,100 | 1,821 | |||||||
| bChina Bohai Bank Co. Ltd., Class H |
Banks | 14,000 | 2,390 | |||||||
| China Cinda Asset Management Co. Ltd., Class H |
Capital Markets | 46,000 | 5,801 | |||||||
| China CITIC Bank Corp. Ltd., Class A |
Banks | 3,900 | 3,084 | |||||||
| China CITIC Bank Corp. Ltd., Class H |
Banks | 42,000 | 21,134 | |||||||
| China Coal Energy Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 1,800 | 2,071 | |||||||
| China Coal Energy Co. Ltd., Class H |
Oil, Gas & Consumable Fuels | 9,000 | 6,822 | |||||||
| China Communications Services Corp. Ltd., Class H |
Diversified Telecommunication Services | 14,000 | 6,884 | |||||||
| China Conch Venture Holdings Ltd. |
Construction & Engineering | 7,440 | 12,985 | |||||||
| China Construction Bank Corp., Class A |
Banks | 3,500 | 3,027 | |||||||
| China Construction Bank Corp., Class H |
Banks | 448,000 | 290,488 | |||||||
| China CSSC Holdings Ltd., Class A |
Machinery | 1,600 | 5,452 | |||||||
| bChina East Education Holdings Ltd., Class A |
Diversified Consumer Services | 2,000 | 1,182 | |||||||
| aChina Eastern Airlines Corp. Ltd., Class A |
Airlines | 3,900 | 2,925 | |||||||
| aChina Eastern Airlines Corp. Ltd., Class H |
Airlines | 8,000 | 3,159 | |||||||
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139 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| China Energy Engineering Corp. Ltd. |
Construction & Engineering | 11,600 | $ | 4,071 | ||||||
| China Energy Engineering Corp. Ltd., Class H |
Construction & Engineering | 14,000 | 1,748 | |||||||
| China Everbright Bank Co. Ltd., Class A |
Banks | 15,100 | 6,618 | |||||||
| China Everbright Bank Co. Ltd., Class H |
Banks | 15,000 | 4,548 | |||||||
| aChina Evergrande Group, Class A |
Real Estate Management & Development | 24,000 | 2,347 | |||||||
| bChina Feihe Ltd. |
Food Products | 20,000 | 15,006 | |||||||
| China Galaxy Securities Co. Ltd., Class A |
Capital Markets | 700 | 1,024 | |||||||
| China Galaxy Securities Co. Ltd., Class H |
Capital Markets | 18,500 | 9,309 | |||||||
| China Great Wall Securities Co. Ltd., Class A |
Capital Markets | 700 | 845 | |||||||
| China Greatwall Technology Group Co. Ltd., Class A |
Technology Hardware, Storage & Peripherals | 1,100 | 1,983 | |||||||
| China Green Electricity Investment of Tianjin Co. Ltd., Class A, A |
Real Estate Management & Development | 700 | 1,169 | |||||||
| China Hongqiao Group Ltd. |
Metals & Mining | 11,000 | 10,538 | |||||||
| a,bChina Huarong Asset Management Co. Ltd., Class H |
Capital Markets | 70,000 | 3,968 | |||||||
| China International Capital Corp. Ltd., Class A |
Capital Markets | 400 | 2,265 | |||||||
| bChina International Capital Corp. Ltd., Class H |
Capital Markets | 7,700 | 15,439 | |||||||
| China International Marine Containers Group Co. Ltd., Class A |
Machinery | 750 | 831 | |||||||
| China International Marine Containers Group Co. Ltd., Class H |
Machinery | 3,700 | 2,545 | |||||||
| China Jinmao Holdings Group Ltd., Class A |
Real Estate Management & Development | 32,000 | 6,237 | |||||||
| China Jushi Co. Ltd., Class A |
Construction Materials | 1,571 | 3,342 | |||||||
| China Lesso Group Holdings Ltd. |
Building Products | 5,000 | 4,471 | |||||||
| China Life Insurance Co. Ltd., Class H |
Insurance | 36,000 | 59,160 | |||||||
| a,bChina Literature Ltd., Class A |
Media | 1,400 | 7,223 | |||||||
| China Longyuan Power Group Corp. Ltd., Class H |
Independent Power Producers & Energy Traders | 17,000 | 19,426 | |||||||
| China Medical System Holdings Ltd. |
Pharmaceuticals | 6,000 | 9,478 | |||||||
| China Meheco Co. Ltd., Class A |
Trading Companies & Distributors | 560 | 1,119 | |||||||
| China Meidong Auto Holdings Ltd. |
Specialty Retail | 2,000 | 4,316 | |||||||
| China Merchants Bank Co. Ltd., Class A |
Banks | 7,100 | 35,431 | |||||||
| China Merchants Bank Co. Ltd., Class H |
Banks | 18,000 | 91,950 | |||||||
| China Merchants Energy Shipping Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 3,500 | 3,573 | |||||||
| China Merchants Expressway Network & Technology Holdings Co. Ltd., Class A |
Transportation Infrastructure | 700 | 863 | |||||||
| China Merchants Port Holdings Co. Ltd. |
Transportation Infrastructure | 7,000 | 10,736 | |||||||
| China Merchants Property Operation & Service Co. Ltd., Class A |
Real Estate Management & Development | 400 | 890 | |||||||
| China Merchants Securities Co. Ltd., Class A |
Capital Markets | 2,720 | 5,462 | |||||||
| bChina Merchants Securities Co. Ltd., Class H |
Capital Markets | 2,200 | 2,108 | |||||||
| China Merchants Shekou Industrial Zone Holdings Co. Ltd., Class A |
Real Estate Management & Development | 2,500 | 4,958 | |||||||
| China Minsheng Banking Corp. Ltd., Class A |
Banks | 12,300 | 6,179 | |||||||
| China Minsheng Banking Corp. Ltd., Class H |
Banks | 31,500 | 10,794 | |||||||
| China National Accord Medicines Corp. Ltd., Class B |
Health Care Providers & Services | 400 | 881 | |||||||
| China National Building Material Co. Ltd., Class H |
Construction Materials | 22,750 | 18,664 | |||||||
| China National Chemical Engineering Co. Ltd., Class A |
Construction & Engineering | 2,100 | 2,838 | |||||||
| China National Nuclear Power Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 5,800 | 5,397 | |||||||
| China National Software & Service Co. Ltd., Class A |
Software | 200 | 2,005 | |||||||
| aChina Nonferrous Metal Industry’s Foreign Engineering & Construction Co. Ltd., Class A |
Metals & Mining | 700 | 559 | |||||||
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Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| China Northern Rare Earth Group High-Tech Co. Ltd., Class A |
Metals & Mining | 1,400 | $ | 5,319 | ||||||
| China Oilfield Services Ltd., Class A |
Energy Equipment & Services | 700 | 1,486 | |||||||
| China Oilfield Services Ltd., Class H |
Energy Equipment & Services | 8,000 | 8,204 | |||||||
| China Overseas Land & Investment Ltd., Class A |
Real Estate Management & Development | 18,500 | 44,683 | |||||||
| China Pacific Insurance Group Co. Ltd., Class A |
Insurance | 2,500 | 9,436 | |||||||
| China Pacific Insurance Group Co. Ltd., Class H |
Insurance | 12,600 | 33,466 | |||||||
| China Petroleum & Chemical Corp., Class A |
Oil, Gas & Consumable Fuels | 11,600 | 9,493 | |||||||
| China Petroleum & Chemical Corp., Class H |
Oil, Gas & Consumable Fuels | 118,000 | 69,748 | |||||||
| China Railway Group Ltd., Class A |
Construction & Engineering | 7,000 | 7,013 | |||||||
| China Railway Group Ltd., Class H |
Construction & Engineering | 21,000 | 12,814 | |||||||
| China Railway Signal & Communication Corp. Ltd., Class A |
Electronic Equipment, Instruments & Components | 2,333 | 1,841 | |||||||
| bChina Railway Signal & Communication Corp. Ltd., Class H |
Electronic Equipment, Instruments & Components | 7,000 | 2,577 | |||||||
| aChina Rare Earth Resources & Technology Co. Ltd., Class A, A |
Metals & Mining | 400 | 1,967 | |||||||
| China Reinsurance Group Corp., Class H |
Insurance | 35,000 | 2,452 | |||||||
| China Resources Boya Bio-pharmaceutical Group Co. Ltd., Class A, A |
Biotechnology | 200 | 1,017 | |||||||
| China Resources Cement Holdings Ltd. |
Construction Materials | 12,000 | 5,885 | |||||||
| China Resources Double Crane Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 400 | 1,004 | |||||||
| China Resources Microelectronics Ltd., Class A, A |
Semiconductors & Semiconductor Equipment | 343 | 3,020 | |||||||
| bChina Resources Mixc Lifestyle Services Ltd. |
Real Estate Management & Development | 2,600 | 13,662 | |||||||
| bChina Resources Pharmaceutical Group Ltd., Class A |
Pharmaceuticals | 7,500 | 5,943 | |||||||
| China Resources Power Holdings Co. Ltd. |
Independent Power Producers & Energy Traders | 8,800 | 18,744 | |||||||
| China Resources Sanjiu Medical & Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 400 | 3,346 | |||||||
| aChina Ruyi Holdings Ltd. |
Entertainment | 16,000 | 4,178 | |||||||
| China Shenhua Energy Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 2,500 | 10,255 | |||||||
| China Shenhua Energy Co. Ltd., Class H |
Oil, Gas & Consumable Fuels | 16,563 | 52,116 | |||||||
| China South Publishing & Media Group Co. Ltd., Class A |
Media | 700 | 1,186 | |||||||
| aChina Southern Airlines Co. Ltd., Class A |
Airlines | 3,900 | 4,469 | |||||||
| aChina Southern Airlines Co. Ltd., Class H |
Airlines | 8,000 | 5,707 | |||||||
| China Southern Power Grid Energy Efficiency&Clean Energy Co. Ltd., Class A, A |
Commercial Services & Supplies | 1,100 | 1,243 | |||||||
| China State Construction Engineering Corp. Ltd., Class A |
Construction & Engineering | 14,700 | 12,415 | |||||||
| China Suntien Green Energy Corp. Ltd., Class H |
Oil, Gas & Consumable Fuels | 9,000 | 3,932 | |||||||
| China Taiping Insurance Holdings Co. Ltd. |
Insurance | 7,000 | 7,437 | |||||||
| China Three Gorges Renewables Group Co. Ltd., Class A, A |
Independent Power Producers & Energy Traders | 8,800 | 7,022 | |||||||
| China Tourism Group Duty Free Corp. Ltd., Class A |
Hotels, Restaurants & Leisure | 600 | 16,010 | |||||||
| a,bChina Tourism Group Duty Free Corp. Ltd., Class H |
Specialty Retail | 300 | 7,418 | |||||||
| bChina Tower Corp. Ltd., Class H |
Diversified Telecommunication Services | 232,000 | 28,077 | |||||||
| aChina TransInfo Technology Co. Ltd., Class A |
IT Services | 400 | 783 | |||||||
| aChina Travel International Investment Hong Kong Ltd., Class A |
Hotels, Restaurants & Leisure | 14,000 | 2,871 | |||||||
| China United Network Communications Ltd., Class A |
Wireless Telecommunication Services | 8,800 | 6,945 | |||||||
| China Vanke Co. Ltd., Class A |
Real Estate Management & Development | 3,500 | 7,767 | |||||||
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Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| China Vanke Co. Ltd., Class H |
Real Estate Management & Development | 9,500 | $ | 14,982 | ||||||
| China World Trade Center Co. Ltd., Class A, A |
Real Estate Management & Development | 400 | 993 | |||||||
| China Yangtze Power Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 7,000 | 21,661 | |||||||
| China Zhenhua Group Science & Technology Co. Ltd., Class A, A |
Electronic Equipment, Instruments & Components | 200 | 2,623 | |||||||
| aChina Zheshang Bank Co. Ltd., Class A |
Banks | 2,500 | 1,041 | |||||||
| Chinalin Securities Co. Ltd., Class A, A |
Capital Markets | 400 | 854 | |||||||
| Chinese Universe Publishing & Media Group Co. Ltd., Class A |
Media | 400 | 722 | |||||||
| Chongqing Brewery Co. Ltd., Class A |
Beverages | 200 | 3,640 | |||||||
| Chongqing Changan Automobile Co. Ltd., Class A |
Automobiles | 2,820 | 4,895 | |||||||
| Chongqing Changan Automobile Co. Ltd., Class B |
Automobiles | 8,338 | 3,664 | |||||||
| Chongqing Fuling Zhacai Group Co. Ltd., Class A |
Food Products | 400 | 1,475 | |||||||
| Chongqing Rural Commercial Bank Co. Ltd., Class A |
Banks | 1,800 | 962 | |||||||
| Chongqing Rural Commercial Bank Co. Ltd., Class H |
Banks | 12,000 | 4,372 | |||||||
| Chongqing Water Group Co. Ltd., Class A |
Water Utilities | 400 | 313 | |||||||
| Chongqing Zhifei Biological Products Co. Ltd., Class A |
Biotechnology | 600 | 7,158 | |||||||
| Chow Tai Fook Jewellery Group Ltd., Class A |
Specialty Retail | 8,800 | 17,466 | |||||||
| CIFI Holdings Group Co. Ltd., Class A |
Real Estate Management & Development | 20,880 | 2,022 | |||||||
| CITIC Ltd., Class B |
Industrial Conglomerates | 23,000 | 26,897 | |||||||
| Citic Pacific Special Steel Group Co. Ltd., Class A |
Metals & Mining | 1,880 | 4,867 | |||||||
| CITIC Securities Co. Ltd., Class A |
Capital Markets | 4,395 | 13,107 | |||||||
| CITIC Securities Co. Ltd., Class H |
Capital Markets | 11,000 | 23,485 | |||||||
| CMOC Group Ltd., Class A |
Metals & Mining | 3,500 | 3,053 | |||||||
| CMOC Group Ltd., Class H |
Metals & Mining | 21,000 | 12,707 | |||||||
| CMST Development Co. Ltd., Class A |
Air Freight & Logistics | 400 | 308 | |||||||
| CNGR Advanced Material Co. Ltd., Class A |
Chemicals | 200 | 2,087 | |||||||
| CNOOC Energy Technology & Services Ltd., Class A |
Energy Equipment & Services | 2,500 | 1,201 | |||||||
| Contemporary Amperex Technology Co. Ltd., Class A |
Electrical Equipment | 800 | 47,302 | |||||||
| COSCO SHIPPING Development Co. Ltd., Class A |
Marine Transportation | 2,800 | 1,007 | |||||||
| COSCO SHIPPING Development Co. Ltd., Class H |
Marine Transportation | 18,000 | 2,385 | |||||||
| aCOSCO SHIPPING Energy Transportation Co. Ltd., Class A |
Marine Transportation | 1,100 | 2,169 | |||||||
| aCOSCO SHIPPING Energy Transportation Co. Ltd., Class H |
Marine Transportation | 6,000 | 6,191 | |||||||
| COSCO SHIPPING Holdings Co. Ltd., Class A |
Marine Transportation | 4,600 | 7,388 | |||||||
| COSCO SHIPPING Holdings Co. Ltd., Class H |
Marine Transportation | 15,950 | 17,941 | |||||||
| Country Garden Holdings Co. Ltd. |
Real Estate Management & Development | 60,000 | 16,892 | |||||||
| Country Garden Services Holdings Co. Ltd. |
Commercial Services & Supplies | 9,300 | 16,088 | |||||||
| CRRC Corp. Ltd., Class A |
Machinery | 8,100 | 7,219 | |||||||
| CRRC Corp. Ltd., Class H |
Machinery | 21,000 | 11,450 | |||||||
| CSC Financial Co. Ltd., Class A |
Capital Markets | 1,800 | 6,718 | |||||||
| bCSC Financial Co. Ltd., Class H |
Capital Markets | 4,500 | 4,385 | |||||||
| CSG Holding Co. Ltd., Class A |
Construction Materials | 700 | 684 | |||||||
| CSG Holding Co. Ltd., Class B |
Construction Materials | 5,401 | 2,043 | |||||||
| CSPC Pharmaceutical Group Ltd., Class A |
Pharmaceuticals | 40,000 | 39,338 | |||||||
| Daan Gene Co. Ltd., Class A |
Biotechnology | 612 | 1,436 | |||||||
| aDada Nexus Ltd., Class A, ADR |
Consumer Staples Distribution & Retail | 343 | 2,905 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| bDali Foods Group Co. Ltd. |
Food Products | 11,000 | $ | 4,596 | ||||||
| Daqin Railway Co. Ltd., Class A |
Ground Transportation | 5,300 | 5,549 | |||||||
| aDaqo New Energy Corp., ADR |
Semiconductors & Semiconductor Equipment | 280 | 13,115 | |||||||
| aDatang International Power Generation Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 2,800 | 1,235 | |||||||
| aDatang International Power Generation Co. Ltd., Class H |
Independent Power Producers & Energy Traders | 14,000 | 2,532 | |||||||
| DHC Software Co. Ltd., Class A |
IT Services | 1,100 | 1,329 | |||||||
| Dian Diagnostics Group Co. Ltd., Class A |
Health Care Providers & Services | 400 | 1,669 | |||||||
| Digital China Information Service Co. Ltd., Class A |
IT Services | 400 | 816 | |||||||
| Do-Fluoride New Materials Co. Ltd., Class A |
Chemicals | 400 | 1,934 | |||||||
| Dong-E-E-Jiao Co. Ltd., Class A |
Pharmaceuticals | 200 | 1,543 | |||||||
| Dongfang Electric Corp. Ltd., Class A |
Electrical Equipment | 1,100 | 3,037 | |||||||
| Dongfang Electric Corp. Ltd., Class H |
Electrical Equipment | 1,800 | 2,908 | |||||||
| Dongfeng Motor Group Co. Ltd., Class H |
Automobiles | 14,000 | 6,563 | |||||||
| Dongguan Development Holdings Co. Ltd., Class A |
Transportation Infrastructure | 400 | 567 | |||||||
| Dongxing Securities Co. Ltd., Class A |
Capital Markets | 1,100 | 1,346 | |||||||
| a,bEast Buy Holding Ltd. |
Diversified Consumer Services | 1,000 | 4,312 | |||||||
| East Group Co. Ltd., Class A |
Electrical Equipment | 400 | 453 | |||||||
| East Money Information Co. Ltd., Class A |
Capital Markets | 4,888 | 14,257 | |||||||
| Easyhome New Retail Group Co. Ltd., Class A, A |
Broadline Retail | 1,100 | 742 | |||||||
| Ecovacs Robotics Co. Ltd., Class A |
Household Durables | 200 | 2,406 | |||||||
| ENN Energy Holdings Ltd. |
Gas Utilities | 3,600 | 49,346 | |||||||
| ENN Natural Gas Co. Ltd., Class A |
Chemicals | 1,100 | 3,340 | |||||||
| bESR Group Ltd., Class H |
Real Estate Management & Development | 9,800 | 17,578 | |||||||
| Eternal Asia Supply Chain Management Ltd., Class A |
Commercial Services & Supplies | 900 | 773 | |||||||
| Eve Energy Co. Ltd., Class A |
Electrical Equipment | 680 | 6,902 | |||||||
| Everbright Securities Co. Ltd., Class A |
Capital Markets | 1,400 | 3,107 | |||||||
| bEverbright Securities Co. Ltd., Class H |
Capital Markets | 1,400 | 951 | |||||||
| a,bEvergrande Property Services Group Ltd. |
Real Estate Management & Development | 24,000 | 3,253 | |||||||
| aFangda Carbon New Material Co. Ltd., Class A |
Electrical Equipment | 1,460 | 1,369 | |||||||
| FAW Jiefang Group Co. Ltd. |
Automobiles | 1,100 | 1,329 | |||||||
| Fiberhome Telecommunication Technologies Co. Ltd., Class A |
Communications Equipment | 400 | 1,142 | |||||||
| Financial Street Holdings Co. Ltd., Class A |
Real Estate Management & Development | 1,100 | 804 | |||||||
| First Capital Securities Co. Ltd., Class A |
Capital Markets | 1,400 | 1,217 | |||||||
| Flat Glass Group Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 400 | 1,998 | |||||||
| Flat Glass Group Co. Ltd., Class H |
Semiconductors & Semiconductor Equipment | 2,000 | 5,733 | |||||||
| Focus Media Information Technology Co. Ltd., Class A |
Technology Hardware, Storage & Peripherals | 5,500 | 5,502 | |||||||
| Foshan Haitian Flavouring & Food Co. Ltd., Class A |
Food Products | 1,400 | 15,604 | |||||||
| Fosun International Ltd. |
Industrial Conglomerates | 10,500 | 7,704 | |||||||
| Foxconn Industrial Internet Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 4,600 | 11,535 | |||||||
| Fujian Funeng Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 400 | 714 | |||||||
| Fujian Sunner Development Co. Ltd., Class A |
Food Products | 400 | 1,436 | |||||||
| aFull Truck Alliance Co. Ltd., ADR |
Ground Transportation | 3,017 | 22,959 | |||||||
| Fuyao Glass Industry Group Co. Ltd., Class A |
Automobile Components | 700 | 3,543 | |||||||
| bFuyao Glass Industry Group Co. Ltd., Class H |
Automobile Components | 2,800 | 12,199 | |||||||
| Ganfeng Lithium Group Co. Ltd., Class A |
Metals & Mining | 600 | 5,808 | |||||||
| bGanfeng Lithium Group Co. Ltd., Class H |
Metals & Mining | 1,400 | 8,703 | |||||||
| aGCL System Integration Technology Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 1,400 | 636 | |||||||
| aGCL Technology Holdings Ltd. |
Semiconductors & Semiconductor Equipment | 98,000 | 25,343 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| aGD Power Development Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 5,600 | $ | 3,099 | ||||||
| aGDS Holdings Ltd., Class A |
IT Services | 4,600 | 11,134 | |||||||
| GEM Co. Ltd., Class A |
Metals & Mining | 1,800 | 1,958 | |||||||
| Gemdale Corp., Class A |
Real Estate Management & Development | 1,800 | 2,202 | |||||||
| aGenscript Biotech Corp. |
Life Sciences Tools & Services | 4,770 | 10,208 | |||||||
| GF Securities Co. Ltd., Class A |
Capital Markets | 2,200 | 5,052 | |||||||
| GF Securities Co. Ltd., Class H |
Capital Markets | 5,600 | 7,933 | |||||||
| GigaDevice Semiconductor, Inc., Class A |
Semiconductors & Semiconductor Equipment | 100 | 1,777 | |||||||
| aGinlong Technologies Co. Ltd., Class A |
Electrical Equipment | 150 | 2,918 | |||||||
| Glarun Technology Co. Ltd., Class A |
Communications Equipment | 400 | 951 | |||||||
| GoerTek, Inc., Class A |
Electronic Equipment, Instruments & Components | 1,100 | 3,428 | |||||||
| Gotion High-tech Co. Ltd., Class A |
Electrical Equipment | 700 | 3,039 | |||||||
| aGrandjoy Holdings Group Co. Ltd., Class A |
Real Estate Management & Development | 700 | 380 | |||||||
| Great Wall Motor Co. Ltd., Class A |
Automobiles | 1,100 | 4,474 | |||||||
| Great Wall Motor Co. Ltd., Class H |
Automobiles | 12,000 | 14,813 | |||||||
| Greentown China Holdings Ltd. |
Real Estate Management & Development | 4,500 | 5,836 | |||||||
| GRG Banking Equipment Co. Ltd., Class A |
Technology Hardware, Storage & Peripherals | 700 | 1,250 | |||||||
| Guangdong Baolihua New Energy Stock Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 1,100 | 969 | |||||||
| aGuangdong Electric Power Development Co. Ltd., Class A, A |
Independent Power Producers & Energy Traders | 1,100 | 1,020 | |||||||
| aGuangdong Electric Power Development Co. Ltd., Class B |
Independent Power Producers & Energy Traders | 3,200 | 876 | |||||||
| Guangdong Golden Dragon Development, Inc., Class A |
Capital Markets | 400 | 805 | |||||||
| Guangdong Haid Group Co. Ltd., Class A |
Food Products | 600 | 5,096 | |||||||
| Guangdong HEC Technology Holding Co. Ltd., Class A |
Metals & Mining | 700 | 912 | |||||||
| Guangdong Kinlong Hardware Products Co. Ltd., Class A |
Building Products | 100 | 1,171 | |||||||
| Guangdong Xinbao Electrical Appliances Holdings Co. Ltd., Class A |
Household Durables | 400 | 993 | |||||||
| Guanghui Energy Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 2,100 | 2,829 | |||||||
| aGuangshen Railway Co. Ltd., Class A |
Ground Transportation | 1,100 | 386 | |||||||
| aGuangshen Railway Co. Ltd., Class H |
Ground Transportation | 8,000 | 1,478 | |||||||
| Guangxi Guiguan Electric Power Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 1,100 | 891 | |||||||
| Guangxi Liugong Machinery Co. Ltd., Class A |
Machinery | 500 | 493 | |||||||
| Guangzhou Automobile Group Co. Ltd., Class A |
Automobiles | 1,100 | 1,784 | |||||||
| Guangzhou Automobile Group Co. Ltd., Class H |
Automobiles | 16,000 | 10,089 | |||||||
| Guangzhou Baiyunshan Pharmaceutical Holdings Co. Ltd., Class A |
Pharmaceuticals | 400 | 1,927 | |||||||
| Guangzhou Baiyunshan Pharmaceutical Holdings Co. Ltd., Class H |
Pharmaceuticals | 1,100 | 3,391 | |||||||
| Guangzhou Haige Communications Group, Inc. Co., Class A |
Communications Equipment | 700 | 1,070 | |||||||
| Guangzhou Kingmed Diagnostics Group Co. Ltd., Class A |
Health Care Providers & Services | 200 | 2,566 | |||||||
| Guangzhou Shiyuan Electronic Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 100 | 1,090 | |||||||
| Guangzhou Tinci Materials Technology Co. Ltd., Class A |
Chemicals | 720 | 4,399 | |||||||
| Guangzhou Yuexiu Capital Holdings Group Co. Ltd., Class A, A |
Capital Markets | 980 | 940 | |||||||
| Guangzhou Zhujiang Brewery Co. Ltd., Class A |
Beverages | 400 | 552 | |||||||
| Guizhou Panjiang Refined Coal Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 700 | 737 | |||||||
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franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| Guizhou Xinbang Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 400 | $ | 293 | ||||||
| Guolian Securities Co. Ltd., Class A |
Capital Markets | 700 | 1,079 | |||||||
| Guosen Securities Co. Ltd., Class A |
Capital Markets | 1,600 | 2,183 | |||||||
| aGuosheng Financial Holding, Inc., Class A |
Electrical Equipment | 400 | 508 | |||||||
| Guotai Junan Securities Co. Ltd., Class A |
Capital Markets | 2,500 | 5,228 | |||||||
| bGuotai Junan Securities Co. Ltd., Class H |
Capital Markets | 3,600 | 4,375 | |||||||
| Guoyuan Securities Co. Ltd., Class A |
Capital Markets | 1,920 | 1,890 | |||||||
| aH World Group Ltd., ADR |
Hotels, Restaurants & Leisure | 1,015 | 49,715 | |||||||
| a,bHaidilao International Holding Ltd. |
Hotels, Restaurants & Leisure | 7,200 | 19,491 | |||||||
| Haier Smart Home Co. Ltd., Class A |
Household Durables | 2,100 | 6,935 | |||||||
| Haier Smart Home Co. Ltd., Class H |
Household Durables | 11,200 | 35,241 | |||||||
| Haisco Pharmaceutical Group Co. Ltd., Class A |
Pharmaceuticals | 400 | 1,451 | |||||||
| Haitian International Holdings Ltd. |
Machinery | 3,000 | 7,758 | |||||||
| Haitong Securities Co. Ltd., Class A |
Capital Markets | 3,200 | 4,105 | |||||||
| Haitong Securities Co. Ltd., Class H |
Capital Markets | 16,800 | 10,487 | |||||||
| aHang Zhou Great Star Industrial Co. Ltd., Class A |
Household Durables | 400 | 1,102 | |||||||
| Hangzhou Binjiang Real Estate Group Co. Ltd., Class A |
Real Estate Management & Development | 700 | 933 | |||||||
| Hangzhou First Applied Material Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 324 | 2,772 | |||||||
| Hangzhou Robam Appliances Co. Ltd., Class A |
Household Durables | 400 | 1,652 | |||||||
| Hangzhou Shunwang Technology Co. Ltd., Class A |
Entertainment | 400 | 901 | |||||||
| Hangzhou Silan Microelectronics Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 600 | 3,234 | |||||||
| Hangzhou Tigermed Consulting Co. Ltd., Class A |
Life Sciences Tools & Services | 300 | 4,181 | |||||||
| bHangzhou Tigermed Consulting Co. Ltd., Class H |
Life Sciences Tools & Services | 400 | 3,755 | |||||||
| Han’s Laser Technology Industry Group Co. Ltd., Class A |
Machinery | 400 | 1,768 | |||||||
| bHansoh Pharmaceutical Group Co. Ltd. |
Pharmaceuticals | 5,000 | 8,688 | |||||||
| Haohua Chemical Science & Technology Co. Ltd., Class A, A |
Chemicals | 400 | 2,601 | |||||||
| Hefei Meiya Optoelectronic Technology, Inc., Class A |
Machinery | 120 | 564 | |||||||
| Heilongjiang Agriculture Co. Ltd., Class A |
Food Products | 700 | 1,368 | |||||||
| Henan Shuanghui Investment & Development Co. Ltd., Class A |
Food Products | 1,200 | 4,533 | |||||||
| Hengan International Group Co. Ltd. |
Personal Products | 3,500 | 16,185 | |||||||
| Hengdian Group DMEGC Magnetics Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 700 | 2,096 | |||||||
| Hengli Petrochemical Co. Ltd., Class A |
Chemicals | 1,260 | 2,972 | |||||||
| Hengtong Optic-electric Co. Ltd., Class A |
Communications Equipment | 700 | 1,539 | |||||||
| Hengyi Petrochemical Co. Ltd., Class A |
Chemicals | 1,100 | 1,301 | |||||||
| Hesteel Co. Ltd., Class A |
Metals & Mining | 4,600 | 1,561 | |||||||
| Hithink RoyalFlush Information Network Co. Ltd., Class A |
Capital Markets | 200 | 5,950 | |||||||
| aHolitech Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 700 | 314 | |||||||
| Hopson Development Holdings Ltd. |
Real Estate Management & Development | 4,182 | 3,825 | |||||||
| Hoshine Silicon Industry Co. Ltd., Class A |
Chemicals | 200 | 2,418 | |||||||
| a,bHua Hong Semiconductor Ltd. |
Semiconductors & Semiconductor Equipment | 2,000 | 8,854 | |||||||
| Huadian Power International Corp. Ltd., Class A |
Independent Power Producers & Energy Traders | 1,800 | 1,518 | |||||||
| Huadian Power International Corp. Ltd., Class H |
Independent Power Producers & Energy Traders | 10,000 | 4,102 | |||||||
| Huadong Medicine Co. Ltd., Class A |
Health Care Providers & Services | 700 | 4,724 | |||||||
| Huafon Chemical Co. Ltd., Class A |
Chemicals | 1,400 | 1,521 | |||||||
| Huagong Tech Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 400 | 1,480 | |||||||
| Huaibei Mining Holdings Co. Ltd., Class A |
Metals & Mining | 700 | 1,382 | |||||||
| Hualan Biological Engineering, Inc., Class A |
Biotechnology | 700 | 2,225 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
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Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| aHuaneng Power International, Inc., Class A |
Independent Power Producers & Energy Traders | 2,800 | $ | 3,494 | ||||||
| aHuaneng Power International, Inc., Class H |
Independent Power Producers & Energy Traders | 22,000 | 11,547 | |||||||
| Huapont Life Sciences Co. Ltd., Class A |
Chemicals | 1,100 | 900 | |||||||
| Huatai Securities Co. Ltd., Class A |
Capital Markets | 2,700 | 5,021 | |||||||
| bHuatai Securities Co. Ltd., Class H |
Capital Markets | 8,200 | 9,370 | |||||||
| Huaxi Securities Co. Ltd., Class A |
Capital Markets | 700 | 839 | |||||||
| Huaxia Bank Co. Ltd., Class A |
Banks | 4,900 | 3,839 | |||||||
| Huaxin Cement Co. Ltd., Class A |
Construction Materials | 400 | 906 | |||||||
| Huaxin Cement Co. Ltd., Class H, H |
Construction Materials | 1,400 | 1,523 | |||||||
| Huayu Automotive Systems Co. Ltd., Class A |
Automobile Components | 1,100 | 2,681 | |||||||
| Hubei Biocause Pharmaceutical Co. Ltd., Class A |
Insurance | 700 | 342 | |||||||
| Hubei Energy Group Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 2,100 | 1,294 | |||||||
| Hubei Xingfa Chemicals Group Co. Ltd., Class A, A |
Chemicals | 400 | 1,774 | |||||||
| Huizhou Desay Sv Automotive Co. Ltd., Class A |
Household Durables | 200 | 3,231 | |||||||
| Humanwell Healthcare Group Co. Ltd., Class A |
Pharmaceuticals | 700 | 2,730 | |||||||
| Hunan Gold Corp. Ltd., Class A |
Metals & Mining | 400 | 882 | |||||||
| Hunan Valin Steel Co. Ltd., Class A |
Metals & Mining | 2,500 | 2,028 | |||||||
| Hundsun Technologies, Inc., Class A |
Software | 676 | 5,239 | |||||||
| aHUTCHMED China Ltd. |
Pharmaceuticals | 2,500 | 6,576 | |||||||
| a,bHygeia Healthcare Holdings Co. Ltd. |
Health Care Providers & Services | 1,400 | 9,952 | |||||||
| aHytera Communications Corp. Ltd., Class A |
Communications Equipment | 400 | 393 | |||||||
| Iflytek Co. Ltd., Class A |
Software | 800 | 7,418 | |||||||
| Imeik Technology Development Co. Ltd., Class A, A |
Biotechnology | 100 | 8,136 | |||||||
| Industrial & Commercial Bank of China Ltd., Class A |
Banks | 26,600 | 17,275 | |||||||
| Industrial & Commercial Bank of China Ltd., Class H |
Banks | 378,000 | 201,280 | |||||||
| Industrial Bank Co. Ltd., Class A |
Banks | 7,400 | 18,200 | |||||||
| Industrial Securities Co. Ltd., Class A |
Capital Markets | 3,240 | 2,887 | |||||||
| Ingenic Semiconductor Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 200 | 2,592 | |||||||
| Inmyshow Digital Technology Group Co. Ltd., Class A |
Media | 700 | 943 | |||||||
| Inner Mongolia BaoTou Steel Union Co. Ltd., Class A |
Metals & Mining | 13,300 | 3,660 | |||||||
| Inner Mongolia Dian Tou Energy Corp. Ltd., Class A |
Oil, Gas & Consumable Fuels | 400 | 783 | |||||||
| Inner Mongolia ERDOS Resources Co. Ltd., Class B |
Metals & Mining | 2,100 | 3,984 | |||||||
| Inner Mongolia Junzheng Energy & Chemical Industry Group Co. Ltd., Class A |
Chemicals | 2,800 | 1,843 | |||||||
| Inner Mongolia Yili Industrial Group Co. Ltd., Class A |
Food Products | 2,200 | 9,329 | |||||||
| Inner Mongolia Yitai Coal Co. Ltd., Class B |
Oil, Gas & Consumable Fuels | 4,900 | 7,198 | |||||||
| a,bInnovent Biologics, Inc., Class B |
Biotechnology | 6,500 | 29,105 | |||||||
| Inspur Electronic Information Industry Co. Ltd., Class A |
Technology Hardware, Storage & Peripherals | 400 | 2,044 | |||||||
| Intco Medical Technology Co. Ltd., Class A |
Health Care Equipment & Supplies | 180 | 677 | |||||||
| aiQIYI, Inc., ADR |
Entertainment | 2,086 | 15,186 | |||||||
| JA Solar Technology Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 740 | 6,179 | |||||||
| Jafron Biomedical Co. Ltd., Class A |
Health Care Equipment & Supplies | 400 | 1,768 | |||||||
| JCET Group Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 700 | 3,308 | |||||||
| a,bJD Health International, Inc. |
Consumer Staples Distribution & Retail | 4,900 | 36,454 | |||||||
| a,bJD Logistics, Inc. |
Air Freight & Logistics | 8,100 | 14,549 | |||||||
| JD.com, Inc., Class A |
Broadline Retail | 11,350 | 248,689 | |||||||
| aJiajiayue Group Co. Ltd., Class A |
Consumer Staples Distribution & Retail | 400 | 783 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
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Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| Jiangling Motors Corp. Ltd., Class A, A |
Automobiles | 400 | $ | 824 | ||||||
| Jiangsu Eastern Shenghong Co. Ltd., Class A |
Chemicals | 1,400 | 2,777 | |||||||
| Jiangsu Expressway Co. Ltd., Class A |
Transportation Infrastructure | 400 | 486 | |||||||
| Jiangsu Expressway Co. Ltd., Class H |
Transportation Infrastructure | 6,000 | 5,595 | |||||||
| Jiangsu Hengli Hydraulic Co. Ltd., Class A |
Machinery | 496 | 4,783 | |||||||
| Jiangsu Hengrui Pharmaceuticals Co. Ltd., Class A |
Pharmaceuticals | 2,332 | 14,541 | |||||||
| Jiangsu King’s Luck Brewery JSC Ltd., Class A |
Beverages | 500 | 4,722 | |||||||
| Jiangsu Linyang Energy Co. Ltd., Class A |
Electrical Equipment | 700 | 806 | |||||||
| Jiangsu Yanghe Brewery Joint-Stock Co. Ltd., Class A |
Beverages | 500 | 12,047 | |||||||
| Jiangsu Yangnong Chemical Co. Ltd., Class A |
Chemicals | 100 | 1,414 | |||||||
| Jiangsu Yuyue Medical Equipment & Supply Co. Ltd., Class A |
Health Care Equipment & Supplies | 400 | 1,855 | |||||||
| Jiangsu Zhangjiagang Rural Commercial Bank Co. Ltd., Class A |
Banks | 480 | 313 | |||||||
| aJiangsu Zhongnan Construction Group Co. Ltd., Class A |
Real Estate Management & Development | 1,800 | 532 | |||||||
| Jiangsu Zhongtian Technology Co. Ltd., Class A |
Electrical Equipment | 1,100 | 2,737 | |||||||
| Jiangxi Copper Co. Ltd., Class A |
Metals & Mining | 700 | 2,017 | |||||||
| Jiangxi Copper Co. Ltd., Class H |
Metals & Mining | 6,000 | 10,166 | |||||||
| aJiangxi Special Electric Motor Co. Ltd., Class A, A |
Electrical Equipment | 700 | 1,569 | |||||||
| aJiangxi Zhengbang Technology Co. Ltd., Class A |
Food Products | 700 | 336 | |||||||
| Jilin Aodong Pharmaceutical Group Co. Ltd., Class A |
Pharmaceuticals | 400 | 892 | |||||||
| aJinke Properties Group Co. Ltd., Class A |
Real Estate Management & Development | 2,500 | 579 | |||||||
| Jinke Smart Services Group Co. Ltd., Class H |
Real Estate Management & Development | 1,400 | 2,140 | |||||||
| bJinxin Fertility Group Ltd. |
Health Care Providers & Services | 7,500 | 5,025 | |||||||
| JiuGui Liquor Co. Ltd., Class A |
Beverages | 100 | 1,883 | |||||||
| bJiumaojiu International Holdings Ltd. |
Hotels, Restaurants & Leisure | 3,000 | 7,139 | |||||||
| Jizhong Energy Resources Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 1,100 | 1,096 | |||||||
| Joincare Pharmaceutical Group Industry Co. Ltd., Class A |
Pharmaceuticals | 700 | 1,342 | |||||||
| Joinn Laboratories China Co. Ltd., Class A |
Life Sciences Tools & Services | 140 | 1,067 | |||||||
| bJoinn Laboratories China Co. Ltd., Class H |
Life Sciences Tools & Services | 420 | 1,635 | |||||||
| aJointo Energy Investment Co. Ltd. Hebei, Class A |
Independent Power Producers & Energy Traders | 400 | 298 | |||||||
| Jointown Pharmaceutical Group Co. Ltd., Class A |
Health Care Providers & Services | 700 | 1,523 | |||||||
| Jonjee Hi-Tech Industrial & Commercial Holding Co. Ltd., Class A |
Food Products | 400 | 2,161 | |||||||
| Joyoung Co. Ltd., Class A |
Household Durables | 400 | 1,044 | |||||||
| JOYY, Inc., ADR |
Interactive Media & Services | 224 | 6,984 | |||||||
| Juewei Food Co. Ltd., Class A |
Food Products | 100 | 638 | |||||||
| aJuneyao Airlines Co. Ltd., Class A, A |
Airlines | 400 | 1,047 | |||||||
| aKaishan Group Co. Ltd., Class A |
Machinery | 400 | 1,031 | |||||||
| aKanzhun Ltd., ADR |
Interactive Media & Services | 672 | 12,788 | |||||||
| aKE Holdings, Inc., ADR |
Real Estate Management & Development | 3,003 | 56,577 | |||||||
| Keda Industrial Group Co. Ltd. |
Machinery | 700 | 1,471 | |||||||
| Kerry Logistics Network Ltd. |
Air Freight & Logistics | 1,500 | 2,331 | |||||||
| Kingboard Holdings Ltd. |
Electronic Equipment, Instruments & Components | 3,500 | 10,745 | |||||||
| aKingdee International Software Group Co. Ltd. |
Software | 13,000 | 21,065 | |||||||
| aKingsoft Cloud Holdings Ltd., ADR |
IT Services | 497 | 4,418 | |||||||
| Kingsoft Corp. Ltd. |
Software | 4,400 | 21,664 | |||||||
| a,bKuaishou Technology, Class B |
Interactive Media & Services | 9,100 | 70,076 | |||||||
| Kuang-Chi Technologies Co. Ltd., Class A |
Automobile Components | 700 | 1,688 | |||||||
| Kunlun Tech Co. Ltd., Class A |
Entertainment | 400 | 2,725 | |||||||
| Kweichow Moutai Co. Ltd., Class A |
Beverages | 420 | 111,310 | |||||||
| aLakala Payment Co. Ltd., Class A |
IT Services | 400 | 1,094 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| Lao Feng Xiang Co. Ltd., Class B |
Textiles, Apparel & Luxury Goods | 1,100 | $ | 3,674 | ||||||
| Laobaixing Pharmacy Chain JSC, Class A |
Consumer Staples Distribution & Retail | 130 | 709 | |||||||
| LB Group Co. Ltd., Class A |
Chemicals | 900 | 2,653 | |||||||
| Lee & Man Paper Manufacturing Ltd. |
Paper & Forest Products | 7,000 | 2,800 | |||||||
| bLegend Holdings Corp., Class H |
Technology Hardware, Storage & Peripherals | 2,700 | 2,879 | |||||||
| Lenovo Group Ltd. |
Technology Hardware, Storage & Peripherals | 36,000 | 38,981 | |||||||
| Lens Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 1,800 | 3,541 | |||||||
| aLeo Group Co. Ltd., Class A |
Media | 2,100 | 731 | |||||||
| Lepu Medical Technology Beijing Co. Ltd., Class A |
Health Care Equipment & Supplies | 700 | 2,363 | |||||||
| Levima Advanced Materials Corp., Class A, A |
Chemicals | 400 | 1,661 | |||||||
| Leyard Optoelectronic Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 700 | 694 | |||||||
| aLi Auto, Inc., Class A |
Automobiles | 5,100 | 63,669 | |||||||
| Li Ning Co. Ltd. |
Textiles, Apparel & Luxury Goods | 11,000 | 86,739 | |||||||
| LianChuang Electronic Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 400 | 745 | |||||||
| Lianhe Chemical Technology Co. Ltd., Class A |
Chemicals | 400 | 821 | |||||||
| Liaoning Port Co. Ltd., Class A |
Transportation Infrastructure | 6,700 | 1,561 | |||||||
| aLingyi iTech Guangdong Co., Class A |
Electrical Equipment | 2,800 | 2,520 | |||||||
| Livzon Pharmaceutical Group, Inc., Class A |
Pharmaceuticals | 200 | 1,089 | |||||||
| Livzon Pharmaceutical Group, Inc., Class H |
Pharmaceuticals | 800 | 2,823 | |||||||
| bLongfor Group Holdings Ltd. |
Real Estate Management & Development | 9,330 | 26,326 | |||||||
| LONGi Green Energy Technology Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 2,400 | 14,123 | |||||||
| Longshine Technology Group Co. Ltd., Class A, A |
Software | 400 | 1,557 | |||||||
| Luenmei Quantum Co. Ltd., Class A |
Water Utilities | 700 | 633 | |||||||
| Lufax Holding Ltd., ADR |
Consumer Finance | 3,416 | 6,969 | |||||||
| Luxi Chemical Group Co. Ltd., Class A |
Chemicals | 700 | 1,391 | |||||||
| Luxshare Precision Industry Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 2,500 | 11,034 | |||||||
| a,bLuye Pharma Group Ltd. |
Pharmaceuticals | 9,500 | 4,405 | |||||||
| Luzhou Laojiao Co. Ltd., Class A |
Beverages | 500 | 18,551 | |||||||
| Maanshan Iron & Steel Co. Ltd., Class A |
Metals & Mining | 1,800 | 755 | |||||||
| Maanshan Iron & Steel Co. Ltd., Class H |
Metals & Mining | 4,000 | 922 | |||||||
| Mango Excellent Media Co. Ltd., Class A |
Entertainment | 740 | 4,013 | |||||||
| Maxscend Microelectronics Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 160 | 2,898 | |||||||
| aMeinian Onehealth Healthcare Holdings Co. Ltd., Class A |
Health Care Providers & Services | 1,520 | 1,664 | |||||||
| a,bMeituan, Class B |
Hotels, Restaurants & Leisure | 22,700 | 414,964 | |||||||
| Metallurgical Corp. of China Ltd., Class A |
Construction & Engineering | 5,600 | 3,180 | |||||||
| Metallurgical Corp. of China Ltd., Class H |
Construction & Engineering | 15,000 | 3,879 | |||||||
| aMicroport Scientific Corp. |
Health Care Equipment & Supplies | 4,200 | 9,877 | |||||||
| Ming Yang Smart Energy Group Ltd., Class A |
Electrical Equipment | 700 | 2,294 | |||||||
| Ming Yuan Cloud Group Holdings Ltd. |
Software | 3,000 | 1,922 | |||||||
| MINISO Group Holding Ltd., ADR |
Broadline Retail | 364 | 6,457 | |||||||
| Minth Group Ltd. |
Automobile Components | 3,500 | 10,567 | |||||||
| aMMG Ltd. |
Metals & Mining | 12,000 | 3,516 | |||||||
| Montage Technology Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 297 | 3,007 | |||||||
| aMontnets Cloud Technology Group Co. Ltd., Class A |
Software | 400 | 839 | |||||||
| Muyuan Foods Co. Ltd., Class A |
Food Products | 1,896 | 13,528 | |||||||
| NanJi E-Commerce Co. Ltd., Class A |
Media | 700 | 517 | |||||||
| Nanjing Hanrui Cobalt Co. Ltd., Class A |
Metals & Mining | 100 | 616 | |||||||
| Nanjing Iron & Steel Co. Ltd., Class A |
Metals & Mining | 2,500 | 1,416 | |||||||
| Nanjing King-Friend Biochemical Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 520 | 1,234 | |||||||
| NARI Technology Co. Ltd., Class A |
Electrical Equipment | 2,580 | 10,185 | |||||||
| NAURA Technology Group Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 200 | 7,742 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| NavInfo Co. Ltd., Class A |
Household Durables | 700 | $ | 1,379 | ||||||
| NetEase, Inc. |
Entertainment | 8,900 | 156,460 | |||||||
| New China Life Insurance Co. Ltd., Class A |
Insurance | 700 | 3,109 | |||||||
| New China Life Insurance Co. Ltd., Class H |
Insurance | 4,600 | 10,935 | |||||||
| aNew Hope Liuhe Co. Ltd., Class A |
Food Products | 1,400 | 2,697 | |||||||
| aNew Oriental Education & Technology Group, Inc. |
Diversified Consumer Services | 6,610 | 25,767 | |||||||
| Newland Digital Technology Co. Ltd., Class A |
Software | 400 | 975 | |||||||
| Nexteer Automotive Group Ltd. |
Automobile Components | 5,000 | 3,153 | |||||||
| Nine Dragons Paper Holdings Ltd. |
Paper & Forest Products | 8,000 | 5,992 | |||||||
| Ninestar Corp., Class A |
Technology Hardware, Storage & Peripherals | 700 | 4,569 | |||||||
| Ningbo Deye Technology Co. Ltd., Class A, A |
Machinery | 40 | 1,503 | |||||||
| aNingbo Joyson Electronic Corp., Class A |
Automobile Components | 500 | 1,109 | |||||||
| Ningbo Orient Wires & Cables Co. Ltd., Class A, A |
Electrical Equipment | 300 | 2,154 | |||||||
| Ningbo Ronbay New Energy Technology Co. Ltd., Class A |
Electrical Equipment | 175 | 1,743 | |||||||
| Ningbo Sanxing Medical Electric Co. Ltd., Class A |
Electrical Equipment | 400 | 741 | |||||||
| Ningbo Shanshan Co. Ltd., Class A, A |
Chemicals | 700 | 1,756 | |||||||
| Ningbo Tuopu Group Co. Ltd., Class A |
Automobile Components | 400 | 3,735 | |||||||
| Ningbo Zhoushan Port Co. Ltd., Class A |
Transportation Infrastructure | 3,200 | 1,687 | |||||||
| Ningxia Baofeng Energy Group Co. Ltd., Class A |
Chemicals | 1,100 | 2,363 | |||||||
| aNIO, Inc., ADR |
Automobiles | 5,803 | 60,990 | |||||||
| bNongfu Spring Co. Ltd., Class H |
Beverages | 8,400 | 48,314 | |||||||
| North Huajin Chemical Industries Co. Ltd., Class A |
Chemicals | 400 | 433 | |||||||
| North Industries Group Red Arrow Co. Ltd., Class A |
Machinery | 400 | 1,330 | |||||||
| Northeast Securities Co. Ltd., Class A |
Capital Markets | 700 | 691 | |||||||
| NSFOCUS Technologies Group Co. Ltd., Class A . |
Software | 400 | 810 | |||||||
| aOceanwide Holdings Co. Ltd., Class A |
Financial Services | 700 | 107 | |||||||
| aOffcn Education Technology Co. Ltd., Class A |
Diversified Consumer Services | 700 | 499 | |||||||
| Offshore Oil Engineering Co. Ltd., Class A |
Energy Equipment & Services | 1,800 | 1,607 | |||||||
| aOFILM Group Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 1,400 | 1,080 | |||||||
| Oppein Home Group, Inc., Class A |
Household Durables | 100 | 1,759 | |||||||
| ORG Technology Co. Ltd., Class A |
Containers & Packaging | 700 | 527 | |||||||
| Orient Securities Co. Ltd., Class A |
Capital Markets | 2,772 | 3,952 | |||||||
| bOrient Securities Co. Ltd., Class H |
Capital Markets | 3,600 | 1,931 | |||||||
| Oriental Energy Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 700 | 898 | |||||||
| aOurpalm Co. Ltd., Class A |
Entertainment | 1,400 | 881 | |||||||
| Ovctek China, Inc., Class A |
Health Care Equipment & Supplies | 400 | 1,929 | |||||||
| aPangang Group Vanadium Titanium & Resources Co. Ltd., Class A |
Metals & Mining | 2,500 | 1,798 | |||||||
| aPDD Holdings, Inc., ADR |
Internet & Direct Marketing Retail | 2,093 | 158,859 | |||||||
| People.cn Co. Ltd., Class A |
Media | 400 | 1,100 | |||||||
| People’s Insurance Co. Group of China Ltd., Class A |
Insurance | 3,500 | 2,650 | |||||||
| Perfect World Co. Ltd., Class A |
Entertainment | 400 | 991 | |||||||
| PetroChina Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 8,800 | 7,586 | |||||||
| PetroChina Co. Ltd., Class H |
Oil, Gas & Consumable Fuels | 102,000 | 60,421 | |||||||
| Pharmaron Beijing Co. Ltd., Class A |
Life Sciences Tools & Services | 150 | 1,070 | |||||||
| bPharmaron Beijing Co. Ltd., Class H |
Life Sciences Tools & Services | 1,000 | 4,197 | |||||||
| PICC Property & Casualty Co. Ltd., Class H |
Insurance | 32,000 | 32,652 | |||||||
| Ping An Bank Co. Ltd., Class A |
Banks | 6,700 | 12,225 | |||||||
| a,bPing An Healthcare & Technology Co. Ltd. |
Health Care Technology | 2,000 | 5,060 | |||||||
| Ping An Insurance Group Co. of China Ltd., Class A |
Insurance | 3,500 | 23,241 | |||||||
| franklintempleton.com | Annual Report |
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FRANKLIN TEMPLETON ETF TRUST
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Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| Ping An Insurance Group Co. of China Ltd., Class H |
Insurance | 29,950 | $ | 194,962 | ||||||
| Pingdingshan Tianan Coal Mining Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 800 | 1,208 | |||||||
| Poly Developments & Holdings Group Co. Ltd., Class A |
Real Estate Management & Development | 4,200 | 8,642 | |||||||
| Poly Property Services Co. Ltd., Class H |
Real Estate Management & Development | 800 | 4,902 | |||||||
| bPop Mart International Group Ltd. |
Specialty Retail | 3,600 | 9,814 | |||||||
| Postal Savings Bank of China Co. Ltd., Class A |
Banks | 7,400 | 5,011 | |||||||
| bPostal Savings Bank of China Co. Ltd., Class H |
Banks | 42,000 | 24,933 | |||||||
| Power Construction Corp. of China Ltd., Class A |
Construction & Engineering | 3,900 | 4,049 | |||||||
| Qingdao Port International Co. Ltd., Class A |
Transportation Infrastructure | 400 | 370 | |||||||
| Qingdao TGOOD Electric Co. Ltd., Class A |
Electrical Equipment | 400 | 1,028 | |||||||
| aQinghai Salt Lake Industry Co. Ltd., Class A |
Chemicals | 1,800 | 5,861 | |||||||
| Qinhuangdao Port Co. Ltd., Class A |
Transportation Infrastructure | 700 | 288 | |||||||
| Raytron Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 111 | 790 | |||||||
| Red Star Macalline Group Corp. Ltd., Class A |
Real Estate Management & Development | 420 | 343 | |||||||
| bRed Star Macalline Group Corp. Ltd., Class H |
Real Estate Management & Development | 3,600 | 1,651 | |||||||
| a,bRemegen Co. Ltd., Class H |
Biotechnology | 500 | 2,666 | |||||||
| aRiseSun Real Estate Development Co. Ltd., Class A |
Real Estate Management & Development | 1,100 | 295 | |||||||
| aRLX Technology, Inc., ADR |
Tobacco | 3,549 | 10,292 | |||||||
| Rongsheng Petrochemical Co. Ltd., Class A |
Chemicals | 1,250 | 2,754 | |||||||
| SAIC Motor Corp. Ltd., Class A |
Automobiles | 3,500 | 7,319 | |||||||
| Sailun Group Co. Ltd., Class A, A |
Automobile Components | 1,100 | 1,728 | |||||||
| Sangfor Technologies, Inc., Class A |
Software | 100 | 2,155 | |||||||
| Sansteel Minguang Co. Ltd. Fujian, Class A |
Metals & Mining | 700 | 499 | |||||||
| Sany Heavy Industry Co. Ltd., Class A |
Machinery | 2,800 | 6,968 | |||||||
| Satellite Chemical Co. Ltd., Class A |
Chemicals | 1,113 | 2,593 | |||||||
| Sealand Securities Co. Ltd., Class A |
Capital Markets | 1,280 | 634 | |||||||
| aSeazen Group Ltd. |
Real Estate Management & Development | 12,000 | 3,103 | |||||||
| aSeazen Holdings Co. Ltd., Class A |
Real Estate Management & Development | 800 | 1,904 | |||||||
| a,bSenseTime Group, Inc., Class B |
Software | 70,000 | 23,720 | |||||||
| SF Holding Co. Ltd., Class A |
Air Freight & Logistics | 1,400 | 11,290 | |||||||
| SG Micro Corp., Class A |
Semiconductors & Semiconductor Equipment | 150 | 3,390 | |||||||
| Shaanxi Coal Industry Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 3,500 | 10,367 | |||||||
| Shaanxi International Trust Co. Ltd., Class A |
Capital Markets | 700 | 325 | |||||||
| Shan Xi Hua Yang Group New Energy Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 700 | 1,409 | |||||||
| aShandong Chenming Paper Holdings Ltd., Class A |
Paper & Forest Products | 700 | 541 | |||||||
| aShandong Chenming Paper Holdings Ltd., Class B |
Paper & Forest Products | 3,500 | 1,021 | |||||||
| aShandong Chenming Paper Holdings Ltd., Class H |
Paper & Forest Products | 3,000 | 940 | |||||||
| Shandong Denghai Seeds Co. Ltd., Class A |
Food Products | 400 | 1,089 | |||||||
| Shandong Gold Mining Co. Ltd., Class A |
Metals & Mining | 1,400 | 4,493 | |||||||
| bShandong Gold Mining Co. Ltd., Class H |
Metals & Mining | 3,500 | 7,107 | |||||||
| Shandong Himile Mechanical Science & Technology Co. Ltd., Class A |
Machinery | 400 | 1,823 | |||||||
| Shandong Hi-speed Co. Ltd., Class A |
Transportation Infrastructure | 1,100 | 980 | |||||||
| Shandong Hualu Hengsheng Chemical Co. Ltd., Class A |
Chemicals | 700 | 3,593 | |||||||
| Shandong Humon Smelting Co. Ltd., Class A |
Metals & Mining | 400 | 682 | |||||||
| Shandong Linglong Tyre Co. Ltd., Class A |
Automobile Components | 400 | 1,138 | |||||||
| Shandong Nanshan Aluminum Co. Ltd., Class A |
Metals & Mining | 3,500 | 1,728 | |||||||
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SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| Shandong Pharmaceutical Glass Co. Ltd., Class A |
Health Care Equipment & Supplies | 400 | $ | 1,529 | ||||||
| Shandong Sun Paper Industry JSC Ltd., Class A . |
Paper & Forest Products | 700 | 1,243 | |||||||
| Shandong Weigao Group Medical Polymer Co. Ltd., Class H |
Health Care Equipment & Supplies | 11,800 | 18,850 | |||||||
| Shanghai 2345 Network Holding Group Co. Ltd., Class A |
Software | 1,100 | 533 | |||||||
| Shanghai AJ Group Co. Ltd., Class A |
Financial Services | 400 | 313 | |||||||
| Shanghai Bailian Group Co. Ltd., Class B |
Consumer Staples Distribution & Retail | 1,400 | 955 | |||||||
| Shanghai Bairun Investment Holding Group Co. Ltd., Class A |
Beverages | 392 | 2,335 | |||||||
| Shanghai Baosight Software Co. Ltd., Class A |
Software | 300 | 2,542 | |||||||
| Shanghai Baosight Software Co. Ltd., Class B |
Software | 2,612 | 8,625 | |||||||
| Shanghai Construction Group Co. Ltd., Class A |
Construction & Engineering | 2,500 | 994 | |||||||
| Shanghai Dazhong Public Utilities Group Co. Ltd., Class A |
Gas Utilities | 700 | 308 | |||||||
| aShanghai Electric Group Co. Ltd., Class A |
Electrical Equipment | 2,800 | 1,802 | |||||||
| aShanghai Electric Group Co. Ltd., Class H |
Electrical Equipment | 14,000 | 3,496 | |||||||
| aShanghai Electric Power Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 1,100 | 1,591 | |||||||
| Shanghai Fosun Pharmaceutical Group Co. Ltd., Class A |
Pharmaceuticals | 700 | 3,302 | |||||||
| Shanghai Fosun Pharmaceutical Group Co. Ltd., Class H |
Pharmaceuticals | 2,000 | 5,682 | |||||||
| Shanghai Fudan Microelectronics Group Co. Ltd., Class H |
Semiconductors & Semiconductor Equipment | 1,000 | 3,675 | |||||||
| Shanghai Huayi Group Co. Ltd., Class B |
Chemicals | 700 | 406 | |||||||
| aShanghai International Airport Co. Ltd., Class A |
Transportation Infrastructure | 800 | 6,492 | |||||||
| Shanghai International Port Group Co. Ltd., Class A |
Transportation Infrastructure | 3,500 | 2,824 | |||||||
| Shanghai Jinjiang International Hotels Co. Ltd., Class A |
Hotels, Restaurants & Leisure | 400 | 3,664 | |||||||
| Shanghai Jinjiang International Hotels Co. Ltd., Class B |
Hotels, Restaurants & Leisure | 700 | 1,477 | |||||||
| Shanghai Jinqiao Export Processing Zone Development Co. Ltd., Class A, A |
Real Estate Management & Development | 400 | 694 | |||||||
| Shanghai Jinqiao Export Processing Zone Development Co. Ltd., Class B |
Real Estate Management & Development | 1,100 | 1,048 | |||||||
| a,bShanghai Junshi Biosciences Co. Ltd., Class H |
Biotechnology | 1,000 | 3,490 | |||||||
| Shanghai Lingang Holdings Corp. Ltd., Class A |
Real Estate Management & Development | 520 | 961 | |||||||
| Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., Class A |
Real Estate Management & Development | 700 | 1,018 | |||||||
| Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., Class B |
Real Estate Management & Development | 5,300 | 4,097 | |||||||
| Shanghai Mechanical & Electrical Industry Co. Ltd., Class B |
Machinery | 1,400 | 1,498 | |||||||
| Shanghai Pharmaceuticals Holding Co. Ltd., Class A |
Health Care Providers & Services | 1,000 | 2,966 | |||||||
| Shanghai Pharmaceuticals Holding Co. Ltd., Class H |
Health Care Providers & Services | 4,400 | 8,206 | |||||||
| Shanghai Pudong Development Bank Co. Ltd., Class A |
Banks | 10,500 | 10,993 | |||||||
| Shanghai Putailai New Energy Technology Co. Ltd., Class A |
Chemicals | 540 | 3,925 | |||||||
| Shanghai RAAS Blood Products Co. Ltd., Class A |
Biotechnology | 1,800 | 1,685 | |||||||
| Shanghai Shibei Hi-Tech Co. Ltd., Class B |
Real Estate Management & Development | 3,200 | 829 | |||||||
| Shanghai Tunnel Engineering Co. Ltd., Class A |
Construction & Engineering | 1,400 | 1,162 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
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Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| Shanghai Waigaoqiao Free Trade Zone Group Co. Ltd., Class A, A |
Trading Companies & Distributors | 400 | $ | 721 | ||||||
| Shanghai Waigaoqiao Free Trade Zone Group Co. Ltd., Class B |
Trading Companies & Distributors | 700 | 653 | |||||||
| Shanghai Yuyuan Tourist Mart Group Co. Ltd., Class A |
Specialty Retail | 1,400 | 1,657 | |||||||
| Shanghai Zhangjiang High-Tech Park Development Co. Ltd., Class A |
Real Estate Management & Development | 700 | 1,677 | |||||||
| Shanghai Zhenhua Heavy Industries Co. Ltd., Class B |
Machinery | 3,900 | 979 | |||||||
| aShangri-La Asia Ltd. |
Hotels, Restaurants & Leisure | 6,000 | 5,625 | |||||||
| Shanxi Coking Coal Energy Group Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 1,480 | 2,368 | |||||||
| Shanxi Lu’an Environmental Energy Development Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 1,100 | 3,514 | |||||||
| Shanxi Meijin Energy Co. Ltd., Class A, A |
Metals & Mining | 1,400 | 1,871 | |||||||
| Shanxi Securities Co. Ltd., Class A |
Capital Markets | 820 | 694 | |||||||
| Shanxi Taigang Stainless Steel Co. Ltd., Class A |
Metals & Mining | 2,100 | 1,327 | |||||||
| Shanxi Xinghuacun Fen Wine Factory Co. Ltd., Class A |
Beverages | 400 | 15,866 | |||||||
| Shanying International Holding Co. Ltd., Class A |
Paper & Forest Products | 1,100 | 396 | |||||||
| Shenghe Resources Holding Co. Ltd., Class A |
Metals & Mining | 700 | 1,442 | |||||||
| Shengyi Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 700 | 1,882 | |||||||
| Shennan Circuits Co. Ltd., Class A, A |
Electronic Equipment, Instruments & Components | 100 | 1,344 | |||||||
| Shenwan Hongyuan Group Co. Ltd., Class A |
Capital Markets | 7,400 | 4,493 | |||||||
| bShenwan Hongyuan Group Co. Ltd., Class H |
Capital Markets | 8,800 | 1,670 | |||||||
| Shenzhen Agricultural Products Group Co. Ltd., Class A |
Consumer Staples Distribution & Retail | 400 | 335 | |||||||
| Shenzhen Airport Co. Ltd., Class A |
Transportation Infrastructure | 700 | 743 | |||||||
| Shenzhen Aisidi Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 400 | 535 | |||||||
| Shenzhen Capchem Technology Co. Ltd., Class A |
Chemicals | 360 | 2,558 | |||||||
| Shenzhen Dynanonic Co. Ltd., Class A, A |
Chemicals | 50 | 1,379 | |||||||
| Shenzhen Energy Group Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 1,880 | 1,673 | |||||||
| aShenzhen Everwin Precision Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 460 | 908 | |||||||
| Shenzhen Expressway Corp. Ltd., Class H |
Transportation Infrastructure | 4,000 | 3,557 | |||||||
| Shenzhen Gas Corp. Ltd., Class A |
Gas Utilities | 1,100 | 1,099 | |||||||
| bShenzhen Hepalink Pharmaceutical Group Co. Ltd., Class H |
Pharmaceuticals | 500 | 348 | |||||||
| Shenzhen Huaqiang Industry Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 400 | 811 | |||||||
| aShenzhen Infogem Technologies Co. Ltd., Class A, A |
Software | 400 | 701 | |||||||
| Shenzhen Inovance Technology Co. Ltd., Class A |
Machinery | 900 | 9,213 | |||||||
| Shenzhen International Holdings Ltd. |
Transportation Infrastructure | 7,000 | 6,189 | |||||||
| Shenzhen Investment Ltd. |
Real Estate Management & Development | 14,000 | 2,479 | |||||||
| Shenzhen Jinjia Group Co. Ltd., Class A |
Containers & Packaging | 400 | 432 | |||||||
| Shenzhen Kaifa Technology Co. Ltd., Class A |
Technology Hardware, Storage & Peripherals | 400 | 974 | |||||||
| Shenzhen Kangtai Biological Products Co. Ltd., Class A |
Biotechnology | 480 | 2,212 | |||||||
| Shenzhen Kedali Industry Co. Ltd., Class A, A |
Automobile Components | 100 | 1,883 | |||||||
| Shenzhen Kingdom Sci-Tech Co. Ltd., Class A |
Software | 400 | 820 | |||||||
| Shenzhen Mindray Bio-Medical Electronics Co. Ltd., Class A |
Health Care Equipment & Supplies | 400 | 18,156 | |||||||
| aShenzhen MTC Co. Ltd., Class A |
Household Durables | 2,100 | 1,508 | |||||||
| Shenzhen Overseas Chinese Town Co. Ltd., Class A |
Hotels, Restaurants & Leisure | 2,500 | 1,758 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| Shenzhen Salubris Pharmaceuticals Co. Ltd., Class A |
Pharmaceuticals | 400 | $ | 2,060 | ||||||
| Shenzhen SC New Energy Technology Corp., Class A |
Semiconductors & Semiconductor Equipment | 100 | 1,667 | |||||||
| Shenzhen Sunway Communication Co. Ltd., Class A |
Communications Equipment | 400 | 1,219 | |||||||
| Shenzhen Transsion Holdings Co. Ltd., Class A |
Technology Hardware, Storage & Peripherals | 216 | 3,183 | |||||||
| Shenzhen Yan Tian Port Holding Co. Ltd., Class A, A |
Transportation Infrastructure | 700 | 514 | |||||||
| Shenzhen YUTO Packaging Technology Co. Ltd., Class A |
Containers & Packaging | 400 | 1,621 | |||||||
| Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd., Class A |
Metals & Mining | 1,100 | 788 | |||||||
| Shenzhou International Group Holdings Ltd. |
Textiles, Apparel & Luxury Goods | 3,600 | 37,789 | |||||||
| aShijiazhuang Changshan BeiMing Technology Co. Ltd., Class A |
Textiles, Apparel & Luxury Goods | 400 | 530 | |||||||
| Shijiazhuang Yiling Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 720 | 3,052 | |||||||
| aShimao Group Holdings Ltd. |
Real Estate Management & Development | 8,500 | 2,246 | |||||||
| a,bShimao Services Holdings Ltd., Class Z |
Real Estate Management & Development | 4,000 | 1,004 | |||||||
| Shinghwa Advanced Material Group Co. Ltd., Class A, A |
Chemicals | 100 | 1,194 | |||||||
| Shui On Land Ltd. |
Real Estate Management & Development | 18,000 | 2,178 | |||||||
| aSiasun Robot & Automation Co. Ltd., Class A |
Machinery | 400 | 695 | |||||||
| Sichuan Chuantou Energy Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 1,400 | 2,695 | |||||||
| Sichuan Hebang Biotechnology Co. Ltd., Class A |
Chemicals | 3,500 | 1,524 | |||||||
| Sichuan Kelun Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 400 | 1,655 | |||||||
| aSichuan New Energy Power Co. Ltd. |
Trading Companies & Distributors | 400 | 927 | |||||||
| Sichuan Road & Bridge Group Co. Ltd., Class A |
Construction & Engineering | 1,800 | 3,617 | |||||||
| Sichuan Swellfun Co. Ltd., Class A |
Beverages | 200 | 2,194 | |||||||
| Sichuan Yahua Industrial Group Co. Ltd., Class A, A |
Chemicals | 400 | 1,233 | |||||||
| Sieyuan Electric Co. Ltd., Class A |
Electrical Equipment | 400 | 2,663 | |||||||
| Silergy Corp. |
Semiconductors & Semiconductor Equipment | 1,610 | 25,355 | |||||||
| Sinoma International Engineering Co., Class A |
Construction & Engineering | 700 | 1,140 | |||||||
| Sinoma Science & Technology Co. Ltd., Class A |
Chemicals | 700 | 2,460 | |||||||
| Sino-Ocean Group Holding Ltd. |
Real Estate Management & Development | 14,000 | 1,587 | |||||||
| Sinopec Engineering Group Co. Ltd., Class H |
Construction & Engineering | 7,500 | 3,726 | |||||||
| aSinopec Oilfield Service Corp., Class A |
Energy Equipment & Services | 1,100 | 336 | |||||||
| aSinopec Oilfield Service Corp., Class H |
Energy Equipment & Services | 14,000 | 1,070 | |||||||
| Sinopec Shanghai Petrochemical Co. Ltd., Class A |
Chemicals | 1,400 | 687 | |||||||
| Sinopec Shanghai Petrochemical Co. Ltd., Class H |
Chemicals | 18,000 | 3,141 | |||||||
| Sinopharm Group Co. Ltd., Class H |
Health Care Providers & Services | 6,400 | 19,363 | |||||||
| Sinotrans Ltd., Class A |
Air Freight & Logistics | 1,800 | 1,090 | |||||||
| Sinotrans Ltd., Class H |
Air Freight & Logistics | 11,000 | 3,405 | |||||||
| Sinotruk Hong Kong Ltd. |
Machinery | 3,500 | 5,440 | |||||||
| SITC International Holdings Co. Ltd. |
Marine Transportation | 6,000 | 12,887 | |||||||
| aSkshu Paint Co. Ltd., Class A |
Chemicals | 100 | 1,695 | |||||||
| Skyworth Digital Co. Ltd., Class A, A |
Communications Equipment | 400 | 1,104 | |||||||
| bSmoore International Holdings Ltd. |
Tobacco | 8,750 | 11,236 | |||||||
| Songcheng Performance Development Co. Ltd., Class A |
Hotels, Restaurants & Leisure | 1,100 | 2,606 | |||||||
| SooChow Securities Co. Ltd., Class A |
Capital Markets | 1,886 | 1,898 | |||||||
| Southwest Securities Co. Ltd., Class A |
Capital Markets | 2,500 | 1,416 | |||||||
| StarPower Semiconductor Ltd., Class A, A |
Semiconductors & Semiconductor Equipment | 100 | 3,998 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| aSTO Express Co. Ltd., Class A |
Air Freight & Logistics | 400 | $ | 648 | ||||||
| Sun Art Retail Group Ltd. |
Consumer Staples Distribution & Retail | 9,000 | 3,611 | |||||||
| aSunac China Holdings Ltd. |
Real Estate Management & Development | 18,000 | 3,578 | |||||||
| bSunac Services Holdings Ltd. |
Real Estate Management & Development | 4,000 | 1,707 | |||||||
| Sungrow Power Supply Co. Ltd., Class A |
Electrical Equipment | 500 | 7,635 | |||||||
| Suning Universal Co. Ltd., Class A |
Real Estate Management & Development | 1,800 | 805 | |||||||
| Sunny Optical Technology Group Co. Ltd. |
Electronic Equipment, Instruments & Components | 3,100 | 37,496 | |||||||
| Sunwoda Electronic Co. Ltd., Class A |
Electrical Equipment | 700 | 2,055 | |||||||
| Suofeiya Home Collection Co. Ltd., Class A |
Household Durables | 400 | 1,136 | |||||||
| Suzhou Anjie Technology Co. Ltd., Class A, A |
Electrical Equipment | 400 | 873 | |||||||
| Suzhou Dongshan Precision Manufacturing Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 700 | 3,083 | |||||||
| aSuzhou Gold Mantis Construction Decoration Co. Ltd., Class A |
Construction & Engineering | 700 | 534 | |||||||
| Suzhou Maxwell Technologies Co. Ltd., Class A |
Electrical Equipment | 100 | 4,441 | |||||||
| Taiji Computer Corp. Ltd., Class A |
IT Services | 200 | 1,228 | |||||||
| aTAL Education Group, ADR |
Diversified Consumer Services | 2,191 | 14,044 | |||||||
| Tangshan Jidong Cement Co. Ltd., Class A |
Construction Materials | 1,100 | 1,390 | |||||||
| TangShan Port Group Co. Ltd., Class A |
Transportation Infrastructure | 1,400 | 632 | |||||||
| Tangshan Sanyou Chemical Industries Co. Ltd., Class A |
Chemicals | 700 | 672 | |||||||
| TBEA Co. Ltd., Class A |
Electrical Equipment | 1,400 | 4,426 | |||||||
| TCL Technology Group Corp., Class A |
Household Durables | 4,600 | 2,967 | |||||||
| TCL Zhonghuan Renewable Energy Technology Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 1,100 | 7,762 | |||||||
| Tencent Holdings Ltd. |
Interactive Media & Services | 28,800 | 1,415,428 | |||||||
| aTencent Music Entertainment Group, ADR |
Entertainment | 2,933 | 24,285 | |||||||
| The People’s Insurance Co. Group of China Ltd., Class H |
Insurance | 41,000 | 13,684 | |||||||
| Thunder Software Technology Co. Ltd., Class A |
Software | 200 | 3,156 | |||||||
| Tian Di Science & Technology Co. Ltd., Class A |
Machinery | 1,400 | 1,036 | |||||||
| Tianjin Chase Sun Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 1,100 | 956 | |||||||
| Tianma Microelectronics Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 800 | 1,224 | |||||||
| aTianqi Lithium Corp., Class A |
Chemicals | 500 | 5,499 | |||||||
| aTianqi Lithium Corp., Class H |
Chemicals | 400 | 2,693 | |||||||
| Tianshan Aluminum Group Co. Ltd., Class A |
Machinery | 700 | 774 | |||||||
| Tianshui Huatian Technology Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 1,100 | 1,618 | |||||||
| aTibet Summit Resources Co. Ltd., Class A, A |
Metals & Mining | 400 | 1,333 | |||||||
| Tingyi Cayman Islands Holding Corp. |
Food Products | 8,000 | 13,330 | |||||||
| Titan Wind Energy Suzhou Co. Ltd., Class A, A |
Electrical Equipment | 700 | 1,505 | |||||||
| aTongcheng Travel Holdings Ltd. |
Hotels, Restaurants & Leisure | 4,400 | 9,574 | |||||||
| aTongFu Microelectronics Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 400 | 1,293 | |||||||
| Tongkun Group Co. Ltd., Class A |
Chemicals | 700 | 1,464 | |||||||
| Tongling Nonferrous Metals Group Co. Ltd., Class A |
Metals & Mining | 3,900 | 1,829 | |||||||
| Tongwei Co. Ltd., Class A |
Food Products | 1,600 | 9,066 | |||||||
| aTopchoice Medical Corp., Class A |
Health Care Providers & Services | 100 | 1,883 | |||||||
| Topsec Technologies Group, Inc., Class A |
Electrical Equipment | 400 | 714 | |||||||
| bTopsports International Holdings Ltd. |
Specialty Retail | 9,000 | 8,232 | |||||||
| Towngas Smart Energy Co. Ltd. |
Gas Utilities | 6,000 | 2,599 | |||||||
| TravelSky Technology Ltd., Class H |
IT Services | 4,000 | 7,470 | |||||||
| Trina Solar Co. Ltd., Class A, A |
Semiconductors & Semiconductor Equipment | 739 | 5,605 | |||||||
| aTrip.com Group Ltd. |
Hotels, Restaurants & Leisure | 2,550 | 95,439 | |||||||
| Tsingtao Brewery Co. Ltd., Class A |
Beverages | 300 | 5,268 | |||||||
| Tsingtao Brewery Co. Ltd., Class H |
Beverages | 2,849 | 31,103 | |||||||
| aTuya, Inc., ADR |
Software | 588 | 1,111 | |||||||
| 154 | Annual Report |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| Unigroup Guoxin Microelectronics Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 319 | $ | 5,162 | ||||||
| Uni-President China Holdings Ltd. |
Food Products | 6,000 | 6,054 | |||||||
| Unisplendour Corp. Ltd., Class A |
Electronic Equipment, Instruments & Components | 560 | 2,388 | |||||||
| Universal Scientific Industrial Shanghai Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 400 | 1,030 | |||||||
| Valiant Co. Ltd., Class A |
Chemicals | 400 | 1,004 | |||||||
| aVipshop Holdings Ltd., ADR |
Broadline Retail | 1,883 | 28,584 | |||||||
| Visual China Group Co. Ltd., Class A, A |
Interactive Media & Services | 400 | 972 | |||||||
| Walvax Biotechnology Co. Ltd., Class A |
Biotechnology | 700 | 3,516 | |||||||
| Wangsu Science & Technology Co. Ltd., Class A |
.IT Services | 700 | 733 | |||||||
| Wanhua Chemical Group Co. Ltd., Class A |
Chemicals | 1,100 | 15,358 | |||||||
| Want Want China Holdings Ltd. |
Food Products | 21,000 | 13,510 | |||||||
| Wanxiang Qianchao Co. Ltd., Class A |
Automobile Components | 1,400 | 1,070 | |||||||
| aWeibo Corp., ADR |
Interactive Media & Services | 350 | 7,021 | |||||||
| Weichai Power Co. Ltd., Class A |
Machinery | 2,500 | 4,591 | |||||||
| Weichai Power Co. Ltd., Class H |
Machinery | 10,000 | 16,051 | |||||||
| Weifu High-Technology Group Co. Ltd., Class A |
Automobile Components | 400 | 1,176 | |||||||
| Weifu High-Technology Group Co. Ltd., Class B |
Automobile Components | 700 | 1,293 | |||||||
| Weihai Guangwei Composites Co. Ltd., Class A |
Chemicals | 200 | 1,487 | |||||||
| Wens Foodstuffs Group Co. Ltd., Class A |
Food Products | 700 | 2,087 | |||||||
| Western Mining Co. Ltd., Class A, A |
Metals & Mining | 700 | 1,291 | |||||||
| Western Securities Co. Ltd., Class A |
Capital Markets | 1,800 | 1,670 | |||||||
| Western Superconducting Technologies Co. Ltd., Class A |
Metals & Mining | 119 | 1,413 | |||||||
| Will Semiconductor Co. Ltd. Shanghai, Class A |
Semiconductors & Semiconductor Equipment | 200 | 2,653 | |||||||
| Wingtech Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 500 | 4,023 | |||||||
| Winning Health Technology Group Co. Ltd., Class A |
Health Care Technology | 700 | 1,414 | |||||||
| Wolong Electric Group Co. Ltd., Class A |
Electrical Equipment | 400 | 736 | |||||||
| Wuchan Zhongda Group Co. Ltd., Class A |
Distributors | 1,800 | 1,271 | |||||||
| Wuhan Guide Infrared Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 1,042 | 1,834 | |||||||
| Wuliangye Yibin Co. Ltd., Class A |
Beverages | 1,300 | 37,293 | |||||||
| WUS Printed Circuit Kunshan Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 700 | 2,191 | |||||||
| WuXi AppTec Co. Ltd., Class A |
Life Sciences Tools & Services | 900 | 10,419 | |||||||
| bWuXi AppTec Co. Ltd., Class H |
Life Sciences Tools & Services | 1,500 | 15,707 | |||||||
| a,bWuxi Biologics Cayman, Inc. |
Life Sciences Tools & Services | 17,000 | 105,249 | |||||||
| Wuxi Shangji Automation Co. Ltd., Class A |
Machinery | 140 | 2,082 | |||||||
| XCMG Construction Machinery Co. Ltd., Class A |
.Machinery | 2,500 | 2,523 | |||||||
| Xiamen C & D, Inc., Class A |
Trading Companies & Distributors | 1,100 | 1,933 | |||||||
| Xiamen Faratronic Co. Ltd., Class A, A |
Electronic Equipment, Instruments & Components | 100 | 2,126 | |||||||
| Xiamen ITG Group Corp. Ltd., Class A |
Trading Companies & Distributors | 700 | 879 | |||||||
| Xiamen Tungsten Co. Ltd., Class A |
Metals & Mining | 500 | 1,484 | |||||||
| Xiangcai Co. Ltd., Class A |
Real Estate Management & Development | 700 | 971 | |||||||
| a,bXiaomi Corp., Class B |
Technology Hardware, Storage & Peripherals | 71,400 | 110,057 | |||||||
| Xinhua Winshare Publishing & Media Co. Ltd., Class H |
Distributors | 2,000 | 1,572 | |||||||
| Xinjiang Goldwind Science & Technology Co. Ltd., Class A |
Electrical Equipment | 1,100 | 1,768 | |||||||
| Xinjiang Goldwind Science & Technology Co. Ltd., Class H |
Electrical Equipment | 3,600 | 3,077 | |||||||
| Xinjiang Tianshan Cement Co. Ltd., Class A, A |
Construction Materials | 700 | 903 | |||||||
| Xinjiang Zhongtai Chemical Co. Ltd., Class A |
Chemicals | 1,100 | 1,161 | |||||||
| Xinxing Ductile Iron Pipes Co. Ltd., Class A |
Metals & Mining | 1,800 | 1,056 | |||||||
| Xinyangfeng Agricultural Technology Co. Ltd., Class A |
Chemicals | 400 | 626 | |||||||
| Xinyi Solar Holdings Ltd. |
Semiconductors & Semiconductor Equipment | 21,000 | 25,173 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
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Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| aXPeng, Inc., Class A |
Automobiles | 4,900 | $ | 27,309 | ||||||
| Xtep International Holdings Ltd. |
Textiles, Apparel & Luxury Goods | 5,500 | 6,992 | |||||||
| Xuji Electric Co. Ltd., Class A |
Electrical Equipment | 400 | 1,363 | |||||||
| bYadea Group Holdings Ltd. |
Automobiles | 4,700 | 12,124 | |||||||
| aYango Group Co. Ltd., Class A |
Real Estate Management & Development | 2,100 | 502 | |||||||
| bYangtze Optical Fibre & Cable Joint Stock Ltd. Co., Class H |
Communications Equipment | 1,000 | 2,059 | |||||||
| Yangzhou Yangjie Electronic Technology Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 200 | 1,602 | |||||||
| Yangzijiang Shipbuilding Holdings Ltd. |
Machinery | 12,600 | 11,372 | |||||||
| Yankuang Energy Group Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 500 | 2,590 | |||||||
| Yankuang Energy Group Co. Ltd., Class H |
Oil, Gas & Consumable Fuels | 10,000 | 35,796 | |||||||
| Yantai Changyu Pioneer Wine Co. Ltd., Class B |
Beverages | 1,100 | 1,647 | |||||||
| Yantai Eddie Precision Machinery Co. Ltd., Class A |
Machinery | 440 | 1,159 | |||||||
| Yantai Jereh Oilfield Services Group Co. Ltd., Class A |
Energy Equipment & Services | 400 | 1,650 | |||||||
| aYatsen Holding Ltd., ADR |
Personal Products | 1,281 | 1,896 | |||||||
| Yealink Network Technology Corp. Ltd., Class A |
Communications Equipment | 300 | 3,321 | |||||||
| aYifan Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 400 | 818 | |||||||
| Yifeng Pharmacy Chain Co. Ltd., Class A |
Consumer Staples Distribution & Retail | 260 | 2,189 | |||||||
| Yihai International Holding Ltd. |
Food Products | 2,300 | 6,754 | |||||||
| Yihai Kerry Arawana Holdings Co. Ltd., Class A |
Food Products | 700 | 4,393 | |||||||
| Yintai Gold Co. Ltd., Class A |
Metals & Mining | 700 | 1,342 | |||||||
| Yixintang Pharmaceutical Group Co. Ltd., Class A |
Consumer Staples Distribution & Retail | 200 | 1,032 | |||||||
| YongXing Special Materials Technology Co. Ltd., Class A |
Metals & Mining | 100 | 1,222 | |||||||
| Yonyou Network Technology Co. Ltd., Class A |
Software | 1,280 | 4,688 | |||||||
| Youngor Group Co. Ltd., Class A |
Real Estate Management & Development | 1,800 | 1,709 | |||||||
| YTO Express Group Co. Ltd., Class A |
Air Freight & Logistics | 1,100 | 2,934 | |||||||
| aYuan Longping High-tech Agriculture Co. Ltd., Class A |
Food Products | 400 | 966 | |||||||
| Yuexiu Property Co. Ltd. |
Real Estate Management & Development | 7,000 | 10,558 | |||||||
| Yum China Holdings, Inc. |
Hotels, Restaurants & Leisure | 2,000 | 125,759 | |||||||
| Yunda Holding Co. Ltd., Class A |
Air Freight & Logistics | 400 | 689 | |||||||
| Yunnan Aluminium Co. Ltd., Class A |
Metals & Mining | 1,100 | 2,180 | |||||||
| Yunnan Baiyao Group Co. Ltd., Class A |
Pharmaceuticals | 600 | 4,779 | |||||||
| Yunnan Botanee Bio-Technology Group Co. Ltd., Class A, A |
Personal Products | 100 | 1,867 | |||||||
| Yunnan Copper Co. Ltd., Class A |
Metals & Mining | 700 | 1,314 | |||||||
| Yunnan Energy New Material Co. Ltd., Class A |
Containers & Packaging | 300 | 4,972 | |||||||
| Yunnan Tin Co. Ltd., Class A |
Metals & Mining | 600 | 1,298 | |||||||
| aZai Lab Ltd. |
Biotechnology | 4,500 | 14,933 | |||||||
| Zhangzhou Pientzehuang Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 200 | 8,282 | |||||||
| aZhaojin Mining Industry Co. Ltd., Class H |
Metals & Mining | 5,500 | 8,352 | |||||||
| Zhefu Holding Group Co. Ltd., Class A |
Electrical Equipment | 2,100 | 1,245 | |||||||
| aZhejiang Century Huatong Group Co. Ltd., Class A |
Entertainment | 2,800 | 2,455 | |||||||
| Zhejiang China Commodities City Group Co. Ltd., Class A |
Real Estate Management & Development | 2,100 | 1,768 | |||||||
| Zhejiang Chint Electrics Co. Ltd., Class A |
Electrical Equipment | 500 | 2,036 | |||||||
| Zhejiang Crystal-Optech Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 580 | 1,176 | |||||||
| Zhejiang Dahua Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 1,100 | 3,622 | |||||||
| Zhejiang Dingli Machinery Co. Ltd., Class A |
Machinery | 200 | 1,596 | |||||||
| Zhejiang Expressway Co. Ltd., Class H |
Transportation Infrastructure | 7,000 | 5,564 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
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Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| Zhejiang Hailiang Co. Ltd., Class A |
Metals & Mining | 400 | $ | 679 | ||||||
| Zhejiang Hisoar Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 400 | 411 | |||||||
| Zhejiang Huace Film & Television Co. Ltd., Class A |
Entertainment | 400 | 462 | |||||||
| Zhejiang Huahai Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 400 | 1,175 | |||||||
| Zhejiang Huayou Cobalt Co. Ltd., Class A |
Metals & Mining | 400 | 3,204 | |||||||
| Zhejiang Jingsheng Mechanical & Electrical Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 500 | 4,754 | |||||||
| Zhejiang Jiuzhou Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 400 | 1,938 | |||||||
| Zhejiang Juhua Co. Ltd., Class A |
Chemicals | 1,100 | 2,832 | |||||||
| Zhejiang Medicine Co. Ltd., Class A |
Pharmaceuticals | 400 | 719 | |||||||
| Zhejiang NHU Co. Ltd., Class A |
Pharmaceuticals | 1,244 | 3,252 | |||||||
| Zhejiang Runtu Co. Ltd., Class A |
Chemicals | 400 | 451 | |||||||
| Zhejiang Sanhua Intelligent Controls Co. Ltd., Class A |
Machinery | 400 | 1,500 | |||||||
| Zhejiang Semir Garment Co. Ltd., Class A |
Textiles, Apparel & Luxury Goods | 400 | 351 | |||||||
| Zhejiang Supcon Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 200 | 3,024 | |||||||
| Zhejiang Supor Co. Ltd., Class A |
Household Durables | 200 | 1,577 | |||||||
| aZhejiang Wanliyang Co. Ltd., Class A |
Machinery | 400 | 549 | |||||||
| Zhejiang Weiming Environment Protection Co. Ltd., Class A, A |
Commercial Services & Supplies | 520 | 1,381 | |||||||
| Zhejiang Weixing New Building Materials Co. Ltd., Class A |
Building Products | 700 | 2,478 | |||||||
| Zhejiang Wolwo Bio-Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 200 | 1,386 | |||||||
| Zhejiang Yongtai Technology Co. Ltd., Class A |
Chemicals | 400 | 1,219 | |||||||
| Zhengzhou Coal Mining Machinery Group Co. Ltd., Class A |
Machinery | 700 | 1,433 | |||||||
| Zheshang Securities Co. Ltd., Class A |
Capital Markets | 400 | 587 | |||||||
| a,bZhongAn Online P&C Insurance Co. Ltd., Class H |
Insurance | 3,900 | 12,296 | |||||||
| Zhongji Innolight Co. Ltd., Class A |
Machinery | 400 | 3,431 | |||||||
| Zhongshan Public Utilities Group Co. Ltd., Class A |
Water Utilities | 700 | 719 | |||||||
| Zhongsheng Group Holdings Ltd. |
Specialty Retail | 3,000 | 14,790 | |||||||
| Zhongtai Securities Co. Ltd., Class A |
Capital Markets | 1,100 | 1,073 | |||||||
| Zhuhai Huafa Properties Co. Ltd., Class A |
Real Estate Management & Development | 700 | 1,099 | |||||||
| Zhuzhou CRRC Times Electric Co. Ltd., Class A, A |
Electrical Equipment | 200 | 1,390 | |||||||
| Zhuzhou CRRC Times Electric Co. Ltd., Class H |
Electrical Equipment | 2,700 | 11,746 | |||||||
| Zhuzhou Hongda Electronics Corp. Ltd., Class A, A |
Electronic Equipment, Instruments & Components | 200 | 1,328 | |||||||
| Zhuzhou Kibing Group Co. Ltd., Class A |
Building Products | 700 | 1,063 | |||||||
| Zijin Mining Group Co. Ltd., Class A |
Metals & Mining | 7,400 | 13,351 | |||||||
| Zijin Mining Group Co. Ltd., Class H |
Metals & Mining | 28,000 | 46,798 | |||||||
| Zoomlion Heavy Industry Science & Technology Co. Ltd., Class A |
Machinery | 2,800 | 2,532 | |||||||
| Zoomlion Heavy Industry Science & Technology Co. Ltd., Class H |
Machinery | 7,800 | 4,124 | |||||||
| ZTE Corp., Class A |
Communications Equipment | 1,400 | 6,638 | |||||||
| ZTE Corp., Class H |
Communications Equipment | 4,000 | 11,720 | |||||||
| ZTO Express Cayman, Inc. |
Air Freight & Logistics | 2,100 | 59,924 | |||||||
|
|
|
|||||||||
| 10,619,511 | ||||||||||
|
|
|
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Hong Kong 7.4% |
||||||||||
| AIA Group Ltd. |
Insurance | 56,400 | $ | 593,820 | ||||||
| aAlibaba Health Information Technology Ltd., Class A |
Health Care Technology | 24,000 | 17,366 | |||||||
| aAlibaba Pictures Group Ltd., Class A |
Media | 70,000 | 4,548 | |||||||
| ASMPT Ltd., Class A |
Semiconductors & Semiconductor Equipment | 1,400 | 13,857 | |||||||
| Bank of East Asia Ltd., Class A |
Banks | 4,200 | 5,340 | |||||||
| Beijing Enterprises Water Group Ltd., Class A |
Water Utilities | 22,000 | 5,493 | |||||||
| Bosideng International Holdings Ltd., Class A |
Household Durables | 14,000 | 7,811 | |||||||
| Cafe de Coral Holdings Ltd., Class A |
Hotels, Restaurants & Leisure | 2,000 | 2,650 | |||||||
| aCathay Pacific Airways Ltd., Class A |
Airlines | 5,000 | 4,809 | |||||||
| Champion REIT, Class A |
Diversified REITs | 11,000 | 4,722 | |||||||
| China Everbright Environment Group Ltd., Class B |
Commercial Services & Supplies | 19,000 | 8,157 | |||||||
| China Everbright Ltd., Class A |
Capital Markets | 4,000 | 2,869 | |||||||
| China Gas Holdings Ltd., Class A |
Gas Utilities | 14,800 | 20,852 | |||||||
| China Mengniu Dairy Co. Ltd., Class B |
Food Products | 15,000 | 61,529 | |||||||
| China Power International Development Ltd., Class H |
Independent Power Producers & Energy Traders | 21,000 | 8,347 | |||||||
| China Resources Beer Holdings Co. Ltd., Class A |
Beverages | 7,553 | 60,617 | |||||||
| China Resources Gas Group Ltd., Class A |
Gas Utilities | 4,500 | 16,596 | |||||||
| China Resources Land Ltd., Class H |
Real Estate Management & Development | 13,500 | 61,567 | |||||||
| China State Construction International Holdings Ltd., Class A |
Construction & Engineering | 8,000 | 9,050 | |||||||
| China Traditional Chinese Medicine Holdings Co. Ltd. |
Pharmaceuticals | 13,000 | 6,806 | |||||||
| CK Asset Holdings Ltd. |
Real Estate Management & Development | 9,200 | 55,845 | |||||||
| CK Infrastructure Holdings Ltd., Class A |
Electric Utilities | 2,900 | 15,775 | |||||||
| CLP Holdings Ltd. |
Electric Utilities | 7,900 | 57,061 | |||||||
| COSCO SHIPPING Ports Ltd., Class B |
Transportation Infrastructure | 6,000 | 4,005 | |||||||
| Dah Sing Banking Group Ltd., Class A |
Banks | 2,400 | 1,837 | |||||||
| Dah Sing Financial Holdings Ltd., Class H |
Banks | 800 | 2,053 | |||||||
| DFI Retail Group Holdings Ltd., Class A |
Consumer Staples Distribution & Retail | 1,500 | 4,545 | |||||||
| Far East Horizon Ltd. |
Financial Services | 7,000 | 6,296 | |||||||
| Geely Automobile Holdings Ltd. |
Automobiles | 25,000 | 32,166 | |||||||
| Guangdong Investment Ltd. |
Water Utilities | 14,000 | 14,321 | |||||||
| Guotai Junan International Holdings Ltd. |
Capital Markets | 13,000 | 1,060 | |||||||
| aHaitong International Securities Group Ltd. |
Capital Markets | 14,000 | 1,159 | |||||||
| Hang Lung Group Ltd. |
Real Estate Management & Development | 4,000 | 7,062 | |||||||
| Hang Lung Properties Ltd. |
Real Estate Management & Development | 9,000 | 16,831 | |||||||
| Hang Seng Bank Ltd. |
Banks | 3,400 | 48,380 | |||||||
| Henderson Land Development Co. Ltd. |
Real Estate Management & Development | 6,000 | 20,752 | |||||||
| Hong Kong & China Gas Co. Ltd. |
Gas Utilities | 52,000 | 45,773 | |||||||
| Hong Kong Exchanges & Clearing Ltd. |
Capital Markets | 6,100 | 270,577 | |||||||
| Hongkong Land Holdings Ltd. |
Real Estate Management & Development | 4,900 | 21,511 | |||||||
| Huabao International Holdings Ltd. |
Chemicals | 5,000 | 2,338 | |||||||
| Hutchison Port Holdings Trust |
Transportation Infrastructure | 26,300 | 4,918 | |||||||
| Hutchison Telecommunications Hong Kong Holdings Ltd. |
Diversified Telecommunication Services | 6,000 | 948 | |||||||
| Hysan Development Co. Ltd. |
Real Estate Management & Development | 3,000 | 8,522 | |||||||
| Jardine Matheson Holdings Ltd. |
Industrial Conglomerates | 930 | 45,170 | |||||||
| Johnson Electric Holdings Ltd. |
Electrical Equipment | 2,000 | 2,267 | |||||||
| Kerry Properties Ltd. |
Real Estate Management & Development | 3,000 | 7,662 | |||||||
| Kingboard Laminates Holdings Ltd. |
Electronic Equipment, Instruments & Components | 5,500 | 5,745 | |||||||
| Kunlun Energy Co. Ltd. |
Oil, Gas & Consumable Fuels | 18,000 | 14,079 | |||||||
| Link REIT |
Diversified REITs | 12,600 | 81,058 | |||||||
| Man Wah Holdings Ltd. |
Household Durables | 8,000 | 6,594 | |||||||
| aMelco International Development Ltd. |
Hotels, Restaurants & Leisure | 4,000 | 4,662 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Hong Kong (continued) |
||||||||||
| MTR Corp. Ltd. |
Ground Transportation | 7,000 | $ | 33,752 | ||||||
| New World Development Co. Ltd. |
Real Estate Management & Development | 7,000 | 18,771 | |||||||
| NWS Holdings Ltd. |
Industrial Conglomerates | 7,000 | 6,269 | |||||||
| Orient Overseas International Ltd. |
Marine Transportation | 700 | 13,394 | |||||||
| PCCW Ltd. |
Diversified Telecommunication Services | 21,000 | 10,487 | |||||||
| Power Assets Holdings Ltd. |
Electric Utilities | 7,000 | 37,542 | |||||||
| Shanghai Industrial Holdings Ltd. |
Industrial Conglomerates | 3,000 | 4,013 | |||||||
| Shougang Fushan Resources Group Ltd. |
Metals & Mining | 8,000 | 2,538 | |||||||
| Sino Biopharmaceutical Ltd. |
Pharmaceuticals | 49,000 | 27,465 | |||||||
| Sino Land Co. Ltd. |
Real Estate Management & Development | 17,500 | 23,675 | |||||||
| Sun Hung Kai Properties Ltd. |
Real Estate Management & Development | 7,000 | 98,090 | |||||||
| aSuper Hi International Holding Ltd. |
Hotels, Restaurants & Leisure | 520 | 1,306 | |||||||
| Swire Pacific Ltd., Class A |
Real Estate Management & Development | 2,000 | 15,363 | |||||||
| Swire Pacific Ltd., Class B |
Real Estate Management & Development | 5,000 | 6,185 | |||||||
| Swire Properties Ltd. |
Real Estate Management & Development | 4,200 | 10,808 | |||||||
| Techtronic Industries Co. Ltd. |
Household Durables | 6,500 | 70,258 | |||||||
| aUnited Energy Group Ltd. |
Oil, Gas & Consumable Fuels | 36,000 | 4,265 | |||||||
| Vinda International Holdings Ltd. |
Household Products | 1,000 | 2,418 | |||||||
| Vitasoy International Holdings Ltd. |
Food Products | 3,500 | 6,777 | |||||||
| VTech Holdings Ltd. |
Communications Equipment | 800 | 4,785 | |||||||
| bWH Group Ltd. |
Food Products | 38,500 | 22,953 | |||||||
| Wharf Holdings Ltd. |
Real Estate Management & Development | 5,000 | 11,440 | |||||||
| Wharf Real Estate Investment Co. Ltd. |
Real Estate Management & Development | 7,000 | 40,217 | |||||||
| Xinyi Glass Holdings Ltd. |
Automobile Components | 9,625 | 17,239 | |||||||
| Yue Yuen Industrial Holdings Ltd. |
Textiles, Apparel & Luxury Goods | 3,500 | 4,931 | |||||||
|
|
|
|||||||||
| 2,222,719 | ||||||||||
|
|
|
|||||||||
| India 15.8% |
||||||||||
| 3M India Ltd. |
Industrial Conglomerates | 14 | 3,912 | |||||||
| Aarti Industries Ltd. |
Chemicals | 931 | 5,870 | |||||||
| ABB India Ltd. |
Electrical Equipment | 210 | 8,599 | |||||||
| ACC Ltd. |
Construction Materials | 364 | 7,384 | |||||||
| Adani Enterprises Ltd. |
Trading Companies & Distributors | 1,309 | 27,881 | |||||||
| aAdani Green Energy Ltd. |
Independent Power Producers & Energy Traders | 1,953 | 20,940 | |||||||
| Adani Ports & Special Economic Zone Ltd. |
Transportation Infrastructure | 3,941 | 30,302 | |||||||
| aAdani Power Ltd. |
Independent Power Producers & Energy Traders | 4,809 | 11,212 | |||||||
| Adani Total Gas Ltd. |
Gas Utilities | 1,330 | 14,043 | |||||||
| aAdani Transmission Ltd. |
Electric Utilities | 1,239 | 14,971 | |||||||
| aAdani Wilmar Ltd. |
Food Products | 770 | 3,803 | |||||||
| aAditya Birla Capital Ltd. |
Financial Services | 2,401 | 4,486 | |||||||
| Alkem Laboratories Ltd. |
Pharmaceuticals | 126 | 5,207 | |||||||
| Ambuja Cements Ltd. |
Construction Materials | 3,416 | 15,194 | |||||||
| APL Apollo Tubes Ltd. |
Metals & Mining | 819 | 12,012 | |||||||
| Apollo Hospitals Enterprise Ltd. |
Health Care Providers & Services | 490 | 25,703 | |||||||
| Ashok Leyland Ltd. |
Machinery | 7,070 | 11,975 | |||||||
| Asian Paints Ltd. |
Chemicals | 2,163 | 72,685 | |||||||
| Astral Ltd. |
Building Products | 584 | 9,501 | |||||||
| bAU Small Finance Bank Ltd. |
Banks | 1,568 | 11,051 | |||||||
| Aurobindo Pharma Ltd. |
Pharmaceuticals | 1,316 | 8,296 | |||||||
| a,bAvenue Supermarts Ltd. |
Consumer Staples Distribution & Retail | 707 | 29,259 | |||||||
| Axis Bank Ltd. |
Banks | 11,102 | 115,974 | |||||||
| Bajaj Auto Ltd. |
Automobiles | 343 | 16,214 | |||||||
| Bajaj Finance Ltd. |
Consumer Finance | 1,134 | 77,503 | |||||||
| Bajaj Finserv Ltd. |
Financial Services | 1,820 | 28,048 | |||||||
| Bajaj Holdings & Investment Ltd. |
Financial Services | 126 | 9,077 | |||||||
| Balkrishna Industries Ltd. |
Automobile Components | 392 | 9,308 | |||||||
| a,bBandhan Bank Ltd. |
Banks | 3,997 | 9,520 | |||||||
| Bank of Baroda |
Banks | 5,166 | 10,614 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| India (continued) |
||||||||||
| Bank of India |
Banks | 2,401 | $ | 2,181 | ||||||
| Bata India Ltd. |
Textiles, Apparel & Luxury Goods | 308 | 5,316 | |||||||
| Bayer CropScience Ltd. |
Chemicals | 63 | 3,126 | |||||||
| Berger Paints India Ltd. |
Chemicals | 1,204 | 8,522 | |||||||
| Bharat Electronics Ltd. |
Aerospace & Defense | 16,345 | 19,401 | |||||||
| Bharat Forge Ltd. |
Automobile Components | 1,239 | 11,615 | |||||||
| Bharat Heavy Electricals Ltd. |
Electrical Equipment | 4,620 | 3,938 | |||||||
| Bharat Petroleum Corp. Ltd. |
Oil, Gas & Consumable Fuels | 4,550 | 19,062 | |||||||
| Bharti Airtel Ltd. |
Wireless Telecommunication Services | 735 | 3,280 | |||||||
| Bharti Airtel Ltd. |
Wireless Telecommunication Services | 11,088 | 101,054 | |||||||
| Biocon Ltd. |
Biotechnology | 2,205 | 5,536 | |||||||
| Bosch Ltd. |
Automobile Components | 42 | 9,899 | |||||||
| Britannia Industries Ltd. |
Food Products | 560 | 29,452 | |||||||
| Canara Bank |
Banks | 1,862 | 6,445 | |||||||
| Castrol India Ltd. |
Chemicals | 2,464 | 3,327 | |||||||
| aCG Power & Industrial Solutions Ltd. |
Electrical Equipment | 3,458 | 12,625 | |||||||
| Cholamandalam Investment & Finance Co. Ltd. |
Consumer Finance | 2,016 | 18,675 | |||||||
| Cipla Ltd. |
Pharmaceuticals | 2,534 | 27,766 | |||||||
| Coal India Ltd. |
Oil, Gas & Consumable Fuels | 9,387 | 24,403 | |||||||
| Coforge Ltd. |
IT Services | 182 | 8,447 | |||||||
| Colgate-Palmolive India Ltd. |
Personal Products | 651 | 11,940 | |||||||
| Container Corp. Of India Ltd. |
Ground Transportation | 1,155 | 8,155 | |||||||
| Coromandel International Ltd. |
Chemicals | 553 | 5,916 | |||||||
| Cummins India Ltd. |
Machinery | 658 | 13,048 | |||||||
| Dabur India Ltd. |
Personal Products | 2,870 | 19,029 | |||||||
| Dalmia Bharat Ltd. |
Construction Materials | 329 | 7,879 | |||||||
| Deepak Nitrite Ltd. |
Chemicals | 371 | 8,318 | |||||||
| Divi’s Laboratories Ltd. |
Life Sciences Tools & Services | 595 | 20,441 | |||||||
| Dixon Technologies India Ltd. |
Household Durables | 175 | 6,093 | |||||||
| DLF Ltd. |
Real Estate Management & Development | 3,010 | 13,064 | |||||||
| bDr Lal PathLabs Ltd. |
Health Care Providers & Services | 175 | 3,893 | |||||||
| Dr Reddy’s Laboratories Ltd. |
Pharmaceuticals | 581 | 32,681 | |||||||
| Eicher Motors Ltd. |
Automobiles | 693 | 24,866 | |||||||
| Emami Ltd. |
Personal Products | 707 | 3,085 | |||||||
| Embassy Office Parks REIT |
Diversified REITs | 2,674 | 10,157 | |||||||
| Exide Industries Ltd. |
Automobile Components | 2,198 | 4,759 | |||||||
| Federal Bank Ltd. |
Banks | 6,573 | 10,581 | |||||||
| aFSN E-Commerce Ventures Ltd. |
Specialty Retail | 6,489 | 9,811 | |||||||
| GAIL India Ltd. |
Gas Utilities | 13,328 | 17,053 | |||||||
| bGeneral Insurance Corp. of India |
Insurance | 518 | 842 | |||||||
| GlaxoSmithKline Pharmaceuticals Ltd. |
Pharmaceuticals | 203 | 3,272 | |||||||
| Glenmark Pharmaceuticals Ltd. |
Pharmaceuticals | 707 | 3,998 | |||||||
| aGMR Airports Infrastructure Ltd. |
Construction & Engineering | 11,893 | 5,868 | |||||||
| aGodrej Consumer Products Ltd. |
Personal Products | 1,652 | 19,461 | |||||||
| aGodrej Industries Ltd. |
Chemicals | 420 | 2,064 | |||||||
| aGodrej Properties Ltd. |
Real Estate Management & Development | 441 | 5,533 | |||||||
| Grasim Industries Ltd. |
Construction Materials | 1,911 | 37,965 | |||||||
| Gujarat Fluorochemicals Ltd. |
Chemicals | 175 | 6,431 | |||||||
| Gujarat Gas Ltd. |
Gas Utilities | 707 | 3,954 | |||||||
| Havells India Ltd. |
Electrical Equipment | 1,204 | 17,412 | |||||||
| HCL Technologies Ltd. |
IT Services | 5,201 | 68,681 | |||||||
| bHDFC Asset Management Co. Ltd. |
Capital Markets | 280 | 5,819 | |||||||
| bHDFC Life Insurance Co. Ltd. |
Insurance | 4,830 | 29,339 | |||||||
| Hero MotoCorp Ltd. |
Automobiles | 595 | 16,995 | |||||||
| Hindalco Industries Ltd. |
Metals & Mining | 6,958 | 34,319 | |||||||
| Hindustan Aeronautics Ltd. |
Aerospace & Defense | 413 | 13,725 | |||||||
| Hindustan Petroleum Corp. Ltd. |
Oil, Gas & Consumable Fuels | 3,458 | 9,964 | |||||||
| 160 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| India (continued) |
||||||||||
| Hindustan Unilever Ltd. |
Household Products | 4,249 | $ | 132,375 | ||||||
| Hindustan Zinc Ltd. |
Metals & Mining | 1,204 | 4,298 | |||||||
| Honeywell Automation India Ltd. |
Electronic Equipment, Instruments & Components | 8 | 3,542 | |||||||
| Housing Development Finance Corp. Ltd. |
Financial Services | 8,484 | 271,040 | |||||||
| ICICI Bank Ltd. |
Banks | 7,567 | 80,773 | |||||||
| bICICI Lombard General Insurance Co. Ltd. |
Insurance | 1,183 | 15,395 | |||||||
| bICICI Prudential Life Insurance Co. Ltd. |
Insurance | 1,904 | 10,094 | |||||||
| aIDFC First Bank Ltd. |
Banks | 15,687 | 10,508 | |||||||
| Indian Bank |
Banks | 945 | 3,318 | |||||||
| Indian Hotels Co. Ltd. |
Hotels, Restaurants & Leisure | 4,074 | 16,079 | |||||||
| Indian Oil Corp. Ltd. |
Oil, Gas & Consumable Fuels | 20,321 | 19,262 | |||||||
| Indian Railway Catering & Tourism Corp. Ltd. |
Commercial Services & Supplies | 1,484 | 10,343 | |||||||
| bIndian Railway Finance Corp. Ltd. |
Financial Services | 4,620 | 1,495 | |||||||
| Indraprastha Gas Ltd. |
Gas Utilities | 1,743 | 9,092 | |||||||
| Indus Towers Ltd. |
Diversified Telecommunication Services | 4,361 | 7,588 | |||||||
| Info Edge India Ltd. |
Interactive Media & Services | 371 | 16,809 | |||||||
| Infosys Ltd. |
IT Services | 17,108 | 297,258 | |||||||
| a,bInterGlobe Aviation Ltd. |
Airlines | 588 | 13,670 | |||||||
| Ipca Laboratories Ltd. |
Pharmaceuticals | 693 | 6,833 | |||||||
| ITC Ltd. |
Tobacco | 14,252 | 66,506 | |||||||
| Jindal Steel & Power Ltd. |
Metals & Mining | 1,960 | 13,027 | |||||||
| JSW Energy Ltd. |
Independent Power Producers & Energy Traders | 1,855 | 5,436 | |||||||
| JSW Steel Ltd. |
Metals & Mining | 4,802 | 40,206 | |||||||
| Jubilant Foodworks Ltd. |
Hotels, Restaurants & Leisure | 1,820 | 9,746 | |||||||
| Kansai Nerolac Paints Ltd. |
Chemicals | 672 | 3,163 | |||||||
| Kotak Mahindra Bank Ltd. |
Banks | 476 | 10,037 | |||||||
| L&T Finance Holdings Ltd. |
Financial Services | 4,494 | 4,487 | |||||||
| bL&T Technology Services Ltd. |
Professional Services | 133 | 5,468 | |||||||
| Larsen & Toubro Ltd. |
Construction & Engineering | 3,339 | 87,929 | |||||||
| bLaurus Labs Ltd. |
Pharmaceuticals | 1,806 | 6,438 | |||||||
| LIC Housing Finance Ltd. |
Financial Services | 1,673 | 6,692 | |||||||
| Linde India Ltd. |
Chemicals | 105 | 5,149 | |||||||
| bLTIMindtree Ltd. |
IT Services | 441 | 25,541 | |||||||
| Lupin Ltd. |
Pharmaceuticals | 1,225 | 9,665 | |||||||
| Macrotech Developers Ltd. |
Real Estate Management & Development | 385 | 4,358 | |||||||
| Mahindra & Mahindra Financial Services Ltd. |
Consumer Finance | 3,031 | 8,544 | |||||||
| Mahindra & Mahindra Ltd. |
Automobiles | 4,445 | 62,671 | |||||||
| aMangalore Refinery & Petrochemicals Ltd. |
Oil, Gas & Consumable Fuels | 784 | 501 | |||||||
| Marico Ltd. |
Personal Products | 2,611 | 15,244 | |||||||
| Maruti Suzuki India Ltd. |
Automobiles | 658 | 66,392 | |||||||
| aMax Financial Services Ltd. |
Insurance | 1,225 | 9,465 | |||||||
| aMax Healthcare Institute Ltd. |
Health Care Providers & Services | 3,605 | 19,349 | |||||||
| Mphasis Ltd. |
IT Services | 385 | 8,413 | |||||||
| MRF Ltd. |
Automobile Components | 12 | 12,272 | |||||||
| Muthoot Finance Ltd. |
Consumer Finance | 539 | 6,427 | |||||||
| Nestle India Ltd. |
Food Products | 168 | 40,281 | |||||||
| NHPC Ltd. |
Independent Power Producers & Energy Traders | 11,564 | 5,657 | |||||||
| bNippon Life India Asset Management Ltd. |
Capital Markets | 791 | 2,022 | |||||||
| NMDC Ltd. |
Metals & Mining | 5,726 | 7,772 | |||||||
| NTPC Ltd. |
Independent Power Producers & Energy Traders | 21,826 | 46,503 | |||||||
| Oberoi Realty Ltd. |
Real Estate Management & Development | 420 | 4,306 | |||||||
| Oil & Natural Gas Corp. Ltd. |
Oil, Gas & Consumable Fuels | 17,346 | 31,882 | |||||||
| Oil India Ltd. |
Oil, Gas & Consumable Fuels | 1,708 | 5,230 | |||||||
| One 97 Communications Ltd. |
IT Services | 462 | 3,580 | |||||||
| Oracle Financial Services Software Ltd. |
Software | 119 | 4,726 | |||||||
| Page Industries Ltd. |
Textiles, Apparel & Luxury Goods | 29 | 13,375 | |||||||
| Patanjali Foods Ltd. |
Food Products | 336 | 3,963 | |||||||
| franklintempleton.com | Annual Report |
161 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| India (continued) |
||||||||||
| aPB Fintech Ltd. |
Insurance | 1,715 | $ | 13,333 | ||||||
| Persistent Systems Ltd. |
IT Services | 245 | 13,742 | |||||||
| Petronet LNG Ltd. |
Oil, Gas & Consumable Fuels | 3,801 | 10,584 | |||||||
| PI Industries Ltd. |
Chemicals | 364 | 13,421 | |||||||
| Pidilite Industries Ltd. |
Chemicals | 742 | 21,244 | |||||||
| Piramal Enterprises Ltd. |
Pharmaceuticals | 630 | 5,200 | |||||||
| Polycab India Ltd. |
Electrical Equipment | 231 | 8,095 | |||||||
| Power Finance Corp. Ltd. |
Financial Services | 5,985 | 11,051 | |||||||
| Power Grid Corp. of India Ltd. |
Electric Utilities | 14,889 | 40,890 | |||||||
| Punjab National Bank |
Banks | 5,607 | 3,179 | |||||||
| Rajesh Exports Ltd. |
Textiles, Apparel & Luxury Goods | 686 | 5,093 | |||||||
| a,bRBL Bank Ltd. |
Banks | 2,380 | 4,086 | |||||||
| REC Ltd. |
Financial Services | 6,363 | 8,939 | |||||||
| Relaxo Footwears Ltd. |
Textiles, Apparel & Luxury Goods | 364 | 3,769 | |||||||
| Reliance Industries Ltd. |
Oil, Gas & Consumable Fuels | 15,673 | 444,554 | |||||||
| Samvardhana Motherson International Ltd. |
Automobile Components | 10,087 | 8,236 | |||||||
| SBI Cards & Payment Services Ltd. |
Consumer Finance | 1,449 | 13,051 | |||||||
| bSBI Life Insurance Co. Ltd. |
Insurance | 2,086 | 27,949 | |||||||
| Schaeffler India Ltd. |
Machinery | 196 | 6,839 | |||||||
| Shree Cement Ltd. |
Construction Materials | 67 | 21,349 | |||||||
| Shriram Finance Ltd. |
Consumer Finance | 1,190 | 18,236 | |||||||
| Siemens Ltd. |
Industrial Conglomerates | 392 | 15,870 | |||||||
| Solar Industries India Ltd. |
Chemicals | 105 | 4,845 | |||||||
| bSona Blw Precision Forgings Ltd. |
Automobile Components | 1,708 | 8,594 | |||||||
| SRF Ltd. |
Chemicals | 686 | 20,132 | |||||||
| aStar Health & Allied Insurance Co. Ltd. |
Insurance | 1,092 | 6,887 | |||||||
| State Bank of India |
Banks | 8,561 | 54,559 | |||||||
| Steel Authority of India Ltd. |
Metals & Mining | 7,049 | 7,093 | |||||||
| Sun Pharmaceutical Industries Ltd. |
Pharmaceuticals | 5,236 | 62,635 | |||||||
| Sun TV Network Ltd. |
Media | 497 | 2,515 | |||||||
| Supreme Industries Ltd. |
Chemicals | 308 | 9,420 | |||||||
| Tata Communications Ltd. |
Diversified Telecommunication Services | 448 | 6,790 | |||||||
| Tata Consultancy Services Ltd. |
IT Services | 4,935 | 192,512 | |||||||
| Tata Consumer Products Ltd. |
Food Products | 3,003 | 25,902 | |||||||
| Tata Elxsi Ltd. |
Software | 168 | 12,182 | |||||||
| aTata Motors Ltd., Class A |
Automobiles | 8,827 | 45,197 | |||||||
| aTata Motors Ltd., Class A |
Automobiles | 1,792 | 4,552 | |||||||
| Tata Power Co. Ltd. |
Electric Utilities | 8,141 | 18,846 | |||||||
| Tata Steel Ltd. |
Metals & Mining | 39,151 | 49,783 | |||||||
| aTata Teleservices Maharashtra Ltd. |
Diversified Telecommunication Services | 2,555 | 1,724 | |||||||
| Tech Mahindra Ltd. |
IT Services | 2,870 | 38,479 | |||||||
| Titan Co. Ltd. |
Textiles, Apparel & Luxury Goods | 2,002 | 61,264 | |||||||
| Torrent Pharmaceuticals Ltd. |
Pharmaceuticals | 469 | 8,772 | |||||||
| Torrent Power Ltd. |
Electric Utilities | 1,036 | 6,434 | |||||||
| Trent Ltd. |
Broadline Retail | 910 | 15,225 | |||||||
| Tube Investments of India Ltd. |
Automobile Components | 490 | 15,184 | |||||||
| TVS Motor Co. Ltd. |
Automobiles | 1,134 | 14,864 | |||||||
| UltraTech Cement Ltd. |
Construction Materials | 546 | 50,640 | |||||||
| Union Bank of India Ltd. |
Banks | 5,621 | 4,552 | |||||||
| United Breweries Ltd. |
Beverages | 266 | 4,611 | |||||||
| aUnited Spirits Ltd. |
Beverages | 1,288 | 11,853 | |||||||
| UNO Minda Ltd. |
Automobile Components | 847 | 4,957 | |||||||
| UPL Ltd. |
Chemicals | 2,625 | 22,923 | |||||||
| Varun Beverages Ltd. |
Beverages | 1,008 | 17,012 | |||||||
| Vedant Fashions Ltd. |
Textiles, Apparel & Luxury Goods | 175 | 2,426 | |||||||
| Vedanta Ltd. |
Metals & Mining | 6,048 | 20,197 | |||||||
| aVodafone Idea Ltd. |
Wireless Telecommunication Services | 20,979 | 1,481 | |||||||
| 162 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| India (continued) |
||||||||||
| Voltas Ltd. |
Construction & Engineering | 952 | $ | 9,479 | ||||||
| Whirlpool of India Ltd. |
Household Durables | 154 | 2,464 | |||||||
| Wipro Ltd. |
IT Services | 6,041 | 26,848 | |||||||
| aYes Bank Ltd. |
Banks | 95,704 | 17,526 | |||||||
| Zee Entertainment Enterprises Ltd. |
Media | 4,053 | 10,468 | |||||||
| aZomato Ltd. |
Hotels, Restaurants & Leisure | 26,733 | 16,590 | |||||||
| Zydus Lifesciences Ltd. |
Pharmaceuticals | 1,183 | 7,076 | |||||||
|
|
|
|||||||||
| 4,727,423 | ||||||||||
|
|
|
|||||||||
| Indonesia 2.3% |
||||||||||
| Adaro Energy Indonesia Tbk PT, Class B |
Oil, Gas & Consumable Fuels | 60,900 | 11,778 | |||||||
| Astra Agro Lestari Tbk PT, Class H |
Food Products | 2,100 | 1,134 | |||||||
| Astra International Tbk PT, Class H |
Automobiles | 95,900 | 38,374 | |||||||
| Avia Avian Tbk PT |
Chemicals | 58,500 | 2,321 | |||||||
| Bank Central Asia Tbk PT, Class A |
Banks | 266,700 | 155,632 | |||||||
| Bank Danamon Indonesia Tbk PT, Class H |
Banks | 4,200 | 804 | |||||||
| Bank Mandiri Persero Tbk PT, Class A |
Banks | 105,700 | 72,784 | |||||||
| Bank Negara Indonesia Persero Tbk PT, Class H |
Banks | 37,100 | 23,134 | |||||||
| Bank Rakyat Indonesia Persero Tbk PT, Class A |
Banks | 330,400 | 104,224 | |||||||
| Bank Syariah Indonesia Tbk PT |
Banks | 16,487 | 1,847 | |||||||
| Barito Pacific Tbk PT, Class A |
Chemicals | 121,232 | 6,670 | |||||||
| Bukit Asam Tbk PT, Class A |
Oil, Gas & Consumable Fuels | 20,300 | 5,402 | |||||||
| aBumi Serpong Damai Tbk PT, Class A |
Real Estate Management & Development | 44,100 | 2,882 | |||||||
| Charoen Pokphand Indonesia Tbk PT, Class A |
Food Products | 36,400 | 12,114 | |||||||
| Dayamitra Telekomunikasi PT |
Diversified Telecommunication Services | 116,900 | 5,496 | |||||||
| Elang Mahkota Teknologi Tbk PT |
Media | 148,400 | 7,819 | |||||||
| First Pacific Co. Ltd. |
Financial Services | 14,000 | 4,494 | |||||||
| aGoTo Gojek Tokopedia Tbk PT |
Broadline Retail | 3,416,000 | 24,832 | |||||||
| Gudang Garam Tbk PT |
Tobacco | 2,100 | 3,641 | |||||||
| Hanjaya Mandala Sampoerna Tbk PT |
Tobacco | 44,100 | 3,309 | |||||||
| Indah Kiat Pulp & Paper Tbk PT |
Paper & Forest Products | 12,600 | 6,302 | |||||||
| Indocement Tunggal Prakarsa Tbk PT |
Construction Materials | 9,100 | 6,388 | |||||||
| Indofood CBP Sukses Makmur Tbk PT |
Food Products | 10,900 | 7,251 | |||||||
| Indofood Sukses Makmur Tbk PT |
Food Products | 21,000 | 8,683 | |||||||
| Indosat Tbk PT |
Wireless Telecommunication Services | 4,900 | 2,271 | |||||||
| aJasa Marga Persero Tbk PT |
Transportation Infrastructure | 11,200 | 2,405 | |||||||
| Kalbe Farma Tbk PT |
Pharmaceuticals | 92,400 | 12,941 | |||||||
| Mayora Indah Tbk PT |
Food Products | 19,600 | 3,490 | |||||||
| aMedia Nusantara Citra Tbk PT |
Media | 21,700 | 854 | |||||||
| aMerdeka Copper Gold Tbk PT |
Metals & Mining | 88,900 | 24,842 | |||||||
| aMNC Digital Entertainment Tbk PT |
Entertainment | 8,100 | 2,199 | |||||||
| Perusahaan Gas Negara Tbk PT |
Gas Utilities | 50,100 | 4,611 | |||||||
| Sarana Menara Nusantara Tbk PT |
Diversified Telecommunication Services | 90,300 | 5,571 | |||||||
| Semen Indonesia Persero Tbk PT |
Construction Materials | 16,454 | 6,913 | |||||||
| aSmartfren Telecom Tbk PT |
Wireless Telecommunication Services | 508,900 | 2,070 | |||||||
| Sumber Alfaria Trijaya Tbk PT |
Consumer Staples Distribution & Retail | 94,500 | 18,151 | |||||||
| Surya Citra Media Tbk PT |
Media | 140,000 | 1,755 | |||||||
| Telkom Indonesia Persero Tbk PT, Class B |
Diversified Telecommunication Services | 223,300 | 60,462 | |||||||
| Tower Bersama Infrastructure Tbk PT |
Diversified Telecommunication Services | 20,300 | 2,924 | |||||||
| Unilever Indonesia Tbk PT |
Household Products | 27,700 | 8,036 | |||||||
| United Tractors Tbk PT |
Oil, Gas & Consumable Fuels | 7,700 | 14,944 | |||||||
| aVale Indonesia Tbk PT |
Metals & Mining | 10,500 | 4,657 | |||||||
| XL Axiata Tbk PT |
Wireless Telecommunication Services | 18,900 | 2,496 | |||||||
|
|
|
|||||||||
| 698,907 | ||||||||||
|
|
|
|||||||||
| Italy 0.1% |
||||||||||
| PRADA SpA |
Textiles, Apparel & Luxury Goods | 2,400 | 17,014 | |||||||
|
|
|
|||||||||
| franklintempleton.com | Annual Report |
163 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Luxembourg 0.0%† |
||||||||||
| L’Occitane International SA |
Specialty Retail | 2,250 | $ | 5,618 | ||||||
|
|
|
|||||||||
| Macau 0.4% |
||||||||||
| aGalaxy Entertainment Group Ltd. |
Hotels, Restaurants & Leisure | 10,000 | 66,816 | |||||||
| aMGM China Holdings Ltd. |
Hotels, Restaurants & Leisure | 4,400 | 5,437 | |||||||
| aSands China Ltd. |
Hotels, Restaurants & Leisure | 11,200 | 38,951 | |||||||
| aSJM Holdings Ltd. |
Hotels, Restaurants & Leisure | 11,500 | 5,743 | |||||||
| aWynn Macau Ltd. |
Hotels, Restaurants & Leisure | 7,600 | 7,493 | |||||||
|
|
|
|||||||||
| 124,440 | ||||||||||
|
|
|
|||||||||
| Malaysia 1.8% |
||||||||||
| Alliance Bank Malaysia Bhd, Class A |
Banks | 6,000 | 4,623 | |||||||
| AMMB Holdings Bhd |
Beverages | 10,500 | 8,924 | |||||||
| Astro Malaysia Holdings Bhd, Class A |
Media | 6,000 | 945 | |||||||
| Axiata Group Bhd, Class A |
Wireless Telecommunication Services | 22,800 | 15,553 | |||||||
| British American Tobacco Malaysia Bhd, Class A |
Tobacco | 700 | 1,723 | |||||||
| CELCOMDIGI BHD |
Wireless Telecommunication Services | 18,200 | 17,901 | |||||||
| CIMB Group Holdings Bhd, Class A |
Banks | 31,200 | 37,546 | |||||||
| Dialog Group Bhd, Class A |
Energy Equipment & Services | 20,300 | 10,857 | |||||||
| FGV Holdings Bhd |
Food Products | 3,200 | 1,073 | |||||||
| Fraser & Neave Holdings Bhd |
Beverages | 600 | 3,535 | |||||||
| Gamuda Bhd |
Construction & Engineering | 10,900 | 10,079 | |||||||
| Genting Bhd |
Hotels, Restaurants & Leisure | 11,200 | 11,828 | |||||||
| Genting Malaysia Bhd |
Hotels, Restaurants & Leisure | 14,000 | 8,408 | |||||||
| Hartalega Holdings Bhd |
Health Care Equipment & Supplies | 7,900 | 3,402 | |||||||
| Hong Leong Bank Bhd |
Banks | 3,200 | 14,664 | |||||||
| Hong Leong Financial Group Bhd |
Banks | 1,100 | 4,482 | |||||||
| IHH Healthcare Bhd |
Health Care Providers & Services | 14,000 | 18,244 | |||||||
| IJM Corp. Bhd |
Construction & Engineering | 15,400 | 5,584 | |||||||
| IOI Corp. Bhd |
Food Products | 13,300 | 11,484 | |||||||
| Kuala Lumpur Kepong Bhd |
Food Products | 2,100 | 9,890 | |||||||
| Malayan Banking Bhd |
Banks | 34,300 | 66,618 | |||||||
| aMalaysia Airports Holdings Bhd |
Transportation Infrastructure | 4,550 | 7,002 | |||||||
| Maxis Bhd |
Wireless Telecommunication Services | 10,200 | 9,547 | |||||||
| MISC Bhd |
Marine Transportation | 8,800 | 14,399 | |||||||
| bMR DIY Group M Bhd |
Specialty Retail | 11,100 | 3,899 | |||||||
| Nestle Malaysia Bhd |
Food Products | 270 | 8,389 | |||||||
| Petronas Chemicals Group Bhd |
Chemicals | 14,000 | 22,432 | |||||||
| Petronas Dagangan Bhd |
Oil, Gas & Consumable Fuels | 1,400 | 6,771 | |||||||
| Petronas Gas Bhd |
Gas Utilities | 2,900 | 10,831 | |||||||
| PPB Group Bhd |
Food Products | 2,800 | 10,508 | |||||||
| Press Metal Aluminium Holdings Bhd |
Metals & Mining | 17,500 | 19,314 | |||||||
| Public Bank Bhd |
Banks | 68,600 | 62,187 | |||||||
| QL Resources Bhd |
Food Products | 5,700 | 7,505 | |||||||
| RHB Bank Bhd |
Banks | 8,100 | 10,243 | |||||||
| Sime Darby Bhd |
Industrial Conglomerates | 17,700 | 8,624 | |||||||
| Sime Darby Plantation Bhd |
Food Products | 17,900 | 17,322 | |||||||
| Telekom Malaysia Bhd |
Diversified Telecommunication Services | 4,200 | 4,664 | |||||||
| Tenaga Nasional Bhd |
Electric Utilities | 14,700 | 30,749 | |||||||
| aTop Glove Corp. Bhd |
Health Care Equipment & Supplies | 26,300 | 5,603 | |||||||
| Westports Holdings Bhd |
Transportation Infrastructure | 3,500 | 2,856 | |||||||
| YTL Corp. Bhd |
Multi-Utilities | 20,713 | 2,887 | |||||||
|
|
|
|||||||||
| 533,095 | ||||||||||
|
|
|
|||||||||
| Pakistan 0.0%† |
||||||||||
| Oil & Gas Development Co. Ltd. |
Oil, Gas & Consumable Fuels | 3,500 | 1,028 | |||||||
| Pakistan Petroleum Ltd. |
Oil, Gas & Consumable Fuels | 3,507 | 790 | |||||||
|
|
|
|||||||||
| 1,818 | ||||||||||
|
|
|
|||||||||
| 164 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Philippines 0.9% |
||||||||||
| Aboitiz Power Corp., Class A |
Independent Power Producers & Energy Traders | 8,100 | $ | 5,543 | ||||||
| ACEN Corp. |
Independent Power Producers & Energy Traders | 32,940 | 3,708 | |||||||
| Alliance Global Group, Inc., Class A |
Industrial Conglomerates | 19,300 | 4,388 | |||||||
| Ayala Corp., Class A |
Financial Services | 1,400 | 16,739 | |||||||
| Ayala Land, Inc., Class A |
Real Estate Management & Development | 35,700 | 17,402 | |||||||
| Bank of the Philippine Islands, Class A |
Banks | 9,686 | 18,262 | |||||||
| BDO Unibank, Inc., Class A |
Banks | 11,844 | 27,995 | |||||||
| aBloomberry Resorts Corp., Class H |
Hotels, Restaurants & Leisure | 15,100 | 2,722 | |||||||
| aConverge Information & Communications Technology Solutions, Inc. |
Diversified Telecommunication Services | 10,200 | 2,402 | |||||||
| DMCI Holdings, Inc., Class A |
Industrial Conglomerates | 17,900 | 3,786 | |||||||
| aEmperador, Inc. |
Beverages | 11,900 | 4,575 | |||||||
| Globe Telecom, Inc. |
Wireless Telecommunication Services | 152 | 5,212 | |||||||
| GT Capital Holdings, Inc. |
Financial Services | 530 | 5,030 | |||||||
| International Container Terminal Services, Inc. |
Transportation Infrastructure | 4,970 | 19,509 | |||||||
| JG Summit Holdings, Inc. |
Industrial Conglomerates | 15,060 | 13,269 | |||||||
| Jollibee Foods Corp. |
Hotels, Restaurants & Leisure | 2,140 | 8,817 | |||||||
| LT Group, Inc. |
Industrial Conglomerates | 15,800 | 2,877 | |||||||
| Manila Electric Co. |
Electric Utilities | 1,330 | 7,608 | |||||||
| Megaworld Corp. |
Real Estate Management & Development | 63,000 | 2,318 | |||||||
| Metro Pacific Investments Corp. |
Financial Services | 35,000 | 2,369 | |||||||
| Metropolitan Bank & Trust Co. |
Banks | 8,980 | 9,663 | |||||||
| bMonde Nissin Corp. |
Food Products | 36,400 | 6,568 | |||||||
| PLDT, Inc. |
Wireless Telecommunication Services | 385 | 10,056 | |||||||
| Puregold Price Club, Inc. |
Consumer Staples Distribution & Retail | 5,360 | 3,086 | |||||||
| San Miguel Corp. |
Industrial Conglomerates | 1,910 | 3,759 | |||||||
| Semirara Mining & Power Corp. |
Oil, Gas & Consumable Fuels | 5,600 | 3,332 | |||||||
| SM Prime Holdings, Inc. |
Real Estate Management & Development | 52,500 | 31,675 | |||||||
| Universal Robina Corp. |
Food Products | 3,640 | 9,642 | |||||||
|
|
|
|||||||||
| 252,312 | ||||||||||
|
|
|
|||||||||
| Singapore 3.6% |
||||||||||
| bBOC Aviation Ltd., Class A |
Trading Companies & Distributors | 700 | 5,408 | |||||||
| CapitaLand Ascendas REIT, Class A |
Diversified REITs | 16,100 | 34,633 | |||||||
| CapitaLand Ascott Trust, Class A |
Diversified REITs | 9,100 | 6,810 | |||||||
| CapitaLand Integrated Commercial Trust, Class A |
Diversified REITs | 23,800 | 35,444 | |||||||
| Capitaland Investment Ltd. |
Real Estate Management & Development | 12,600 | 34,875 | |||||||
| City Developments Ltd., Class H |
Real Estate Management & Development | 2,100 | 11,641 | |||||||
| ComfortDelGro Corp. Ltd., Class H |
Ground Transportation | 10,200 | 9,053 | |||||||
| DBS Group Holdings Ltd., Class A |
Banks | 8,700 | 215,938 | |||||||
| Frasers Logistics & Commercial Trust |
Diversified REITs | 14,000 | 13,794 | |||||||
| Genting Singapore Ltd. |
Hotels, Restaurants & Leisure | 28,700 | 24,177 | |||||||
| Jardine Cycle & Carriage Ltd. |
Distributors | 400 | 9,411 | |||||||
| Keppel Corp. Ltd. |
Industrial Conglomerates | 6,300 | 26,677 | |||||||
| Keppel DC REIT |
Diversified REITs | 6,300 | 9,761 | |||||||
| Keppel REIT |
Diversified REITs | 8,400 | 5,591 | |||||||
| Mapletree Industrial Trust |
Diversified REITs | 9,500 | 16,934 | |||||||
| Mapletree Logistics Trust |
Diversified REITs | 16,100 | 20,707 | |||||||
| Mapletree Pan Asia Commercial Trust |
Diversified REITs | 10,900 | 14,757 | |||||||
| NETLINK NBN TRUST |
Diversified Telecommunication Services | 14,000 | 9,056 | |||||||
| Olam Group Ltd. |
Consumer Staples Distribution & Retail | 4,000 | 4,723 | |||||||
| Oversea-Chinese Banking Corp. Ltd. |
Banks | 16,800 | 156,306 | |||||||
| aSATS Ltd. |
Transportation Infrastructure | 4,365 | 9,160 | |||||||
| Sembcorp Industries Ltd. |
Industrial Conglomerates | 4,600 | 15,154 | |||||||
| aSembcorp Marine Ltd. |
Machinery | 179,035 | 16,024 | |||||||
| aSIA Engineering Co. Ltd. |
Transportation Infrastructure | 1,100 | 1,862 | |||||||
| Singapore Airlines Ltd. |
Airlines | 6,300 | 27,151 | |||||||
| Singapore Exchange Ltd. |
Capital Markets | 3,850 | 27,220 | |||||||
| franklintempleton.com | Annual Report |
165 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Singapore (continued) |
||||||||||
| Singapore Post Ltd. |
Air Freight & Logistics | 7,700 | $ | 2,896 | ||||||
| Singapore Technologies Engineering Ltd. |
Aerospace & Defense | 7,600 | 20,921 | |||||||
| Singapore Telecommunications Ltd. |
Diversified Telecommunication Services | 36,400 | 67,349 | |||||||
| StarHub Ltd. |
Wireless Telecommunication Services | 2,800 | 2,190 | |||||||
| Suntec Real Estate Investment Trust |
Diversified REITs | 10,500 | 11,293 | |||||||
| United Overseas Bank Ltd. |
Banks | 6,200 | 138,778 | |||||||
| UOL Group Ltd. |
Real Estate Management & Development | 2,100 | 10,946 | |||||||
| Venture Corp. Ltd. |
Electronic Equipment, Instruments & Components | 1,313 | 17,450 | |||||||
| Wilmar International Ltd. |
Food Products | 10,500 | 33,248 | |||||||
| aYangzijiang Financial Holding Ltd. |
Capital Markets | 12,600 | 3,554 | |||||||
| Yanlord Land Group Ltd. |
Real Estate Management & Development | 2,800 | 1,916 | |||||||
|
|
|
|||||||||
| 1,072,808 | ||||||||||
|
|
|
|||||||||
| South Korea 12.4% |
||||||||||
| aAlteogen, Inc., Class A |
Biotechnology | 168 | 5,117 | |||||||
| Amorepacific Corp., Class H |
Personal Products | 140 | 14,711 | |||||||
| AMOREPACIFIC Group, Class A |
Personal Products | 147 | 4,347 | |||||||
| BGF retail Co. Ltd. |
Consumer Staples Distribution & Retail | 28 | 3,908 | |||||||
| BNK Financial Group, Inc., Class H |
Banks | 1,477 | 7,386 | |||||||
| Celltrion Healthcare Co. Ltd., Class A |
Health Care Providers & Services | 491 | 22,705 | |||||||
| aCelltrion Pharm, Inc., Class A |
Pharmaceuticals | 100 | 6,368 | |||||||
| Celltrion, Inc., Class A |
Biotechnology | 535 | 61,561 | |||||||
| Cheil Worldwide, Inc., Class A |
Media | 357 | 5,106 | |||||||
| aCJ CheilJedang Corp., Class A |
Food Products | 35 | 8,764 | |||||||
| CJ Corp., Class A |
Industrial Conglomerates | 63 | 5,047 | |||||||
| aCJ ENM Co. Ltd., Class A |
Entertainment | 49 | 3,233 | |||||||
| aCJ Logistics Corp., Class A |
Ground Transportation | 42 | 2,578 | |||||||
| Coway Co. Ltd. |
Household Durables | 280 | 11,292 | |||||||
| aDaewoo Engineering & Construction Co. Ltd., Class A |
Construction & Engineering | 854 | 2,644 | |||||||
| aDaewoo Shipbuilding & Marine Engineering Co. Ltd., Class A |
Machinery | 245 | 4,611 | |||||||
| DB Insurance Co. Ltd., Class A |
Insurance | 217 | 12,485 | |||||||
| DGB Financial Group, Inc., Class A |
Banks | 777 | 4,118 | |||||||
| DL E&C Co. Ltd., Class A |
Construction & Engineering | 154 | 3,827 | |||||||
| DL Holdings Co. Ltd., Class A |
Construction & Engineering | 63 | 2,579 | |||||||
| Dongsuh Cos., Inc., Class A |
Consumer Staples Distribution & Retail | 154 | 2,322 | |||||||
| Doosan Bobcat, Inc., Class A |
Machinery | 112 | 3,760 | |||||||
| aDoosan Enerbility Co. Ltd., Class H |
Electrical Equipment | 1,939 | 25,320 | |||||||
| Ecopro BM Co. Ltd. |
Electrical Equipment | 196 | 33,800 | |||||||
| aE-MART, Inc., Class A |
Consumer Staples Distribution & Retail | 98 | 7,949 | |||||||
| F&F Co. Ltd. |
Textiles, Apparel & Luxury Goods | 77 | 8,251 | |||||||
| Fila Holdings Corp. |
Textiles, Apparel & Luxury Goods | 245 | 6,869 | |||||||
| Green Cross Corp. |
Biotechnology | 28 | 2,626 | |||||||
| GS Engineering & Construction Corp. |
Construction & Engineering | 308 | 4,886 | |||||||
| aGS Holdings Corp. |
Oil, Gas & Consumable Fuels | 252 | 7,820 | |||||||
| GS Retail Co. Ltd. |
Consumer Staples Distribution & Retail | 189 | 4,116 | |||||||
| Hana Financial Group, Inc. |
Banks | 1,372 | 42,893 | |||||||
| aHanjin Kal Corp. |
Airlines | 105 | 3,706 | |||||||
| Hankook Tire & Technology Co. Ltd. |
Automobile Components | 364 | 9,730 | |||||||
| aHanmi Pharm Co. Ltd. |
Pharmaceuticals | 28 | 5,506 | |||||||
| aHanmi Science Co. Ltd. |
Pharmaceuticals | 84 | 2,513 | |||||||
| Hanon Systems |
Automobile Components | 833 | 5,618 | |||||||
| Hanwha Aerospace Co. Ltd. |
Aerospace & Defense | 168 | 12,802 | |||||||
| Hanwha Corp. |
Industrial Conglomerates | 196 | 3,952 | |||||||
| Hanwha Corp. |
Industrial Conglomerates | 91 | 978 | |||||||
| Hanwha Galleria Co. Ltd. |
Broadline Retail | 568 | 929 | |||||||
| aHanwha Life Insurance Co. Ltd. |
Insurance | 1,435 | 2,646 | |||||||
| 166 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| South Korea (continued) |
||||||||||
| aHanwha Solutions Corp. |
Chemicals | 503 | $ | 20,748 | ||||||
| HD Hyundai Co. Ltd. |
Machinery | 245 | 10,934 | |||||||
| aHite Jinro Co. Ltd. |
Beverages | 154 | 2,650 | |||||||
| HL Mando Co. Ltd. |
Automobile Components | 161 | 5,670 | |||||||
| aHLB, Inc. |
Leisure Products | 476 | 12,706 | |||||||
| aHMM Co. Ltd. |
Marine Transportation | 1,428 | 22,322 | |||||||
| Hotel Shilla Co. Ltd. |
Specialty Retail | 154 | 9,641 | |||||||
| aHYBE Co. Ltd. |
Entertainment | 91 | 13,204 | |||||||
| Hyundai Department Store Co. Ltd. |
Broadline Retail | 70 | 2,941 | |||||||
| aHyundai Doosan Infracore Co. Ltd. |
Machinery | 651 | 3,765 | |||||||
| Hyundai Engineering & Construction Co. Ltd. |
Construction & Engineering | 357 | 9,996 | |||||||
| Hyundai Glovis Co. Ltd. |
Air Freight & Logistics | 91 | 11,079 | |||||||
| aHyundai Heavy Industries Co. Ltd. |
Machinery | 70 | 5,377 | |||||||
| Hyundai Marine & Fire Insurance Co. Ltd. |
Insurance | 301 | 7,815 | |||||||
| aHyundai Mipo Dockyard Co. Ltd. |
Machinery | 91 | 4,907 | |||||||
| Hyundai Mobis Co. Ltd. |
Automobile Components | 301 | 49,941 | |||||||
| Hyundai Motor Co. |
Automobiles | 672 | 95,237 | |||||||
| Hyundai Steel Co. |
Metals & Mining | 371 | 9,889 | |||||||
| Hyundai Wia Corp. |
Automobile Components | 84 | 3,613 | |||||||
| aIndustrial Bank of Korea |
Banks | 1,274 | 9,884 | |||||||
| aKakao Corp. |
Interactive Media & Services | 1,449 | 68,006 | |||||||
| aKakao Games Corp. |
Entertainment | 140 | 4,484 | |||||||
| aKakaoBank Corp. |
Banks | 770 | 14,284 | |||||||
| aKakaopay Corp. |
IT Services | 105 | 4,484 | |||||||
| aKangwon Land, Inc. |
Hotels, Restaurants & Leisure | 427 | 6,527 | |||||||
| KB Financial Group, Inc. |
Banks | 1,869 | 68,409 | |||||||
| KCC Corp. |
Building Products | 21 | 3,581 | |||||||
| aKEPCO Plant Service & Engineering Co. Ltd. |
Commercial Services & Supplies | 112 | 3,252 | |||||||
| Kia Corp. |
Automobiles | 1,232 | 76,654 | |||||||
| aKorea Aerospace Industries Ltd. |
Aerospace & Defense | 350 | 12,743 | |||||||
| aKorea Electric Power Corp. |
Electric Utilities | 1,253 | 17,334 | |||||||
| aKorea Gas Corp. |
Gas Utilities | 133 | 2,769 | |||||||
| aKorea Investment Holdings Co. Ltd. |
Capital Markets | 182 | 7,689 | |||||||
| aKorea Shipbuilding & Offshore Engineering Co. Ltd. |
Machinery | 210 | 12,501 | |||||||
| Korea Zinc Co. Ltd. |
Metals & Mining | 42 | 17,841 | |||||||
| aKorean Air Lines Co. Ltd. |
Airlines | 875 | 15,593 | |||||||
| aKrafton, Inc. |
Entertainment | 133 | 18,747 | |||||||
| aKT&G Corp. |
Tobacco | 511 | 32,932 | |||||||
| aKumho Petrochemical Co. Ltd. |
Chemicals | 84 | 9,272 | |||||||
| L&F Co. Ltd. |
Electronic Equipment, Instruments & Components | 112 | 26,971 | |||||||
| LG Chem Ltd. |
Chemicals | 226 | 123,603 | |||||||
| LG Corp. |
Industrial Conglomerates | 434 | 27,603 | |||||||
| aLG Display Co. Ltd. |
Electronic Equipment, Instruments & Components | 1,106 | 13,958 | |||||||
| LG Electronics, Inc. |
Household Durables | 532 | 47,117 | |||||||
| aLG Energy Solution Ltd. |
Electrical Equipment | 161 | 72,223 | |||||||
| LG H&H Co. Ltd. |
Personal Products | 40 | 18,435 | |||||||
| LG Innotek Co. Ltd. |
Electronic Equipment, Instruments & Components | 70 | 14,545 | |||||||
| LG Uplus Corp. |
Diversified Telecommunication Services | 1,050 | 8,735 | |||||||
| Lotte Chemical Corp. |
Chemicals | 84 | 12,311 | |||||||
| Lotte Chilsung Beverage Co. Ltd. |
Beverages | 14 | 1,773 | |||||||
| Lotte Corp. |
Industrial Conglomerates | 133 | 2,937 | |||||||
| aLotte Energy Materials Corp. |
Electronic Equipment, Instruments & Components | 91 | 4,809 | |||||||
| LOTTE Fine Chemical Co. Ltd. |
Chemicals | 84 | 3,768 | |||||||
| Lotte Shopping Co. Ltd. |
Broadline Retail | 56 | 3,523 | |||||||
| LS Corp. |
Electrical Equipment | 84 | 5,136 | |||||||
| Meritz Financial Group, Inc. |
Financial Services | 637 | 18,887 | |||||||
| franklintempleton.com | Annual Report |
167 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| South Korea (continued) |
||||||||||
| Mirae Asset Securities Co. Ltd. |
Capital Markets | 1,309 | $ | 6,496 | ||||||
| Mirae Asset Securities Co. Ltd. |
Capital Markets | 721 | 1,966 | |||||||
| NAVER Corp. |
Interactive Media & Services | 693 | 107,529 | |||||||
| NCSoft Corp. |
Entertainment | 73 | 20,832 | |||||||
| a,bNetmarble Corp. |
Software | 84 | 4,278 | |||||||
| aNH Investment & Securities Co. Ltd. |
Capital Markets | 644 | 4,353 | |||||||
| aNHN Corp. |
Software | 77 | 1,556 | |||||||
| NongShim Co. Ltd. |
Food Products | 18 | 5,240 | |||||||
| aOCI Co. Ltd. |
Chemicals | 84 | 6,601 | |||||||
| Orion Corp. |
Food Products | 84 | 8,814 | |||||||
| aOttogi Corp. |
Food Products | 7 | 2,409 | |||||||
| Pan Ocean Co. Ltd. |
Marine Transportation | 987 | 4,405 | |||||||
| aParadise Co. Ltd. |
Hotels, Restaurants & Leisure | 238 | 3,070 | |||||||
| aPearl Abyss Corp. |
Entertainment | 147 | 5,222 | |||||||
| POSCO Chemical Co. Ltd. |
Construction Materials | 133 | 27,839 | |||||||
| POSCO Holdings, Inc. |
Metals & Mining | 357 | 100,915 | |||||||
| Posco International Corp. |
Trading Companies & Distributors | 259 | 4,437 | |||||||
| S-1 Corp. |
Commercial Services & Supplies | 91 | 3,866 | |||||||
| a,bSamsung Biologics Co. Ltd. |
Life Sciences Tools & Services | 87 | 52,660 | |||||||
| Samsung C&T Corp. |
Industrial Conglomerates | 392 | 32,580 | |||||||
| Samsung Card Co. Ltd. |
Consumer Finance | 154 | 3,596 | |||||||
| Samsung Electro-Mechanics Co. Ltd. |
Electronic Equipment, Instruments & Components | 266 | 31,200 | |||||||
| Samsung Electronics Co. Ltd. |
Technology Hardware, Storage & Peripherals | 22,680 | 1,114,967 | |||||||
| aSamsung Engineering Co. Ltd. |
Construction & Engineering | 665 | 16,193 | |||||||
| Samsung Fire & Marine Insurance Co. Ltd. |
Insurance | 154 | 24,368 | |||||||
| aSamsung Heavy Industries Co. Ltd. |
Machinery | 2,989 | 11,870 | |||||||
| Samsung Life Insurance Co. Ltd. |
Insurance | 322 | 15,533 | |||||||
| Samsung SDI Co. Ltd. |
Electronic Equipment, Instruments & Components | 253 | 142,839 | |||||||
| Samsung SDS Co. Ltd. |
IT Services | 175 | 15,593 | |||||||
| Samsung Securities Co. Ltd. |
Capital Markets | 322 | 7,841 | |||||||
| SD Biosensor, Inc. |
Health Care Equipment & Supplies | 168 | 2,723 | |||||||
| aSeegene, Inc. |
Biotechnology | 147 | 2,800 | |||||||
| aShin Poong Pharmaceutical Co. Ltd. |
Pharmaceuticals | 168 | 2,324 | |||||||
| Shinhan Financial Group Co. Ltd. |
Banks | 2,401 | 65,196 | |||||||
| aShinsegae, Inc. |
Broadline Retail | 35 | 5,794 | |||||||
| aSK Biopharmaceuticals Co. Ltd. |
Pharmaceuticals | 126 | 6,127 | |||||||
| aSK Bioscience Co. Ltd. |
Biotechnology | 98 | 5,428 | |||||||
| SK Chemicals Co. Ltd. |
Chemicals | 35 | 2,003 | |||||||
| SK Hynix, Inc. |
Semiconductors & Semiconductor Equipment | 2,604 | 177,220 | |||||||
| a,bSK IE Technology Co. Ltd. |
Chemicals | 126 | 6,891 | |||||||
| aSK Innovation Co. Ltd. |
Oil, Gas & Consumable Fuels | 252 | 34,707 | |||||||
| SK Networks Co. Ltd. |
Trading Companies & Distributors | 728 | 2,519 | |||||||
| aSK Square Co. Ltd. |
Semiconductors & Semiconductor Equipment | 420 | 12,824 | |||||||
| SK Telecom Co. Ltd. |
Wireless Telecommunication Services | 112 | 4,155 | |||||||
| SK, Inc. |
Industrial Conglomerates | 175 | 23,188 | |||||||
| SKC Co. Ltd. |
Chemicals | 91 | 7,990 | |||||||
| S-Oil Corp. |
Oil, Gas & Consumable Fuels | 203 | 12,490 | |||||||
| Solus Advanced Materials Co. Ltd. |
Electronic Equipment, Instruments & Components | 70 | 2,527 | |||||||
| SSANGYONG C&E Co. Ltd. |
Construction Materials | 574 | 2,720 | |||||||
| aWemade Co. Ltd. |
Entertainment | 84 | 3,239 | |||||||
| Woori Financial Group, Inc. |
Banks | 3,024 | 26,504 | |||||||
| Yuhan Corp. |
Pharmaceuticals | 252 | 9,795 | |||||||
|
|
|
|||||||||
| 3,715,366 | ||||||||||
|
|
|
|||||||||
| Taiwan 16.4% |
||||||||||
| Accton Technology Corp. |
Communications Equipment | 2,630 | 27,555 | |||||||
| Acer, Inc., Class H |
Technology Hardware, Storage & Peripherals | 14,000 | 12,944 | |||||||
| Advanced Energy Solution Holding Co. Ltd. |
Electrical Equipment | 110 | 2,594 | |||||||
| 168 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Taiwan (continued) |
||||||||||
| Advantech Co. Ltd. |
Technology Hardware, Storage & Peripherals | 1,750 | $ | 21,324 | ||||||
| ASE Technology Holding Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 16,700 | 61,705 | |||||||
| Asia Cement Corp. |
Construction Materials | 11,000 | 15,643 | |||||||
| ASMedia Technology, Inc. |
Semiconductors & Semiconductor Equipment | 180 | 6,769 | |||||||
| ASPEED Technology, Inc. |
Semiconductors & Semiconductor Equipment | 156 | 13,501 | |||||||
| Asustek Computer, Inc. |
Technology Hardware, Storage & Peripherals | 3,500 | 31,324 | |||||||
| AUO Corp., Class H |
Electronic Equipment, Instruments & Components | 35,000 | 21,151 | |||||||
| Capital Securities Corp., Class A |
Capital Markets | 7,000 | 2,759 | |||||||
| Catcher Technology Co. Ltd. |
Technology Hardware, Storage & Peripherals | 3,000 | 18,721 | |||||||
| Cathay Financial Holding Co. Ltd., Class A |
Insurance | 43,001 | 59,034 | |||||||
| Chailease Holding Co. Ltd., Class A |
Financial Services | 6,650 | 48,814 | |||||||
| Chang Hwa Commercial Bank Ltd., Class A |
Banks | 28,000 | 15,955 | |||||||
| Cheng Shin Rubber Industry Co. Ltd., Class A |
Automobile Components | 8,800 | 10,564 | |||||||
| Chicony Electronics Co. Ltd. |
Technology Hardware, Storage & Peripherals | 2,630 | 8,232 | |||||||
| China Airlines Ltd., Class A |
Airlines | 14,000 | 8,966 | |||||||
| China Development Financial Holding Corp., Class A |
Banks | 70,000 | 28,853 | |||||||
| China Motor Corp., Class A |
Automobiles | 930 | 1,952 | |||||||
| China Steel Corp., Class A |
Metals & Mining | 59,000 | 59,877 | |||||||
| Chunghwa Telecom Co. Ltd. |
Diversified Telecommunication Services | 18,380 | 72,138 | |||||||
| Compal Electronics, Inc., Class H |
Technology Hardware, Storage & Peripherals | 21,000 | 17,415 | |||||||
| CTBC Financial Holding Co. Ltd., Class A |
Banks | 84,000 | 60,281 | |||||||
| Delta Electronics, Inc., Class A |
Electronic Equipment, Instruments & Components | 10,500 | 103,802 | |||||||
| E Ink Holdings, Inc. |
Electronic Equipment, Instruments & Components | 4,400 | 26,662 | |||||||
| E.Sun Financial Holding Co. Ltd., Class A |
Banks | 65,000 | 54,011 | |||||||
| Eclat Textile Co. Ltd., Class A |
Textiles, Apparel & Luxury Goods | 840 | 13,656 | |||||||
| eMemory Technology, Inc. |
Semiconductors & Semiconductor Equipment | 350 | 21,381 | |||||||
| ENNOSTAR, Inc., Class H |
Semiconductors & Semiconductor Equipment | 2,920 | 5,102 | |||||||
| Eternal Materials Co. Ltd., Class H |
Chemicals | 5,000 | 5,148 | |||||||
| Eva Airways Corp., Class H |
Airlines | 10,000 | 8,818 | |||||||
| Evergreen Marine Corp. Taiwan Ltd. |
Marine Transportation | 4,830 | 25,143 | |||||||
| Far Eastern International Bank |
Banks | 12,770 | 4,655 | |||||||
| Far Eastern New Century Corp. |
Industrial Conglomerates | 19,250 | 19,789 | |||||||
| Far EasTone Telecommunications Co. Ltd. |
Wireless Telecommunication Services | 7,000 | 17,289 | |||||||
| Feng TAY Enterprise Co. Ltd. |
Textiles, Apparel & Luxury Goods | 2,310 | 14,643 | |||||||
| First Financial Holding Co. Ltd. |
Banks | 49,000 | 42,567 | |||||||
| a,bFIT Hon Teng Ltd. |
Electronic Equipment, Instruments & Components | 7,000 | 1,641 | |||||||
| Formosa Chemicals & Fibre Corp. |
Chemicals | 16,700 | 37,900 | |||||||
| Formosa Petrochemical Corp. |
Oil, Gas & Consumable Fuels | 6,130 | 17,113 | |||||||
| Formosa Plastics Corp. |
Chemicals | 18,380 | 55,416 | |||||||
| Formosa Sumco Technology Corp. |
Semiconductors & Semiconductor Equipment | 350 | 1,908 | |||||||
| Formosa Taffeta Co. Ltd. |
Textiles, Apparel & Luxury Goods | 3,000 | 2,769 | |||||||
| Foxconn Technology Co. Ltd. |
Technology Hardware, Storage & Peripherals | 5,250 | 9,639 | |||||||
| Fubon Financial Holding Co. Ltd. |
Insurance | 35,000 | 64,948 | |||||||
| Genius Electronic Optical Co. Ltd. |
Electronic Equipment, Instruments & Components | 460 | 5,824 | |||||||
| Giant Manufacturing Co. Ltd. |
Leisure Products | 1,572 | 9,087 | |||||||
| Globalwafers Co. Ltd. |
Semiconductors & Semiconductor Equipment | 1,050 | 17,864 | |||||||
| Hiwin Technologies Corp. |
Machinery | 1,485 | 12,218 | |||||||
| Hon Hai Precision Industry Co. Ltd. |
Electronic Equipment, Instruments & Components | 58,000 | 198,111 | |||||||
| Hotai Motor Co. Ltd. |
Specialty Retail | 1,580 | 33,315 | |||||||
| aHTC Corp. |
Technology Hardware, Storage & Peripherals | 3,500 | 7,196 | |||||||
| Hua Nan Financial Holdings Co. Ltd. |
Banks | 49,000 | 35,968 | |||||||
| Innolux Corp. |
Electronic Equipment, Instruments & Components | 35,000 | 16,668 | |||||||
| Inventec Corp. |
Technology Hardware, Storage & Peripherals | 14,000 | 14,691 | |||||||
| Largan Precision Co. Ltd. |
Electronic Equipment, Instruments & Components | 510 | 36,432 | |||||||
| Lite-On Technology Corp. |
Technology Hardware, Storage & Peripherals | 10,500 | 25,278 | |||||||
| MediaTek, Inc. |
Semiconductors & Semiconductor Equipment | 7,210 | 186,362 | |||||||
| franklintempleton.com | Annual Report |
169 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Taiwan (continued) |
||||||||||
| Mega Financial Holding Co. Ltd. |
Banks | 54,000 | $ | 58,527 | ||||||
| Micro-Star International Co. Ltd. |
Technology Hardware, Storage & Peripherals | 3,500 | 16,553 | |||||||
| momo.com, Inc. |
Broadline Retail | 296 | 8,779 | |||||||
| Nan Ya Plastics Corp. |
Chemicals | 28,000 | 71,270 | |||||||
| Nan Ya Printed Circuit Board Corp. |
Electronic Equipment, Instruments & Components | 1,170 | 10,875 | |||||||
| Nanya Technology Corp. |
Semiconductors & Semiconductor Equipment | 3,790 | 8,278 | |||||||
| Nien Made Enterprise Co. Ltd. |
Household Durables | 770 | 8,270 | |||||||
| Novatek Microelectronics Corp. |
Semiconductors & Semiconductor Equipment | 2,890 | 40,957 | |||||||
| aOneness Biotech Co. Ltd. |
Pharmaceuticals | 1,400 | 12,277 | |||||||
| Pegatron Corp. |
Technology Hardware, Storage & Peripherals | 10,000 | 22,892 | |||||||
| Pou Chen Corp. |
Textiles, Apparel & Luxury Goods | 12,000 | 12,297 | |||||||
| Powerchip Semiconductor Manufacturing Corp. |
Semiconductors & Semiconductor Equipment | 14,000 | 15,220 | |||||||
| Powertech Technology, Inc. |
Semiconductors & Semiconductor Equipment | 3,500 | 10,461 | |||||||
| President Chain Store Corp. |
Consumer Staples Distribution & Retail | 2,800 | 24,784 | |||||||
| Quanta Computer, Inc. |
Technology Hardware, Storage & Peripherals | 13,130 | 38,423 | |||||||
| Realtek Semiconductor Corp. |
Semiconductors & Semiconductor Equipment | 2,370 | 30,163 | |||||||
| Ruentex Development Co. Ltd. |
Real Estate Management & Development | 11,900 | 13,816 | |||||||
| Shanghai Commercial & Savings Bank Ltd. |
Banks | 18,146 | 27,981 | |||||||
| Shin Kong Financial Holding Co. Ltd. |
Insurance | 67,041 | 18,540 | |||||||
| Sino-American Silicon Products, Inc. |
Semiconductors & Semiconductor Equipment | 2,680 | 13,731 | |||||||
| SinoPac Financial Holdings Co. Ltd. |
Banks | 51,580 | 28,121 | |||||||
| Synnex Technology International Corp. |
Electronic Equipment, Instruments & Components | 7,000 | 14,093 | |||||||
| Taishin Financial Holding Co. Ltd. |
Banks | 56,000 | 30,531 | |||||||
| Taiwan Business Bank |
Banks | 28,000 | 12,369 | |||||||
| Taiwan Cement Corp. |
Construction Materials | 30,097 | 35,981 | |||||||
| Taiwan Cooperative Financial Holding Co. Ltd. |
Banks | 49,000 | 42,003 | |||||||
| Taiwan Fertilizer Co. Ltd. |
Chemicals | 3,500 | 6,437 | |||||||
| Taiwan Glass Industry Corp. |
Building Products | 8,000 | 5,399 | |||||||
| Taiwan High Speed Rail Corp. |
Transportation Infrastructure | 8,000 | 7,948 | |||||||
| Taiwan Mobile Co. Ltd. |
Wireless Telecommunication Services | 8,000 | 26,537 | |||||||
| Taiwan Secom Co. Ltd. |
Commercial Services & Supplies | 1,170 | 4,054 | |||||||
| Taiwan Semiconductor Manufacturing Co. Ltd. |
Semiconductors & Semiconductor Equipment | 115,500 | 2,021,890 | |||||||
| Teco Electric & Machinery Co. Ltd. |
Electrical Equipment | 10,000 | 13,958 | |||||||
| Transcend Information, Inc. |
Technology Hardware, Storage & Peripherals | 1,170 | 2,809 | |||||||
| U-Ming Marine Transport Corp. |
Marine Transportation | 2,000 | 3,665 | |||||||
| Unimicron Technology Corp. |
Electronic Equipment, Instruments & Components | 6,130 | 29,696 | |||||||
| Uni-President Enterprises Corp. |
Food Products | 23,700 | 55,966 | |||||||
| United Microelectronics Corp. |
Semiconductors & Semiconductor Equipment | 56,000 | 97,295 | |||||||
| Vanguard International Semiconductor Corp. |
Semiconductors & Semiconductor Equipment | 4,380 | 13,939 | |||||||
| Voltronic Power Technology Corp. |
Electrical Equipment | 290 | 16,478 | |||||||
| Walsin Lihwa Corp. |
Electrical Equipment | 16,851 | 26,980 | |||||||
| Walsin Technology Corp. |
Electronic Equipment, Instruments & Components | 2,450 | 7,781 | |||||||
| Wan Hai Lines Ltd. |
Marine Transportation | 4,460 | 10,034 | |||||||
| Win Semiconductors Corp. |
Semiconductors & Semiconductor Equipment | 1,750 | 10,489 | |||||||
| Winbond Electronics Corp. |
Semiconductors & Semiconductor Equipment | 12,000 | 10,444 | |||||||
| Wistron Corp. |
Technology Hardware, Storage & Peripherals | 14,000 | 19,243 | |||||||
| Wiwynn Corp. |
Technology Hardware, Storage & Peripherals | 420 | 15,519 | |||||||
| Yageo Corp. |
Electronic Equipment, Instruments & Components | 1,890 | 32,837 | |||||||
| Yang Ming Marine Transport Corp. |
Marine Transportation | 8,750 | 18,479 | |||||||
| Yuanta Financial Holding Co. Ltd. |
Capital Markets | 56,000 | 41,107 | |||||||
| Yulon Motor Co. Ltd. |
Automobiles | 2,863 | 7,071 | |||||||
| Zhen Ding Technology Holding Ltd. |
Electronic Equipment, Instruments & Components | 2,630 | 9,847 | |||||||
|
|
|
|||||||||
| 4,924,179 | ||||||||||
|
|
|
|||||||||
| Thailand 2.6% |
||||||||||
| Advanced Info Service PCL, NVDR |
Wireless Telecommunication Services | 5,600 | 34,719 | |||||||
| aAirports of Thailand PCL, Class H, NVDR |
Transportation Infrastructure | 20,700 | 42,980 | |||||||
| Asset World Corp. PCL, Class H, NVDR |
Hotels, Restaurants & Leisure | 37,100 | 6,293 | |||||||
| 170 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Thailand (continued) |
||||||||||
| B Grimm Power PCL, Class A, NVDR |
Independent Power Producers & Energy Traders | 3,900 | $ | 4,619 | ||||||
| Bangkok Bank PCL, Class A, fgn. |
Banks | 2,100 | 9,304 | |||||||
| Bangkok Bank PCL, Class A, NVDR |
Banks | 1,100 | 4,874 | |||||||
| Bangkok Dusit Medical Services PCL, Class A, NVDR |
Health Care Providers & Services | 44,100 | 38,045 | |||||||
| Bangkok Expressway & Metro PCL, Class H, NVDR |
Transportation Infrastructure | 38,900 | 10,068 | |||||||
| Bangkok Life Assurance PCL, Class A, NVDR |
Insurance | 2,500 | 2,047 | |||||||
| Banpu PCL, Class A, NVDR |
Oil, Gas & Consumable Fuels | 28,000 | 8,843 | |||||||
| Berli Jucker PCL, Class A, NVDR |
Consumer Staples Distribution & Retail | 4,900 | 5,481 | |||||||
| BTS Group Holdings PCL, Class A, NVDR |
Ground Transportation | 42,000 | 8,721 | |||||||
| Bumrungrad Hospital PCL, NVDR |
Health Care Providers & Services | 2,800 | 18,506 | |||||||
| Carabao Group PCL, Class A, NVDR |
Beverages | 1,800 | 5,040 | |||||||
| Central Pattana PCL, Class A, NVDR |
Real Estate Management & Development | 13,700 | 27,544 | |||||||
| Central Retail Corp. PCL, Class A, NVDR |
Broadline Retail | 14,000 | 18,321 | |||||||
| Charoen Pokphand Foods PCL, Class A, NVDR |
Food Products | 23,800 | 14,755 | |||||||
| CP ALL PCL, Class B, NVDR |
Consumer Staples Distribution & Retail | 28,700 | 52,037 | |||||||
| Delta Electronics Thailand PCL, Class A, NVDR |
Electronic Equipment, Instruments & Components | 1,400 | 46,755 | |||||||
| Digital Telecommunications Infrastructure Fund, Class A, fgn. |
Financial Services |
25,900 | 9,619 | |||||||
| Electricity Generating PCL, Class A, NVDR |
Independent Power Producers & Energy Traders | 1,400 | 6,366 | |||||||
| Energy Absolute PCL, Class A, NVDR |
Oil, Gas & Consumable Fuels | 8,400 | 18,669 | |||||||
| Global Power Synergy PCL, NVDR |
Independent Power Producers & Energy Traders | 3,500 | 6,960 | |||||||
| Gulf Energy Development PCL, NVDR |
Independent Power Producers & Energy Traders | 20,000 | 30,852 | |||||||
| Home Product Center PCL, NVDR |
Specialty Retail | 28,000 | 11,791 | |||||||
| Indorama Ventures PCL, NVDR |
Chemicals | 8,800 | 8,878 | |||||||
| Intouch Holdings PCL, NVDR |
Wireless Telecommunication Services | 4,200 | 9,089 | |||||||
| IRPC PCL, NVDR |
Oil, Gas & Consumable Fuels | 48,700 | 3,731 | |||||||
| Kasikornbank PCL, fgn. |
Banks | 5,300 | 20,537 | |||||||
| Kasikornbank PCL, NVDR |
Banks | 1,800 | 6,975 | |||||||
| Krung Thai Bank PCL, NVDR |
Banks | 30,800 | 14,862 | |||||||
| Krungthai Card PCL, NVDR |
Consumer Finance | 6,600 | 10,471 | |||||||
| Land & Houses PCL, NVDR |
Real Estate Management & Development | 34,700 | 9,995 | |||||||
| aMinor International PCL, NVDR |
Hotels, Restaurants & Leisure | 17,900 | 16,882 | |||||||
| Muangthai Capital PCL, NVDR |
Consumer Finance | 3,500 | 3,531 | |||||||
| Osotspa PCL, NVDR |
Beverages | 6,700 | 6,025 | |||||||
| PTT Exploration & Production PCL, NVDR |
Oil, Gas & Consumable Fuels | 6,300 | 27,728 | |||||||
| PTT Global Chemical PCL, NVDR |
Chemicals | 9,800 | 13,112 | |||||||
| PTT Oil & Retail Business PCL, NVDR |
Specialty Retail | 13,700 | 8,534 | |||||||
| PTT PCL, NVDR |
Oil, Gas & Consumable Fuels | 69,000 | 63,562 | |||||||
| Ratch Group PCL, NVDR |
Independent Power Producers & Energy Traders | 6,000 | 6,755 | |||||||
| SCB X PCL, NVDR |
Banks | 8,400 | 25,179 | |||||||
| SCG Packaging PCL, NVDR |
Containers & Packaging | 6,000 | 8,115 | |||||||
| Siam Cement PCL, NVDR |
Construction Materials | 3,500 | 32,242 | |||||||
| Siam City Cement PCL, NVDR |
Construction Materials | 400 | 1,632 | |||||||
| Siam Makro PCL, NVDR |
Consumer Staples Distribution & Retail | 7,000 | 8,035 | |||||||
| Sri Trang Gloves Thailand PCL, NVDR |
Health Care Equipment & Supplies | 4,900 | 1,462 | |||||||
| Srisawad Corp. PCL, NVDR |
Consumer Finance | 3,200 | 4,936 | |||||||
| Thai Oil PCL, NVDR |
Oil, Gas & Consumable Fuels | 5,375 | 8,252 | |||||||
| Thai Union Group PCL, NVDR |
Food Products | 14,400 | 5,938 | |||||||
| TMBThanachart Bank PCL, NVDR |
Banks | 210,000 | 8,721 | |||||||
| True Corp. PCL, NVDR |
Diversified Telecommunication Services | 54,060 | 13,280 | |||||||
|
|
|
|||||||||
| 791,668 | ||||||||||
|
|
|
|||||||||
| United Kingdom 0.3% |
||||||||||
| CK Hutchison Holdings Ltd., Class A |
Real Estate Management & Development | 13,000 | 80,650 | |||||||
|
|
|
|||||||||
| franklintempleton.com | Annual Report |
171 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Asia ex Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| United States 0.1% |
||||||||||
| bJS Global Lifestyle Co. Ltd. |
Household Durables | 5,500 | $ | 5,647 | ||||||
| Parade Technologies Ltd. |
Semiconductors & Semiconductor Equipment | 350 | 12,070 | |||||||
| a,bSamsonite International SA |
Textiles, Apparel & Luxury Goods | 6,300 | 19,462 | |||||||
|
|
|
|||||||||
| 37,179 | ||||||||||
|
|
|
|||||||||
| Total Common Stocks |
29,831,002 | |||||||||
|
|
|
|||||||||
| Preferred Stocks 0.7% |
||||||||||
| South Korea 0.7% |
||||||||||
| c Amorepacific Corp., 1.546%, pfd. |
Personal Products | 49 | 1,668 | |||||||
| a,cCJ CheilJedang Corp., 1.780%,pfd. |
Food Products | 7 | 836 | |||||||
| cHyundai Motor Co., 7.411%, pfd. |
Automobiles | 168 | 12,363 | |||||||
| cHyundai Motor Co., 7.468%, pfd. |
Automobiles | 112 | 8,121 | |||||||
| cLG Chem Ltd., 3.237%, pfd. |
Chemicals | 28 | 6,678 | |||||||
| cLG Electronics, Inc., 1.54%, pfd. |
Household Durables | 77 | 2,881 | |||||||
| cLG H&H Co. Ltd., 1.636%, pfd. |
Personal Products | 11 | 2,091 | |||||||
| cSamsung Electronics Co. Ltd., 2.681%, pfd. |
Technology Hardware, Storage & Peripherals | 3,962 | 164,037 | |||||||
| cSamsung Fire & Marine Insurance Co. Ltd., 8.666%, pfd. |
Insurance | 14 | 1,713 | |||||||
| cSamsung SDI Co. Ltd., 0.325%, pfd. |
Electronic Equipment, Instruments & Components | 7 | 1,788 | |||||||
|
|
|
|||||||||
| Total Preferred Stocks |
202,176 | |||||||||
|
|
|
|||||||||
| Total Investments (Cost $32,145,017) 100.2% |
30,033,178 | |||||||||
| Other Assets, less Liabilities (0.2)% |
(52,849 | ) | ||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 29,980,329 | ||||||||
|
|
|
|||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $1,662,626, representing 5.5% of net assets.
cVariable rate security. The rate shown represents the yield at period end.
See Abbreviations on page 355.
| 172 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Australia ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$31.55 | $29.12 | $17.38 | $24.63 | $24.67 | |||||||||||||||
|
|
|
| ||||||||||||||||||
| Income from investment operationsa: |
||||||||||||||||||||
| Net investment incomeb |
1.60 | 1.48 | 0.81 | 1.07 | 1.29 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(4.84 | ) | 2.47 | 11.55 | (7.18 | ) | (0.37 | ) | ||||||||||||
|
|
|
| ||||||||||||||||||
| Total from investment operations |
(3.24 | ) | 3.95 | 12.36 | (6.11 | ) | 0.92 | |||||||||||||
|
|
|
| ||||||||||||||||||
| Less distributions from net investment income |
(1.55 | ) | (1.52 | ) | (0.62 | ) | (1.14 | ) | (0.96 | ) | ||||||||||
|
|
|
| ||||||||||||||||||
| Net asset value, end of year |
$26.76 | $31.55 | $29.12 | $17.38 | $24.63 | |||||||||||||||
|
|
|
| ||||||||||||||||||
| Total returnc |
(9.90)% | 13.93% | 71.72% | (26.23)% | 4.00% | |||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||
| Total expenses |
0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
| Net investment income |
5.94% | 4.93% | 3.25% | 4.28% | 5.30% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$29,437 | $29,968 | $23,295 | $7,820 | $7,389 | |||||||||||||||
| Portfolio turnover ratee |
5.88%f | 15.26%f | 6.98%f | 8.16%f | 4.56% | |||||||||||||||
| aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund. bBased on average daily shares outstanding. cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. dRatios are annualized for periods less than one year. ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”). |
| |||||||||||||||||||
| fPortfolio turnover rate excluding cash creations was as follows: | 5.88% | 15.26% | 6.98% | 8.16% | — | |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
173 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE Australia ETF
| Industry | Shares | Value | ||||||||
| Common Stocks 98.3% |
||||||||||
| Australia 95.6% |
||||||||||
| Adbri Ltd. |
Construction Materials | 10,538 | $ | 11,187 | ||||||
| AGL Energy Ltd. |
Multi-Utilities | 13,486 | 72,710 | |||||||
| aAllkem Ltd. |
Metals & Mining | 13,266 | 105,553 | |||||||
| ALS Ltd. |
Professional Services | 10,868 | 89,967 | |||||||
| Altium Ltd. |
Software | 2,662 | 67,892 | |||||||
| Alumina Ltd. |
Metals & Mining | 56,738 | 55,480 | |||||||
| aAMP Ltd. |
Financial Services | 68,068 | 47,868 | |||||||
| Ampol Ltd. |
Oil, Gas & Consumable Fuels | 5,390 | 110,067 | |||||||
| Ansell Ltd. |
Health Care Equipment & Supplies | 2,882 | 51,209 | |||||||
| ANZ Group Holdings Ltd. |
Banks | 67,628 | 1,038,588 | |||||||
| APA Group |
Gas Utilities | 26,796 | 181,620 | |||||||
| Aristocrat Leisure Ltd. |
Hotels, Restaurants & Leisure | 14,916 | 371,628 | |||||||
| ASX Ltd. |
Capital Markets | 4,378 | 190,649 | |||||||
| Atlas Arteria Ltd. |
Transportation Infrastructure | 32,934 | 138,742 | |||||||
| Aurizon Holdings Ltd. |
Ground Transportation | 39,842 | 89,659 | |||||||
| Bank of Queensland Ltd. |
Banks | 14,828 | 64,453 | |||||||
| Beach Energy Ltd. |
Oil, Gas & Consumable Fuels | 40,260 | 38,154 | |||||||
| Bendigo & Adelaide Bank Ltd. |
Banks | 12,716 | 73,838 | |||||||
| BHP Group Ltd. |
Metals & Mining | 113,762 | 3,598,554 | |||||||
| BlueScope Steel Ltd. |
Metals & Mining | 10,494 | 141,621 | |||||||
| Boral Ltd. |
Construction Materials | 7,788 | 18,360 | |||||||
| Brambles Ltd. |
Commercial Services & Supplies | 31,372 | 282,183 | |||||||
| carsales.com Ltd. |
Interactive Media & Services | 8,109 | 120,188 | |||||||
| Challenger Ltd. |
Financial Services | 15,180 | 63,441 | |||||||
| Charter Hall Group |
Diversified REITs | 10,626 | 78,284 | |||||||
| Cleanaway Waste Management Ltd. |
Commercial Services & Supplies | 50,248 | 80,096 | |||||||
| Cochlear Ltd. |
Health Care Equipment & Supplies | 1,452 | 230,176 | |||||||
| Coles Group Ltd. |
Consumer Staples Distribution & Retail | 28,754 | 347,029 | |||||||
| Commonwealth Bank of Australia |
Banks | 38,192 | 2,514,937 | |||||||
| Computershare Ltd. |
IT Services | 12,144 | 175,601 | |||||||
| CSL Ltd. |
Biotechnology | 10,868 | 2,098,491 | |||||||
| CSR Ltd. |
Construction Materials | 10,824 | 34,435 | |||||||
| Deterra Royalties Ltd. |
Metals & Mining | 9,658 | 31,049 | |||||||
| Dexus |
Diversified REITs | 24,332 | 122,386 | |||||||
| Domain Holdings Australia Ltd. |
Interactive Media & Services | 5,720 | 13,447 | |||||||
| Domino’s Pizza Enterprises Ltd. |
Hotels, Restaurants & Leisure | 1,430 | 47,763 | |||||||
| Downer EDI Ltd. |
Commercial Services & Supplies | 15,400 | 35,378 | |||||||
| Endeavour Group Ltd. |
Consumer Staples Distribution & Retail | 30,910 | 140,152 | |||||||
| Evolution Mining Ltd. |
Metals & Mining | 38,874 | 81,232 | |||||||
| aFlight Centre Travel Group Ltd. |
Hotels, Restaurants & Leisure | 3,432 | 42,478 | |||||||
| Fortescue Metals Group Ltd. |
Metals & Mining | 35,948 | 541,473 | |||||||
| Goodman Group |
Diversified REITs | 41,448 | 521,607 | |||||||
| GPT Group |
Diversified REITs | 43,098 | 122,387 | |||||||
| Harvey Norman Holdings Ltd. |
Broadline Retail | 13,552 | 32,494 | |||||||
| IDP Education Ltd. |
Diversified Consumer Services | 4,092 | 74,846 | |||||||
| IGO Ltd. |
Metals & Mining | 13,948 | 119,293 | |||||||
| Iluka Resources Ltd. |
Metals & Mining | 9,482 | 67,443 | |||||||
| Incitec Pivot Ltd. |
Chemicals | 43,758 | 91,731 | |||||||
| Insignia Financial Ltd. |
Capital Markets | 14,674 | 26,928 | |||||||
| Insurance Australia Group Ltd. |
Insurance | 55,902 | 175,595 | |||||||
| JB Hi-Fi Ltd. |
Specialty Retail | 2,464 | 70,087 | |||||||
| Lendlease Corp. Ltd. |
Real Estate Management & Development | 15,510 | 75,104 | |||||||
| aLottery Corp. Ltd. |
Hotels, Restaurants & Leisure | 50,264 | 172,361 | |||||||
| aLynas Rare Earths Ltd. |
Metals & Mining | 20,460 | 86,878 | |||||||
| Macquarie Group Ltd. |
Capital Markets | 7,854 | 924,010 | |||||||
| Magellan Financial Group Ltd. |
Capital Markets | 3,190 | 18,545 | |||||||
| Medibank Pvt Ltd. |
Insurance | 61,974 | 139,464 | |||||||
| 174 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Australia ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Australia (continued) |
||||||||||
| Metcash Ltd. |
Consumer Staples Distribution & Retail | 21,802 | $ | 56,217 | ||||||
| Mineral Resources Ltd. |
Metals & Mining | 3,762 | 203,055 | |||||||
| Mirvac Group |
Diversified REITs | 89,496 | 124,675 | |||||||
| National Australia Bank Ltd. |
Banks | 71,060 | 1,319,263 | |||||||
| New Hope Corp. Ltd. |
Oil, Gas & Consumable Fuels | 5,368 | 20,421 | |||||||
| Newcrest Mining Ltd. |
Metals & Mining | 20,152 | 362,389 | |||||||
| aNEXTDC Ltd. |
IT Services | 10,230 | 71,667 | |||||||
| Northern Star Resources Ltd. |
Metals & Mining | 25,454 | 209,859 | |||||||
| Nufarm Ltd. |
Chemicals | 8,734 | 33,401 | |||||||
| Orica Ltd. |
Chemicals | 10,252 | 105,672 | |||||||
| Origin Energy Ltd. |
Oil, Gas & Consumable Fuels | 38,918 | 216,082 | |||||||
| Orora Ltd. |
Containers & Packaging | 19,206 | 43,992 | |||||||
| OZ Minerals Ltd. |
Metals & Mining | 7,370 | 138,753 | |||||||
| Perpetual Ltd. |
Capital Markets | 2,530 | 37,211 | |||||||
| aPilbara Minerals Ltd. |
Metals & Mining | 63,118 | 166,557 | |||||||
| Platinum Asset Management Ltd. |
Capital Markets | 12,012 | 13,837 | |||||||
| Pro Medicus Ltd. |
Health Care Technology | 946 | 40,467 | |||||||
| aQantas Airways Ltd. |
Airlines | 18,062 | 80,082 | |||||||
| QBE Insurance Group Ltd. |
Insurance | 33,506 | 327,409 | |||||||
| Qube Holdings Ltd. |
Transportation Infrastructure | 37,488 | 72,059 | |||||||
| Ramsay Health Care Ltd. |
Health Care Providers & Services | 3,960 | 176,478 | |||||||
| REA Group Ltd. |
Media | 1,144 | 105,758 | |||||||
| Reece Ltd. |
Trading Companies & Distributors | 4,796 | 55,730 | |||||||
| Region RE Ltd. |
Diversified REITs | 25,806 | 40,616 | |||||||
| Rio Tinto Ltd. |
Metals & Mining | 8,404 | 676,218 | |||||||
| Santos Ltd. |
Oil, Gas & Consumable Fuels | 68,112 | 314,764 | |||||||
| Scentre Group |
Real Estate Investment Trusts (REITs) | 117,524 | 216,457 | |||||||
| SEEK Ltd. |
Professional Services | 7,854 | 125,824 | |||||||
| Seven Group Holdings Ltd. |
Trading Companies & Distributors | 3,234 | 50,034 | |||||||
| Sonic Healthcare Ltd. |
Health Care Providers & Services | 10,340 | 241,275 | |||||||
| South32 Ltd. |
Metals & Mining | 103,774 | 303,727 | |||||||
| aStar Entertainment Group Ltd. |
Hotels, Restaurants & Leisure | 31,174 | 29,857 | |||||||
| Steadfast Group Ltd. |
Insurance | 23,056 | 90,334 | |||||||
| Stockland |
Real Estate Investment Trusts (REITs) | 54,054 | 144,087 | |||||||
| Suncorp Group Ltd. |
Insurance | 28,622 | 232,144 | |||||||
| Tabcorp Holdings Ltd. |
Hotels, Restaurants & Leisure | 51,018 | 33,998 | |||||||
| Telstra Group Ltd. |
Diversified Telecommunication Services | 92,356 | 261,030 | |||||||
| TPG Telecom Ltd. |
Diversified Telecommunication Services | 8,426 | 27,539 | |||||||
| Transurban Group |
Transportation Infrastructure | 69,410 | 660,585 | |||||||
| Treasury Wine Estates Ltd. |
Beverages | 16,324 | 142,894 | |||||||
| Vicinity Ltd. |
Real Estate Investment Trusts (REITs) | 85,162 | 110,937 | |||||||
| Washington H Soul Pattinson & Co. Ltd. |
Oil, Gas & Consumable Fuels | 6,006 | 121,480 | |||||||
| Wesfarmers Ltd. |
Broadline Retail | 25,586 | 861,095 | |||||||
| Westpac Banking Corp. |
Banks | 78,760 | 1,142,555 | |||||||
| Whitehaven Coal Ltd. |
Oil, Gas & Consumable Fuels | 16,808 | 75,761 | |||||||
| WiseTech Global Ltd. |
Software | 3,586 | 156,448 | |||||||
| Woodside Energy Group Ltd. |
Oil, Gas & Consumable Fuels | 42,746 | 954,496 | |||||||
| Woolworths Group Ltd. |
Consumer Staples Distribution & Retail | 27,456 | 696,930 | |||||||
| Worley Ltd. |
Energy Equipment & Services | 8,448 | 81,532 | |||||||
| Yancoal Australia Ltd. |
Oil, Gas & Consumable Fuels | 3,762 | 14,614 | |||||||
|
|
|
|||||||||
| 28,145,056 | ||||||||||
|
|
|
|||||||||
| Ireland 0.7% |
||||||||||
| James Hardie Industries PLC, CDI |
Construction Materials | 9,988 | 212,925 | |||||||
|
|
|
|||||||||
| New Zealand 0.6% |
||||||||||
| aXero Ltd. |
Software | 2,860 | 171,283 | |||||||
|
|
|
|||||||||
| franklintempleton.com | Annual Report |
175 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Australia ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| United Kingdom 1.3% |
||||||||||
| Amcor PLC, CDI |
Containers & Packaging | 33,638 | $ | 376,010 | ||||||
|
|
|
|||||||||
| United States 0.1% |
||||||||||
| Sims Ltd. |
Metals & Mining | 3,630 | 37,708 | |||||||
|
|
|
|||||||||
| Total Investments (Cost $27,816,869) 98.3% |
28,942,982 | |||||||||
| Other Assets, less Liabilities 1.7% |
493,954 | |||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 29,436,936 | ||||||||
|
|
|
|||||||||
aNon-income producing.
At March 31, 2023, 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 | $481,617 | 6/15/23 | $865 | |||||||||||||||
*As of year end.
See Note 7 regarding other derivative information.
See Abbreviations on page 355.
| 176 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Brazil ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$23.56 | $20.70 | $14.46 | $25.72 | $27.87 | |||||||||||||||
| Income from investment operationsa: | ||||||||||||||||||||
| Net investment incomeb |
2.06 | 1.84 | 0.46 | 1.07 | 0.80 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(6.74 | ) | 2.55 | 6.31 | (11.33 | ) | (2.07 | ) | ||||||||||||
| Total from investment operations |
(4.68 | ) | 4.39 | 6.77 | (10.26 | ) | (1.27 | ) | ||||||||||||
| Less distributions from net investment income |
(2.07 | ) | (1.53 | ) | (0.53 | ) | (1.00 | ) | (0.88 | ) | ||||||||||
| Net asset value, end of year |
$16.81 | $23.56 | $20.70 | $14.46 | $25.72 | |||||||||||||||
| Total returnc |
(19.57)% | 23.03% | 46.83% | (41.69)% | (3.98)% | |||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||
| Total expenses |
0.19% | 0.19% | 0.19% | 0.23% | 0.19% | |||||||||||||||
| Net investment income |
10.93% | 8.87% | 2.43% | 4.26% | 3.37% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$268,914 | $527,820 | $107,656 | $102,700 | $20,579 | |||||||||||||||
| Portfolio turnover ratee |
52.70%f | 17.71%f | 21.01%f | 36.07%f | 39.76% | |||||||||||||||
|
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
dRatios are annualized for periods less than one year.
ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
|
| |||||||||||||||||||
| fPortfolio turnover rate excluding cash creations was as follows: | 13.82% | 14.95% | 9.31% | 17.47% | — | |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
177 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE Brazil ETF
| Industry | Shares | Value | ||||||||
| Common Stocks 74.1% |
||||||||||
| Brazil 72.8% |
||||||||||
| Ambev SA |
Beverages | 3,280,000 | $ | 9,270,233 | ||||||
| Atacadao SA |
Consumer Staples Distribution & Retail | 400,000 | 977,467 | |||||||
| Auren Energia SA |
Independent Power Producers & Energy Traders | 272,043 | 787,115 | |||||||
| B3 SA - Brasil Bolsa Balcao |
Capital Markets | 4,560,000 | 9,308,417 | |||||||
| Banco Bradesco SA |
Banks | 1,136,000 | 2,655,017 | |||||||
| Banco BTG Pactual S.A |
Capital Markets | 864,000 | 3,348,474 | |||||||
| Banco do Brasil SA |
Banks | 640,004 | 4,936,750 | |||||||
| Banco Santander Brasil SA |
Banks | 272,000 | 1,437,720 | |||||||
| BB Seguridade Participacoes SA |
Insurance | 512,000 | 3,282,899 | |||||||
| Bradespar SA |
Metals & Mining | 25,130 | 121,679 | |||||||
| aBRF SA |
Food Products | 608,000 | 744,673 | |||||||
| Caixa Seguridade Participacoes SA |
Insurance | 336,000 | 583,167 | |||||||
| CCR SA |
Transportation Infrastructure | 832,000 | 2,100,409 | |||||||
| Centrais Eletricas Brasileiras SA |
Electric Utilities | 992,000 | 6,511,269 | |||||||
| Cia de Saneamento Basico do Estado de Sao Paulo SABESP |
Water Utilities | 256,000 | 2,555,330 | |||||||
| Cia Energetica de Minas Gerais |
Electric Utilities | 240,000 | 810,374 | |||||||
| Cia Paranaense de Energia |
Electric Utilities | 240,000 | 295,370 | |||||||
| Cia Siderurgica Nacional SA |
Metals & Mining | 464,000 | 1,412,980 | |||||||
| Cielo SA |
IT Services | 864,000 | 826,468 | |||||||
| Cosan SA |
Oil, Gas & Consumable Fuels | 896,000 | 2,666,661 | |||||||
| CPFL Energia SA |
Electric Utilities | 144,000 | 898,891 | |||||||
| CSN Mineracao SA |
Metals & Mining | 400,000 | 381,835 | |||||||
| Dexco SA |
Paper & Forest Products | 240,260 | 278,631 | |||||||
| Diagnosticos da America SA |
Health Care Providers & Services | 64,000 | 94,291 | |||||||
| EDP - Energias do Brasil SA |
Electric Utilities | 192,000 | 845,970 | |||||||
| aEmbraer SA |
Aerospace & Defense | 560,000 | 2,296,218 | |||||||
| Energisa SA |
Electric Utilities | 224,080 | 1,775,758 | |||||||
| aEneva SA |
Independent Power Producers & Energy Traders | 912,000 | 1,883,268 | |||||||
| Engie Brasil Energia SA |
Independent Power Producers & Energy Traders | 128,000 | 1,014,104 | |||||||
| Equatorial Energia SA |
Electric Utilities | 704,000 | 3,743,374 | |||||||
| a,bGPS Participacoes e Empreendimentos SA |
Commercial Services & Supplies | 304,000 | 725,487 | |||||||
| GRUPO DE MODA SOMA SA |
Textiles, Apparel & Luxury Goods | 336,000 | 537,441 | |||||||
| aGrupo Mateus SA |
Consumer Staples Distribution & Retail | 288,000 | 324,907 | |||||||
| a,bHapvida Participacoes e Investimentos SA |
Health Care Providers & Services | 3,024,000 | 1,562,621 | |||||||
| Hypera SA |
Pharmaceuticals | 304,000 | 2,260,401 | |||||||
| Intelbras SA Industria de Telecomunicacao Eletronica Brasileira |
Communications Equipment | 48,000 | 216,415 | |||||||
| Itau Unibanco Holding SA |
Banks | 336,000 | 1,395,623 | |||||||
| Klabin SA |
Containers & Packaging | 576,000 | 2,055,094 | |||||||
| Localiza Rent a Car SA |
Ground Transportation | 592,033 | 6,235,306 | |||||||
| Lojas Renner SA |
Broadline Retail | 725,410 | 2,370,700 | |||||||
| M Dias Branco SA |
Food Products | 96,000 | 477,515 | |||||||
| aMagazine Luiza SA |
Broadline Retail | 2,288,000 | 1,493,670 | |||||||
| Marfrig Global Foods SA |
Food Products | 224,000 | 293,350 | |||||||
| Multiplan Empreendimentos Imobiliarios SA |
Real Estate Management & Development | 208,000 | 1,010,822 | |||||||
| Natura & Co. Holding SA |
Personal Products | 720,016 | 1,874,505 | |||||||
| Neoenergia SA |
Electric Utilities | 176,000 | 520,684 | |||||||
| aPetro Rio SA |
Oil, Gas & Consumable Fuels | 506,600 | 3,116,386 | |||||||
| Petroleo Brasileiro SA |
Oil, Gas & Consumable Fuels | 2,784,000 | 14,545,271 | |||||||
| Petroreconcavo SA |
Oil, Gas & Consumable Fuels | 144,000 | 577,392 | |||||||
| Porto Seguro SA |
Insurance | 144,000 | 667,991 | |||||||
| Raia Drogasil SA |
Consumer Staples Distribution & Retail | 800,043 | 3,858,005 | |||||||
| bRede D’Or Sao Luiz SA |
Health Care Providers & Services | 576,002 | 2,412,955 | |||||||
| Rumo SA |
Ground Transportation | 944,000 | 3,509,571 | |||||||
| Sao Martinho SA |
Food Products | 128,000 | 682,128 | |||||||
| Sendas Distribuidora SA |
Consumer Staples Distribution & Retail | 896,000 | 2,746,184 | |||||||
| 178 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Brazil ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Brazil (continued) |
||||||||||
| SLC Agricola SA |
Food Products | 71,400 | $ | 642,005 | ||||||
| aSmartfit Escola de Ginastica e Danca SA |
Hotels, Restaurants & Leisure | 80,000 | 210,483 | |||||||
| Suzano SA |
Paper & Forest Products | 528,000 | 4,332,094 | |||||||
| Telefonica Brasil SA |
Diversified Telecommunication Services | 330,000 | 2,516,207 | |||||||
| TIM SA |
Wireless Telecommunication Services | 608,000 | 1,508,533 | |||||||
| TOTVS SA |
Software | 336,000 | 1,866,133 | |||||||
| Transmissora Alianca de Energia Eletrica SA |
Electric Utilities | 165,000 | 1,133,465 | |||||||
| Ultrapar Participacoes SA |
Oil, Gas & Consumable Fuels | 624,000 | 1,718,069 | |||||||
| Usinas Siderurgicas de Minas Gerais SA |
Metals & Mining | 128,000 | 201,205 | |||||||
| Vale SA |
Metals & Mining | 2,921,613 | 46,265,235 | |||||||
| Vamos Locacao de Caminhoes Maquinas e Equipamentos SA |
Ground Transportation | 240,000 | 631,922 | |||||||
| Vibra Energia SA |
Specialty Retail | 848,000 | 2,410,074 | |||||||
| WEG SA |
Machinery | 1,120,000 | 8,957,349 | |||||||
|
|
|
|||||||||
| 195,708,010 | ||||||||||
|
|
|
|||||||||
| United States 1.3% |
||||||||||
| JBS SA |
Food Products | 1,008,000 | 3,548,701 | |||||||
|
|
|
|||||||||
| Total Common Stocks |
199,256,711 | |||||||||
|
|
|
|||||||||
| Preferred Stocks 25.0% |
||||||||||
| Brazil 25.0% |
||||||||||
| a,cAlpargatas SA, pfd. |
Textiles, Apparel & Luxury Goods | 176,000 | 282,905 | |||||||
| cBanco Bradesco SA, 6.492%, pfd. |
Banks | 3,904,000 | 10,140,660 | |||||||
| cBradespar SA, 11.708%, pfd. |
Metals & Mining | 192,084 | 1,016,063 | |||||||
| cBraskem SA, Class A, 8.76%, pfd. |
Chemicals | 144,000 | 549,843 | |||||||
| cCentrais Eletricas Brasileiras SA, Class B, 4.449%,pfd. |
Electric Utilities | 208,000 | 1,488,337 | |||||||
| cCia Energetica de Minas Gerais, 11.32%, pfd. |
Electric Utilities | 944,000 | 2,129,946 | |||||||
| cCia Paranaense de Energia, 11.974%, pfd. |
Electric Utilities | 992,000 | 1,357,819 | |||||||
| cCTEEP-Cia de Transmissao de Energia Eletrica Paulista, 4.167%, pfd. |
Electric Utilities | 144,000 | 615,449 | |||||||
| cGerdau SA, 13.863%, pfd. |
Metals & Mining | 806,400 | 4,022,258 | |||||||
| cItau Unibanco Holding SA, 4.349%, pfd. |
Banks | 3,632,000 | 17,722,140 | |||||||
| cItausa SA, 4.745%, pfd. |
Banks | 3,920,010 | 6,355,206 | |||||||
| cMetalurgica Gerdau SA, 10.025%, pfd. |
Metals & Mining | 496,000 | 1,157,276 | |||||||
| cPetroleo Brasileiro SA, 43.945%, pfd. |
Oil, Gas & Consumable Fuels | 4,208,000 | 19,462,078 | |||||||
| cUnipar Carbocloro SA, Class B, 19.565%, pfd. |
Chemicals | 35,540 | 491,017 | |||||||
| cUsinas Siderurgicas de Minas Gerais SA, Class A, 8.628%, pfd. |
Metals & Mining | 352,000 | 506,105 | |||||||
|
|
|
|||||||||
| Total Preferred Stocks |
67,297,102 | |||||||||
|
|
|
|||||||||
| franklintempleton.com | Annual Report |
179 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Brazil ETF (continued)
| Industry | Shares | Value | ||||||||
| Right 0.0%† |
||||||||||
| Brazil 0.0%† |
||||||||||
| aLocaliza Rent a Car SA |
Ground Transportation | 2,648 | $ | 6,857 | ||||||
|
|
|
|||||||||
| Total Rights (Cost $0) |
6,857 | |||||||||
|
|
|
|||||||||
| Total Investments (Cost $268,034,332) |
266,560,670 | |||||||||
| Other Assets, less Liabilities 0.9% |
2,353,106 | |||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 268,913,776 | ||||||||
|
|
|
|||||||||
†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 March 31, 2023, the value of was $4,701,063, representing 1.7% of net assets. cVariable rate security. The rate shown represents the yield at period end.
At March 31, 2023, 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 | $ | 2,316,399 | 4/12/23 | $(100,113) | ||||||||||||||
*As of year end.
See Note 7 regarding other derivative information.
See Abbreviations on page 355.
| 180 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Canada ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$36.07 | $30.20 | $19.50 | $24.13 | $23.77 | |||||||||||||||
| Income from investment operationsa: | ||||||||||||||||||||
| Net investment incomeb |
0.92 | 0.80 | 0.75 | 0.69 | 0.67 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(5.58 | ) | 5.77 | 10.63 | (4.72 | ) | 0.33 | |||||||||||||
| Total from investment operations | (4.66 | ) | 6.57 | 11.38 | (4.03 | ) | 1.00 | |||||||||||||
| Less distributions from net investment income | (0.65 | ) | (0.70 | ) | (0.68 | ) | (0.60 | ) | (0.64 | ) | ||||||||||
| Net asset value, end of year | $30.76 | $36.07 | $30.20 | $19.50 | $24.13 | |||||||||||||||
| Total returnc |
(12.82)% | 21.95% | 59.10% | (17.25)% | 4.48% | |||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||
| Total expenses |
0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
| Net investment income |
3.00% | 2.37% | 2.88% | 2.73% | 2.79% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$279,927 | $43,289 | $24,160 | $4,876 | $4,827 | |||||||||||||||
| Portfolio turnover ratee |
5.27%f | 5.63%f | 3.14%f | 4.57%f | 6.95% | |||||||||||||||
|
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
dRatios are annualized for periods less than one year.
ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
|
| |||||||||||||||||||
| fPortfolio turnover rate excluding cash creations was as follows: | 5.27% | 5.63% | 3.14% | 4.57% | — | |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
181 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE Canada ETF
| Industry | Shares | Value | ||||||||
| Common Stocks 99.7% |
||||||||||
| Canada 97.4% |
||||||||||
| Agnico Eagle Mines Ltd. |
Metals & Mining | 81,718 | $ | 4,160,321 | ||||||
| Alimentation Couche-Tard, Inc. |
Consumer Staples Distribution & Retail | 136,864 | 6,871,769 | |||||||
| Bank of Montreal |
Banks | 118,664 | 10,555,121 | |||||||
| Bank of Nova Scotia |
Banks | 213,850 | 10,756,101 | |||||||
| Barrick Gold Corp. |
Metals & Mining | 314,678 | 5,833,872 | |||||||
| BCE, Inc. |
Diversified Telecommunication Services | 54,418 | 2,434,304 | |||||||
| aBrookfield Asset Management Ltd., Class A |
Capital Markets | 48,594 | 1,589,579 | |||||||
| Brookfield Corp. |
Capital Markets | 239,512 | 7,792,303 | |||||||
| Canadian Imperial Bank of Commerce, Class A |
Banks | 158,340 | 6,705,187 | |||||||
| Canadian National Railway Co. |
Ground Transportation | 106,652 | 12,567,181 | |||||||
| Canadian Natural Resources Ltd. |
Oil, Gas & Consumable Fuels | 194,922 | 10,771,948 | |||||||
| Canadian Pacific Railway Ltd. |
Ground Transportation | 166,712 | 12,819,831 | |||||||
| Canadian Tire Corp. Ltd., Class A |
Broadline Retail | 9,464 | 1,233,359 | |||||||
| Canadian Utilities Ltd., Class A |
Multi-Utilities | 22,204 | 617,876 | |||||||
| Cenovus Energy, Inc. |
Oil, Gas & Consumable Fuels | 249,158 | 4,341,187 | |||||||
| aCGI, Inc., Class A |
IT Services | 37,856 | 3,643,362 | |||||||
| Constellation Software, Inc. |
Software | 3,424 | 6,428,548 | |||||||
| Dollarama, Inc. |
Broadline Retail | 48,776 | 2,911,026 | |||||||
| Enbridge, Inc. |
Oil, Gas & Consumable Fuels | 363,272 | 13,831,903 | |||||||
| Fairfax Financial Holdings Ltd. |
Insurance | 3,795 | 2,520,457 | |||||||
| Fortis, Inc. |
Electric Utilities | 85,540 | 3,631,192 | |||||||
| Franco-Nevada Corp. |
Metals & Mining | 34,216 | 4,983,929 | |||||||
| George Weston Ltd. |
Consumer Staples Distribution & Retail | 12,376 | 1,637,819 | |||||||
| Great-West Lifeco, Inc. |
Insurance | 48,594 | 1,286,169 | |||||||
| bHydro One Ltd. |
Electric Utilities | 56,602 | 1,609,373 | |||||||
| IGM Financial, Inc. |
Capital Markets | 14,560 | 434,535 | |||||||
| Imperial Oil Ltd. |
Oil, Gas & Consumable Fuels | 31,850 | 1,617,505 | |||||||
| Intact Financial Corp. |
Insurance | 31,668 | 4,525,972 | |||||||
| Loblaw Cos. Ltd. |
Consumer Staples Distribution & Retail | 27,482 | 2,501,170 | |||||||
| Magna International, Inc. |
Automobile Components | 47,684 | 2,550,593 | |||||||
| Manulife Financial Corp. |
Insurance | 334,698 | 6,133,307 | |||||||
| Metro, Inc., Class A |
Consumer Staples Distribution & Retail | 42,406 | 2,329,377 | |||||||
| National Bank of Canada |
Banks | 60,242 | 4,303,095 | |||||||
| Nutrien Ltd. |
Chemicals | 93,366 | 6,885,773 | |||||||
| Pembina Pipeline Corp. |
Oil, Gas & Consumable Fuels | 98,462 | 3,185,182 | |||||||
| Power Corp. of Canada |
Insurance | 96,460 | 2,461,838 | |||||||
| Restaurant Brands International, Inc. |
Hotels, Restaurants & Leisure | 54,236 | 3,636,038 | |||||||
| Royal Bank of Canada |
Banks | 251,706 | 24,038,867 | |||||||
| Saputo, Inc. |
Food Products | 43,316 | 1,119,267 | |||||||
| Shaw Communications, Inc., Class B |
Media | 76,986 | 2,300,450 | |||||||
| aShopify, Inc., Class A |
IT Services | 204,022 | 9,768,815 | |||||||
| Sun Life Financial, Inc. |
Insurance | 105,196 | 4,907,877 | |||||||
| Suncor Energy, Inc. |
Oil, Gas & Consumable Fuels | 242,242 | 7,510,603 | |||||||
| TC Energy Corp. |
Oil, Gas & Consumable Fuels | 181,090 | 7,034,323 | |||||||
| Teck Resources Ltd., Class B |
Metals & Mining | 79,898 | 2,913,486 | |||||||
| TELUS Corp. |
Diversified Telecommunication Services | 85,540 | 1,695,820 | |||||||
| Thomson Reuters Corp. |
Professional Services | 29,120 | 3,783,545 | |||||||
| Toronto-Dominion Bank |
Banks | 326,326 | 19,519,038 | |||||||
| Tourmaline Oil Corp. |
Oil, Gas & Consumable Fuels | 51,324 | 2,135,861 | |||||||
| Wheaton Precious Metals Corp. |
Metals & Mining | 80,990 | 3,895,252 | |||||||
|
|
|
|||||||||
| 272,721,306 | ||||||||||
|
|
|
|||||||||
| 182 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Canada ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| United States 2.3% |
||||||||||
| Waste Connections, Inc. |
Commercial Services & Supplies | 46,046 | $ | 6,399,861 | ||||||
|
|
|
|||||||||
| Total Investments (Cost $298,943,761) 99.7% |
279,121,167 | |||||||||
| Other Assets, less Liabilities 0.3% |
805,881 | |||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 279,927,048 | ||||||||
|
|
|
|||||||||
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $1,609,373, representing 0.6% of net assets.
At March 31, 2023, 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 | $893,487 | 6/15/23 | $13,181 | |||||||||||||||
*As of year end.
See Note 7 regarding other derivative information.
See Abbreviations on page 355.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
183 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE China ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$21.43 | $31.78 | $22.19 | $24.01 | $25.99 | |||||||||||||||
| Income from investment operationsa: | ||||||||||||||||||||
| Net investment incomeb |
0.54 | 0.49 | 0.32 | 0.45 | 0.40 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(1.77 | ) | (10.47 | ) | 9.56 | (1.78 | ) | (1.99 | ) | |||||||||||
| Total from investment operations |
(1.23 | ) | (9.98 | ) | 9.88 | (1.33 | ) | (1.59 | ) | |||||||||||
| Less distributions from net investment income |
(0.50 | ) | (0.37 | ) | (0.29 | ) | (0.49 | ) | (0.39 | ) | ||||||||||
| Net asset value, end of year |
$19.70 | $21.43 | $31.78 | $22.19 | $24.01 | |||||||||||||||
| Total returnc |
(5.68)% | (31.63)% | 44.67% | (5.64)% | (5.94)% | |||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||
| 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% | —% | |||||||||||||||
| Net investment income |
2.82% | 1.80% | 1.06% | 1.94% | 1.70% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$114,234 | $111,454 | $120,782 | $48,807 | $43,220 | |||||||||||||||
| Portfolio turnover ratee |
9.69%f | 12.78%f | 15.97%f | 32.47%f | 7.21% | |||||||||||||||
|
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
dRatios are annualized for periods less than one year.
ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
|
| |||||||||||||||||||
| fPortfolio turnover rate excluding cash creations was as follows: | 9.69% | 12.00% | 15.31% | 32.47% | — | |||||||||||||||
| 184 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE China ETF
| Industry | Shares | Value | ||||||||
| Common Stocks 100.0% |
| |||||||||
| China 96.3% |
||||||||||
| 360 DigiTech, Inc., ADR |
Consumer Finance | 5,742 | $ | 111,395 | ||||||
| 360 Security Technology, Inc., Class A |
Software | 26,100 | 66,321 | |||||||
| 37 Interactive Entertainment Network Technology Group Co. Ltd., Class A |
Entertainment | 5,800 | 24,028 | |||||||
| 3peak, Inc., Class A |
Semiconductors & Semiconductor Equipment | 321 | 11,382 | |||||||
| a3SBio, Inc., Class A |
Biotechnology | 72,500 | 72,223 | |||||||
| Addsino Co. Ltd., Class A |
Communications Equipment | 5,800 | 9,502 | |||||||
| bAdvanced Micro-Fabrication Equipment, Inc. China, Class A |
Semiconductors & Semiconductor Equipment | 2,349 | 50,457 | |||||||
| AECC Aero-Engine Control Co. Ltd., Class A |
Aerospace & Defense | 5,800 | 20,574 | |||||||
| AECC Aviation Power Co. Ltd., Class A |
Aerospace & Defense | 8,700 | 54,666 | |||||||
| bAgile Group Holdings Ltd. |
Real Estate Management & Development | 78,000 | 17,389 | |||||||
| Agricultural Bank of China Ltd., Class A |
Banks | 339,300 | 153,659 | |||||||
| Agricultural Bank of China Ltd., Class H |
Banks | 1,566,000 | 580,521 | |||||||
| Aier Eye Hospital Group Co. Ltd., Class A |
Health Care Providers & Services | 26,141 | 118,271 | |||||||
| bAir China Ltd., Class A |
Airlines | 31,900 | 49,704 | |||||||
| bAir China Ltd., Class H |
Airlines | 82,000 | 73,330 | |||||||
| a,bAkeso, Inc. |
Biotechnology | 25,000 | 128,663 | |||||||
| bAlibaba Group Holding Ltd., Class A |
Internet & Direct Marketing Retail | 750,678 | 9,601,089 | |||||||
| aA-Living Smart City Services Co. Ltd., Class H |
Commercial Services & Supplies | 43,500 | 37,737 | |||||||
| Aluminum Corp. of China Ltd., Class A |
Metals & Mining | 49,300 | 39,628 | |||||||
| Aluminum Corp. of China Ltd., Class H |
Metals & Mining | 174,000 | 88,220 | |||||||
| bAmlogic Shanghai Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 1,456 | 17,835 | |||||||
| Angang Steel Co. Ltd., Class A |
Metals & Mining | 23,200 | 10,034 | |||||||
| Angang Steel Co. Ltd., Class H |
Metals & Mining | 76,000 | 24,301 | |||||||
| Angel Yeast Co. Ltd., Class A |
Food Products | 2,900 | 17,631 | |||||||
| aAngelalign Technology, Inc. |
Health Care Equipment & Supplies | 2,400 | 35,679 | |||||||
| Anhui Anke Biotechnology Group Co. Ltd., Class A |
Pharmaceuticals | 6,916 | 11,128 | |||||||
| Anhui Conch Cement Co. Ltd., Class A |
Construction Materials | 14,500 | 59,649 | |||||||
| Anhui Conch Cement Co. Ltd., Class H |
Construction Materials | 61,210 | 212,092 | |||||||
| Anhui Expressway Co. Ltd., Class H |
Transportation Infrastructure | 18,000 | 18,138 | |||||||
| Anhui Gujing Distillery Co. Ltd., Class A |
Beverages | 1,500 | 64,654 | |||||||
| Anhui Gujing Distillery Co. Ltd., Class B |
Beverages | 6,300 | 112,438 | |||||||
| Anhui Zhongding Sealing Parts Co. Ltd., Class A |
Automobile Components | 5,800 | 10,735 | |||||||
| Anjoy Foods Group Co. Ltd., Class A |
Food Products | 1,100 | 26,210 | |||||||
| ANTA Sports Products Ltd., Class A |
Textiles, Apparel & Luxury Goods | 59,050 | 857,547 | |||||||
| Apeloa Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 2,900 | 8,995 | |||||||
| Asymchem Laboratories Tianjin Co. Ltd., Class A |
Pharmaceuticals | 700 | 13,591 | |||||||
| Autohome, Inc., ADR |
Software | 3,074 | 102,887 | |||||||
| Avary Holding Shenzhen Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 2,900 | 13,099 | |||||||
| b,cAVIC Electromechanical Systems Co. Ltd., Class A |
Aerospace & Defense | 500 | — | |||||||
| AVIC Industry-Finance Holdings Co. Ltd., Class A |
Financial Services | 31,900 | 19,045 | |||||||
| AviChina Industry & Technology Co. Ltd., Class H |
Aerospace & Defense | 116,000 | 60,882 | |||||||
| AVICOPTER PLC, Class A |
Aerospace & Defense | 2,900 | 17,867 | |||||||
| aBAIC Motor Corp. Ltd., Class H |
Automobiles | 116,000 | 32,214 | |||||||
| bBaidu, Inc., Class A |
Interactive Media & Services | 114,588 | 2,170,617 | |||||||
| Bank of Beijing Co. Ltd., Class A |
Banks | 72,500 | 46,452 | |||||||
| Bank of Changsha Co. Ltd., Class A |
Banks | 14,500 | 16,702 | |||||||
| Bank of Chengdu Co. Ltd., Class A |
Banks | 5,800 | 11,453 | |||||||
| Bank of China Ltd., Class A |
Banks | 165,300 | 81,359 | |||||||
| Bank of China Ltd., Class H |
Banks | 3,857,000 | 1,478,936 | |||||||
| franklintempleton.com | Annual Report |
185 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| Bank of Communications Co. Ltd., Class A |
Banks | 136,300 | $ | 101,422 | ||||||
| Bank of Communications Co. Ltd., Class H |
Banks | 377,000 | 237,247 | |||||||
| Bank of Guiyang Co. Ltd., Class A |
Banks | 14,500 | 11,634 | |||||||
| Bank of Hangzhou Co. Ltd., Class A |
Banks | 20,300 | 34,320 | |||||||
| Bank of Jiangsu Co. Ltd., Class A |
Banks | 21,100 | 21,569 | |||||||
| Bank of Nanjing Co. Ltd., Class A |
Banks | 37,700 | 49,188 | |||||||
| Bank of Ningbo Co. Ltd., Class A |
Banks | 23,220 | 92,342 | |||||||
| Bank of Qingdao Co. Ltd., Class A |
Banks | 17,400 | 8,311 | |||||||
| Bank of Shanghai Co. Ltd., Class A |
Banks | 49,300 | 43,002 | |||||||
| Bank of Suzhou Co. Ltd., Class A, A |
Banks | 6,320 | 6,405 | |||||||
| bBank of Zhengzhou Co. Ltd., Class A |
Banks | 21,980 | 7,266 | |||||||
| Baoshan Iron & Steel Co. Ltd., Class A |
Metals & Mining | 66,700 | 60,607 | |||||||
| BBMG Corp., Class A |
Construction Materials | 37,700 | 13,450 | |||||||
| BBMG Corp., Class H |
Construction Materials | 116,000 | 15,073 | |||||||
| bBeiGene Ltd. |
Biotechnology | 31,900 | 525,845 | |||||||
| Beijing Capital Development Co. Ltd., Class A |
Real Estate Management & Development | 8,700 | 5,777 | |||||||
| Beijing Capital Eco-Environment Protection Group Co. Ltd., Class A |
Water Utilities | 29,000 | 12,542 | |||||||
| bBeijing Capital International Airport Co. Ltd., Class H |
Transportation Infrastructure | 116,000 | 85,412 | |||||||
| bBeijing Dabeinong Technology Group Co. Ltd., Class A |
Food Products | 14,500 | 16,490 | |||||||
| Beijing Easpring Material Technology Co. Ltd., Class A |
Chemicals | 2,900 | 24,290 | |||||||
| bBeijing E-Hualu Information Technology Co. Ltd., Class A |
Software | 2,900 | 15,975 | |||||||
| Beijing Enlight Media Co. Ltd., Class A |
Entertainment | 11,600 | 15,017 | |||||||
| Beijing Enterprises Holdings Ltd., Class H |
Industrial Conglomerates | 29,000 | 104,364 | |||||||
| Beijing Haixin Energy Technology Co. Ltd., Class A |
Chemicals | 9,900 | 5,766 | |||||||
| bBeijing Jetsen Technology Co. Ltd., Class A, A |
Software | 8,700 | 8,501 | |||||||
| Beijing Jingneng Clean Energy Co. Ltd., Class H |
Independent Power Producers & Energy Traders | 58,000 | 13,817 | |||||||
| Beijing Kingsoft Office Software, Inc., Class A |
Software | 1,682 | 115,851 | |||||||
| Beijing New Building Materials PLC, Class A |
Building Products | 5,800 | 22,669 | |||||||
| bBeijing Orient National Communication Science & Technology Co. Ltd., Class A |
Software | 5,800 | 12,728 | |||||||
| Beijing Originwater Technology Co. Ltd., Class A |
Commercial Services & Supplies | 14,535 | 10,689 | |||||||
| Beijing Shiji Information Technology Co. Ltd., Class A |
Software | 6,480 | 24,213 | |||||||
| Beijing Shougang Co. Ltd., Class A |
Metals & Mining | 29,000 | 16,089 | |||||||
| Beijing Shunxin Agriculture Co. Ltd., Class A |
Beverages | 2,900 | 14,991 | |||||||
| Beijing Sinnet Technology Co. Ltd., Class A |
IT Services | 6,000 | 11,716 | |||||||
| Beijing Tongrentang Co. Ltd., Class A |
Pharmaceuticals | 5,800 | 46,570 | |||||||
| Beijing Ultrapower Software Co. Ltd., Class A |
IT Services | 8,700 | 11,934 | |||||||
| Beijing United Information Technology Co. Ltd., Class A, A |
Trading Companies & Distributors | 1,740 | 21,017 | |||||||
| Beijing Wantai Biological Pharmacy Enterprise Co. Ltd., Class A |
Biotechnology | 1,015 | 17,167 | |||||||
| Beijing Yanjing Brewery Co. Ltd., Class A |
Beverages | 11,600 | 23,665 | |||||||
| Beijing Yuanliu Hongyuan Electronic Technology Co. Ltd., Class A, A |
Electronic Equipment, Instruments & Components | 800 | 8,965 | |||||||
| Beijing Zhong Ke San Huan High-Tech Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 3,260 | 6,219 | |||||||
| Bethel Automotive Safety Systems Co. Ltd., Class A |
Automobile Components | 1,600 | 16,593 | |||||||
| bBilibili, Inc., Class Z |
Entertainment | 12,180 | 294,184 | |||||||
| Bloomage Biotechnology Corp. Ltd., Class A, A |
Biotechnology | 1,118 | 18,462 | |||||||
| 186 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| aBlue Moon Group Holdings Ltd. |
Household Products | 43,500 | $ | 27,763 | ||||||
| Bluefocus Intelligent Communications Group Co. Ltd., Class A |
Media | 11,600 | 16,148 | |||||||
| Bluestar Adisseo Co., Class A |
Chemicals | 2,900 | 3,725 | |||||||
| BOC International China Co. Ltd., Class A |
Capital Markets | 2,900 | 4,535 | |||||||
| BOE Technology Group Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 139,200 | 89,999 | |||||||
| BOE Technology Group Co. Ltd., Class B |
Electronic Equipment, Instruments & Components | 34,800 | 15,693 | |||||||
| Bright Dairy & Food Co. Ltd., Class A |
Food Products | 5,800 | 9,029 | |||||||
| BTG Hotels Group Co. Ltd., Class A |
Hotels, Restaurants & Leisure | 2,900 | 9,856 | |||||||
| BYD Co. Ltd., Class A |
Automobiles | 6,800 | 253,511 | |||||||
| BYD Co. Ltd., Class H |
Automobiles | 49,236 | 1,441,338 | |||||||
| BYD Electronic International Co. Ltd. |
Communications Equipment | 39,500 | 122,778 | |||||||
| By-health Co. Ltd., Class A |
Personal Products | 5,800 | 18,032 | |||||||
| C&D International Investment Group Ltd. |
Real Estate Management & Development | 37,000 | 121,370 | |||||||
| C&S Paper Co. Ltd., Class A |
Household Products | 5,800 | 10,219 | |||||||
| Caida Securities Co. Ltd., Class A |
Capital Markets | 5,800 | 6,689 | |||||||
| Caitong Securities Co. Ltd., Class A |
Capital Markets | 17,460 | 19,094 | |||||||
| Camel Group Co. Ltd., Class A |
Electrical Equipment | 5,800 | 8,319 | |||||||
| Canmax Technologies Co. Ltd., Class A, A |
Chemicals | 2,900 | 21,617 | |||||||
| CanSino Biologics, Inc., Class A |
Pharmaceuticals | 240 | 3,973 | |||||||
| aCanSino Biologics, Inc., Class H |
Pharmaceuticals | 4,900 | 26,217 | |||||||
| CECEP Solar Energy Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 14,500 | 14,463 | |||||||
| CECEP Wind-Power Corp., Class A |
Independent Power Producers & Energy Traders | 26,380 | 14,866 | |||||||
| Central China Securities Co. Ltd., Class A |
Capital Markets | 11,600 | 6,284 | |||||||
| Central China Securities Co. Ltd., Class H |
Capital Markets | 58,000 | 8,571 | |||||||
| CETC Cyberspace Security Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 2,900 | 16,448 | |||||||
| CGN Power Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 31,900 | 13,332 | |||||||
| aCGN Power Co. Ltd., Class H |
Independent Power Producers & Energy Traders | 551,000 | 131,960 | |||||||
| Changchun High & New Technology Industry Group, Inc., Class A |
Pharmaceuticals | 1,500 | 35,669 | |||||||
| Changjiang Securities Co. Ltd., Class A |
Capital Markets | 23,200 | 18,817 | |||||||
| Changzhou Xingyu Automotive Lighting Systems Co. Ltd., Class A |
Automobile Components | 1,000 | 17,460 | |||||||
| Chaozhou Three-Circle Group Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 5,800 | 25,422 | |||||||
| Chengdu Xingrong Environment Co. Ltd., Class A |
Water Utilities | 11,600 | 8,615 | |||||||
| Chengxin Lithium Group Co. Ltd., Class A, A |
Paper & Forest Products | 2,900 | 14,582 | |||||||
| China Baoan Group Co. Ltd., Class A |
Industrial Conglomerates | 8,700 | 14,404 | |||||||
| aChina Bohai Bank Co. Ltd., Class H |
Banks | 159,500 | 27,227 | |||||||
| China Cinda Asset Management Co. Ltd., Class H |
Capital Markets | 464,000 | 58,518 | |||||||
| China CITIC Bank Corp. Ltd., Class A |
Banks | 37,700 | 29,810 | |||||||
| China CITIC Bank Corp. Ltd., Class H |
Banks | 464,000 | 233,479 | |||||||
| China Coal Energy Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 17,400 | 20,017 | |||||||
| China Coal Energy Co. Ltd., Class H |
Oil, Gas & Consumable Fuels | 116,000 | 87,924 | |||||||
| China Communications Services Corp. Ltd., Class H |
Diversified Telecommunication Services | 126,000 | 61,957 | |||||||
| China Conch Venture Holdings Ltd. |
Construction & Engineering | 77,280 | 134,872 | |||||||
| China Construction Bank Corp., Class A |
Banks | 31,900 | 27,592 | |||||||
| China Construction Bank Corp., Class H |
Banks | 4,756,000 | 3,083,846 | |||||||
| China CSSC Holdings Ltd., Class A |
Machinery | 17,400 | 59,290 | |||||||
| aChina East Education Holdings Ltd., Class A |
Diversified Consumer Services | 14,500 | 8,571 | |||||||
| bChina Eastern Airlines Corp. Ltd., Class A |
Airlines | 49,300 | 36,972 | |||||||
| bChina Eastern Airlines Corp. Ltd., Class H |
Airlines | 58,000 | 22,905 | |||||||
| China Energy Engineering Corp. Ltd. |
Construction & Engineering | 124,700 | 43,762 | |||||||
| China Energy Engineering Corp. Ltd., Class H |
Construction & Engineering | 232,000 | 28,963 | |||||||
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Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| China Everbright Bank Co. Ltd., Class A |
Banks | 168,200 | $ | 73,724 | ||||||
| China Everbright Bank Co. Ltd., Class H |
Banks | 145,000 | 43,962 | |||||||
| bChina Evergrande Group, Class A |
Real Estate Management & Development | 182,000 | 17,798 | |||||||
| aChina Feihe Ltd. |
Food Products | 203,000 | 152,316 | |||||||
| China Galaxy Securities Co. Ltd., Class A |
Capital Markets | 8,700 | 12,732 | |||||||
| China Galaxy Securities Co. Ltd., Class H |
Capital Markets | 188,500 | 94,851 | |||||||
| China Great Wall Securities Co. Ltd., Class A |
Capital Markets | 8,700 | 10,502 | |||||||
| China Greatwall Technology Group Co. Ltd., Class A |
Technology Hardware, Storage & Peripherals | 11,600 | 20,912 | |||||||
| China Green Electricity Investment of Tianjin Co. Ltd., Class A, A |
Real Estate Management & Development | 5,800 | 9,687 | |||||||
| China Hongqiao Group Ltd. |
Metals & Mining | 116,000 | 111,124 | |||||||
| a,bChina Huarong Asset Management Co. Ltd., Class H |
Capital Markets | 783,000 | 44,387 | |||||||
| China International Capital Corp. Ltd., Class A |
Capital Markets | 2,900 | 16,419 | |||||||
| aChina International Capital Corp. Ltd., Class H |
Capital Markets | 81,200 | 162,815 | |||||||
| China International Marine Containers Group Co. Ltd., Class A |
Machinery | 9,150 | 10,140 | |||||||
| China International Marine Containers Group Co. Ltd., Class H |
Machinery | 29,000 | 19,949 | |||||||
| China Jinmao Holdings Group Ltd., Class A |
Real Estate Management & Development | 348,000 | 67,827 | |||||||
| China Jushi Co. Ltd., Class A |
Construction Materials | 15,787 | 33,586 | |||||||
| China Lesso Group Holdings Ltd. |
Building Products | 58,000 | 51,868 | |||||||
| China Life Insurance Co. Ltd., Class H |
Insurance | 377,000 | 619,533 | |||||||
| a,bChina Literature Ltd., Class A |
Media | 17,400 | 89,771 | |||||||
| China Longyuan Power Group Corp. Ltd., Class H |
Independent Power Producers & Energy Traders | 174,000 | 198,827 | |||||||
| China Medical System Holdings Ltd. |
Pharmaceuticals | 65,000 | 102,676 | |||||||
| China Meheco Co. Ltd., Class A |
Trading Companies & Distributors | 5,840 | 11,668 | |||||||
| China Meidong Auto Holdings Ltd. |
Specialty Retail | 22,000 | 47,475 | |||||||
| China Merchants Bank Co. Ltd., Class A |
Banks | 75,400 | 376,270 | |||||||
| China Merchants Bank Co. Ltd., Class H |
Banks | 196,000 | 1,001,229 | |||||||
| China Merchants Energy Shipping Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 29,000 | 29,603 | |||||||
| China Merchants Expressway Network & Technology Holdings Co. Ltd., Class A |
Transportation Infrastructure | 5,800 | 7,154 | |||||||
| China Merchants Port Holdings Co. Ltd. |
Transportation Infrastructure | 77,300 | 118,560 | |||||||
| China Merchants Property Operation & Service Co. Ltd., Class A |
Real Estate Management & Development | 2,900 | 6,453 | |||||||
| China Merchants Securities Co. Ltd., Class A |
Capital Markets | 26,100 | 52,411 | |||||||
| aChina Merchants Securities Co. Ltd., Class H |
Capital Markets | 23,200 | 22,225 | |||||||
| China Merchants Shekou Industrial Zone Holdings Co. Ltd., Class A |
Real Estate Management & Development | 26,100 | 51,764 | |||||||
| China Minsheng Banking Corp. Ltd., Class A |
Banks | 121,800 | 61,190 | |||||||
| China Minsheng Banking Corp. Ltd., Class H |
Banks | 319,000 | 109,314 | |||||||
| China National Accord Medicines Corp. Ltd., Class B |
Health Care Providers & Services | 2,900 | 6,384 | |||||||
| China National Building Material Co. Ltd., Class H |
Construction Materials | 232,000 | 190,330 | |||||||
| China National Chemical Engineering Co. Ltd., Class A |
Construction & Engineering | 23,200 | 31,351 | |||||||
| China National Nuclear Power Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 58,000 | 53,969 | |||||||
| China National Software & Service Co. Ltd., Class A |
Software | 2,900 | 29,066 | |||||||
| China Northern Rare Earth Group High-Tech Co. Ltd., Class A |
Metals & Mining | 14,500 | 55,088 | |||||||
| China Oilfield Services Ltd., Class A |
Energy Equipment & Services | 5,800 | 12,314 | |||||||
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Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| China Oilfield Services Ltd., Class H |
Energy Equipment & Services | 92,000 | $ | 94,345 | ||||||
| China Overseas Land & Investment Ltd., Class A |
Real Estate Management & Development | 188,500 | 455,284 | |||||||
| China Pacific Insurance Group Co. Ltd., Class A |
Insurance | 23,200 | 87,566 | |||||||
| China Pacific Insurance Group Co. Ltd., Class H |
Insurance | 133,400 | 354,319 | |||||||
| China Petroleum & Chemical Corp., Class A |
Oil, Gas & Consumable Fuels | 121,800 | 99,678 | |||||||
| China Petroleum & Chemical Corp., Class H |
Oil, Gas & Consumable Fuels | 1,276,000 | 754,226 | |||||||
| China Railway Group Ltd., Class A |
Construction & Engineering | 72,500 | 72,634 | |||||||
| China Railway Group Ltd., Class H |
Construction & Engineering | 203,000 | 123,870 | |||||||
| China Railway Signal & Communication Corp. Ltd., Class A |
Electronic Equipment, Instruments & Components | 25,114 | 19,821 | |||||||
| aChina Railway Signal & Communication Corp. Ltd., Class H |
Electronic Equipment, Instruments & Components | 87,000 | 32,029 | |||||||
| bChina Rare Earth Resources & Technology Co. Ltd., Class A, A |
Metals & Mining | 2,900 | 14,261 | |||||||
| China Reinsurance Group Corp., Class H |
Insurance | 348,000 | 24,382 | |||||||
| China Resources Boya Bio-pharmaceutical Group Co. Ltd., Class A, A |
Biotechnology | 2,900 | 14,751 | |||||||
| China Resources Cement Holdings Ltd. |
Construction Materials | 116,000 | 56,892 | |||||||
| China Resources Double Crane Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 2,900 | 7,280 | |||||||
| China Resources Microelectronics Ltd., Class A, A |
Semiconductors & Semiconductor Equipment | 3,432 | 30,215 | |||||||
| aChina Resources Mixc Lifestyle Services Ltd. |
Real Estate Management & Development | 29,000 | 152,389 | |||||||
| aChina Resources Pharmaceutical Group Ltd., Class A |
Pharmaceuticals | 87,000 | 68,935 | |||||||
| China Resources Power Holdings Co. Ltd. |
Independent Power Producers & Energy Traders | 96,100 | 204,688 | |||||||
| China Resources Sanjiu Medical & Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 2,900 | 24,261 | |||||||
| bChina Ruyi Holdings Ltd. |
Entertainment | 232,000 | 60,586 | |||||||
| China Shenhua Energy Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 26,100 | 107,063 | |||||||
| China Shenhua Energy Co. Ltd., Class H |
Oil, Gas & Consumable Fuels | 172,350 | 542,302 | |||||||
| China South Publishing & Media Group Co. Ltd., Class A |
Media | 5,800 | 9,831 | |||||||
| bChina Southern Airlines Co. Ltd., Class A |
Airlines | 43,500 | 49,851 | |||||||
| bChina Southern Airlines Co. Ltd., Class H |
Airlines | 78,000 | 55,644 | |||||||
| China Southern Power Grid Energy Efficiency&Clean Energy Co. Ltd., Class A, A |
.Commercial Services & Supplies | 11,600 | 13,108 | |||||||
| China State Construction Engineering Corp. Ltd., Class A |
Construction & Engineering | 150,800 | 127,363 | |||||||
| China Suntien Green Energy Corp. Ltd., Class H |
Oil, Gas & Consumable Fuels | 87,000 | 38,014 | |||||||
| China Taiping Insurance Holdings Co. Ltd. |
Insurance | 75,400 | 80,107 | |||||||
| China Three Gorges Renewables Group Co. Ltd., Class A, A |
Independent Power Producers & Energy Traders | 89,900 | 71,739 | |||||||
| ChinaTourism Group Duty Free Corp. Ltd.,Class A |
Hotels, Restaurants & Leisure | 7,100 | 189,449 | |||||||
| a,bChinaTourism Group Duty Free Corp. Ltd.,Class H |
Specialty Retail | 3,700 | 91,487 | |||||||
| aChina Tower Corp. Ltd., Class H |
Diversified Telecommunication Services | 2,378,000 | 287,785 | |||||||
| bChina TransInfo Technology Co. Ltd., Class A |
IT Services | 2,900 | 5,680 | |||||||
| China United Network Communications Ltd., Class A |
Wireless Telecommunication Services | 98,600 | 77,820 | |||||||
| China Vanke Co. Ltd., Class A |
Real Estate Management & Development | 34,800 | 77,229 | |||||||
| China Vanke Co. Ltd., Class H |
Real Estate Management & Development | 113,100 | 178,368 | |||||||
| China World Trade Center Co. Ltd., Class A, A |
Real Estate Management & Development | 2,900 | 7,196 | |||||||
| China Yangtze Power Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 81,200 | 251,263 | |||||||
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Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| China Zhenhua Group Science & Technology Co. Ltd., Class A, A |
Electronic Equipment, Instruments & Components | 1,800 | $ | 23,606 | ||||||
| bChina Zheshang Bank Co. Ltd., Class A |
Banks | 29,000 | 12,078 | |||||||
| Chinalin Securities Co. Ltd., Class A, A |
Capital Markets | 2,900 | 6,195 | |||||||
| Chinese Universe Publishing & Media Group Co. Ltd., Class A |
Media | 5,800 | 10,473 | |||||||
| Chongqing Brewery Co. Ltd., Class A |
Beverages | 1,700 | 30,944 | |||||||
| Chongqing Changan Automobile Co. Ltd., Class A |
Automobiles | 30,144 | 52,323 | |||||||
| Chongqing Changan Automobile Co. Ltd., Class B |
Automobiles | 81,772 | 35,938 | |||||||
| Chongqing Fuling Zhacai Group Co. Ltd., Class A |
Food Products | 2,900 | 10,697 | |||||||
| Chongqing Rural Commercial Bank Co. Ltd., Class A |
Banks | 17,400 | 9,299 | |||||||
| Chongqing Rural Commercial Bank Co. Ltd., Class H |
Banks | 116,000 | 42,263 | |||||||
| Chongqing Water Group Co. Ltd., Class A |
Water Utilities | 8,700 | 6,803 | |||||||
| Chongqing Zhifei Biological Products Co. Ltd., Class A |
Biotechnology | 5,800 | 69,197 | |||||||
| cCIFI Holdings Group Co. Ltd., Class A |
Real Estate Management & Development | 266,320 | 25,784 | |||||||
| CITIC Ltd., Class B |
Industrial Conglomerates | 261,000 | 305,222 | |||||||
| Citic Pacific Special Steel Group Co. Ltd., Class A |
Metals & Mining | 18,280 | 47,328 | |||||||
| CITIC Securities Co. Ltd., Class A |
Capital Markets | 43,500 | 129,728 | |||||||
| CITIC Securities Co. Ltd., Class H |
Capital Markets | 116,200 | 248,092 | |||||||
| CMOC Group Ltd., Class A |
Metals & Mining | 31,900 | 27,825 | |||||||
| CMOC Group Ltd., Class H |
Metals & Mining | 213,000 | 128,886 | |||||||
| CMST Development Co. Ltd., Class A |
Air Freight & Logistics | 8,700 | 6,689 | |||||||
| CNGR Advanced Material Co. Ltd., Class A |
Chemicals | 2,900 | 30,257 | |||||||
| CNOOC Energy Technology & Services Ltd., Class A |
Energy Equipment & Services | 20,300 | 9,755 | |||||||
| CNPC Capital Co. Ltd., Class A |
Machinery | 17,400 | 17,686 | |||||||
| Contemporary Amperex Technology Co. Ltd., Class A |
Electrical Equipment | 8,900 | 526,240 | |||||||
| COSCO SHIPPING Development Co. Ltd., Class A |
Marine Transportation | 40,600 | 14,603 | |||||||
| COSCO SHIPPING Development Co. Ltd., Class H |
Marine Transportation | 174,000 | 23,052 | |||||||
| bCOSCO SHIPPING Energy Transportation Co. Ltd., Class A |
Marine Transportation | 11,600 | 22,871 | |||||||
| bCOSCO SHIPPING Energy Transportation Co. Ltd., Class H |
Marine Transportation | 66,000 | 68,102 | |||||||
| COSCO SHIPPING Holdings Co. Ltd., Class A |
Marine Transportation | 45,480 | 73,048 | |||||||
| COSCO SHIPPING Holdings Co. Ltd., Class H |
Marine Transportation | 159,500 | 179,413 | |||||||
| Country Garden Holdings Co. Ltd. |
Real Estate Management & Development | 667,000 | 187,781 | |||||||
| Country Garden Services Holdings Co. Ltd. |
Commercial Services & Supplies | 107,300 | 185,623 | |||||||
| CRRC Corp. Ltd., Class A |
Machinery | 89,900 | 80,117 | |||||||
| CRRC Corp. Ltd., Class H |
Machinery | 203,000 | 110,681 | |||||||
| CSC Financial Co. Ltd., Class A |
Capital Markets | 17,400 | 64,940 | |||||||
| aCSC Financial Co. Ltd., Class H |
Capital Markets | 43,500 | 42,392 | |||||||
| CSG Holding Co. Ltd., Class A |
Construction Materials | 5,800 | 5,667 | |||||||
| CSG Holding Co. Ltd., Class B |
Construction Materials | 60,900 | 23,041 | |||||||
| CSPC Pharmaceutical Group Ltd., Class A |
Pharmaceuticals | 428,000 | 420,915 | |||||||
| Daan Gene Co. Ltd., Class A |
Biotechnology | 4,140 | 9,712 | |||||||
| bDada Nexus Ltd., Class A, ADR |
Consumer Staples Distribution & Retail | 3,770 | 31,932 | |||||||
| aDali Foods Group Co. Ltd. |
Food Products | 101,500 | 42,410 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
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Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| Daqin Railway Co. Ltd., Class A |
Ground Transportation | 52,200 | $ | 54,653 | ||||||
| bDaqo New Energy Corp., ADR |
Semiconductors & Semiconductor Equipment | 2,842 | 133,119 | |||||||
| DaShenLin Pharmaceutical Group Co. Ltd., Class A |
Consumer Staples Distribution & Retail | 1,152 | 6,245 | |||||||
| bDatang International Power Generation Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 26,100 | 11,516 | |||||||
| bDatang International Power Generation Co. Ltd., Class H |
Independent Power Producers & Energy Traders | 116,000 | 20,984 | |||||||
| DHC Software Co. Ltd., Class A |
IT Services | 11,600 | 14,020 | |||||||
| Dian Diagnostics Group Co. Ltd., Class A |
Health Care Providers & Services | 2,900 | 12,099 | |||||||
| Do-Fluoride New Materials Co. Ltd., Class A |
Chemicals | 2,900 | 14,024 | |||||||
| Dong-E-E-Jiao Co. Ltd., Class A |
Pharmaceuticals | 2,900 | 22,377 | |||||||
| Dongfang Electric Corp. Ltd., Class A |
Electrical Equipment | 8,700 | 24,020 | |||||||
| Dongfang Electric Corp. Ltd., Class H |
Electrical Equipment | 17,400 | 28,106 | |||||||
| Dongfeng Motor Group Co. Ltd., Class H |
Automobiles | 153,900 | 72,147 | |||||||
| Dongxing Securities Co. Ltd., Class A |
Capital Markets | 11,600 | 14,189 | |||||||
| a,bEast Buy Holding Ltd. |
Diversified Consumer Services | 14,500 | 62,526 | |||||||
| East Group Co. Ltd., Class A |
Electrical Equipment | 8,700 | 9,856 | |||||||
| East Money Information Co. Ltd., Class A |
Capital Markets | 46,480 | 135,569 | |||||||
| Eastern Air Logistics Co. Ltd., Class A |
Air Freight & Logistics | 5,800 | 12,846 | |||||||
| Ecovacs Robotics Co. Ltd., Class A |
Household Durables | 2,200 | 26,462 | |||||||
| ENN Energy Holdings Ltd. |
Gas Utilities | 38,200 | 523,611 | |||||||
| ENN Natural Gas Co. Ltd., Class A |
Chemicals | 8,700 | 26,414 | |||||||
| Eternal Asia Supply Chain Management Ltd., Class A |
Commercial Services & Supplies | 11,600 | 9,966 | |||||||
| Eve Energy Co. Ltd., Class A |
Electrical Equipment | 6,800 | 69,017 | |||||||
| Everbright Securities Co. Ltd., Class A |
Capital Markets | 14,500 | 32,179 | |||||||
| aEverbright Securities Co. Ltd., Class H |
Capital Markets | 11,600 | 7,876 | |||||||
| a,bEvergrande Property Services Group Ltd. |
Real Estate Management & Development | 221,000 | 29,956 | |||||||
| bFangda Carbon New Material Co. Ltd., Class A |
Electrical Equipment | 14,500 | 13,598 | |||||||
| FAW Jiefang Group Co. Ltd. |
Automobiles | 5,800 | 7,010 | |||||||
| Fiberhome Telecommunication Technologies Co. Ltd., Class A |
Communications Equipment | 5,800 | 16,554 | |||||||
| Financial Street Holdings Co. Ltd., Class A |
Real Estate Management & Development | 11,600 | 8,480 | |||||||
| First Capital Securities Co. Ltd., Class A |
Capital Markets | 17,400 | 15,126 | |||||||
| Flat Glass Group Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 2,900 | 14,489 | |||||||
| Flat Glass Group Co. Ltd., Class H |
Semiconductors & Semiconductor Equipment | 29,000 | 83,122 | |||||||
| Focus Media Information Technology Co. Ltd., Class A |
Technology Hardware, Storage & Peripherals | 55,100 | 55,122 | |||||||
| Foshan Haitian Flavouring & Food Co. Ltd., Class A |
Food Products | 15,061 | 167,863 | |||||||
| Fosun International Ltd. |
Industrial Conglomerates | 116,000 | 85,116 | |||||||
| Foxconn Industrial Internet Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 46,400 | 116,350 | |||||||
| Fujian Funeng Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 5,800 | 10,355 | |||||||
| Fujian Sunner Development Co. Ltd., Class A |
Food Products | 5,800 | 20,827 | |||||||
| bFull Truck Alliance Co. Ltd., ADR |
Ground Transportation | 32,190 | 244,966 | |||||||
| Fuyao Glass Industry Group Co. Ltd., Class A |
Automobile Components | 5,800 | 29,358 | |||||||
| aFuyao Glass Industry Group Co. Ltd., Class H |
Automobile Components | 34,800 | 151,614 | |||||||
| Ganfeng Lithium Group Co. Ltd., Class A |
Metals & Mining | 6,060 | 58,656 | |||||||
| aGanfeng Lithium Group Co. Ltd., Class H |
Metals & Mining | 16,860 | 104,812 | |||||||
| G-bits Network Technology Xiamen Co. Ltd., Class A |
Entertainment | 200 | 13,885 | |||||||
| bGCL System Integration Technology Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 23,200 | 10,540 | |||||||
| bGCL Technology Holdings Ltd. |
Semiconductors & Semiconductor Equipment | 1,044,000 | 269,979 | |||||||
| bGD Power Development Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 63,800 | 35,304 | |||||||
| bGDS Holdings Ltd., Class A |
IT Services | 49,300 | 119,326 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
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Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| GEM Co. Ltd., Class A |
Metals & Mining | 20,300 | $ | 22,082 | ||||||
| Gemdale Corp., Class A |
Real Estate Management & Development | 17,400 | 21,283 | |||||||
| bGenscript Biotech Corp. |
Life Sciences Tools & Services | 49,307 | 105,524 | |||||||
| GF Securities Co. Ltd., Class A |
Capital Markets | 20,300 | 46,617 | |||||||
| GF Securities Co. Ltd., Class H |
Capital Markets | 52,200 | 73,945 | |||||||
| GigaDevice Semiconductor, Inc., Class A |
Semiconductors & Semiconductor Equipment | 2,248 | 39,936 | |||||||
| bGinlong Technologies Co. Ltd., Class A |
Electrical Equipment | 1,350 | 26,260 | |||||||
| Glarun Technology Co. Ltd., Class A |
Communications Equipment | 5,800 | 13,784 | |||||||
| GoerTek, Inc., Class A |
Electronic Equipment, Instruments & Components | 11,600 | 36,148 | |||||||
| GoodWe Technologies Co. Ltd., Class A, A |
Electrical Equipment | 364 | 15,342 | |||||||
| Gotion High-tech Co. Ltd., Class A |
Electrical Equipment | 5,800 | 25,177 | |||||||
| bGrandjoy Holdings Group Co. Ltd., Class A |
Real Estate Management & Development | 17,400 | 9,451 | |||||||
| Great Wall Motor Co. Ltd., Class A |
Automobiles | 8,700 | 35,384 | |||||||
| Great Wall Motor Co. Ltd., Class H |
Automobiles | 130,500 | 161,090 | |||||||
| Gree Electric Appliances, Inc. of Zhuhai, Class A |
Household Durables | 2,900 | 15,519 | |||||||
| Greentown China Holdings Ltd. |
Real Estate Management & Development | 43,500 | 56,412 | |||||||
| GRG Banking Equipment Co. Ltd., Class A |
Technology Hardware, Storage & Peripherals | 8,700 | 15,532 | |||||||
| Guangdong Baolihua New Energy Stock Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 8,700 | 7,665 | |||||||
| bGuangdong Electric Power Development Co. Ltd., Class A, A |
Independent Power Producers & Energy Traders | 8,700 | 8,070 | |||||||
| bGuangdong Electric Power Development Co. Ltd., Class B |
Independent Power Producers & Energy Traders | 46,400 | 12,708 | |||||||
| Guangdong Golden Dragon Development, Inc., Class A |
Capital Markets | 2,900 | 5,836 | |||||||
| Guangdong Haid Group Co. Ltd., Class A |
Food Products | 6,000 | 50,963 | |||||||
| Guangdong HEC Technology Holding Co. Ltd., Class A |
Metals & Mining | 11,600 | 15,118 | |||||||
| Guangdong Kinlong Hardware Products Co. Ltd., Class A |
Building Products | 700 | 8,196 | |||||||
| Guangdong Xinbao Electrical Appliances Holdings Co. Ltd., Class A |
Household Durables | 2,900 | 7,196 | |||||||
| Guanghui Energy Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 23,200 | 31,250 | |||||||
| bGuangshen Railway Co. Ltd., Class A |
Ground Transportation | 14,500 | 5,089 | |||||||
| bGuangshen Railway Co. Ltd., Class H |
Ground Transportation | 58,000 | 10,713 | |||||||
| Guangxi Guiguan Electric Power Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 14,500 | 11,740 | |||||||
| Guangxi Liugong Machinery Co. Ltd., Class A |
Machinery | 5,800 | 5,718 | |||||||
| Guangzhou Automobile Group Co. Ltd., Class A |
Automobiles | 11,600 | 18,817 | |||||||
| Guangzhou Automobile Group Co. Ltd., Class H |
Automobiles | 162,000 | 102,154 | |||||||
| Guangzhou Baiyunshan Pharmaceutical Holdings Co. Ltd., Class A |
Pharmaceuticals | 5,800 | 27,939 | |||||||
| Guangzhou Baiyunshan Pharmaceutical Holdings Co. Ltd., Class H |
Pharmaceuticals | 10,500 | 32,370 | |||||||
| Guangzhou Haige Communications Group, Inc. Co., Class A |
Communications Equipment | 8,700 | 13,302 | |||||||
| Guangzhou Kingmed Diagnostics Group Co. Ltd., Class A |
Health Care Providers & Services | 2,900 | 37,204 | |||||||
| Guangzhou Shiyuan Electronic Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 700 | 7,630 | |||||||
| Guangzhou Tinci Materials Technology Co. Ltd., Class A |
Chemicals | 7,460 | 45,581 | |||||||
| Guangzhou Wondfo Biotech Co. Ltd., Class A |
Health Care Equipment & Supplies | 1,300 | 5,889 | |||||||
| Guangzhou Yuexiu Capital Holdings Group Co. Ltd., Class A, A |
Capital Markets | 10,093 | 9,685 | |||||||
| Guangzhou Zhujiang Brewery Co. Ltd., Class A |
Beverages | 5,800 | 7,998 | |||||||
| 192 | Annual Report |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| bGuizhou Bailing Group Pharmaceutical Co. Ltd., Class A, A |
Pharmaceuticals | 5,800 | $ | 6,807 | ||||||
| Guizhou Panjiang Refined Coal Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 5,800 | 6,106 | |||||||
| Guizhou Xinbang Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 8,700 | 6,372 | |||||||
| Guolian Securities Co. Ltd., Class A |
Capital Markets | 8,700 | 13,416 | |||||||
| Guosen Securities Co. Ltd., Class A |
Capital Markets | 20,300 | 27,698 | |||||||
| bGuosheng Financial Holding, Inc., Class A |
Electrical Equipment | 8,700 | 11,047 | |||||||
| Guotai Junan Securities Co. Ltd., Class A |
Capital Markets | 26,100 | 54,577 | |||||||
| aGuotai Junan Securities Co. Ltd., Class H |
Capital Markets | 34,800 | 42,292 | |||||||
| Guoyuan Securities Co. Ltd., Class A |
Capital Markets | 17,400 | 17,128 | |||||||
| bH World Group Ltd., ADR |
Hotels, Restaurants & Leisure | 10,788 | 528,396 | |||||||
| a,bHaidilao International Holding Ltd. |
Hotels, Restaurants & Leisure | 77,000 | 208,441 | |||||||
| Haier Smart Home Co. Ltd., Class A |
Household Durables | 23,200 | 76,620 | |||||||
| Haier Smart Home Co. Ltd., Class H |
Household Durables | 116,000 | 364,996 | |||||||
| Haitian International Holdings Ltd. |
Machinery | 30,000 | 77,580 | |||||||
| Haitong Securities Co. Ltd., Class A |
Capital Markets | 34,800 | 44,645 | |||||||
| Haitong Securities Co. Ltd., Class H |
Capital Markets | 174,000 | 108,612 | |||||||
| bHang Zhou Great Star Industrial Co. Ltd., Class A |
Household Durables | 2,900 | 7,990 | |||||||
| Hangzhou Binjiang Real Estate Group Co. Ltd., Class A |
Real Estate Management & Development | 11,600 | 15,456 | |||||||
| Hangzhou Chang Chuan Technology Co. Ltd., Class A, A |
Semiconductors & Semiconductor Equipment | 2,900 | 20,422 | |||||||
| Hangzhou First Applied Material Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 2,440 | 20,874 | |||||||
| Hangzhou Lion Electronics Co. Ltd., Class A, A |
Semiconductors & Semiconductor Equipment | 2,900 | 23,006 | |||||||
| Hangzhou Oxygen Plant Group Co. Ltd., Class A |
Machinery | 2,900 | 14,054 | |||||||
| Hangzhou Robam Appliances Co. Ltd., Class A |
Household Durables | 2,900 | 11,976 | |||||||
| Hangzhou Silan Microelectronics Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 5,800 | 31,258 | |||||||
| Hangzhou Tigermed Consulting Co. Ltd., Class A |
Life Sciences Tools & Services | 2,900 | 40,417 | |||||||
| aHangzhou Tigermed Consulting Co. Ltd., Class H |
Life Sciences Tools & Services | 5,800 | 54,454 | |||||||
| Han’s Laser Technology Industry Group Co. Ltd., Class A |
Machinery | 2,900 | 12,817 | |||||||
| aHansoh Pharmaceutical Group Co. Ltd. |
Pharmaceuticals | 58,000 | 100,780 | |||||||
| Haohua Chemical Science & Technology Co. Ltd., Class A, A |
Chemicals | 2,800 | 18,205 | |||||||
| Harbin Boshi Automation Co. Ltd., Class A |
Machinery | 2,900 | 6,904 | |||||||
| Hefei Meiya Optoelectronic Technology, Inc., Class A |
Machinery | 3,680 | 17,309 | |||||||
| Heilongjiang Agriculture Co. Ltd., Class A |
Food Products | 5,800 | 11,334 | |||||||
| Henan Shenhuo Coal & Power Co. Ltd., Class A, A |
Metals & Mining | 8,700 | 22,449 | |||||||
| Henan Shuanghui Investment & Development Co. Ltd., Class A |
Food Products | 11,600 | 43,817 | |||||||
| Hengan International Group Co. Ltd. |
Personal Products | 35,700 | 165,085 | |||||||
| Hengdian Group DMEGC Magnetics Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 5,800 | 17,365 | |||||||
| Hengli Petrochemical Co. Ltd., Class A |
Chemicals | 11,600 | 27,364 | |||||||
| Hengtong Optic-electric Co. Ltd., Class A |
Communications Equipment | 8,700 | 19,130 | |||||||
| Hengyi Petrochemical Co. Ltd., Class A |
Chemicals | 14,500 | 17,145 | |||||||
| Hesteel Co. Ltd., Class A |
Metals & Mining | 40,600 | 13,775 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| Hithink RoyalFlush Information Network Co. Ltd., Class A |
Capital Markets | 2,900 | $ | 86,274 | ||||||
| bHolitech Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 11,600 | 5,203 | |||||||
| Hongfa Technology Co. Ltd., Class A |
Electrical Equipment | 1,040 | 4,936 | |||||||
| Hopson Development Holdings Ltd. |
Real Estate Management & Development | 43,028 | 39,356 | |||||||
| Hoshine Silicon Industry Co. Ltd., Class A |
Chemicals | 2,900 | 35,054 | |||||||
| a,bHua Hong Semiconductor Ltd. |
Semiconductors & Semiconductor Equipment | 20,500 | 90,749 | |||||||
| Huadian Power International Corp. Ltd., Class A |
Independent Power Producers & Energy Traders | 26,100 | 22,006 | |||||||
| Huadian Power International Corp. Ltd., Class H |
Independent Power Producers & Energy Traders | 58,000 | 23,791 | |||||||
| Huadong Medicine Co. Ltd., Class A |
Health Care Providers & Services | 5,800 | 39,138 | |||||||
| Huafon Chemical Co. Ltd., Class A |
Chemicals | 14,500 | 15,751 | |||||||
| Huagong Tech Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 2,900 | 10,730 | |||||||
| Huaibei Mining Holdings Co. Ltd., Class A |
Metals & Mining | 8,700 | 17,179 | |||||||
| Hualan Biological Engineering, Inc., Class A |
Biotechnology | 6,460 | 20,535 | |||||||
| Huaneng Lancang River Hydropower, Inc., Class A |
Independent Power Producers & Energy Traders | 23,200 | 23,885 | |||||||
| bHuaneng Power International, Inc., Class A |
Independent Power Producers & Energy Traders | 26,100 | 32,571 | |||||||
| bHuaneng Power International, Inc., Class H |
Independent Power Producers & Energy Traders | 232,000 | 121,764 | |||||||
| Huapont Life Sciences Co. Ltd., Class A |
Chemicals | 5,800 | 4,747 | |||||||
| Huatai Securities Co. Ltd., Class A |
Capital Markets | 26,100 | 48,534 | |||||||
| aHuatai Securities Co. Ltd., Class H |
Capital Markets | 81,200 | 92,786 | |||||||
| Huaxi Securities Co. Ltd., Class A |
Capital Markets | 8,700 | 10,426 | |||||||
| Huaxia Bank Co. Ltd., Class A |
Banks | 55,100 | 43,167 | |||||||
| Huaxin Cement Co. Ltd., Class A |
Construction Materials | 5,800 | 13,133 | |||||||
| Huaxin Cement Co. Ltd., Class H, H |
Construction Materials | 12,800 | 13,925 | |||||||
| Huayu Automotive Systems Co. Ltd., Class A |
Automobile Components | 11,600 | 28,277 | |||||||
| Hubei Biocause Pharmaceutical Co. Ltd., Class A |
Insurance | 14,500 | 7,094 | |||||||
| Hubei Energy Group Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 26,100 | 16,077 | |||||||
| Hubei Xingfa Chemicals Group Co. Ltd., Class A, A |
Chemicals | 2,900 | 12,859 | |||||||
| Huizhou Desay Sv Automotive Co. Ltd., Class A |
Household Durables | 1,700 | 27,466 | |||||||
| Humanwell Healthcare Group Co. Ltd., Class A |
Pharmaceuticals | 5,800 | 22,618 | |||||||
| Hunan Gold Corp. Ltd., Class A |
Metals & Mining | 2,900 | 6,398 | |||||||
| Hunan Valin Steel Co. Ltd., Class A |
Metals & Mining | 26,100 | 21,169 | |||||||
| Hundsun Technologies, Inc., Class A |
Software | 6,906 | 53,520 | |||||||
| a,bHygeia Healthcare Holdings Co. Ltd. |
Health Care Providers & Services | 17,400 | 123,685 | |||||||
| Iflytek Co. Ltd., Class A |
Software | 8,700 | 80,674 | |||||||
| Imeik Technology Development Co. Ltd., Class A, A |
Biotechnology | 600 | 48,818 | |||||||
| Industrial & Commercial Bank of China Ltd., Class A |
Banks | 278,400 | 180,808 | |||||||
| Industrial & Commercial Bank of China Ltd., Class H |
Banks | 4,031,000 | 2,146,457 | |||||||
| Industrial Bank Co. Ltd., Class A |
Banks | 75,400 | 185,445 | |||||||
| Industrial Securities Co. Ltd., Class A |
Capital Markets | 33,790 | 30,113 | |||||||
| Ingenic Semiconductor Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 1,300 | 16,850 | |||||||
| Inmyshow Digital Technology Group Co. Ltd., Class A |
Media | 5,800 | 7,812 | |||||||
| Inner Mongolia BaoTou Steel Union Co. Ltd., Class A |
Metals & Mining | 139,200 | 38,310 | |||||||
| Inner Mongolia Dian Tou Energy Corp. Ltd., Class A |
Oil, Gas & Consumable Fuels | 2,900 | 5,676 | |||||||
| Inner Mongolia ERDOS Resources Co. Ltd., Class A |
Metals & Mining | 5,800 | 12,964 | |||||||
| Inner Mongolia ERDOS Resources Co. Ltd., Class B |
Metals & Mining | 20,300 | 38,509 | |||||||
| 194 | Annual Report |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| Inner Mongolia Junzheng Energy & Chemical Industry Group Co. Ltd., Class A |
Chemicals | 29,000 | $ | 19,088 | ||||||
| Inner Mongolia Yili Industrial Group Co. Ltd., Class A |
Food Products | 23,200 | 98,377 | |||||||
| Inner Mongolia Yitai Coal Co. Ltd., Class B |
Oil, Gas & Consumable Fuels | 52,200 | 76,682 | |||||||
| Inner Mongolia Yuan Xing Energy Co. Ltd., Class A |
Chemicals | 14,500 | 18,243 | |||||||
| a,bInnovent Biologics, Inc., Class B |
Biotechnology | 69,000 | 308,964 | |||||||
| Inspur Electronic Information Industry Co. Ltd., Class A |
Technology Hardware, Storage & Peripherals | 5,908 | 30,197 | |||||||
| Intco Medical Technology Co. Ltd., Class A |
Health Care Equipment & Supplies | 1,890 | 7,106 | |||||||
| biQIYI, Inc., ADR |
Entertainment | 22,243 | 161,929 | |||||||
| JA Solar Technology Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 8,780 | 73,310 | |||||||
| Jafron Biomedical Co. Ltd., Class A |
Health Care Equipment & Supplies | 2,900 | 12,817 | |||||||
| Jason Furniture Hangzhou Co. Ltd., Class A |
Household Durables | 3,680 | 21,746 | |||||||
| JCET Group Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 5,800 | 27,407 | |||||||
| a,bJD Health International, Inc. |
Consumer Staples Distribution & Retail | 53,650 | 399,131 | |||||||
| a,bJD Logistics, Inc. |
Air Freight & Logistics | 84,100 | 151,060 | |||||||
| JD.com, Inc., Class A |
Broadline Retail | 120,860 | 2,648,160 | |||||||
| bJiajiayue Group Co. Ltd., Class A |
Consumer Staples Distribution & Retail | 2,900 | 5,680 | |||||||
| Jiangsu Cnano Technology Co. Ltd., Class A |
Chemicals | 810 | 7,988 | |||||||
| Jiangsu Eastern Shenghong Co. Ltd., Class A |
Chemicals | 17,400 | 34,510 | |||||||
| Jiangsu Expressway Co. Ltd., Class A |
Transportation Infrastructure | 5,800 | 7,052 | |||||||
| Jiangsu Expressway Co. Ltd., Class H |
Transportation Infrastructure | 62,000 | 57,814 | |||||||
| Jiangsu Hengli Hydraulic Co. Ltd., Class A |
Machinery | 4,180 | 40,307 | |||||||
| Jiangsu Hengrui Pharmaceuticals Co. Ltd., Class A |
Pharmaceuticals | 23,200 | 144,660 | |||||||
| Jiangsu King’s Luck Brewery JSC Ltd., Class A |
Beverages | 5,800 | 54,771 | |||||||
| Jiangsu Linyang Energy Co. Ltd., Class A |
Electrical Equipment | 8,700 | 10,021 | |||||||
| Jiangsu Pacific Quartz Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 1,200 | 21,577 | |||||||
| Jiangsu Yanghe Brewery Joint-Stock Co. Ltd., Class A |
Beverages | 5,800 | 139,745 | |||||||
| Jiangsu Yangnong Chemical Co. Ltd., Class A |
Chemicals | 900 | 12,729 | |||||||
| Jiangsu Yuyue Medical Equipment & Supply Co. Ltd., Class A |
Health Care Equipment & Supplies | 2,900 | 13,446 | |||||||
| bJiangsu Zhongnan Construction Group Co. Ltd., Class A |
Real Estate Management & Development | 17,400 | 5,143 | |||||||
| Jiangsu Zhongtian Technology Co. Ltd., Class A |
Electrical Equipment | 11,600 | 28,868 | |||||||
| Jiangxi Copper Co. Ltd., Class A |
Metals & Mining | 8,700 | 25,071 | |||||||
| Jiangxi Copper Co. Ltd., Class H |
Metals & Mining | 58,000 | 98,268 | |||||||
| bJiangxi Special Electric Motor Co. Ltd., Class A, A |
Electrical Equipment | 5,800 | 12,998 | |||||||
| bJiangxi Zhengbang Technology Co. Ltd., Class A |
Food Products | 11,600 | 5,574 | |||||||
| Jilin Aodong Pharmaceutical Group Co. Ltd., Class A |
Pharmaceuticals | 5,800 | 12,931 | |||||||
| bJinke Properties Group Co. Ltd., Class A |
Real Estate Management & Development | 23,200 | 5,372 | |||||||
| Jinke Smart Services Group Co. Ltd., Class H |
Real Estate Management & Development | 11,600 | 17,733 | |||||||
| aJinxin Fertility Group Ltd. |
Health Care Providers & Services | 79,000 | 52,935 | |||||||
| JiuGui Liquor Co. Ltd., Class A |
Beverages | 900 | 16,949 | |||||||
| aJiumaojiu International Holdings Ltd. |
Hotels, Restaurants & Leisure | 29,000 | 69,009 | |||||||
| Jizhong Energy Resources Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 11,600 | 11,554 | |||||||
| Joincare Pharmaceutical Group Industry Co. Ltd., Class A |
Pharmaceuticals | 8,700 | 16,685 | |||||||
| Joinn Laboratories China Co. Ltd., Class A |
Life Sciences Tools & Services | 1,400 | 10,674 | |||||||
| aJoinn Laboratories China Co. Ltd., Class H |
Life Sciences Tools & Services | 3,980 | 15,489 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| Jointown Pharmaceutical Group Co. Ltd., Class A |
Health Care Providers & Services | 5,800 | $ | 12,618 | ||||||
| Jonjee Hi-Tech Industrial & Commercial Holding Co. Ltd., Class A |
Food Products | 2,900 | 15,667 | |||||||
| Joyoung Co. Ltd., Class A |
Household Durables | 2,900 | 7,567 | |||||||
| JOYY, Inc., ADR |
Interactive Media & Services | 2,320 | 72,338 | |||||||
| bJuneyao Airlines Co. Ltd., Class A, A |
Airlines | 8,700 | 22,778 | |||||||
| bKaishan Group Co. Ltd., Class A |
Machinery | 2,900 | 7,475 | |||||||
| bKanzhun Ltd., ADR |
Interactive Media & Services | 6,931 | 131,897 | |||||||
| b KE Holdings, Inc., ADR |
Real Estate Management & Development | 32,683 | 615,748 | |||||||
| Keda Industrial Group Co. Ltd. |
Machinery | 5,800 | 12,187 | |||||||
| Kingboard Holdings Ltd. |
Electronic Equipment, Instruments & Components | 37,800 | 116,049 | |||||||
| bKingdee International Software Group Co. Ltd. |
Software | 132,000 | 213,892 | |||||||
| bKingsoft Cloud Holdings Ltd., ADR |
IT Services | 5,278 | 46,921 | |||||||
| Kingsoft Corp. Ltd. |
Software | 42,400 | 208,761 | |||||||
| a,bKuaishou Technology, Class B |
Interactive Media & Services | 101,500 | 781,620 | |||||||
| Kuang-Chi Technologies Co. Ltd., Class A |
Automobile Components | 8,700 | 20,979 | |||||||
| Kunlun Tech Co. Ltd., Class A |
Entertainment | 2,900 | 19,755 | |||||||
| Kweichow Moutai Co. Ltd., Class A |
Beverages | 4,500 | 1,192,608 | |||||||
| bLakala Payment Co. Ltd., Class A |
IT Services | 2,900 | 7,931 | |||||||
| Lao Feng Xiang Co. Ltd., Class B |
Textiles, Apparel & Luxury Goods | 11,600 | 38,744 | |||||||
| LB Group Co. Ltd., Class A |
Chemicals | 8,700 | 25,642 | |||||||
| Lee & Man Paper Manufacturing Ltd. |
Paper & Forest Products | 87,000 | 34,800 | |||||||
| aLegend Holdings Corp., Class H |
Technology Hardware, Storage & Peripherals | 26,100 | 27,829 | |||||||
| Lens Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 17,400 | 34,231 | |||||||
| bLeo Group Co. Ltd., Class A |
Media | 31,900 | 11,102 | |||||||
| Lepu Medical Technology Beijing Co. Ltd., Class A |
Health Care Equipment & Supplies | 5,800 | 19,577 | |||||||
| Levima Advanced Materials Corp., Class A, A |
Chemicals | 2,900 | 12,044 | |||||||
| Leyard Optoelectronic Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 8,700 | 8,627 | |||||||
| bLi Auto, Inc., Class A |
Automobiles | 54,462 | 679,912 | |||||||
| Li Ning Co. Ltd. |
Textiles, Apparel & Luxury Goods | 117,500 | 926,535 | |||||||
| LianChuang Electronic Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 3,560 | 6,630 | |||||||
| Lianhe Chemical Technology Co. Ltd., Class A |
Chemicals | 2,900 | 5,950 | |||||||
| Liaoning Port Co. Ltd., Class A |
Transportation Infrastructure | 66,700 | 15,540 | |||||||
| bLingyi iTech Guangdong Co., Class A |
Electrical Equipment | 29,000 | 26,098 | |||||||
| Livzon Pharmaceutical Group, Inc., Class A |
Pharmaceuticals | 2,900 | 15,785 | |||||||
| Livzon Pharmaceutical Group, Inc., Class H |
Pharmaceuticals | 8,700 | 30,700 | |||||||
| aLongfor Group Holdings Ltd. |
Real Estate Management & Development | 97,630 | 275,480 | |||||||
| LONGi Green Energy Technology Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 26,100 | 153,583 | |||||||
| Longshine Technology Group Co. Ltd., Class A, A |
Software | 2,900 | 11,288 | |||||||
| Luenmei Quantum Co. Ltd., Class A |
Water Utilities | 5,800 | 5,245 | |||||||
| Lufax Holding Ltd., ADR |
Consumer Finance | 36,221 | 73,891 | |||||||
| Luxi Chemical Group Co. Ltd., Class A |
Chemicals | 5,800 | 11,529 | |||||||
| Luxshare Precision Industry Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 26,199 | 115,634 | |||||||
| a,bLuye Pharma Group Ltd. |
Pharmaceuticals | 87,000 | 40,342 | |||||||
| Luzhou Laojiao Co. Ltd., Class A |
Beverages | 5,800 | 215,191 | |||||||
| Maanshan Iron & Steel Co. Ltd., Class A |
Metals & Mining | 23,200 | 9,730 | |||||||
| Maanshan Iron & Steel Co. Ltd., Class H |
Metals & Mining | 58,000 | 13,373 | |||||||
| Mango Excellent Media Co. Ltd., Class A |
Entertainment | 6,730 | 36,495 | |||||||
| Maxscend Microelectronics Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 1,632 | 29,563 | |||||||
| Meihua Holdings Group Co. Ltd., Class A |
Food Products | 11,600 | 16,520 | |||||||
| bMeinian Onehealth Healthcare Holdings Co. Ltd., Class A |
Health Care Providers & Services | 14,500 | 15,878 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| a,bMeituan, Class B |
Hotels, Restaurants & Leisure | 240,029 | $ | 4,387,819 | ||||||
| Metallurgical Corp. of China Ltd., Class A |
Construction & Engineering | 52,200 | 29,645 | |||||||
| Metallurgical Corp. of China Ltd., Class H |
Construction & Engineering | 145,000 | 37,497 | |||||||
| bMicroport Scientific Corp. |
Health Care Equipment & Supplies | 46,400 | 109,115 | |||||||
| Ming Yang Smart Energy Group Ltd., Class A |
Electrical Equipment | 8,700 | 28,517 | |||||||
| Ming Yuan Cloud Group Holdings Ltd. |
Software | 29,000 | 18,582 | |||||||
| MINISO Group Holding Ltd., ADR |
Broadline Retail | 4,321 | 76,655 | |||||||
| Minth Group Ltd. |
Automobile Components | 36,500 | 110,198 | |||||||
| Montage Technology Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 4,025 | 40,746 | |||||||
| Muyuan Foods Co. Ltd., Class A |
Food Products | 19,560 | 139,566 | |||||||
| NanJi E-Commerce Co. Ltd., Class A |
Media | 11,600 | 8,564 | |||||||
| Nanjing Hanrui Cobalt Co. Ltd., Class A |
Metals & Mining | 800 | 4,927 | |||||||
| Nanjing Iron & Steel Co. Ltd., Class A |
Metals & Mining | 23,200 | 13,142 | |||||||
| Nanjing King-Friend Biochemical Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 3,745 | 8,889 | |||||||
| NARI Technology Co. Ltd., Class A |
Electrical Equipment | 24,240 | 95,692 | |||||||
| NAURA Technology Group Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 1,800 | 69,682 | |||||||
| NavInfo Co. Ltd., Class A |
Household Durables | 8,700 | 17,141 | |||||||
| NetEase, Inc. |
Entertainment | 92,800 | 1,631,399 | |||||||
| New China Life Insurance Co. Ltd., Class A |
Insurance | 8,700 | 38,640 | |||||||
| New China Life Insurance Co. Ltd., Class H |
Insurance | 49,300 | 117,190 | |||||||
| bNew Hope Liuhe Co. Ltd., Class A |
Food Products | 17,400 | 33,521 | |||||||
| bNew Oriental Education & Technology Group, Inc. |
Diversified Consumer Services | 67,880 | 264,604 | |||||||
| Newland Digital Technology Co. Ltd., Class A |
Software | 2,900 | 7,069 | |||||||
| Nine Dragons Paper Holdings Ltd. |
Paper & Forest Products | 81,000 | 60,673 | |||||||
| Ninestar Corp., Class A |
Technology Hardware, Storage & Peripherals | 5,800 | 37,854 | |||||||
| Ningbo Deye Technology Co. Ltd., Class A, A |
Machinery | 700 | 26,294 | |||||||
| bNingbo Joyson Electronic Corp., Class A |
Automobile Components | 5,800 | 12,863 | |||||||
| Ningbo Orient Wires & Cables Co. Ltd., Class A, A |
Electrical Equipment | 2,900 | 20,823 | |||||||
| Ningbo Ronbay New Energy Technology Co. Ltd., Class A |
Electrical Equipment | 1,586 | 15,797 | |||||||
| Ningbo Sanxing Medical Electric Co. Ltd., Class A |
Electrical Equipment | 5,800 | 10,752 | |||||||
| Ningbo Shanshan Co. Ltd., Class A, A |
Chemicals | 8,700 | 21,828 | |||||||
| Ningbo Tuopu Group Co. Ltd., Class A |
Automobile Components | 2,900 | 27,077 | |||||||
| Ningbo Zhoushan Port Co. Ltd., Class A |
Transportation Infrastructure | 23,200 | 12,230 | |||||||
| Ningxia Baofeng Energy Group Co. Ltd., Class A |
Chemicals | 8,700 | 18,686 | |||||||
| bNIO, Inc., ADR |
Automobiles | 61,190 | 643,107 | |||||||
| aNongfu Spring Co. Ltd., Class H |
Beverages | 87,000 | 500,392 | |||||||
| North Huajin Chemical Industries Co. Ltd., Class A |
Chemicals | 5,800 | 6,284 | |||||||
| North Industries Group Red Arrow Co. Ltd., Class A |
Machinery | 2,900 | 9,645 | |||||||
| Northeast Securities Co. Ltd., Class A |
Capital Markets | 8,700 | 8,589 | |||||||
| NSFOCUS Technologies Group Co. Ltd., Class A |
Software | 2,900 | 5,870 | |||||||
| bOffcn Education Technology Co. Ltd., Class A |
Diversified Consumer Services | 8,700 | 6,208 | |||||||
| Offshore Oil Engineering Co. Ltd., Class A |
Energy Equipment & Services | 14,500 | 12,943 | |||||||
| bOFILM Group Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 11,600 | 8,953 | |||||||
| Oppein Home Group, Inc., Class A |
Household Durables | 900 | 15,829 | |||||||
| ORG Technology Co. Ltd., Class A |
Containers & Packaging | 8,700 | 6,550 | |||||||
| Orient Securities Co. Ltd., Class A |
Capital Markets | 26,724 | 38,098 | |||||||
| aOrient Securities Co. Ltd., Class H |
Capital Markets | 46,400 | 24,885 | |||||||
| Oriental Energy Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 5,800 | 7,441 | |||||||
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Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| bOurpalm Co. Ltd., Class A |
Entertainment | 14,500 | $ | 9,121 | ||||||
| Ovctek China, Inc., Class A |
Health Care Equipment & Supplies | 3,620 | 17,459 | |||||||
| bPangang Group Vanadium Titanium & Resources Co. Ltd., Class A |
Metals & Mining | 31,900 | 22,947 | |||||||
| bPDD Holdings, Inc., ADR |
Internet & Direct Marketing Retail | 22,330 | 1,694,847 | |||||||
| People.cn Co. Ltd., Class A |
Media | 2,900 | 7,977 | |||||||
| People’s Insurance Co. Group of China Ltd., Class A |
Insurance | 37,700 | 28,547 | |||||||
| Perfect World Co. Ltd., Class A |
Entertainment | 5,800 | 14,375 | |||||||
| PetroChina Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 89,900 | 77,499 | |||||||
| PetroChina Co. Ltd., Class H |
Oil, Gas & Consumable Fuels | 1,044,000 | 618,424 | |||||||
| Pharmaron Beijing Co. Ltd., Class A |
Life Sciences Tools & Services | 1,500 | 10,696 | |||||||
| aPharmaron Beijing Co. Ltd., Class H |
Life Sciences Tools & Services | 10,000 | 41,975 | |||||||
| PICC Property & Casualty Co. Ltd., Class H |
Insurance | 348,000 | 355,095 | |||||||
| Ping An Bank Co. Ltd., Class A |
Banks | 69,600 | 126,991 | |||||||
| a,bPing An Healthcare & Technology Co. Ltd. |
Health Care Technology | 20,300 | 51,358 | |||||||
| Ping An Insurance Group Co. of China Ltd., Class A |
Insurance | 37,700 | 250,334 | |||||||
| Ping An Insurance Group Co. of China Ltd., Class H |
Insurance | 319,000 | 2,076,561 | |||||||
| Pingdingshan Tianan Coal Mining Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 8,700 | 13,137 | |||||||
| Poly Developments & Holdings Group Co. Ltd., Class A |
Real Estate Management & Development | 43,500 | 89,505 | |||||||
| Poly Property Services Co. Ltd., Class H |
Real Estate Management & Development | 6,800 | 41,666 | |||||||
| aPop Mart International Group Ltd. |
Specialty Retail | 34,800 | 94,869 | |||||||
| Porton Pharma Solutions Ltd., Class A |
Pharmaceuticals | 2,900 | 15,663 | |||||||
| Postal Savings Bank of China Co. Ltd., Class A |
Banks | 72,500 | 49,091 | |||||||
| aPostal Savings Bank of China Co. Ltd., Class H |
Banks | 464,000 | 275,446 | |||||||
| Power Construction Corp. of China Ltd., Class A |
Construction & Engineering | 60,900 | 63,230 | |||||||
| Pylon Technologies Co. Ltd., Class A |
Electrical Equipment | 659 | 23,559 | |||||||
| Qingdao TGOOD Electric Co. Ltd., Class A |
Electrical Equipment | 2,900 | 7,453 | |||||||
| bQinghai Salt Lake Industry Co. Ltd., Class A |
Chemicals | 20,300 | 66,097 | |||||||
| Raytron Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 1,348 | 9,599 | |||||||
| aRed Star Macalline Group Corp. Ltd., Class H |
Real Estate Management & Development | 36,000 | 16,510 | |||||||
| a,bRemegen Co. Ltd., Class H |
Biotechnology | 7,500 | 39,984 | |||||||
| bRiseSun Real Estate Development Co. Ltd., Class A |
Real Estate Management & Development | 14,500 | 3,885 | |||||||
| bRLX Technology, Inc., ADR |
Tobacco | 37,091 | 107,564 | |||||||
| Rongsheng Petrochemical Co. Ltd., Class A |
Chemicals | 11,600 | 25,557 | |||||||
| SAIC Motor Corp. Ltd., Class A |
Automobiles | 34,800 | 72,769 | |||||||
| Sailun Group Co. Ltd., Class A, A |
Automobile Components | 11,600 | 18,226 | |||||||
| Sangfor Technologies, Inc., Class A |
Software | 600 | 12,927 | |||||||
| Sansteel Minguang Co. Ltd. Fujian, Class A |
Metals & Mining | 8,700 | 6,208 | |||||||
| Sany Heavy Industry Co. Ltd., Class A |
Machinery | 31,900 | 79,386 | |||||||
| Satellite Chemical Co. Ltd., Class A |
Chemicals | 13,146 | 30,629 | |||||||
| SDIC Capital Co. Ltd., Class A |
Capital Markets | 17,400 | 17,584 | |||||||
| Sealand Securities Co. Ltd., Class A |
Capital Markets | 24,240 | 12,001 | |||||||
| bSeazen Group Ltd. |
Real Estate Management & Development | 116,000 | 29,998 | |||||||
| bSeazen Holdings Co. Ltd., Class A |
Real Estate Management & Development | 8,700 | 20,701 | |||||||
| a,bSenseTime Group, Inc., Class B |
Software | 783,000 | 265,324 | |||||||
| SF Holding Co. Ltd., Class A |
Air Freight & Logistics | 17,400 | 140,319 | |||||||
| SG Micro Corp., Class A |
Semiconductors & Semiconductor Equipment | 1,275 | 28,815 | |||||||
| Shaanxi Coal Industry Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 34,800 | 103,073 | |||||||
| Shaanxi International Trust Co. Ltd., Class A |
Capital Markets | 14,500 | 6,736 | |||||||
| Shan Xi Hua Yang Group New Energy Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 8,700 | 17,508 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| bShandong Chenming Paper Holdings Ltd., Class A |
Paper & Forest Products | 5,800 | $ | 4,485 | ||||||
| bShandong Chenming Paper Holdings Ltd., Class B |
Paper & Forest Products | 34,800 | 10,152 | |||||||
| bShandong Chenming Paper Holdings Ltd., Class H |
Paper & Forest Products | 29,000 | 9,088 | |||||||
| Shandong Denghai Seeds Co. Ltd., Class A |
Food Products | 2,900 | 7,897 | |||||||
| Shandong Gold Mining Co. Ltd., Class A |
Metals & Mining | 12,284 | 39,424 | |||||||
| aShandong Gold Mining Co. Ltd., Class H |
Metals & Mining | 36,750 | 74,624 | |||||||
| Shandong Himile Mechanical Science & Technology Co. Ltd., Class A |
Machinery | 2,900 | 13,218 | |||||||
| Shandong Hi-speed Co. Ltd., Class A |
Transportation Infrastructure | 11,600 | 10,338 | |||||||
| Shandong Hualu Hengsheng Chemical Co. Ltd., Class A |
Chemicals | 8,780 | 45,068 | |||||||
| Shandong Humon Smelting Co. Ltd., Class A |
Metals & Mining | 2,900 | 4,945 | |||||||
| Shandong Linglong Tyre Co. Ltd., Class A |
Automobile Components | 2,900 | 8,252 | |||||||
| Shandong Nanshan Aluminum Co. Ltd., Class A |
Metals & Mining | 43,500 | 21,473 | |||||||
| Shandong Pharmaceutical Glass Co. Ltd., Class A |
Health Care Equipment & Supplies | 2,900 | 11,085 | |||||||
| Shandong Sun Paper Industry JSC Ltd., Class A |
Paper & Forest Products | 8,700 | 15,443 | |||||||
| Shandong Weigao Group Medical Polymer Co. Ltd., Class H |
Health Care Equipment & Supplies | 118,500 | 189,299 | |||||||
| bShanghai Aiko Solar Energy Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 2,900 | 13,982 | |||||||
| Shanghai AJ Group Co. Ltd., Class A |
Financial Services | 5,800 | 4,535 | |||||||
| Shanghai Bairun Investment Holding Group Co. Ltd., Class A |
Beverages | 3,940 | 23,471 | |||||||
| Shanghai Baosight Software Co. Ltd., Class A |
Software | 3,280 | 27,798 | |||||||
| Shanghai Baosight Software Co. Ltd., Class B |
Software | 26,190 | 86,479 | |||||||
| Shanghai Construction Group Co. Ltd., Class A |
Construction & Engineering | 26,100 | 10,376 | |||||||
| bShanghai Electric Group Co. Ltd., Class A |
Electrical Equipment | 34,800 | 22,398 | |||||||
| bShanghai Electric Group Co. Ltd., Class H |
Electrical Equipment | 116,000 | 28,963 | |||||||
| bShanghai Electric Power Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 11,600 | 16,773 | |||||||
| Shanghai Fosun Pharmaceutical Group Co. Ltd., Class A |
Pharmaceuticals | 8,700 | 41,034 | |||||||
| Shanghai Fosun Pharmaceutical Group Co. Ltd., Class H |
Pharmaceuticals | 29,000 | 82,383 | |||||||
| Shanghai Friendess Electronic Technology Corp. Ltd., Class A, A |
Electronic Equipment, Instruments & Components | 420 | 11,211 | |||||||
| Shanghai Fudan Microelectronics Group Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 999 | 9,523 | |||||||
| Shanghai Fudan Microelectronics Group Co. Ltd., Class H |
Semiconductors & Semiconductor Equipment | 14,000 | 51,453 | |||||||
| Shanghai Huayi Group Co. Ltd., Class B |
Chemicals | 8,700 | 5,046 | |||||||
| bShanghai International Airport Co. Ltd., Class A |
Transportation Infrastructure | 8,700 | 70,603 | |||||||
| Shanghai International Port Group Co. Ltd., Class A |
Transportation Infrastructure | 40,600 | 32,753 | |||||||
| Shanghai Jinjiang International Hotels Co. Ltd., Class A |
Hotels, Restaurants & Leisure | 2,900 | 26,566 | |||||||
| Shanghai Jinjiang International Hotels Co. Ltd., Class B |
Hotels, Restaurants & Leisure | 8,700 | 18,357 | |||||||
| Shanghai Jinqiao Export Processing Zone Development Co. Ltd., Class A, A |
Real Estate Management & Development | 2,900 | 5,034 | |||||||
| Shanghai Jinqiao Export Processing Zone Development Co. Ltd., Class B |
Real Estate Management & Development | 17,400 | 16,582 | |||||||
| bShanghai Junshi Biosciences Co. Ltd., Class A, A |
Biotechnology | 2,813 | 19,678 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| a,bShanghai Junshi Biosciences Co. Ltd., Class H |
Biotechnology | 5,800 | $ | 20,245 | ||||||
| Shanghai Lingang Holdings Corp. Ltd., Class A |
Real Estate Management & Development | 6,600 | 12,196 | |||||||
| Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., Class A |
Real Estate Management & Development | 5,800 | 8,437 | |||||||
| Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., Class B |
Real Estate Management & Development | 60,900 | 47,076 | |||||||
| Shanghai M&G Stationery, Inc., Class A |
Commercial Services & Supplies | 2,900 | 20,734 | |||||||
| Shanghai Mechanical & Electrical Industry Co. Ltd., Class B |
Machinery | 11,600 | 12,412 | |||||||
| Shanghai Pharmaceuticals Holding Co. Ltd., Class A |
Health Care Providers & Services | 11,600 | 34,408 | |||||||
| Shanghai Pharmaceuticals Holding Co. Ltd., Class H |
Health Care Providers & Services | 43,500 | 81,127 | |||||||
| Shanghai Pudong Development Bank Co. Ltd., Class A |
Banks | 104,415 | 109,322 | |||||||
| Shanghai Putailai New Energy Technology Co. Ltd., Class A |
Chemicals | 5,020 | 36,484 | |||||||
| Shanghai RAAS Blood Products Co. Ltd., Class A |
Biotechnology | 26,100 | 24,438 | |||||||
| Shanghai Rural Commercial Bank Co. Ltd., Class A |
Banks | 11,600 | 9,730 | |||||||
| Shanghai Tunnel Engineering Co. Ltd., Class A |
Construction & Engineering | 14,500 | 12,035 | |||||||
| Shanghai Waigaoqiao Free Trade Zone Group Co. Ltd., Class B |
Trading Companies & Distributors | 11,600 | 10,823 | |||||||
| Shanghai Yuyuan Tourist Mart Group Co. Ltd., Class A |
Specialty Retail | 17,400 | 20,599 | |||||||
| Shanghai Zhangjiang High-Tech Park Development Co. Ltd., Class A |
Real Estate Management & Development | 5,800 | 13,893 | |||||||
| Shanghai Zhenhua Heavy Industries Co. Ltd., Class B |
Machinery | 52,200 | 13,102 | |||||||
| Shanxi Coking Coal Energy Group Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 17,400 | 27,846 | |||||||
| Shanxi Lu’an Environmental Energy Development Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 11,600 | 37,060 | |||||||
| Shanxi Meijin Energy Co. Ltd., Class A, A |
Metals & Mining | 17,400 | 23,260 | |||||||
| Shanxi Securities Co. Ltd., Class A |
Capital Markets | 14,700 | 12,437 | |||||||
| Shanxi Taigang Stainless Steel Co. Ltd., Class A |
Metals & Mining | 23,200 | 14,662 | |||||||
| Shanxi Xinghuacun Fen Wine Factory Co. Ltd., Class A |
Beverages | 4,420 | 175,325 | |||||||
| Shanying International Holding Co. Ltd., Class A |
Paper & Forest Products | 17,400 | 6,258 | |||||||
| Shenghe Resources Holding Co. Ltd., Class A |
Metals & Mining | 5,800 | 11,951 | |||||||
| Shengyi Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 8,700 | 23,386 | |||||||
| Shennan Circuits Co. Ltd., Class A, A |
Electronic Equipment, Instruments & Components | 600 | 8,066 | |||||||
| Shenwan Hongyuan Group Co. Ltd., Class A |
Capital Markets | 78,300 | 47,546 | |||||||
| aShenwan Hongyuan Group Co. Ltd., Class H |
Capital Markets | 92,800 | 17,614 | |||||||
| Shenzhen Agricultural Products Group Co. Ltd., Class A |
Consumer Staples Distribution & Retail | 5,800 | 4,856 | |||||||
| Shenzhen Airport Co. Ltd., Class A |
Transportation Infrastructure | 5,800 | 6,157 | |||||||
| Shenzhen Capchem Technology Co. Ltd., Class A |
Chemicals | 2,980 | 21,172 | |||||||
| Shenzhen Dynanonic Co. Ltd., Class A, A |
Chemicals | 540 | 14,895 | |||||||
| Shenzhen Energy Group Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 17,400 | 15,481 | |||||||
| bShenzhen Everwin Precision Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 5,800 | 11,444 | |||||||
| Shenzhen Expressway Corp. Ltd., Class H |
Transportation Infrastructure | 24,000 | 21,340 | |||||||
| Shenzhen Gas Corp. Ltd., Class A |
Gas Utilities | 9,400 | 9,390 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| Shenzhen Hepalink Pharmaceutical Group Co. Ltd., Class A, A |
Pharmaceuticals | 2,900 | $ | 5,819 | ||||||
| Shenzhen Huaqiang Industry Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 2,900 | 5,883 | |||||||
| bShenzhen Infogem Technologies Co. Ltd., Class A, A |
Software | 2,900 | 5,080 | |||||||
| Shenzhen Inovance Technology Co. Ltd., Class A |
Machinery | 9,650 | 98,786 | |||||||
| Shenzhen International Holdings Ltd. |
Transportation Infrastructure | 72,500 | 64,096 | |||||||
| Shenzhen Investment Ltd. |
Real Estate Management & Development | 116,000 | 20,540 | |||||||
| Shenzhen Jinjia Group Co. Ltd., Class A |
Containers & Packaging | 5,800 | 6,258 | |||||||
| Shenzhen Kaifa Technology Co. Ltd., Class A |
Technology Hardware, Storage & Peripherals | 5,800 | 14,121 | |||||||
| Shenzhen Kangtai Biological Products Co. Ltd., Class A |
Biotechnology | 4,460 | 20,549 | |||||||
| Shenzhen Kedali Industry Co. Ltd., Class A, A |
Automobile Components | 800 | 15,062 | |||||||
| Shenzhen Kingdom Sci-Tech Co. Ltd., Class A |
Software | 2,900 | 5,942 | |||||||
| Shenzhen Mindray Bio-Medical Electronics Co. Ltd., Class A |
Health Care Equipment & Supplies | 4,400 | 199,718 | |||||||
| bShenzhen MTC Co. Ltd., Class A |
Household Durables | 20,300 | 14,573 | |||||||
| bShenzhen Neptunus Bioengineering Co. Ltd., Class A |
Health Care Providers & Services | 11,600 | 5,726 | |||||||
| Shenzhen Overseas Chinese Town Co. Ltd., Class A |
Hotels, Restaurants & Leisure | 31,900 | 22,436 | |||||||
| Shenzhen Salubris Pharmaceuticals Co. Ltd., Class A |
Pharmaceuticals | 2,900 | 14,932 | |||||||
| Shenzhen SC New Energy Technology Corp., Class A |
Semiconductors & Semiconductor Equipment | 1,100 | 18,333 | |||||||
| Shenzhen Senior Technology Material Co. Ltd., Class A |
Chemicals | 5,800 | 16,250 | |||||||
| Shenzhen Sunway Communication Co. Ltd., Class A |
Communications Equipment | 2,900 | 8,834 | |||||||
| Shenzhen Transsion Holdings Co. Ltd., Class A |
Technology Hardware, Storage & Peripherals | 2,912 | 42,913 | |||||||
| Shenzhen Yan Tian Port Holding Co. Ltd., Class A, A |
Transportation Infrastructure | 8,700 | 6,385 | |||||||
| Shenzhen YUTO Packaging Technology Co. Ltd., Class A |
Containers & Packaging | 2,900 | 11,752 | |||||||
| Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd., Class A |
Metals & Mining | 14,500 | 10,388 | |||||||
| Shenzhou International Group Holdings Ltd. |
Textiles, Apparel & Luxury Goods | 37,700 | 395,732 | |||||||
| bShijiazhuang Changshan BeiMing Technology Co. Ltd., Class A |
Textiles, Apparel & Luxury Goods | 5,800 | 7,686 | |||||||
| Shijiazhuang Yiling Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 6,480 | 27,468 | |||||||
| bShimao Group Holdings Ltd. |
Real Estate Management & Development | 78,000 | 20,614 | |||||||
| a,bShimao Services Holdings Ltd., Class Z |
Real Estate Management & Development | 29,000 | 7,278 | |||||||
| Shui On Land Ltd. |
Real Estate Management & Development | 174,000 | 21,057 | |||||||
| bSiasun Robot & Automation Co. Ltd., Class A |
Machinery | 5,800 | 10,076 | |||||||
| Sichuan Chuantou Energy Co. Ltd., Class A |
Independent Power Producers & Energy Traders | 17,400 | 33,496 | |||||||
| Sichuan Hebang Biotechnology Co. Ltd., Class A |
Chemicals | 34,800 | 15,152 | |||||||
| Sichuan Kelun Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 5,800 | 24,003 | |||||||
| bSichuan New Energy Power Co. Ltd. |
Trading Companies & Distributors | 5,800 | 13,446 | |||||||
| Sichuan Road & Bridge Group Co. Ltd., Class A |
Construction & Engineering | 17,400 | 34,966 | |||||||
| Sichuan Swellfun Co. Ltd., Class A |
Beverages | 1,600 | 17,551 | |||||||
| Sichuan Yahua Industrial Group Co. Ltd., Class A, A |
Chemicals | 2,900 | 8,940 | |||||||
| Sieyuan Electric Co. Ltd., Class A |
Electrical Equipment | 2,900 | 19,307 | |||||||
| Sinoma International Engineering Co., Class A |
Construction & Engineering | 8,700 | 14,164 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| Sinoma Science & Technology Co. Ltd., Class A |
Chemicals | 5,800 | $ | 20,380 | ||||||
| Sinomine Resource Group Co. Ltd., Class A |
Metals & Mining | 1,600 | 16,379 | |||||||
| Sino-Ocean Group Holding Ltd. |
Real Estate Management & Development | 159,500 | 18,084 | |||||||
| Sinopec Engineering Group Co. Ltd., Class H |
Construction & Engineering | 72,500 | 36,019 | |||||||
| bSinopec Oilfield Service Corp., Class A |
Energy Equipment & Services | 20,300 | 6,208 | |||||||
| bSinopec Oilfield Service Corp., Class H |
Energy Equipment & Services | 116,000 | 8,866 | |||||||
| Sinopec Shanghai Petrochemical Co. Ltd., Class A |
Chemicals | 23,200 | 11,385 | |||||||
| Sinopec Shanghai Petrochemical Co. Ltd., Class H |
Chemicals | 174,000 | 30,367 | |||||||
| Sinopharm Group Co. Ltd., Class H |
Health Care Providers & Services | 58,000 | 175,479 | |||||||
| Sinotrans Ltd., Class A |
Air Freight & Logistics | 14,500 | 8,784 | |||||||
| Sinotrans Ltd., Class H |
Air Freight & Logistics | 87,000 | 26,931 | |||||||
| Sinotruk Hong Kong Ltd. |
Machinery | 29,000 | 45,070 | |||||||
| bSkshu Paint Co. Ltd., Class A |
Chemicals | 980 | 16,612 | |||||||
| Skyworth Digital Co. Ltd., Class A, A |
Communications Equipment | 2,900 | 8,007 | |||||||
| aSmoore International Holdings Ltd. |
Tobacco | 93,690 | 120,306 | |||||||
| Songcheng Performance Development Co. Ltd., Class A |
Hotels, Restaurants & Leisure | 9,360 | 22,176 | |||||||
| SooChow Securities Co. Ltd., Class A |
Capital Markets | 20,504 | 20,631 | |||||||
| Southwest Securities Co. Ltd., Class A |
Capital Markets | 26,100 | 14,784 | |||||||
| StarPower Semiconductor Ltd., Class A, A |
Semiconductors & Semiconductor Equipment | 500 | 19,990 | |||||||
| bSTO Express Co. Ltd., Class A |
Air Freight & Logistics | 5,800 | 9,392 | |||||||
| Sun Art Retail Group Ltd. |
Consumer Staples Distribution & Retail | 101,500 | 40,730 | |||||||
| bSunac China Holdings Ltd. |
Real Estate Management & Development | 160,000 | 31,802 | |||||||
| aSunac Services Holdings Ltd. |
Real Estate Management & Development | 30,898 | 13,186 | |||||||
| Sungrow Power Supply Co. Ltd., Class A |
Electrical Equipment | 5,800 | 88,563 | |||||||
| Suning Universal Co. Ltd., Class A |
Real Estate Management & Development | 14,500 | 6,482 | |||||||
| Sunny Optical Technology Group Co. Ltd. |
Electronic Equipment, Instruments & Components | 31,900 | 385,850 | |||||||
| Sunwoda Electronic Co. Ltd., Class A |
Electrical Equipment | 5,800 | 17,027 | |||||||
| Suzhou Anjie Technology Co. Ltd., Class A, A |
Electrical Equipment | 2,900 | 6,326 | |||||||
| Suzhou Dongshan Precision Manufacturing Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 5,800 | 25,549 | |||||||
| bSuzhou Gold Mantis Construction Decoration Co. Ltd., Class A |
Construction & Engineering | 8,700 | 6,638 | |||||||
| Suzhou Maxwell Technologies Co. Ltd., Class A |
Electrical Equipment | 640 | 28,425 | |||||||
| Taiji Computer Corp. Ltd., Class A |
IT Services | 2,900 | 17,812 | |||||||
| bTAL Education Group, ADR |
Diversified Consumer Services | 22,272 | 142,764 | |||||||
| Tangshan Jidong Cement Co. Ltd., Class A |
Construction Materials | 11,600 | 14,662 | |||||||
| TangShan Port Group Co. Ltd., Class A |
Transportation Infrastructure | 20,300 | 9,164 | |||||||
| Tangshan Sanyou Chemical Industries Co. Ltd., Class A |
Chemicals | 8,900 | 8,541 | |||||||
| TBEA Co. Ltd., Class A |
Electrical Equipment | 14,500 | 45,840 | |||||||
| TCL Technology Group Corp., Class A |
Household Durables | 63,800 | 41,156 | |||||||
| TCL Zhonghuan Renewable Energy Technology Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 11,600 | 81,857 | |||||||
| Tencent Holdings Ltd. |
Interactive Media & Services | 306,264 | 15,051,899 | |||||||
| bTencent Music Entertainment Group, ADR |
Entertainment | 31,668 | 262,211 | |||||||
| The People’s Insurance Co. Group of China Ltd., Class H |
Insurance | 406,000 | 135,507 | |||||||
| Thunder Software Technology Co. Ltd., Class A |
Software | 1,500 | 23,666 | |||||||
| Tian Di Science & Technology Co. Ltd., Class A |
Machinery | 14,500 | 10,726 | |||||||
| Tianjin Chase Sun Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 11,600 | 10,084 | |||||||
| Tianma Microelectronics Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 8,700 | 13,315 | |||||||
| bTianqi Lithium Corp., Class A |
Chemicals | 5,800 | 63,783 | |||||||
| bTianqi Lithium Corp., Class H |
Chemicals | 5,800 | 39,049 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| Tianshan Aluminum Group Co. Ltd., Class A |
Machinery | 8,700 | $ | 9,616 | ||||||
| Tianshui Huatian Technology Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 11,600 | 17,061 | |||||||
| bTibet Summit Resources Co. Ltd., Class A, A |
Metals & Mining | 2,900 | 9,662 | |||||||
| Tingyi Cayman Islands Holding Corp. |
Food Products | 96,000 | 159,960 | |||||||
| Titan Wind Energy Suzhou Co. Ltd., Class A, A |
Electrical Equipment | 5,800 | 12,466 | |||||||
| bTongcheng Travel Holdings Ltd. |
Hotels, Restaurants & Leisure | 61,600 | 134,030 | |||||||
| bTongFu Microelectronics Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 5,800 | 18,750 | |||||||
| Tongkun Group Co. Ltd., Class A |
Chemicals | 8,700 | 18,192 | |||||||
| Tongling Nonferrous Metals Group Co. Ltd., Class A |
Metals & Mining | 40,600 | 19,037 | |||||||
| Tongwei Co. Ltd., Class A |
Food Products | 17,400 | 98,588 | |||||||
| bTopchoice Medical Corp., Class A |
Health Care Providers & Services | 1,200 | 22,591 | |||||||
| Topsec Technologies Group, Inc., Class A |
Electrical Equipment | 5,800 | 10,346 | |||||||
| aTopsports International Holdings Ltd. |
Specialty Retail | 87,000 | 79,575 | |||||||
| Towngas Smart Energy Co. Ltd. |
Gas Utilities | 58,000 | 25,121 | |||||||
| TravelSky Technology Ltd., Class H |
IT Services | 58,000 | 108,317 | |||||||
| Trina Solar Co. Ltd., Class A, A |
Semiconductors & Semiconductor Equipment | 8,033 | 60,932 | |||||||
| bTrip.com Group Ltd. |
Hotels, Restaurants & Leisure | 27,579 | 1,032,199 | |||||||
| Tsingtao Brewery Co. Ltd., Class A |
Beverages | 2,900 | 50,928 | |||||||
| Tsingtao Brewery Co. Ltd., Class H |
Beverages | 31,676 | 345,815 | |||||||
| bTuya, Inc., ADR |
Software | 12,209 | 23,075 | |||||||
| Unigroup Guoxin Microelectronics Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 2,999 | 48,531 | |||||||
| Uni-President China Holdings Ltd. |
Food Products | 58,000 | 58,518 | |||||||
| Unisplendour Corp. Ltd., Class A |
Electronic Equipment, Instruments & Components | 5,800 | 24,738 | |||||||
| Universal Scientific Industrial Shanghai Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 2,900 | 7,470 | |||||||
| Valiant Co. Ltd., Class A |
Chemicals | 2,900 | 7,276 | |||||||
| bVipshop Holdings Ltd., ADR |
Broadline Retail | 19,517 | 296,268 | |||||||
| Visual China Group Co. Ltd., Class A, A |
Interactive Media & Services | 2,900 | 7,044 | |||||||
| Walvax Biotechnology Co. Ltd., Class A |
Biotechnology | 5,800 | 29,130 | |||||||
| bWanda Film Holding Co. Ltd., Class A |
Entertainment | 8,700 | 18,116 | |||||||
| Wangsu Science & Technology Co. Ltd., Class A |
IT Services | 8,700 | 9,109 | |||||||
| Wanhua Chemical Group Co. Ltd., Class A |
Chemicals | 11,600 | 161,957 | |||||||
| Wanxiang Qianchao Co. Ltd., Class A |
Automobile Components | 14,500 | 11,085 | |||||||
| bWeibo Corp., ADR |
Interactive Media & Services | 3,509 | 70,391 | |||||||
| Weichai Power Co. Ltd., Class A |
Machinery | 26,100 | 47,926 | |||||||
| Weichai Power Co. Ltd., Class H |
Machinery | 87,000 | 139,644 | |||||||
| Weifu High-Technology Group Co. Ltd., Class A |
Automobile Components | 2,900 | 8,526 | |||||||
| Weifu High-Technology Group Co. Ltd., Class B |
Automobile Components | 8,700 | 16,070 | |||||||
| Wens Foodstuffs Group Co. Ltd., Class A |
Food Products | 5,800 | 17,289 | |||||||
| Western Mining Co. Ltd., Class A, A |
Metals & Mining | 8,700 | 16,051 | |||||||
| Western Securities Co. Ltd., Class A |
Capital Markets | 17,400 | 16,140 | |||||||
| Western Superconducting Technologies Co. Ltd., Class A |
Metals & Mining | 1,488 | 17,666 | |||||||
| Will Semiconductor Co. Ltd. Shanghai, Class A |
Semiconductors & Semiconductor Equipment | 2,900 | 38,471 | |||||||
| Wingtech Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 5,800 | 46,663 | |||||||
| Winning Health Technology Group Co. Ltd., Class A |
Health Care Technology | 9,600 | 19,389 | |||||||
| Wolong Electric Group Co. Ltd., Class A |
Electrical Equipment | 5,800 | 10,667 | |||||||
| Wuchan Zhongda Group Co. Ltd., Class A |
Distributors | 23,200 | 16,385 | |||||||
| Wuhan Guide Infrared Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 11,673 | 20,551 | |||||||
| Wuliangye Yibin Co. Ltd., Class A |
Beverages | 14,200 | 407,351 | |||||||
| WUS Printed Circuit Kunshan Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 8,740 | 27,350 | |||||||
| WuXi AppTec Co. Ltd., Class A |
Life Sciences Tools & Services | 9,560 | 110,672 | |||||||
| aWuXi AppTec Co. Ltd., Class H |
Life Sciences Tools & Services | 17,320 | 181,365 | |||||||
| a,bWuxi Biologics Cayman, Inc. |
Life Sciences Tools & Services | 181,681 | 1,124,809 | |||||||
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Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| Wuxi Shangji Automation Co. Ltd., Class A |
Machinery | 1,260 | $ | 18,735 | ||||||
| XCMG Construction Machinery Co. Ltd., Class A |
Machinery | 43,500 | 43,897 | |||||||
| Xiamen C & D, Inc., Class A |
Trading Companies & Distributors | 11,600 | 20,388 | |||||||
| Xiamen Faratronic Co. Ltd., Class A, A |
Electronic Equipment, Instruments & Components | 800 | 17,009 | |||||||
| Xiamen ITG Group Corp. Ltd., Class A |
Trading Companies & Distributors | 8,700 | 10,920 | |||||||
| Xiamen Tungsten Co. Ltd., Class A |
Metals & Mining | 5,800 | 17,213 | |||||||
| Xiangcai Co. Ltd., Class A |
Real Estate Management & Development | 5,800 | 8,049 | |||||||
| a,bXiaomi Corp., Class B |
Technology Hardware, Storage & Peripherals | 748,200 | 1,153,284 | |||||||
| Xinfengming Group Co. Ltd., Class A, A |
Chemicals | 2,900 | 4,582 | |||||||
| Xinhua Winshare Publishing & Media Co. Ltd., Class H |
Distributors | 29,000 | 22,794 | |||||||
| Xinjiang Daqo New Energy Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 2,900 | 20,536 | |||||||
| Xinjiang Goldwind Science & Technology Co. Ltd., Class A |
Electrical Equipment | 11,600 | 18,648 | |||||||
| Xinjiang Goldwind Science & Technology Co. Ltd., Class H |
Electrical Equipment | 29,000 | 24,789 | |||||||
| Xinjiang Tianshan Cement Co. Ltd., Class A, A |
Construction Materials | 8,700 | 11,224 | |||||||
| Xinjiang Zhongtai Chemical Co. Ltd., Class A |
Chemicals | 11,600 | 12,246 | |||||||
| Xinxing Ductile Iron Pipes Co. Ltd., Class A |
Metals & Mining | 14,500 | 8,509 | |||||||
| Xinyangfeng Agricultural Technology Co. Ltd., Class A |
Chemicals | 5,800 | 9,071 | |||||||
| Xinyi Solar Holdings Ltd. |
Semiconductors & Semiconductor Equipment | 215,642 | 258,497 | |||||||
| bXPeng, Inc., Class A |
Automobiles | 53,550 | 298,449 | |||||||
| Xtep International Holdings Ltd. |
Textiles, Apparel & Luxury Goods | 58,000 | 73,738 | |||||||
| Xuji Electric Co. Ltd., Class A |
Electrical Equipment | 2,900 | 9,882 | |||||||
| aYadea Group Holdings Ltd. |
Automobiles | 58,000 | 149,619 | |||||||
| Yangling Metron New Material, Inc., Class A |
Semiconductors & Semiconductor Equipment | 2,900 | 18,969 | |||||||
| bYango Group Co. Ltd., Class A |
Real Estate Management & Development | 20,300 | 4,848 | |||||||
| aYangtze Optical Fibre & Cable Joint Stock Ltd. Co., Class H |
Communications Equipment | 8,500 | 17,498 | |||||||
| Yangzhou Yangjie Electronic Technology Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 2,900 | 23,226 | |||||||
| Yangzijiang Shipbuilding Holdings Ltd. |
Machinery | 130,500 | 117,784 | |||||||
| Yankuang Energy Group Co. Ltd., Class A |
Oil, Gas & Consumable Fuels | 5,800 | 30,042 | |||||||
| Yankuang Energy Group Co. Ltd., Class H |
Oil, Gas & Consumable Fuels | 96,000 | 343,645 | |||||||
| Yantai Changyu Pioneer Wine Co. Ltd., Class B |
Beverages | 11,600 | 17,363 | |||||||
| Yantai Eddie Precision Machinery Co. Ltd., Class A |
Machinery | 3,660 | 9,641 | |||||||
| Yantai Jereh Oilfield Services Group Co. Ltd., Class A |
Energy Equipment & Services | 2,900 | 11,959 | |||||||
| bYatsen Holding Ltd., ADR |
Personal Products | 12,064 | 17,855 | |||||||
| Yealink Network Technology Corp. Ltd., Class A |
Communications Equipment | 2,900 | 32,098 | |||||||
| bYifan Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 5,800 | 11,858 | |||||||
| Yifeng Pharmacy Chain Co. Ltd., Class A |
Consumer Staples Distribution & Retail | 2,990 | 25,175 | |||||||
| Yihai International Holding Ltd. |
Food Products | 29,000 | 85,153 | |||||||
| Yihai Kerry Arawana Holdings Co. Ltd., Class A |
Food Products | 5,800 | 36,401 | |||||||
| Yintai Gold Co. Ltd., Class A |
Metals & Mining | 8,900 | 17,068 | |||||||
| Yixintang Pharmaceutical Group Co. Ltd., Class A |
Consumer Staples Distribution & Retail | 2,900 | 14,966 | |||||||
| YongXing Special Materials Technology Co. Ltd., Class A |
Metals & Mining | 1,100 | 13,439 | |||||||
| Yonyou Network Technology Co. Ltd., Class A |
Software | 12,590 | 46,108 | |||||||
| Youngor Group Co. Ltd., Class A |
Real Estate Management & Development | 20,300 | 19,273 | |||||||
| bYoungy Co. Ltd., Class A |
Metals & Mining | 1,000 | 11,033 | |||||||
| YTO Express Group Co. Ltd., Class A |
Air Freight & Logistics | 11,600 | 30,945 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| bYuan Longping High-tech Agriculture Co. Ltd., Class A |
Food Products | 5,800 | $ | 14,003 | ||||||
| Yuexiu Property Co. Ltd. |
Real Estate Management & Development | 66,800 | 100,754 | |||||||
| Yum China Holdings, Inc. |
Hotels, Restaurants & Leisure | 21,400 | 1,345,619 | |||||||
| Yunda Holding Co. Ltd., Class A |
Air Freight & Logistics | 6,100 | 10,508 | |||||||
| Yunnan Aluminium Co. Ltd., Class A |
Metals & Mining | 13,190 | 26,141 | |||||||
| Yunnan Baiyao Group Co. Ltd., Class A |
Pharmaceuticals | 6,180 | 49,225 | |||||||
| Yunnan Botanee Bio-Technology Group Co. Ltd., Class A, A |
Personal Products | 700 | 13,071 | |||||||
| Yunnan Copper Co. Ltd., Class A |
Metals & Mining | 5,800 | 10,887 | |||||||
| Yunnan Energy New Material Co. Ltd., Class A |
Containers & Packaging | 2,900 | 48,065 | |||||||
| Yunnan Tin Co. Ltd., Class A |
Metals & Mining | 5,800 | 12,550 | |||||||
| bYunnan Yuntianhua Co. Ltd., Class A |
Chemicals | 5,800 | 17,922 | |||||||
| bZai Lab Ltd. |
Biotechnology | 47,270 | 156,865 | |||||||
| Zangge Mining Co. Ltd., Class A |
Chemicals | 5,800 | 20,405 | |||||||
| Zhangzhou Pientzehuang Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 2,100 | 86,963 | |||||||
| bZhaojin Mining Industry Co. Ltd., Class H |
Metals & Mining | 58,000 | 88,072 | |||||||
| Zhefu Holding Group Co. Ltd., Class A |
Electrical Equipment | 23,200 | 13,750 | |||||||
| bZhejiang Century Huatong Group Co. Ltd., Class A |
Entertainment | 26,100 | 22,880 | |||||||
| Zhejiang China Commodities City Group Co. Ltd., Class A |
Real Estate Management & Development | 20,300 | 17,086 | |||||||
| Zhejiang Chint Electrics Co. Ltd., Class A |
Electrical Equipment | 5,800 | 23,623 | |||||||
| Zhejiang Crystal-Optech Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 5,800 | 11,757 | |||||||
| Zhejiang Dahua Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 11,600 | 38,192 | |||||||
| Zhejiang Dingli Machinery Co. Ltd., Class A |
Machinery | 2,900 | 23,137 | |||||||
| Zhejiang Expressway Co. Ltd., Class H |
Transportation Infrastructure | 73,933 | 58,770 | |||||||
| Zhejiang Hailiang Co. Ltd., Class A |
Metals & Mining | 5,800 | 9,848 | |||||||
| Zhejiang HangKe Technology, Inc.Co., Class A |
Electrical Equipment | 1,196 | 7,802 | |||||||
| Zhejiang Hisoar Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 5,800 | 5,963 | |||||||
| Zhejiang Huace Film & Television Co. Ltd., Class A |
Entertainment | 8,700 | 10,046 | |||||||
| Zhejiang Huahai Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 6,000 | 17,623 | |||||||
| Zhejiang Huayou Cobalt Co. Ltd., Class A |
Metals & Mining | 5,860 | 46,933 | |||||||
| Zhejiang Jingsheng Mechanical & Electrical Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 5,800 | 55,143 | |||||||
| Zhejiang Jiuzhou Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 2,900 | 14,054 | |||||||
| Zhejiang Juhua Co. Ltd., Class A |
Chemicals | 8,700 | 22,398 | |||||||
| Zhejiang Medicine Co. Ltd., Class A |
Pharmaceuticals | 2,900 | 5,211 | |||||||
| Zhejiang NHU Co. Ltd., Class A |
Pharmaceuticals | 11,856 | 30,990 | |||||||
| Zhejiang Sanhua Intelligent Controls Co. Ltd., Class A |
Machinery | 2,900 | 10,874 | |||||||
| Zhejiang Supcon Technology Co. Ltd., Class A |
Electronic Equipment, Instruments & Components | 1,728 | 26,131 | |||||||
| Zhejiang Supor Co. Ltd., Class A |
Household Durables | 1,400 | 11,039 | |||||||
| bZhejiang Wanfeng Auto Wheel Co. Ltd., Class A |
Automobile Components | 11,600 | 10,507 | |||||||
| bZhejiang Wanliyang Co. Ltd., Class A |
Machinery | 5,800 | 7,964 | |||||||
| Zhejiang Weiming Environment Protection Co. Ltd., Class A, A |
Commercial Services & Supplies | 780 | 2,072 | |||||||
| Zhejiang Weixing New Building Materials Co. Ltd., Class A |
Building Products | 5,800 | 20,532 | |||||||
| Zhejiang Wolwo Bio-Pharmaceutical Co. Ltd., Class A |
Pharmaceuticals | 2,900 | 20,101 | |||||||
| Zhejiang Yongtai Technology Co. Ltd., Class A |
Chemicals | 2,900 | 8,834 | |||||||
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Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| China (continued) |
||||||||||
| Zhengzhou Coal Mining Machinery Group Co. Ltd., Class A |
Machinery | 5,800 | $ | 11,875 | ||||||
| Zheshang Securities Co. Ltd., Class A |
Capital Markets | 5,800 | 8,505 | |||||||
| a,bZhongAn Online P&C Insurance Co. Ltd., Class H |
Insurance | 37,700 | 118,864 | |||||||
| Zhongji Innolight Co. Ltd., Class A |
Machinery | 2,900 | 24,873 | |||||||
| Zhongshan Public Utilities Group Co. Ltd., Class A |
Water Utilities | 5,800 | 5,954 | |||||||
| Zhongsheng Group Holdings Ltd. |
Specialty Retail | 35,500 | 175,014 | |||||||
| Zhongtai Securities Co. Ltd., Class A |
Capital Markets | 8,700 | 8,488 | |||||||
| Zhuhai Huafa Properties Co. Ltd., Class A |
Real Estate Management & Development | 8,700 | 13,657 | |||||||
| Zhuzhou CRRC Times Electric Co. Ltd., Class A, A |
Electrical Equipment | 2,002 | 13,917 | |||||||
| Zhuzhou CRRC Times Electric Co. Ltd., Class H . |
Electrical Equipment | 26,100 | 113,544 | |||||||
| Zhuzhou Kibing Group Co. Ltd., Class A |
Building Products | 8,700 | 13,213 | |||||||
| Zijin Mining Group Co. Ltd., Class A |
Metals & Mining | 72,500 | 130,805 | |||||||
| Zijin Mining Group Co. Ltd., Class H |
Metals & Mining | 294,000 | 491,376 | |||||||
| Zoomlion Heavy Industry Science & Technology Co. Ltd., Class A |
Machinery | 26,100 | 23,602 | |||||||
| Zoomlion Heavy Industry Science & Technology Co. Ltd., Class H |
Machinery | 81,200 | 42,928 | |||||||
| ZTE Corp., Class A |
Communications Equipment | 14,500 | 68,749 | |||||||
| ZTE Corp., Class H |
Communications Equipment | 40,600 | 118,956 | |||||||
| ZTO Express Cayman, Inc. |
Air Freight & Logistics | 22,198 | 633,425 | |||||||
|
|
|
|||||||||
| 109,967,110 | ||||||||||
|
|
|
|||||||||
| Hong Kong 3.7% |
||||||||||
| bAlibaba Health Information Technology Ltd., Class A |
Health Care Technology | 244,000 | 176,551 | |||||||
| bAlibaba Pictures Group Ltd., Class A |
Media | 580,000 | 37,682 | |||||||
| Beijing Enterprises Water Group Ltd., Class A |
Water Utilities | 232,000 | 57,926 | |||||||
| Bosideng International Holdings Ltd., Class A |
Household Durables | 201,000 | 112,151 | |||||||
| China Everbright Environment Group Ltd., Class B |
Commercial Services & Supplies | 174,000 | 74,698 | |||||||
| China Everbright Ltd., Class A |
Capital Markets | 42,000 | 30,122 | |||||||
| China Gas Holdings Ltd., Class A |
Gas Utilities | 150,800 | 212,466 | |||||||
| China Mengniu Dairy Co. Ltd., Class B |
Food Products | 159,000 | 652,208 | |||||||
| China Power International Development Ltd., Class H |
Independent Power Producers & Energy Traders | 261,000 | 103,736 | |||||||
| China Resources Beer Holdings Co. Ltd., Class A |
Beverages | 79,504 | 638,062 | |||||||
| China Resources Gas Group Ltd., Class A |
Gas Utilities | 46,800 | 172,595 | |||||||
| China Resources Land Ltd., Class H |
Real Estate Management & Development | 142,500 | 649,877 | |||||||
| China State Construction International Holdings Ltd., Class A |
Construction & Engineering | 82,000 | 92,760 | |||||||
| China Traditional Chinese Medicine Holdings Co. Ltd. |
Pharmaceuticals | 116,000 | 60,734 | |||||||
| COSCO SHIPPING Ports Ltd., Class B |
Transportation Infrastructure | 58,000 | 38,716 | |||||||
| Far East Horizon Ltd. |
Financial Services | 58,000 | 52,163 | |||||||
| Geely Automobile Holdings Ltd. |
Automobiles | 280,000 | 360,257 | |||||||
| Guangdong Investment Ltd. |
Water Utilities | 148,700 | 152,111 | |||||||
| Kingboard Laminates Holdings Ltd. |
Electronic Equipment, Instruments & Components | 55,100 | 57,557 | |||||||
| Kunlun Energy Co. Ltd. |
Oil, Gas & Consumable Fuels | 174,000 | 136,098 | |||||||
| Shanghai Industrial Holdings Ltd. |
Industrial Conglomerates | 29,000 | 38,790 | |||||||
| Shougang Fushan Resources Group Ltd. |
Metals & Mining | 58,000 | 18,398 | |||||||
| Sino Biopharmaceutical Ltd. |
Pharmaceuticals | 493,000 | 276,333 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE China ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Hong Kong (continued) |
||||||||||
| Vinda International Holdings Ltd. |
Household Products | 13,000 | $ | 31,432 | ||||||
|
|
|
|||||||||
| 4,233,423 | ||||||||||
|
|
|
|||||||||
| Singapore 0.0%† |
||||||||||
| bYangzijiang Financial Holding Ltd. |
Capital Markets | 124,700 | 35,171 | |||||||
| Yanlord Land Group Ltd. |
Real Estate Management & Development | 31,900 | 21,834 | |||||||
|
|
|
|||||||||
| 57,005 | ||||||||||
|
|
|
|||||||||
| Total Investments |
114,257,538 | |||||||||
| Other Assets, less Liabilities 0.0%† |
(23,182 | ) | ||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 114,234,356 | ||||||||
|
|
|
|||||||||
†Rounds to less than 0.1% of net assets.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $13,685,854, representing 12.0% of net assets.
bNon-income producing.
cFair valued using significant unobservable inputs. Note 8 regarding fair value measurements.
See Abbreviations on page 355.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
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FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Europe ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$27.18 | $27.28 | $19.03 | $23.24 | $24.98 | |||||||||||||||
| Income from investment operationsa: | ||||||||||||||||||||
| Net investment incomeb |
1.11 | 0.85 | 0.60 | 0.76 | 0.86 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(0.89 | ) | 0.11 | 8.14 | (4.21 | ) | (1.79 | ) | ||||||||||||
| Total from investment operations |
0.22 | 0.96 | 8.74 | (3.45 | ) | (0.93 | ) | |||||||||||||
| Less distributions from net investment income |
(0.84 | ) | (1.06 | ) | (0.49 | ) | (0.76 | ) | (0.81 | ) | ||||||||||
| Net asset value, end of year |
$26.56 | $27.18 | $27.28 | $19.03 | $23.24 | |||||||||||||||
| Total returnc |
1.31% | 3.30% | 46.23% | (15.44)% | (3.69)% | |||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||
| Expenses before waiver and payments by affiliates |
0.24%e | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
| Expenses net of waiver and payments by affiliates |
0.24%e | 0.09% | 0.09% | 0.09% | —% | |||||||||||||||
| Net investment income |
4.50% | 2.96% | 2.53% | 3.23% | 3.61% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$111,558 | $184,857 | $229,126 | $91,356 | $74,359 | |||||||||||||||
| Portfolio turnover ratef |
5.22%g | 5.47%g | 5.00%g | 4.47%g | 5.81% | |||||||||||||||
|
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
dRatios are annualized for periods less than one year, except for non-recurring expenses, if any.
eExpense ratios are including non-recurring European Union tax reclaim contingent fees that were incurred by the Fund during the period. Without these fees, the gross and net expense ratios would have been 0.09% and 0.09%, respectively, for the year ended March 31, 2023.
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: | 5.22% | 5.47% | 4.92% | 4.47% | — | |||||||||||||||
| 208 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE Europe ETF
| Industry | Shares | Value | ||||||||
| Common Stocks 98.2% |
||||||||||
| Australia 1.4% |
||||||||||
| Glencore PLC |
Metals & Mining | 135,345 | $ | 777,496 | ||||||
| Rio Tinto PLC |
Metals & Mining | 11,655 | 789,425 | |||||||
|
|
|
|||||||||
| 1,566,921 | ||||||||||
|
|
|
|||||||||
| Austria 0.3% |
||||||||||
| ANDRITZ AG |
Machinery | 735 | 49,749 | |||||||
| Erste Group Bank AG |
Banks | 3,486 | 115,515 | |||||||
| OMV AG |
Oil, Gas & Consumable Fuels | 1,554 | 71,349 | |||||||
| aRaiffeisen Bank International AG |
Banks | 1,365 | 20,999 | |||||||
| Telekom Austria AG |
Diversified Telecommunication Services | 1,512 | 11,417 | |||||||
| Verbund AG |
Electric Utilities | 693 | 60,233 | |||||||
| voestalpine AG |
Metals & Mining | 1,260 | 42,820 | |||||||
|
|
|
|||||||||
| 372,082 | ||||||||||
|
|
|
|||||||||
| Belgium 1.4% |
||||||||||
| Ackermans & van Haaren NV |
Financial Services | 231 | 38,147 | |||||||
| Ageas SA |
Insurance | 1,974 | 85,486 | |||||||
| Anheuser-Busch InBev SA |
Beverages | 9,282 | 618,478 | |||||||
| D’ieteren Group |
Distributors | 252 | 48,980 | |||||||
| Elia Group SA |
Electric Utilities | 399 | 52,713 | |||||||
| Groupe Bruxelles Lambert NV |
Financial Services | 1,050 | 89,551 | |||||||
| KBC Group NV |
Banks | 2,961 | 203,635 | |||||||
| Lotus Bakeries NV |
Food Products | 4 | 28,030 | |||||||
| Proximus SADP |
Diversified Telecommunication Services | 1,491 | 14,407 | |||||||
| Sofina SA |
Financial Services | 168 | 37,673 | |||||||
| Solvay SA |
Chemicals | 756 | 86,530 | |||||||
| UCB SA |
Pharmaceuticals | 1,281 | 114,735 | |||||||
| Umicore SA |
Chemicals | 2,184 | 74,055 | |||||||
| Warehouses De Pauw CVA |
Diversified REITs | 1,680 | 49,866 | |||||||
|
|
|
|||||||||
| 1,542,286 | ||||||||||
|
|
|
|||||||||
| Bermuda 0.1% |
||||||||||
| Hiscox Ltd. |
Insurance | 3,528 | 48,377 | |||||||
|
|
|
|||||||||
| Chile 0.1% |
||||||||||
| Antofagasta PLC |
Metals & Mining | 3,759 | 73,482 | |||||||
|
|
|
|||||||||
| Denmark 4.4% |
||||||||||
| AP Moller - Maersk AS, Class A |
Marine Transportation | 30 | 53,205 | |||||||
| AP Moller - Maersk AS, Class B |
Marine Transportation | 51 | 92,568 | |||||||
| Carlsberg AS, Class B |
Beverages | 987 | 153,019 | |||||||
| Chr Hansen Holding AS |
Chemicals | 1,092 | 82,976 | |||||||
| Coloplast AS, Class B |
Health Care Equipment & Supplies | 1,428 | 187,816 | |||||||
| aDanske Bank AS |
Banks | 7,056 | 142,014 | |||||||
| aDemant AS |
Health Care Equipment & Supplies | 1,008 | 35,312 | |||||||
| DSV AS |
Air Freight & Logistics | 1,911 | 369,711 | |||||||
| aGenmab AS |
Biotechnology | 693 | 261,673 | |||||||
| H Lundbeck AS |
Pharmaceuticals | 2,604 | 12,070 | |||||||
| aH Lundbeck AS, Class A |
Pharmaceuticals | 651 | 2,765 | |||||||
| Novo Nordisk AS, Class B |
Pharmaceuticals | 16,758 | 2,653,789 | |||||||
| Novozymes AS, Class B |
Chemicals | 2,142 | 109,622 | |||||||
| bOrsted AS |
Electric Utilities | 2,037 | 173,321 | |||||||
| Pandora AS |
Textiles, Apparel & Luxury Goods | 924 | 88,323 | |||||||
| ROCKWOOL AS, Class B |
Building Products | 63 | 15,441 | |||||||
| Royal Unibrew AS |
Beverages | 525 | 45,788 | |||||||
| Tryg AS |
Insurance | 3,759 | 82,180 | |||||||
| Vestas Wind Systems AS |
Electrical Equipment | 10,794 | 313,278 | |||||||
|
|
|
|||||||||
| 4,874,871 | ||||||||||
|
|
|
|||||||||
| franklintempleton.com | Annual Report |
209 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Finland 1.9% |
||||||||||
| Elisa Oyj |
Diversified Telecommunication Services | 1,617 | $ | 97,607 | ||||||
| Fortum OYJ |
Electric Utilities | 4,725 | 72,459 | |||||||
| Huhtamaki OYJ |
Containers & Packaging | 987 | 36,673 | |||||||
| Kesko OYJ, Class B |
Consumer Staples Distribution & Retail | 2,856 | 61,453 | |||||||
| Kojamo Oyj |
Real Estate Management & Development | 2,079 | 24,507 | |||||||
| Kone OYJ, Class B |
Machinery | 3,507 | 182,889 | |||||||
| Metso Outotec OYJ |
Machinery | 6,447 | 70,324 | |||||||
| Neste OYJ |
Oil, Gas & Consumable Fuels | 4,410 | 217,666 | |||||||
| Nokia OYJ |
Communications Equipment | 60,480 | 296,707 | |||||||
| Nordea Bank Abp |
Banks | 37,149 | 397,269 | |||||||
| Orion OYJ, Class B |
Pharmaceuticals | 1,155 | 51,687 | |||||||
| Sampo Oyj, Class A |
Insurance | 4,998 | 236,100 | |||||||
| Stora Enso OYJ, Class R |
Paper & Forest Products | 6,174 | 80,359 | |||||||
| UPM-Kymmene OYJ |
Paper & Forest Products | 5,691 | 191,363 | |||||||
| Valmet Oyj |
Machinery | 1,785 | 57,869 | |||||||
| Wartsila OYJ Abp |
Machinery | 5,250 | 49,555 | |||||||
|
|
|
|||||||||
| 2,124,487 | ||||||||||
|
|
|
|||||||||
| France 17.3% |
||||||||||
| aAccor SA |
Hotels, Restaurants & Leisure | 1,953 | 63,591 | |||||||
| aAeroports de Paris |
Transportation Infrastructure | 336 | 48,058 | |||||||
| Air Liquide SA |
Chemicals | 5,481 | 918,235 | |||||||
| Airbus SE |
Aerospace & Defense | 5,985 | 801,616 | |||||||
| bALD SA |
Ground Transportation | 1,449 | 17,002 | |||||||
| Alstom SA |
Machinery | 3,234 | 88,121 | |||||||
| bAmundi SA |
Capital Markets | 609 | 38,409 | |||||||
| Arkema SA |
Chemicals | 693 | 68,364 | |||||||
| AXA SA |
Insurance | 20,034 | 613,038 | |||||||
| BioMerieux |
Health Care Equipment & Supplies | 462 | 48,688 | |||||||
| BNP Paribas SA |
Banks | 11,823 | 709,178 | |||||||
| Bollore SE |
Entertainment | 10,605 | 65,559 | |||||||
| Bouygues SA |
Construction & Engineering | 2,247 | 75,899 | |||||||
| Bureau Veritas SA |
Professional Services | 3,087 | 88,777 | |||||||
| Capgemini SE |
IT Services | 1,722 | 319,451 | |||||||
| Carrefour SA |
Consumer Staples Distribution & Retail | 6,384 | 129,216 | |||||||
| Cie de Saint-Gobain |
Building Products | 4,914 | 279,327 | |||||||
| Cie Generale des Etablissements Michelin SCA |
Automobile Components | 7,539 | 230,529 | |||||||
| Covivio SA |
Diversified REITs | 525 | 30,573 | |||||||
| Credit Agricole SA |
Banks | 13,020 | 147,086 | |||||||
| Danone SA |
Food Products | 6,552 | 407,957 | |||||||
| Dassault Aviation SA |
Aerospace & Defense | 252 | 49,993 | |||||||
| Dassault Systemes SE |
Software | 7,161 | 294,670 | |||||||
| Edenred |
IT Services | 2,667 | 158,033 | |||||||
| Eiffage SA |
Construction & Engineering | 798 | 86,473 | |||||||
| Engie SA |
Multi-Utilities | 17,766 | 281,305 | |||||||
| EssilorLuxottica SA |
Textiles, Apparel & Luxury Goods | 3,192 | 575,679 | |||||||
| Eurazeo SE |
Financial Services | 525 | 37,360 | |||||||
| Gecina SA |
Diversified REITs | 546 | 56,680 | |||||||
| Getlink SE |
Transportation Infrastructure | 3,717 | 61,342 | |||||||
| Hermes International |
Textiles, Apparel & Luxury Goods | 336 | 680,448 | |||||||
| ICADE |
Diversified REITs | 336 | 15,821 | |||||||
| Ipsen SA |
Pharmaceuticals | 378 | 41,684 | |||||||
| aJCDecaux SE |
Media | 798 | 16,742 | |||||||
| Kering SA |
Textiles, Apparel & Luxury Goods | 777 | 506,503 | |||||||
| Klepierre SA |
Diversified REITs | 1,974 | 44,716 | |||||||
| bLa Francaise des Jeux SAEM |
Hotels, Restaurants & Leisure | 924 | 38,539 | |||||||
| Legrand SA |
Electrical Equipment | 2,856 | 260,892 | |||||||
| L’Oreal SA |
Personal Products | 2,646 | 1,182,239 | |||||||
| 210 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| France (continued) |
||||||||||
| LVMH Moet Hennessy Louis Vuitton SE |
Textiles, Apparel & Luxury Goods | 2,646 | $ | 2,427,436 | ||||||
| bNeoen SA |
Independent Power Producers & Energy Traders | 690 | 21,702 | |||||||
| Orange SA |
Diversified Telecommunication Services | 20,538 | 244,378 | |||||||
| Pernod Ricard SA |
Beverages | 2,184 | 495,205 | |||||||
| Publicis Groupe SA |
Media | 2,415 | 188,335 | |||||||
| Remy Cointreau SA |
Beverages | 273 | 49,829 | |||||||
| aRenault SA |
Automobiles | 2,079 | 84,928 | |||||||
| Rexel SA |
Trading Companies & Distributors | 2,604 | 62,099 | |||||||
| Safran SA |
Aerospace & Defense | 3,738 | 554,509 | |||||||
| Sanofi |
Pharmaceuticals | 11,676 | 1,271,583 | |||||||
| Sartorius Stedim Biotech |
Life Sciences Tools & Services | 252 | 77,207 | |||||||
| Schneider Electric SE |
Electrical Equipment | 5,691 | 950,201 | |||||||
| SCOR SE |
Insurance | 1,575 | 35,832 | |||||||
| SEB SA |
Household Durables | 315 | 35,866 | |||||||
| Societe Generale SA |
Banks | 7,875 | 177,832 | |||||||
| Sodexo SA |
Hotels, Restaurants & Leisure | 924 | 90,409 | |||||||
| aSOITEC |
Semiconductors & Semiconductor Equipment | 273 | 43,778 | |||||||
| Teleperformance |
Professional Services | 630 | 151,746 | |||||||
| Thales SA |
Aerospace & Defense | 1,071 | 158,655 | |||||||
| TotalEnergies SE |
Oil, Gas & Consumable Fuels | 24,381 | 1,439,928 | |||||||
| aUbisoft Entertainment SA |
Entertainment | 945 | 25,113 | |||||||
| aUnibail-Rodamco-Westfield |
Diversified REITs | 1,092 | 58,591 | |||||||
| Valeo SA |
Automobile Components | 2,562 | 52,636 | |||||||
| Veolia Environnement SA |
Multi-Utilities | 6,825 | 210,587 | |||||||
| Vinci SA |
Construction & Engineering | 5,334 | 612,660 | |||||||
| Vivendi SE |
Media | 7,392 | 74,689 | |||||||
| Wendel SE |
Financial Services | 294 | 31,095 | |||||||
| a,bWorldline SA |
IT Services | 2,646 | 112,431 | |||||||
|
|
|
|||||||||
| 19,317,053 | ||||||||||
|
|
|
|||||||||
| Germany 12.2% |
||||||||||
| adidas AG |
Textiles, Apparel & Luxury Goods | 1,806 | 319,395 | |||||||
| Allianz SE |
Insurance | 4,305 | 995,301 | |||||||
| BASF SE |
Chemicals | 9,807 | 515,267 | |||||||
| Bayer AG |
Pharmaceuticals | 10,542 | 672,541 | |||||||
| Bayerische Motoren Werke AG |
Automobiles | 3,402 | 373,085 | |||||||
| Bechtle AG |
IT Services | 903 | 43,157 | |||||||
| Beiersdorf AG |
Personal Products | 1,071 | 139,572 | |||||||
| Brenntag SE |
Trading Companies & Distributors | 1,638 | 123,149 | |||||||
| Carl Zeiss Meditec AG |
Health Care Equipment & Supplies | 399 | 55,487 | |||||||
| aCommerzbank AG |
Banks | 11,046 | 116,433 | |||||||
| Continental AG |
Automobile Components | 1,155 | 86,484 | |||||||
| bCovestro AG |
Chemicals | 1,911 | 79,166 | |||||||
| aCTS Eventim AG & Co. KGaA |
Entertainment | 651 | 40,633 | |||||||
| aDaimler Truck Holding AG |
Machinery | 4,515 | 152,605 | |||||||
| a,bDelivery Hero SE |
Internet & Direct Marketing Retail | 1,995 | 67,993 | |||||||
| Deutsche Bank AG |
Capital Markets | 21,714 | 220,719 | |||||||
| Deutsche Boerse AG |
Capital Markets | 1,974 | 384,858 | |||||||
| aDeutsche Lufthansa AG |
Airlines | 6,300 | 70,226 | |||||||
| Deutsche Post AG |
Air Freight & Logistics | 10,395 | 486,643 | |||||||
| Deutsche Telekom AG |
Diversified Telecommunication Services | 36,288 | 881,151 | |||||||
| Deutsche Wohnen SE |
Real Estate Management & Development | 567 | 11,144 | |||||||
| bDWS Group GmbH & Co. KGaA |
Capital Markets | 378 | 11,630 | |||||||
| E.ON SE |
Multi-Utilities | 23,688 | 295,962 | |||||||
| Evonik Industries AG |
Chemicals | 2,058 | 43,287 | |||||||
| Fielmann AG |
Specialty Retail | 252 | 10,508 | |||||||
| aFraport AG Frankfurt Airport Services Worldwide |
Transportation Infrastructure | 378 | 19,018 | |||||||
| franklintempleton.com | Annual Report |
211 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Germany (continued) |
||||||||||
| Fresenius Medical Care AG & Co. KGaA |
Health Care Providers & Services | 2,163 | $ | 91,885 | ||||||
| Fresenius SE & Co. KGaA |
Health Care Providers & Services | 4,326 | 116,795 | |||||||
| Fuchs Petrolub SE |
Chemicals | 357 | 12,237 | |||||||
| GEA Group AG |
Machinery | 1,743 | 79,440 | |||||||
| Hannover Rueck SE |
Insurance | 651 | 127,558 | |||||||
| HeidelbergCement AG |
Construction Materials | 1,575 | 115,093 | |||||||
| Hella GmbH & Co. KGaA |
Automobile Components | 231 | 20,115 | |||||||
| aHelloFresh SE |
Internet & Direct Marketing Retail | 1,722 | 40,991 | |||||||
| Henkel AG & Co. KGaA |
Household Products | 1,071 | 77,960 | |||||||
| HOCHTIEF AG |
Construction & Engineering | 210 | 17,536 | |||||||
| Infineon Technologies AG |
Semiconductors & Semiconductor Equipment | 13,965 | 571,691 | |||||||
| KION Group AG |
Machinery | 777 | 30,061 | |||||||
| Knorr-Bremse AG |
Machinery | 693 | 46,138 | |||||||
| LANXESS AG |
Chemicals | 945 | 38,840 | |||||||
| LEG Immobilien SE |
Real Estate Management & Development | 798 | 43,765 | |||||||
| Mercedes-Benz Group AG |
Automobiles | 9,009 | 692,782 | |||||||
| Merck KGaA |
Pharmaceuticals | 1,386 | 258,323 | |||||||
| aMETRO AG |
Consumer Staples Distribution & Retail | 1,407 | 12,107 | |||||||
| MTU Aero Engines AG |
Aerospace & Defense | 567 | 142,054 | |||||||
| Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen |
Insurance | 1,512 | 529,775 | |||||||
| Nemetschek SE |
Software | 567 | 38,982 | |||||||
| Puma SE |
Textiles, Apparel & Luxury Goods | 1,050 | 64,864 | |||||||
| Rational AG |
Machinery | 63 | 42,231 | |||||||
| Rheinmetall AG |
Industrial Conglomerates | 462 | 137,331 | |||||||
| RWE AG |
Multi-Utilities | 6,783 | 292,123 | |||||||
| SAP SE |
Software | 11,886 | 1,498,746 | |||||||
| Sartorius AG |
Health Care Equipment & Supplies | 21 | 7,244 | |||||||
| bScout24 SE |
Interactive Media & Services | 840 | 49,920 | |||||||
| Siemens AG |
Industrial Conglomerates | 8,001 | 1,297,470 | |||||||
| aSiemens Energy AG |
Electrical Equipment | 5,040 | 110,828 | |||||||
| bSiemens Healthineers AG |
Health Care Equipment & Supplies | 2,982 | 171,774 | |||||||
| Sixt SE |
Ground Transportation | 147 | 19,580 | |||||||
| Symrise AG |
Chemicals | 1,386 | 150,883 | |||||||
| aTalanx AG |
Insurance | 546 | 25,330 | |||||||
| Telefonica Deutschland Holding AG |
Diversified Telecommunication Services | 9,597 | 29,580 | |||||||
| athyssenkrupp AG |
Metals & Mining | 5,250 | 37,737 | |||||||
| Traton SE |
Machinery | 525 | 10,284 | |||||||
| United Internet AG |
Diversified Telecommunication Services | 924 | 15,932 | |||||||
| Volkswagen AG |
Automobiles | 315 | 54,073 | |||||||
| Vonovia SE |
Real Estate Management & Development | 7,707 | 145,192 | |||||||
| Wacker Chemie AG |
Chemicals | 168 | 27,269 | |||||||
| a,bZalando SE |
Internet & Direct Marketing Retail | 2,373 | 99,362 | |||||||
|
|
|
|||||||||
| 13,607,295 | ||||||||||
|
|
|
|||||||||
| Ireland 1.5% |
||||||||||
| AIB Group PLC |
Banks | 12,222 | 49,689 | |||||||
| Bank of Ireland Group PLC |
Banks | 11,466 | 116,151 | |||||||
| CRH PLC |
Construction Materials | 8,043 | 405,896 | |||||||
| DCC PLC |
Industrial Conglomerates | 1,050 | 61,253 | |||||||
| Experian PLC |
Professional Services | 9,912 | 326,001 | |||||||
| aFlutter Entertainment PLC |
Hotels, Restaurants & Leisure | 1,890 | 341,887 | |||||||
| Glanbia PLC |
Food Products | 2,037 | 29,567 | |||||||
| Kerry Group PLC, Class A |
Food Products | 1,659 | 165,534 | |||||||
| Kingspan Group PLC |
Building Products | 1,638 | 112,186 | |||||||
| Smurfit Kappa Group PLC |
Containers & Packaging | 2,814 | 101,806 | |||||||
|
|
|
|||||||||
| 1,709,970 | ||||||||||
|
|
|
|||||||||
| 212 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Isle Of Man 0.1% |
||||||||||
| Entain PLC |
Hotels, Restaurants & Leisure | 6,300 | $ | 97,877 | ||||||
|
|
|
|||||||||
|
Italy 3.4% |
||||||||||
| A2A SpA |
Multi-Utilities | 16,401 | 26,194 | |||||||
| Amplifon SpA |
Health Care Providers & Services | 1,407 | 48,825 | |||||||
| Assicurazioni Generali SpA |
Insurance | 14,511 | 289,769 | |||||||
| Banca Mediolanum SpA |
Financial Services | 2,667 | 24,218 | |||||||
| Banco BPM SpA |
Banks | 14,721 | 57,657 | |||||||
| Buzzi Unicem SpA |
Construction Materials | 903 | 21,937 | |||||||
| Davide Campari-Milano NV |
Beverages | 5,439 | 66,478 | |||||||
| De’ Longhi SpA |
Household Durables | 756 | 17,298 | |||||||
| DiaSorin SpA |
Health Care Equipment & Supplies | 231 | 24,359 | |||||||
| Enel SpA |
Electric Utilities | 83,076 | 507,881 | |||||||
| Eni SpA |
Oil, Gas & Consumable Fuels | 23,688 | 332,147 | |||||||
| Ferrari NV |
Automobiles | 1,281 | 346,961 | |||||||
| FinecoBank Banca Fineco SpA |
Banks | 6,594 | 101,300 | |||||||
| Hera SpA |
Multi-Utilities | 8,757 | 24,756 | |||||||
| bInfrastrutture Wireless Italiane SpA |
Diversified Telecommunication Services | 3,738 | 49,221 | |||||||
| Interpump Group SpA |
Machinery | 840 | 47,137 | |||||||
| Intesa Sanpaolo SpA |
Banks | 173,334 | 445,845 | |||||||
| Italgas SpA |
Gas Utilities | 5,313 | 32,469 | |||||||
| Leonardo SpA |
Aerospace & Defense | 4,263 | 50,113 | |||||||
| Mediobanca Banca di Credito Finanziario SpA |
Banks | 6,888 | 69,357 | |||||||
| Moncler SpA |
Textiles, Apparel & Luxury Goods | 2,184 | 150,768 | |||||||
| a,bNexi SpA |
IT Services | 5,859 | 47,652 | |||||||
| bPirelli & C SpA |
Automobile Components | 5,355 | 26,890 | |||||||
| bPoste Italiane SpA |
Insurance | 4,851 | 49,605 | |||||||
| Prysmian SpA |
Electrical Equipment | 2,814 | 118,316 | |||||||
| Recordati Industria Chimica e Farmaceutica SpA |
Pharmaceuticals | 1,071 | 45,333 | |||||||
| Reply SpA |
IT Services | 252 | 31,622 | |||||||
| Snam SpA |
Gas Utilities | 23,814 | 126,492 | |||||||
| aTelecom Italia SpA |
Diversified Telecommunication Services | 112,791 | 37,277 | |||||||
| aTelecom Italia SpA |
Diversified Telecommunication Services | 64,575 | 20,809 | |||||||
| Tenaris SA |
Energy Equipment & Services | 4,956 | 70,536 | |||||||
| Terna - Rete Elettrica Nazionale |
Electric Utilities | 15,225 | 125,151 | |||||||
| UniCredit SpA |
Banks | 20,160 | 381,328 | |||||||
| UnipolSai Assicurazioni SpA |
Insurance | 4,221 | 10,676 | |||||||
|
|
|
|||||||||
| 3,826,377 | ||||||||||
|
|
|
|||||||||
|
Luxembourg 0.2% |
||||||||||
| ArcelorMittal SA |
Metals & Mining | 5,124 | 155,152 | |||||||
| Eurofins Scientific SE |
Life Sciences Tools & Services | 1,281 | 85,787 | |||||||
| RTL Group SA |
Media | 399 | 19,698 | |||||||
| aSUSE SA |
Software | 378 | 6,862 | |||||||
|
|
|
|||||||||
| 267,499 | ||||||||||
|
|
|
|||||||||
|
Mexico 0.0%† |
||||||||||
| Fresnillo PLC |
Metals & Mining | 1,995 | 18,402 | |||||||
|
|
|
|||||||||
|
Netherlands 9.0% |
||||||||||
| Aalberts NV |
Machinery | 1,008 | 47,540 | |||||||
| bABN AMRO Bank NV |
Banks | 4,242 | 67,379 | |||||||
| a,bAdyen NV |
IT Services | 315 | 499,385 | |||||||
| Aegon NV |
Insurance | 18,186 | 78,065 | |||||||
| Akzo Nobel NV |
Chemicals | 1,869 | 146,161 | |||||||
| aArgenx SE |
Biotechnology | 588 | 217,650 | |||||||
| ASM International NV |
Semiconductors & Semiconductor Equipment | 483 | 195,156 | |||||||
| ASML Holding NV |
Semiconductors & Semiconductor Equipment | 4,326 | 2,938,429 | |||||||
| franklintempleton.com | Annual Report |
213 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Netherlands (continued) |
||||||||||
| ASR Nederland NV |
Insurance | 1,533 | $ | 61,191 | ||||||
| BE Semiconductor Industries NV |
Semiconductors & Semiconductor Equipment | 840 | 73,101 | |||||||
| bCTP NV |
Real Estate Management & Development | 1,155 | 14,958 | |||||||
| bEuronext NV |
Capital Markets | 861 | 66,023 | |||||||
| aEXOR NV |
Financial Services | 1,092 | 89,977 | |||||||
| Heineken Holding NV |
Beverages | 1,281 | 117,672 | |||||||
| Heineken NV |
Beverages | 2,688 | 289,293 | |||||||
| IMCD NV |
Trading Companies & Distributors | 609 | 99,512 | |||||||
| ING Groep NV |
Banks | 38,829 | 461,090 | |||||||
| JDE Peet’s NV |
Food Products | 861 | 25,088 | |||||||
| Koninklijke Ahold Delhaize NV |
Consumer Staples Distribution & Retail | 10,269 | 351,326 | |||||||
| Koninklijke DSM NV |
Chemicals | 1,869 | 220,723 | |||||||
| Koninklijke KPN NV |
Diversified Telecommunication Services | 34,083 | 120,568 | |||||||
| Koninklijke Philips NV |
Health Care Equipment & Supplies | 9,492 | 173,623 | |||||||
| Koninklijke Vopak NV |
Oil, Gas & Consumable Fuels | 693 | 24,462 | |||||||
| NN Group NV |
Insurance | 3,024 | 109,930 | |||||||
| OCI NV |
Chemicals | 1,008 | 34,234 | |||||||
| Prosus NV |
Internet & Direct Marketing Retail | 7,938 | 620,428 | |||||||
| aQIAGEN NV |
Life Sciences Tools & Services | 2,331 | 106,138 | |||||||
| Randstad NV |
Professional Services | 1,176 | 69,761 | |||||||
| Shell PLC |
Oil, Gas & Consumable Fuels | 74,655 | 2,130,911 | |||||||
| bSignify NV |
Electrical Equipment | 1,323 | 44,041 | |||||||
| Universal Music Group NV |
Entertainment | 7,980 | 202,051 | |||||||
| Wolters Kluwer NV |
Professional Services | 2,688 | 339,786 | |||||||
|
|
|
|||||||||
| 10,035,652 | ||||||||||
|
|
|
|||||||||
| Nigeria 0.0%† |
||||||||||
| bAirtel Africa PLC |
Wireless Telecommunication Services | 11,991 | 15,790 | |||||||
|
|
|
|||||||||
| Norway 1.1% |
||||||||||
| aAdevinta ASA, Class B |
Interactive Media & Services | 3,045 | 21,588 | |||||||
| Aker ASA, Class A |
Financial Services | 252 | 16,169 | |||||||
| Aker BP ASA |
Oil, Gas & Consumable Fuels | 3,255 | 79,657 | |||||||
| a,bAutoStore Holdings Ltd. |
Machinery | 7,539 | 16,175 | |||||||
| DNB Bank ASA |
Banks | 11,025 | 197,223 | |||||||
| Equinor ASA |
Oil, Gas & Consumable Fuels | 9,912 | 282,697 | |||||||
| Gjensidige Forsikring ASA |
Insurance | 1,869 | 30,570 | |||||||
| Kongsberg Gruppen ASA |
Aerospace & Defense | 777 | 31,367 | |||||||
| Leroy Seafood Group ASA |
Food Products | 2,772 | 14,372 | |||||||
| Mowi ASA |
Food Products | 4,683 | 86,478 | |||||||
| aNordic Semiconductor ASA |
Semiconductors & Semiconductor Equipment | 1,638 | 24,946 | |||||||
| Norsk Hydro ASA |
Metals & Mining | 14,427 | 107,172 | |||||||
| Orkla ASA |
Food Products | 8,064 | 57,178 | |||||||
| Salmar ASA |
Food Products | 735 | 31,988 | |||||||
| Schibsted ASA, Class A |
Media | 819 | 13,826 | |||||||
| Schibsted ASA, Class B |
Media | 1,050 | 16,803 | |||||||
| Telenor ASA |
Diversified Telecommunication Services | 6,720 | 78,729 | |||||||
| TOMRA Systems ASA |
Commercial Services & Supplies | 2,688 | 45,172 | |||||||
| Var Energi ASA |
Oil, Gas & Consumable Fuels | 4,263 | 10,388 | |||||||
| Yara International ASA |
Chemicals | 1,722 | 74,631 | |||||||
|
|
|
|||||||||
| 1,237,129 | ||||||||||
|
|
|
|||||||||
| Poland 0.4% |
||||||||||
| a,bAllegro.eu SA |
Internet & Direct Marketing Retail | 4,137 | 28,142 | |||||||
| Bank Polska Kasa Opieki SA |
Banks | 1,659 | 32,910 | |||||||
| a,bDino Polska SA |
Consumer Staples Distribution & Retail | 504 | 45,755 | |||||||
| aInPost SA |
Air Freight & Logistics | 2,121 | 19,384 | |||||||
| KGHM Polska Miedz SA |
Metals & Mining | 1,449 | 41,119 | |||||||
| 214 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Poland (continued) |
||||||||||
| LPP SA |
Textiles, Apparel & Luxury Goods | 12 | $ | 26,685 | ||||||
| Polski Koncern Naftowy ORLEN SA |
Oil, Gas & Consumable Fuels | 6,237 | 84,317 | |||||||
| Powszechna Kasa Oszczednosci Bank Polski SA |
Banks | 9,051 | 59,919 | |||||||
| Powszechny Zaklad Ubezpieczen SA |
Insurance | 6,132 | 49,932 | |||||||
| Santander Bank Polska SA |
Banks | 315 | 21,336 | |||||||
|
|
|
|||||||||
| 409,499 | ||||||||||
|
|
|
|||||||||
| Portugal 0.3% |
||||||||||
| EDP - Energias de Portugal SA |
Electric Utilities | 30,051 | 163,767 | |||||||
| Galp Energia SGPS SA, Class B |
Oil, Gas & Consumable Fuels | 5,460 | 62,049 | |||||||
| Jeronimo Martins SGPS SA |
Consumer Staples Distribution & Retail | 2,961 | 69,551 | |||||||
|
|
|
|||||||||
| 295,367 | ||||||||||
|
|
|
|||||||||
| Russia 0.0%† |
||||||||||
| a,cEvraz PLC |
Metals & Mining | 10,404 | — | |||||||
|
|
|
|||||||||
| Spain 3.9% |
||||||||||
| Acciona SA |
Electric Utilities | 252 | 50,568 | |||||||
| ACS Actividades de Construccion y Servicios SA |
Construction & Engineering | 2,226 | 70,981 | |||||||
| a,bAena SME SA |
Transportation Infrastructure | 756 | 122,300 | |||||||
| aAmadeus IT Group SA |
IT Services | 4,830 | 323,564 | |||||||
| Banco Bilbao Vizcaya Argentaria SA |
Banks | 64,533 | 460,705 | |||||||
| Banco Santander SA |
Banks | 175,455 | 653,075 | |||||||
| Bankinter SA |
Banks | 7,266 | 41,255 | |||||||
| CaixaBank SA |
Banks | 41,013 | 159,698 | |||||||
| bCellnex Telecom SA |
Diversified Telecommunication Services | 6,006 | 233,342 | |||||||
| Corp. ACCIONA Energias Renovables SA |
Independent Power Producers & Energy Traders | 609 | 23,661 | |||||||
| EDP Renovaveis SA |
Independent Power Producers & Energy Traders | 2,625 | 60,147 | |||||||
| Enagas SA |
Gas Utilities | 2,625 | 50,479 | |||||||
| Endesa SA |
Electric Utilities | 3,360 | 73,009 | |||||||
| Ferrovial SA |
Construction & Engineering | 5,061 | 148,955 | |||||||
| aGrifols SA |
Biotechnology | 3,507 | 34,703 | |||||||
| Iberdrola SA |
Electric Utilities | 63,924 | 797,636 | |||||||
| Industria de Diseno Textil SA |
Specialty Retail | 11,277 | 378,584 | |||||||
| Inmobiliaria Colonial Socimi SA |
Diversified REITs | 3,507 | 22,194 | |||||||
| Mapfre SA |
Insurance | 10,185 | 20,560 | |||||||
| Merlin Properties Socimi SA |
Diversified REITs | 3,528 | 30,894 | |||||||
| Naturgy Energy Group SA |
Gas Utilities | 1,554 | 46,851 | |||||||
| Red Electrica Corp. SA |
Electric Utilities | 4,578 | 80,575 | |||||||
| Repsol SA |
Oil, Gas & Consumable Fuels | 13,713 | 211,335 | |||||||
| Telefonica SA |
Diversified Telecommunication Services | 53,613 | 231,419 | |||||||
|
|
|
|||||||||
| 4,326,490 | ||||||||||
|
|
|
|||||||||
| Sweden 4.8% |
||||||||||
| Alfa Laval AB |
Machinery | 3,339 | 119,044 | |||||||
| Assa Abloy AB, Class B |
Building Products | 10,437 | 249,915 | |||||||
| Atlas Copco AB, Class A |
Machinery | 27,069 | 343,376 | |||||||
| Atlas Copco AB, Class B |
Machinery | 16,233 | 186,570 | |||||||
| Axfood AB |
Consumer Staples Distribution & Retail | 1,134 | 27,690 | |||||||
| Beijer Ref AB |
Trading Companies & Distributors | 3,445 | 60,365 | |||||||
| Boliden AB |
Metals & Mining | 2,898 | 113,969 | |||||||
| Castellum AB |
Real Estate Management & Development | 2,835 | 32,917 | |||||||
| Electrolux AB, Class B |
Household Durables | 2,415 | 29,326 | |||||||
| Epiroc AB, Class A |
Machinery | 6,720 | 133,369 | |||||||
| Epiroc AB, Class B |
Machinery | 4,011 | 68,252 | |||||||
| EQT AB |
Capital Markets | 3,633 | 73,784 | |||||||
| Essity AB, Class B |
Household Products | 6,531 | 186,680 | |||||||
| franklintempleton.com | Annual Report |
215 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Sweden (continued) |
||||||||||
| bEvolution AB |
Hotels, Restaurants & Leisure | 1,722 | $ | 230,529 | ||||||
| aFastighets AB Balder, Class B, B |
Real Estate Management & Development | 6,762 | 27,721 | |||||||
| Getinge AB, Class B |
Health Care Equipment & Supplies | 2,373 | 57,829 | |||||||
| H & M Hennes & Mauritz AB, Class B |
Specialty Retail | 7,140 | 101,782 | |||||||
| Hexagon AB, Class B |
Electronic Equipment, Instruments & Components | 20,118 | 230,581 | |||||||
| Holmen AB, Class B |
Paper & Forest Products | 1,008 | 38,805 | |||||||
| Husqvarna AB, Class B |
Household Durables | 4,494 | 38,935 | |||||||
| Industrivarden AB, Class A |
Financial Services | 1,323 | 35,686 | |||||||
| Industrivarden AB, Class C |
Financial Services | 1,617 | 43,538 | |||||||
| Indutrade AB |
Machinery | 3,066 | 65,078 | |||||||
| Investment AB Latour, Class B |
Industrial Conglomerates | 1,491 | 30,281 | |||||||
| Investor AB, Class A |
Financial Services | 5,628 | 114,627 | |||||||
| Investor AB, Class B |
Financial Services | 19,509 | 387,657 | |||||||
| aKinnevik AB, Class B |
Financial Services | 2,541 | 37,859 | |||||||
| L E Lundbergforetagen AB, Class B |
Financial Services | 798 | 36,069 | |||||||
| Lifco AB, Class B |
Industrial Conglomerates | 2,415 | 51,935 | |||||||
| Nibe Industrier AB, Class B |
Building Products | 15,708 | 178,446 | |||||||
| Saab AB, Class B |
Aerospace & Defense | 966 | 58,782 | |||||||
| Sagax AB, Class B |
Real Estate Management & Development | 1,806 | 41,590 | |||||||
| Sagax AB, Class D |
Real Estate Management & Development | 1,260 | 3,184 | |||||||
| Sandvik AB |
Machinery | 11,571 | 245,267 | |||||||
| Securitas AB, Class B |
Commercial Services & Supplies | 5,124 | 45,599 | |||||||
| Skandinaviska Enskilda Banken AB, Class A |
Banks | 17,556 | 193,598 | |||||||
| Skandinaviska Enskilda Banken AB, Class C |
Banks | 231 | 2,958 | |||||||
| Skanska AB, Class B |
Construction & Engineering | 3,801 | 58,117 | |||||||
| SKF AB, Class B |
Machinery | 4,053 | 79,735 | |||||||
| SSAB AB, Class A |
Metals & Mining | 2,562 | 18,886 | |||||||
| SSAB AB, Class B |
Metals & Mining | 7,056 | 50,299 | |||||||
| Svenska Cellulosa AB SCA, Class B |
Paper & Forest Products | 6,279 | 82,624 | |||||||
| Svenska Handelsbanken AB, Class A |
Banks | 15,834 | 137,183 | |||||||
| Svenska Handelsbanken AB, Class B |
Banks | 399 | 4,279 | |||||||
| Sweco AB, Class B |
Construction & Engineering | 2,100 | 26,631 | |||||||
| Swedbank AB, Class A |
Banks | 10,773 | 176,770 | |||||||
| aSwedish Orphan Biovitrum AB |
Biotechnology | 1,890 | 44,017 | |||||||
| Tele2 AB, Class B |
Wireless Telecommunication Services | 6,006 | 59,802 | |||||||
| Telefonaktiebolaget LM Ericsson, Class A |
Communications Equipment | 399 | 2,551 | |||||||
| Telefonaktiebolaget LM Ericsson, Class B |
Communications Equipment | 32,340 | 188,996 | |||||||
| Telia Co. AB |
Diversified Telecommunication Services | 27,258 | 69,318 | |||||||
| Trelleborg AB, Class B |
Machinery | 2,436 | 69,277 | |||||||
| Volvo AB, Class A |
Machinery | 2,184 | 46,968 | |||||||
| Volvo AB, Class B |
Machinery | 16,170 | 333,472 | |||||||
| aVolvo Car AB, Class B |
Automobiles | 5,733 | 24,987 | |||||||
|
|
|
|||||||||
| 5,397,505 | ||||||||||
|
|
|
|||||||||
| Switzerland 14.5% |
||||||||||
| ABB Ltd. |
Electrical Equipment | 16,248 | 557,933 | |||||||
| Adecco Group AG |
Professional Services | 1,701 | 61,724 | |||||||
| Alcon, Inc. |
Health Care Equipment & Supplies | 4,935 | 349,510 | |||||||
| Bachem Holding AG, Class B |
Life Sciences Tools & Services | 336 | 33,617 | |||||||
| Baloise Holding AG |
Insurance | 483 | 75,288 | |||||||
| Banque Cantonale Vaudoise |
Banks | 294 | 27,773 | |||||||
| Barry Callebaut AG |
Food Products | 42 | 89,145 | |||||||
| Belimo Holding AG |
Building Products | 105 | 50,687 | |||||||
| BKW AG |
Electric Utilities | 189 | 29,750 | |||||||
| Chocoladefabriken Lindt & Spruengli AG |
Food Products | 22 | 260,084 | |||||||
| Cie Financiere Richemont SA, Class A |
Textiles, Apparel & Luxury Goods | 5,481 | 875,352 | |||||||
| Clariant AG |
Chemicals | 2,415 | 39,944 | |||||||
| Coca-Cola HBC AG |
Beverages | 2,079 | 56,887 | |||||||
| 216 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Switzerland (continued) |
||||||||||
| Credit Suisse Group AG |
Capital Markets | 38,766 | $ | 34,907 | ||||||
| DKSH Holding AG |
Professional Services | 378 | 30,474 | |||||||
| Emmi AG |
Food Products | 21 | 21,102 | |||||||
| EMS-Chemie Holding AG |
Chemicals | 84 | 69,330 | |||||||
| aFlughafen Zurich AG |
Transportation Infrastructure | 210 | 38,504 | |||||||
| Geberit AG |
Building Products | 357 | 198,987 | |||||||
| Georg Fischer AG |
Machinery | 882 | 68,451 | |||||||
| Givaudan SA |
Chemicals | 84 | 273,364 | |||||||
| Helvetia Holding AG |
Insurance | 378 | 52,714 | |||||||
| Julius Baer Group Ltd |
Capital Markets | 2,268 | 154,717 | |||||||
| Kuehne & Nagel International AG |
Marine Transportation | 525 | 156,256 | |||||||
| Logitech International SA |
Technology Hardware, Storage & Peripherals | 1,512 | 87,885 | |||||||
| Lonza Group AG |
Life Sciences Tools & Services | 798 | 478,162 | |||||||
| Nestle SA |
Food Products | 28,917 | 3,528,092 | |||||||
| Novartis AG |
Pharmaceuticals | 21,336 | 1,956,218 | |||||||
| Partners Group Holding AG |
Capital Markets | 231 | 216,650 | |||||||
| PSP Swiss Property AG |
Real Estate Management & Development | 483 | 54,986 | |||||||
| Roche Holding AG |
Pharmaceuticals | 7,434 | 2,123,477 | |||||||
| Roche Holding AG |
Pharmaceuticals | 315 | 94,822 | |||||||
| Schindler Holding AG, PC |
Machinery | 441 | 97,560 | |||||||
| Schindler Holding AG |
Machinery | 210 | 44,365 | |||||||
| SGS SA |
Professional Services | 63 | 138,682 | |||||||
| SIG Group AG |
Containers & Packaging | 3,486 | 89,750 | |||||||
| Sika AG |
Chemicals | 1,554 | 434,620 | |||||||
| Sonova Holding AG |
Health Care Equipment & Supplies | 546 | 160,534 | |||||||
| STMicroelectronics NV |
Semiconductors & Semiconductor Equipment | 6,783 | 360,769 | |||||||
| Straumann Holding AG |
Health Care Equipment & Supplies | 1,134 | 169,253 | |||||||
| Swatch Group AG |
Textiles, Apparel & Luxury Goods | 315 | 108,063 | |||||||
| Swatch Group AG |
Textiles, Apparel & Luxury Goods | 483 | 30,559 | |||||||
| Swiss Life Holding AG |
Insurance | 336 | 207,143 | |||||||
| Swiss Prime Site AG |
Real Estate Management & Development | 798 | 66,431 | |||||||
| Swiss Re AG |
Insurance | 3,087 | 317,097 | |||||||
| Swisscom AG |
Diversified Telecommunication Services | 273 | 174,280 | |||||||
| Tecan Group AG |
Life Sciences Tools & Services | 126 | 55,059 | |||||||
| Temenos AG |
Software | 651 | 45,094 | |||||||
| UBS Group AG |
Capital Markets | 30,660 | 647,399 | |||||||
| bVAT Group AG |
Machinery | 273 | 98,077 | |||||||
| Zurich Insurance Group AG |
Insurance | 1,596 | 764,675 | |||||||
|
|
|
|||||||||
| 16,156,202 | ||||||||||
|
|
|
|||||||||
| United Kingdom 19.2% |
||||||||||
| 3i Group PLC |
Capital Markets | 10,185 | 212,196 | |||||||
| abrdn PLC |
Capital Markets | 21,126 | 53,157 | |||||||
| Admiral Group PLC |
Insurance | 3,108 | 78,318 | |||||||
| Allfunds Group PLC |
Capital Markets | 3,633 | 23,998 | |||||||
| Anglo American PLC |
Metals & Mining | 12,936 | 428,339 | |||||||
| Ashtead Group PLC |
Trading Companies & Distributors | 4,683 | 287,083 | |||||||
| Associated British Foods PLC |
Food Products | 3,696 | 88,656 | |||||||
| AstraZeneca PLC |
Pharmaceuticals | 15,834 | 2,198,995 | |||||||
| bAuto Trader Group PLC |
Interactive Media & Services | 9,807 | 74,720 | |||||||
| Aviva PLC |
Insurance | 29,904 | 149,452 | |||||||
| B&M European Value Retail SA |
Broadline Retail | 9,891 | 58,960 | |||||||
| BAE Systems PLC |
Aerospace & Defense | 32,760 | 398,013 | |||||||
| Barclays PLC |
Banks | 169,092 | 304,830 | |||||||
| Barratt Developments PLC |
Household Durables | 10,773 | 62,139 | |||||||
| Beazley PLC |
Insurance | 7,077 | 52,283 | |||||||
| Berkeley Group Holdings PLC |
Household Durables | 1,134 | 58,848 | |||||||
| BP PLC |
Oil, Gas & Consumable Fuels | 189,714 | 1,198,193 | |||||||
| franklintempleton.com | Annual Report |
217 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| United Kingdom (continued) |
||||||||||
| British American Tobacco PLC |
Tobacco | 24,024 | $ | 843,756 | ||||||
| British Land Co. PLC |
Diversified REITs | 9,744 | 46,722 | |||||||
| BT Group PLC |
Diversified Telecommunication Services | 74,592 | 134,470 | |||||||
| Bunzl PLC |
Trading Companies & Distributors | 3,633 | 137,321 | |||||||
| Burberry Group PLC |
Textiles, Apparel & Luxury Goods | 4,032 | 128,922 | |||||||
| Centrica PLC |
Multi-Utilities | 62,727 | 82,251 | |||||||
| CNH Industrial NV |
Machinery | 10,647 | 162,869 | |||||||
| Compass Group PLC |
Hotels, Restaurants & Leisure | 18,732 | 470,867 | |||||||
| bConvaTec Group PLC |
Health Care Equipment & Supplies | 17,787 | 50,275 | |||||||
| Croda International PLC |
Chemicals | 1,470 | 118,106 | |||||||
| Dechra Pharmaceuticals PLC |
Pharmaceuticals | 1,176 | 38,533 | |||||||
| Derwent London PLC |
Diversified REITs | 1,155 | 33,675 | |||||||
| Diageo PLC |
Beverages | 23,814 | 1,064,136 | |||||||
| Direct Line Insurance Group PLC |
Insurance | 14,427 | 24,528 | |||||||
| DS Smith PLC |
Containers & Packaging | 13,545 | 52,672 | |||||||
| Endeavour Mining PLC |
Metals & Mining | 1,932 | 47,729 | |||||||
| Ferguson PLC |
Trading Companies & Distributors | 2,226 | 293,124 | |||||||
| GSK PLC |
Pharmaceuticals | 42,840 | 756,934 | |||||||
| aHaleon PLC |
Personal Products | 53,151 | 211,614 | |||||||
| Halma PLC |
Electronic Equipment, Instruments & Components | 4,095 | 112,860 | |||||||
| Hargreaves Lansdown PLC |
Capital Markets | 4,011 | 39,645 | |||||||
| Hikma Pharmaceuticals PLC |
Pharmaceuticals | 1,785 | 36,968 | |||||||
| Howden Joinery Group PLC |
Trading Companies & Distributors | 5,796 | 50,022 | |||||||
| HSBC Holdings PLC |
Banks | 215,838 | 1,467,000 | |||||||
| IMI PLC |
Machinery | 2,709 | 51,382 | |||||||
| Imperial Brands PLC |
Tobacco | 9,954 | 229,414 | |||||||
| Informa PLC |
Media | 15,057 | 128,943 | |||||||
| InterContinental Hotels Group PLC |
Hotels, Restaurants & Leisure | 1,890 | 124,136 | |||||||
| Intermediate Capital Group PLC |
Capital Markets | 2,940 | 44,240 | |||||||
| aInternational Consolidated Airlines Group SA |
Airlines | 12,012 | 22,424 | |||||||
| Intertek Group PLC |
Professional Services | 1,743 | 87,348 | |||||||
| ITV PLC |
Media | 39,837 | 40,784 | |||||||
| J Sainsbury PLC |
Consumer Staples Distribution & Retail | 18,522 | 63,827 | |||||||
| JD Sports Fashion PLC |
Specialty Retail | 26,019 | 57,184 | |||||||
| Johnson Matthey PLC |
Chemicals | 1,974 | 48,412 | |||||||
| a,bJust Eat Takeaway.com NV |
Internet & Direct Marketing Retail | 2,142 | 40,795 | |||||||
| Kingfisher PLC |
Specialty Retail | 20,937 | 67,618 | |||||||
| Land Securities Group PLC |
Diversified REITs | 8,148 | 62,583 | |||||||
| Legal & General Group PLC |
Insurance | 63,567 | 187,769 | |||||||
| Lloyds Banking Group PLC |
Banks | 717,969 | 423,227 | |||||||
| London Stock Exchange Group PLC |
Capital Markets | 4,179 | 406,549 | |||||||
| M&G PLC |
Financial Services | 23,646 | 57,889 | |||||||
| Melrose Industries PLC |
Industrial Conglomerates | 43,638 | 89,837 | |||||||
| Mondi PLC |
Paper & Forest Products | 5,187 | 82,221 | |||||||
| National Grid PLC |
Multi-Utilities | 39,060 | 529,563 | |||||||
| NatWest Group PLC |
Banks | 58,044 | 189,182 | |||||||
| Next PLC |
Broadline Retail | 1,323 | 107,506 | |||||||
| a,cNMC Health PLC |
Health Care Providers & Services | 1,159 | — | |||||||
| aOcado Group PLC |
Consumer Staples Distribution & Retail | 6,573 | 43,480 | |||||||
| Pearson PLC |
Media | 7,686 | 80,246 | |||||||
| a,bPepco Group NV |
Broadline Retail | 1,554 | 14,970 | |||||||
| Persimmon PLC |
Household Durables | 3,360 | 52,180 | |||||||
| Phoenix Group Holdings PLC |
Insurance | 7,791 | 52,636 | |||||||
| Prudential PLC |
Insurance | 29,400 | 400,595 | |||||||
| Reckitt Benckiser Group PLC |
Household Products | 7,665 | 583,618 | |||||||
| RELX PLC |
Professional Services | 20,538 | 664,820 | |||||||
| Renishaw PLC |
Electronic Equipment, Instruments & Components | 357 | 18,071 | |||||||
| 218 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| United Kingdom (continued) |
||||||||||
| Rentokil Initial PLC |
Commercial Services & Supplies | 27,111 | $ | 198,313 | ||||||
| Rightmove PLC |
Interactive Media & Services | 8,694 | 60,521 | |||||||
| aRolls-Royce Holdings PLC |
Aerospace & Defense | 90,027 | 165,880 | |||||||
| RS GROUP PLC |
Trading Companies & Distributors | 5,145 | 58,144 | |||||||
| Sage Group PLC |
Software | 10,878 | 104,238 | |||||||
| Schroders PLC |
Capital Markets | 9,324 | 53,032 | |||||||
| Segro PLC |
Diversified REITs | 12,852 | 121,978 | |||||||
| Severn Trent PLC |
Water Utilities | 2,646 | 94,191 | |||||||
| Smith & Nephew PLC |
Health Care Equipment & Supplies | 9,387 | 130,226 | |||||||
| Smiths Group PLC |
Industrial Conglomerates | 3,801 | 80,671 | |||||||
| Spirax-Sarco Engineering PLC |
Machinery | 798 | 116,972 | |||||||
| SSE PLC |
Electric Utilities | 11,634 | 259,359 | |||||||
| St. James’s Place PLC |
Capital Markets | 5,754 | 86,157 | |||||||
| Standard Chartered PLC |
Banks | 25,410 | 192,971 | |||||||
| Tate & Lyle PLC |
Food Products | 4,284 | 41,560 | |||||||
| Taylor Wimpey PLC |
Household Durables | 38,409 | 56,490 | |||||||
| Tesco PLC |
Consumer Staples Distribution & Retail | 77,553 | 254,781 | |||||||
| Unilever PLC |
Personal Products | 26,922 | 1,394,755 | |||||||
| UNITE Group PLC |
Diversified REITs | 3,381 | 40,111 | |||||||
| United Utilities Group PLC |
Water Utilities | 7,245 | 94,956 | |||||||
| Vodafone Group PLC |
Wireless Telecommunication Services | 252,945 | 279,289 | |||||||
| Weir Group PLC |
Machinery | 2,772 | 63,716 | |||||||
| Whitbread PLC |
Hotels, Restaurants & Leisure | 2,142 | 79,110 | |||||||
| aWise PLC, Class A |
IT Services | 7,644 | 51,397 | |||||||
| WPP PLC |
Media | 11,256 | 133,413 | |||||||
|
|
|
|||||||||
| 21,398,859 | ||||||||||
|
|
|
|||||||||
| United States 0.7% |
||||||||||
| Holcim AG, Class B |
Construction Materials | 5,838 | 376,398 | |||||||
| Stellantis NV |
Automobiles | 22,260 | 404,749 | |||||||
|
|
|
|||||||||
| 781,147 | ||||||||||
|
|
|
|||||||||
| Total Common Stocks |
109,500,619 | |||||||||
|
|
|
|||||||||
| Preferred Stocks 0.6% |
||||||||||
| Germany 0.6% |
||||||||||
| dBayerische Motoren Werke AG, 6.172%, pfd. |
Automobiles | 609 | 62,393 | |||||||
| dFuchs Petrolub SE, 2.744%, pfd. |
Chemicals | 735 | 29,977 | |||||||
| dHenkel AG & Co. KGaA, 2.567%, pfd. |
Household Products | 1,785 | 139,747 | |||||||
| dSartorius AG, 0.372%, pfd. |
Health Care Equipment & Supplies | 273 | 114,785 | |||||||
| dSixt SE, 4.98%, pfd. |
Ground Transportation | 168 | 13,634 | |||||||
| dVolkswagen AG, 21.188%, pfd. |
Automobiles | 2,163 | 295,253 | |||||||
|
|
|
|||||||||
| 655,789 | ||||||||||
|
|
|
|||||||||
| franklintempleton.com | Annual Report |
219 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe ETF (continued)
| Industry | Shares | Value | ||||||||
| Preferred Stocks (continued) |
||||||||||
| Spain 0.0%† |
||||||||||
| aGrifols SA, Class B, pfd.,B |
Biotechnology | 2,730 | $ | 19,487 | ||||||
|
|
|
|||||||||
| Total Preferred Stocks |
675,276 | |||||||||
|
|
|
|||||||||
| Total Investments |
110,175,895 | |||||||||
| Other Assets, less Liabilities 1.2% |
1,382,253 | |||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 111,558,148 | ||||||||
|
|
|
|||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $2,717,273, representing 2.4% of net assets.
cFair valued using significant unobservable inputs. Note 8 regarding fair value measurements.
dVariable rate security. The rate shown represents the yield at period end.
At March 31, 2023, 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 | 18 | $ | 833,285 | 6/16/23 | $ | 29,100 | |||||||||||||
| FTSE 100 Index |
Long | 4 | 377,810 | 6/16/23 | 1,714 | |||||||||||||||
|
|
|
|||||||||||||||||||
| Total Futures Contracts |
$ | 30,814 | ||||||||||||||||||
|
|
|
|||||||||||||||||||
* As of year end.
See Note 7 regarding other derivative information.
See Abbreviations on page 355.
| 220 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Europe Hedged ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$27.12 | $25.72 | $19.15 | $22.81 | $23.88 | |||||||||||||||
| Income from investment operationsa: | ||||||||||||||||||||
| Net investment incomeb |
0.86 | 0.76 | 0.59 | 0.73 | 0.79 | |||||||||||||||
| Net realized and unrealized gains (losses) |
0.65 | 1.51 | 6.45 | (2.92 | ) | 0.62 | ||||||||||||||
| Total from investment operations |
1.51 | 2.27 | 7.04 | (2.19 | ) | 1.41 | ||||||||||||||
| Less distributions from: |
||||||||||||||||||||
| Net investment income |
(0.64 | ) | (0.87 | ) | (0.47 | ) | (1.47 | ) | (0.38 | ) | ||||||||||
| Net realized gains |
(4.39 | ) | — | — | — | (2.10 | ) | |||||||||||||
| Total distributions |
(5.03 | ) | (0.87 | ) | (0.47 | ) | (1.47 | ) | (2.48 | ) | ||||||||||
| Net asset value, end of year |
$23.60 | $27.12 | $25.72 | $19.15 | $22.81 | |||||||||||||||
| Total returnc |
7.53% | 8.75% | 36.92% | (10.67)% | 6.98% | |||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||
| Expenses before waiver and payments by affiliates |
0.15%e | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
| Expenses net of waiver and payments by affiliates |
0.15%e | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
| Net investment income |
3.44% | 2.77% | 2.58% | 3.10% | 3.28% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$14,163 | $21,695 | $15,429 | $3,831 | $4,563 | |||||||||||||||
| Portfolio turnover ratef |
22.30%g | 11.67%g | 12.87%g | 14.81%g | 26.81% | |||||||||||||||
|
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
dRatios are annualized for periods less than one year, except for non-recurring expenses, if any.
eExpense ratios are including non-recurring European Union tax reclaim contingent fees that were incurred by the Fund during the period. Without these fees, the gross and net expense ratios would have been 0.09% and 0.09%, respectively, for the year ended March 31, 2023.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
|
| |||||||||||||||||||
| gPortfolio turnover rate excluding cash creations was as follows: | 22.37% | 11.67% | 12.87% | 14.81% | — | |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
221 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE Europe Hedged ETF
| Industry | Shares | Value | ||||||||
| Common Stocks 98.4% |
||||||||||
| Australia 1.4% |
||||||||||
| Glencore PLC |
Metals & Mining | 17,226 | $ | 98,956 | ||||||
| Rio Tinto PLC |
Metals & Mining | 1,485 | 100,583 | |||||||
|
|
|
|||||||||
| 199,539 | ||||||||||
|
|
|
|||||||||
| Austria 0.4% |
||||||||||
| ANDRITZ AG |
Machinery | 99 | 6,701 | |||||||
| Erste Group Bank AG |
Banks | 453 | 15,011 | |||||||
| OMV AG |
Oil, Gas & Consumable Fuels | 195 | 8,953 | |||||||
| aRaiffeisen Bank International AG |
Banks | 177 | 2,723 | |||||||
| Telekom Austria AG |
Diversified Telecommunication Services | 207 | 1,563 | |||||||
| Verbund AG |
Electric Utilities | 93 | 8,083 | |||||||
| voestalpine AG |
Metals & Mining | 162 | 5,506 | |||||||
|
|
|
|||||||||
| 48,540 | ||||||||||
|
|
|
|||||||||
| Belgium 1.4% |
||||||||||
| Ackermans & van Haaren NV |
Financial Services | 30 | 4,954 | |||||||
| Ageas SA |
Insurance | 249 | 10,783 | |||||||
| Anheuser-Busch InBev SA |
Beverages | 1,176 | 78,359 | |||||||
| D’ieteren Group |
Distributors | 27 | 5,248 | |||||||
| Elia Group SA |
Electric Utilities | 51 | 6,738 | |||||||
| Groupe Bruxelles Lambert NV |
Financial Services | 138 | 11,770 | |||||||
| KBC Group NV |
Banks | 372 | 25,583 | |||||||
| Lotus Bakeries NV |
Food Products | 1 | 7,008 | |||||||
| Proximus SADP |
Diversified Telecommunication Services | 165 | 1,594 | |||||||
| Sofina SA |
Financial Services | 21 | 4,709 | |||||||
| Solvay SA |
Chemicals | 93 | 10,645 | |||||||
| UCB SA |
Pharmaceuticals | 165 | 14,779 | |||||||
| Umicore SA |
Chemicals | 279 | 9,460 | |||||||
| Warehouses De Pauw CVA |
Diversified REITs | 213 | 6,322 | |||||||
|
|
|
|||||||||
| 197,952 | ||||||||||
|
|
|
|||||||||
| Bermuda 0.1% |
||||||||||
| Hiscox Ltd. |
Insurance | 474 | 6,500 | |||||||
|
|
|
|||||||||
| Chile 0.1% |
||||||||||
| Antofagasta PLC |
Metals & Mining | 462 | 9,031 | |||||||
|
|
|
|||||||||
| Denmark 4.4% |
||||||||||
| AP Moller - Maersk AS, Class A |
Marine Transportation | 4 | 7,094 | |||||||
| AP Moller - Maersk AS, Class B |
Marine Transportation | 6 | 10,890 | |||||||
| Carlsberg AS, Class B |
Beverages | 126 | 19,534 | |||||||
| Chr Hansen Holding AS |
Chemicals | 141 | 10,714 | |||||||
| Coloplast AS, Class B |
Health Care Equipment & Supplies | 183 | 24,069 | |||||||
| aDanske Bank AS |
Banks | 888 | 17,873 | |||||||
| aDemant AS |
Health Care Equipment & Supplies | 126 | 4,414 | |||||||
| DSV AS |
Air Freight & Logistics | 240 | 46,431 | |||||||
| aGenmab AS |
Biotechnology | 90 | 33,984 | |||||||
| H Lundbeck AS |
Pharmaceuticals | 399 | 1,849 | |||||||
| aH Lundbeck AS, Class A |
Pharmaceuticals | 102 | 433 | |||||||
| Novo Nordisk AS, Class B |
Pharmaceuticals | 2,133 | 337,781 | |||||||
| Novozymes AS, Class B |
Chemicals | 270 | 13,818 | |||||||
| bOrsted AS |
Electric Utilities | 261 | 22,208 | |||||||
| Pandora AS |
Textiles, Apparel & Luxury Goods | 120 | 11,470 | |||||||
| ROCKWOOL AS, Class B |
Building Products | 9 | 2,206 | |||||||
| Royal Unibrew AS |
Beverages | 60 | 5,233 | |||||||
| Tryg AS |
Insurance | 486 | 10,625 | |||||||
| Vestas Wind Systems AS |
Electrical Equipment | 1,368 | 39,704 | |||||||
|
|
|
|||||||||
| 620,330 | ||||||||||
|
|
|
|||||||||
| 222 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Finland 1.9% |
||||||||||
| Elisa Oyj |
Diversified Telecommunication Services | 210 | $ | 12,676 | ||||||
| Fortum OYJ |
Electric Utilities | 576 | 8,833 | |||||||
| Huhtamaki OYJ |
Containers & Packaging | 132 | 4,905 | |||||||
| Kesko OYJ, Class B |
Consumer Staples Distribution & Retail | 345 | 7,423 | |||||||
| Kojamo Oyj |
Real Estate Management & Development | 279 | 3,289 | |||||||
| Kone OYJ, Class B |
Machinery | 441 | 22,998 | |||||||
| Metso Outotec OYJ |
Machinery | 825 | 8,999 | |||||||
| Neste OYJ |
Oil, Gas & Consumable Fuels | 567 | 27,986 | |||||||
| Nokia OYJ |
Communications Equipment | 7,665 | 37,604 | |||||||
| Nordea Bank Abp |
Banks | 4,716 | 50,433 | |||||||
| Orion OYJ, Class B |
Pharmaceuticals | 135 | 6,041 | |||||||
| Sampo Oyj, Class A |
Insurance | 633 | 29,902 | |||||||
| Stora Enso OYJ, Class R |
Paper & Forest Products | 783 | 10,191 | |||||||
| UPM-Kymmene OYJ |
Paper & Forest Products | 738 | 24,816 | |||||||
| Valmet Oyj |
Machinery | 225 | 7,294 | |||||||
| Wartsila OYJ Abp |
Machinery | 705 | 6,655 | |||||||
|
|
|
|||||||||
| 270,045 | ||||||||||
|
|
|
|||||||||
| France 17.3% |
||||||||||
| aAccor SA |
Hotels, Restaurants & Leisure | 255 | 8,303 | |||||||
| aAeroports de Paris |
Transportation Infrastructure | 45 | 6,436 | |||||||
| Air Liquide SA |
Chemicals | 699 | 117,104 | |||||||
| Airbus SE |
Aerospace & Defense | 762 | 102,060 | |||||||
| bALD SA |
Ground Transportation | 189 | 2,218 | |||||||
| Alstom SA |
Machinery | 414 | 11,281 | |||||||
| bAmundi SA |
Capital Markets | 84 | 5,298 | |||||||
| Arkema SA |
Chemicals | 87 | 8,583 | |||||||
| AXA SA |
Insurance | 2,550 | 78,030 | |||||||
| BioMerieux |
Health Care Equipment & Supplies | 60 | 6,323 | |||||||
| BNP Paribas SA |
Banks | 1,503 | 90,154 | |||||||
| Bollore SE |
Entertainment | 1,320 | 8,160 | |||||||
| Bouygues SA |
Construction & Engineering | 285 | 9,627 | |||||||
| Bureau Veritas SA |
Professional Services | 381 | 10,957 | |||||||
| Capgemini SE |
IT Services | 216 | 40,070 | |||||||
| Carrefour SA |
Consumer Staples Distribution & Retail | 819 | 16,577 | |||||||
| Cie de Saint-Gobain |
Building Products | 624 | 35,470 | |||||||
| Cie Generale des Etablissements Michelin SCA |
Automobile Components | 951 | 29,080 | |||||||
| Covivio SA |
Diversified REITs | 69 | 4,018 | |||||||
| Credit Agricole SA |
Banks | 1,638 | 18,504 | |||||||
| Danone SA |
Food Products | 831 | 51,742 | |||||||
| Dassault Aviation SA |
Aerospace & Defense | 33 | 6,547 | |||||||
| Dassault Systemes SE |
Software | 912 | 37,528 | |||||||
| Edenred |
IT Services | 339 | 20,087 | |||||||
| Eiffage SA |
Construction & Engineering | 96 | 10,403 | |||||||
| Engie SA |
Multi-Utilities | 2,265 | 35,864 | |||||||
| EssilorLuxottica SA |
Textiles, Apparel & Luxury Goods | 405 | 73,042 | |||||||
| Eurazeo SE |
Financial Services | 69 | 4,910 | |||||||
| Gecina SA |
Diversified REITs | 66 | 6,851 | |||||||
| Getlink SE |
Transportation Infrastructure | 492 | 8,120 | |||||||
| Hermes International |
Textiles, Apparel & Luxury Goods | 42 | 85,056 | |||||||
| ICADE |
Diversified REITs | 42 | 1,978 | |||||||
| Ipsen SA |
Pharmaceuticals | 48 | 5,293 | |||||||
| aJCDecaux SE |
Media | 93 | 1,951 | |||||||
| Kering SA |
Textiles, Apparel & Luxury Goods | 96 | 62,580 | |||||||
| Klepierre SA |
Diversified REITs | 255 | 5,776 | |||||||
| bLa Francaise des Jeux SAEM |
Hotels, Restaurants & Leisure | 120 | 5,005 | |||||||
| Legrand SA |
Electrical Equipment | 366 | 33,434 | |||||||
| L’Oreal SA |
Personal Products | 336 | 150,126 | |||||||
| franklintempleton.com | Annual Report |
223 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| France (continued) |
||||||||||
| LVMH Moet Hennessy Louis Vuitton SE |
Textiles, Apparel & Luxury Goods | 336 | $ | 308,246 | ||||||
| bNeoen SA |
Independent Power Producers & Energy Traders | 76 | 2,390 | |||||||
| Orange SA |
Diversified Telecommunication Services | 2,607 | 31,020 | |||||||
| Pernod Ricard SA |
Beverages | 279 | 63,261 | |||||||
| Publicis Groupe SA |
Media | 306 | 23,864 | |||||||
| Remy Cointreau SA |
Beverages | 33 | 6,023 | |||||||
| aRenault SA |
Automobiles | 273 | 11,152 | |||||||
| Rexel SA |
Trading Companies & Distributors | 342 | 8,156 | |||||||
| Safran SA |
Aerospace & Defense | 474 | 70,315 | |||||||
| Sanofi |
Pharmaceuticals | 1,485 | 161,725 | |||||||
| Sartorius Stedim Biotech |
Life Sciences Tools & Services | 33 | 10,110 | |||||||
| Schneider Electric SE |
Electrical Equipment | 726 | 121,217 | |||||||
| SCOR SE |
Insurance | 213 | 4,846 | |||||||
| SEB SA |
Household Durables | 42 | 4,782 | |||||||
| Societe Generale SA |
Banks | 1,020 | 23,033 | |||||||
| Sodexo SA |
Hotels, Restaurants & Leisure | 120 | 11,741 | |||||||
| aSOITEC |
Semiconductors & Semiconductor Equipment | 33 | 5,292 | |||||||
| Teleperformance |
Professional Services | 81 | 19,510 | |||||||
| Thales SA |
Aerospace & Defense | 135 | 19,999 | |||||||
| TotalEnergies SE |
Oil, Gas & Consumable Fuels | 3,102 | 183,202 | |||||||
| aUbisoft Entertainment SA |
Entertainment | 132 | 3,508 | |||||||
| aUnibail-Rodamco-Westfield |
Diversified REITs | 135 | 7,243 | |||||||
| Valeo SA |
Automobile Components | 324 | 6,657 | |||||||
| Veolia Environnement SA |
Multi-Utilities | 864 | 26,659 | |||||||
| Vinci SA |
Construction & Engineering | 678 | 77,875 | |||||||
| Vivendi SE |
Media | 975 | 9,851 | |||||||
| Wendel SE |
Financial Services | 39 | 4,125 | |||||||
| a,bWorldline SA |
IT Services | 333 | 14,150 | |||||||
|
|
|
|||||||||
| 2,454,498 | ||||||||||
|
|
|
|||||||||
| Germany 12.2% |
||||||||||
| adidas AG |
Textiles, Apparel & Luxury Goods | 228 | 40,322 | |||||||
| Allianz SE |
Insurance | 549 | 126,927 | |||||||
| BASF SE |
Chemicals | 1,248 | 65,571 | |||||||
| Bayer AG |
Pharmaceuticals | 1,341 | 85,551 | |||||||
| Bayerische Motoren Werke AG |
Automobiles | 432 | 47,376 | |||||||
| Bechtle AG |
IT Services | 117 | 5,592 | |||||||
| Beiersdorf AG |
Personal Products | 135 | 17,593 | |||||||
| Brenntag SE |
Trading Companies & Distributors | 210 | 15,788 | |||||||
| Carl Zeiss Meditec AG |
Health Care Equipment & Supplies | 51 | 7,092 | |||||||
| aCommerzbank AG |
Banks | 1,440 | 15,179 | |||||||
| Continental AG |
Automobile Components | 153 | 11,456 | |||||||
| bCovestro AG |
Chemicals | 240 | 9,942 | |||||||
| aCTS Eventim AG & Co. KGaA |
Entertainment | 84 | 5,243 | |||||||
| a Daimler Truck Holding AG |
Machinery | 570 | 19,266 | |||||||
| a,bDelivery Hero SE |
Internet & Direct Marketing Retail | 255 | 8,691 | |||||||
| Deutsche Bank AG |
Capital Markets | 2,805 | 28,512 | |||||||
| Deutsche Boerse AG |
Capital Markets | 249 | 48,546 | |||||||
| aDeutsche Lufthansa AG |
Airlines | 852 | 9,497 | |||||||
| Deutsche Post AG |
Air Freight & Logistics | 1,320 | 61,796 | |||||||
| Deutsche Telekom AG |
Diversified Telecommunication Services | 4,617 | 112,111 | |||||||
| Deutsche Wohnen SE |
Real Estate Management & Development | 57 | 1,120 | |||||||
| bDWS Group GmbH & Co. KGaA |
Capital Markets | 42 | 1,292 | |||||||
| E.ON SE |
Multi-Utilities | 3,021 | 37,745 | |||||||
| Evonik Industries AG |
Chemicals | 270 | 5,679 | |||||||
| Fielmann AG |
Specialty Retail | 39 | 1,626 | |||||||
| aFraport AG Frankfurt Airport Services Worldwide |
Transportation Infrastructure | 48 | 2,415 | |||||||
| Fresenius Medical Care AG & Co. KGaA |
Health Care Providers & Services | 270 | 11,470 | |||||||
| 224 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Germany (continued) |
||||||||||
| Fresenius SE & Co. KGaA |
Health Care Providers & Services | 558 | $ | 15,065 | ||||||
| Fuchs Petrolub SE |
Chemicals | 33 | 1,131 | |||||||
| GEA Group AG |
Machinery | 231 | 10,528 | |||||||
| Hannover Rueck SE |
Insurance | 78 | 15,283 | |||||||
| HeidelbergCement AG |
Construction Materials | 198 | 14,469 | |||||||
| Hella GmbH & Co. KGaA |
Automobile Components | 30 | 2,612 | |||||||
| aHelloFresh SE |
Internet & Direct Marketing Retail | 231 | 5,499 | |||||||
| Henkel AG & Co. KGaA |
Household Products | 141 | 10,264 | |||||||
| HOCHTIEF AG |
Construction & Engineering | 33 | 2,756 | |||||||
| Infineon Technologies AG |
Semiconductors & Semiconductor Equipment | 1,776 | 72,705 | |||||||
| KION Group AG |
Machinery | 96 | 3,714 | |||||||
| Knorr-Bremse AG |
Machinery | 93 | 6,192 | |||||||
| LANXESS AG |
Chemicals | 114 | 4,686 | |||||||
| LEG Immobilien SE |
Real Estate Management & Development | 105 | 5,759 | |||||||
| Mercedes-Benz Group AG |
Automobiles | 1,173 | 90,202 | |||||||
| Merck KGaA |
Pharmaceuticals | 174 | 32,430 | |||||||
| aMETRO AG |
Consumer Staples Distribution & Retail | 162 | 1,394 | |||||||
| MTU Aero Engines AG |
Aerospace & Defense | 72 | 18,039 | |||||||
| Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen |
Insurance | 192 | 67,273 | |||||||
| Nemetschek SE |
Software | 78 | 5,363 | |||||||
| Puma SE |
Textiles, Apparel & Luxury Goods | 132 | 8,154 | |||||||
| Rational AG |
Machinery | 7 | 4,692 | |||||||
| Rheinmetall AG |
Industrial Conglomerates | 60 | 17,835 | |||||||
| RWE AG |
Multi-Utilities | 855 | 36,822 | |||||||
| SAP SE |
Software | 1,512 | 190,653 | |||||||
| Sartorius AG |
Health Care Equipment & Supplies | 4 | 1,380 | |||||||
| bScout24 SE |
Interactive Media & Services | 105 | 6,240 | |||||||
| Siemens AG |
Industrial Conglomerates | 1,017 | 164,920 | |||||||
| aSiemens Energy AG |
Electrical Equipment | 612 | 13,458 | |||||||
| bSiemens Healthineers AG |
Health Care Equipment & Supplies | 375 | 21,601 | |||||||
| Sixt SE |
Ground Transportation | 18 | 2,398 | |||||||
| Symrise AG |
Chemicals | 180 | 19,595 | |||||||
| aTalanx AG |
Insurance | 75 | 3,479 | |||||||
| Telefonica Deutschland Holding AG |
Diversified Telecommunication Services | 1,158 | 3,569 | |||||||
| athyssenkrupp AG |
Metals & Mining | 714 | 5,132 | |||||||
| Traton SE |
Machinery | 81 | 1,587 | |||||||
| United Internet AG |
Diversified Telecommunication Services | 120 | 2,069 | |||||||
| Volkswagen AG |
Automobiles | 39 | 6,695 | |||||||
| Vonovia SE |
Real Estate Management & Development | 951 | 17,916 | |||||||
| Wacker Chemie AG |
Chemicals | 21 | 3,409 | |||||||
| a,bZalando SE |
Internet & Direct Marketing Retail | 303 | 12,687 | |||||||
|
|
|
|||||||||
| 1,733,053 | ||||||||||
|
|
|
|||||||||
| Ireland 1.5% |
||||||||||
| AIB Group PLC |
Banks | 1,509 | 6,135 | |||||||
| Bank of Ireland Group PLC |
Banks | 1,473 | 14,922 | |||||||
| CRH PLC |
Construction Materials | 1,020 | 51,475 | |||||||
| DCC PLC |
Industrial Conglomerates | 132 | 7,700 | |||||||
| Experian PLC |
Professional Services | 1,254 | 41,244 | |||||||
| aFlutter Entertainment PLC |
Hotels, Restaurants & Leisure | 240 | 43,414 | |||||||
| Glanbia PLC |
Food Products | 249 | 3,614 | |||||||
| Kerry Group PLC, Class A |
Food Products | 207 | 20,654 | |||||||
| Kingspan Group PLC |
Building Products | 207 | 14,177 | |||||||
| Smurfit Kappa Group PLC |
Containers & Packaging | 357 | 12,916 | |||||||
|
|
|
|||||||||
| 216,251 | ||||||||||
|
|
|
|||||||||
| franklintempleton.com | Annual Report |
225 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Isle Of Man 0.1% |
||||||||||
| Entain PLC |
Hotels, Restaurants & Leisure | 789 | $ | 12,258 | ||||||
|
|
|
|||||||||
| Italy 3.4% |
||||||||||
| A2A SpA |
Multi-Utilities | 2,160 | 3,450 | |||||||
| Amplifon SpA |
Health Care Providers & Services | 183 | 6,350 | |||||||
| Assicurazioni Generali SpA |
Insurance | 1,848 | 36,903 | |||||||
| Banca Mediolanum SpA |
Financial Services | 333 | 3,024 | |||||||
| Banco BPM SpA |
Banks | 1,746 | 6,838 | |||||||
| Buzzi Unicem SpA |
Construction Materials | 114 | 2,769 | |||||||
| Davide Campari-Milano NV |
Beverages | 660 | 8,067 | |||||||
| De’ Longhi SpA |
Household Durables | 96 | 2,197 | |||||||
| DiaSorin SpA |
Health Care Equipment & Supplies | 30 | 3,164 | |||||||
| Enel SpA |
Electric Utilities | 10,602 | 64,815 | |||||||
| Eni SpA |
Oil, Gas & Consumable Fuels | 3,015 | 42,275 | |||||||
| Ferrari NV |
Automobiles | 165 | 44,691 | |||||||
| FinecoBank Banca Fineco SpA |
Banks | 825 | 12,674 | |||||||
| Hera SpA |
Multi-Utilities | 1,107 | 3,129 | |||||||
| bInfrastrutture Wireless Italiane SpA |
Diversified Telecommunication Services | 441 | 5,807 | |||||||
| Interpump Group SpA |
Machinery | 105 | 5,892 | |||||||
| Intesa Sanpaolo SpA |
Banks | 22,116 | 56,886 | |||||||
| Italgas SpA |
Gas Utilities | 696 | 4,253 | |||||||
| Leonardo SpA |
Aerospace & Defense | 570 | 6,701 | |||||||
| Mediobanca Banca di Credito Finanziario SpA |
Banks | 867 | 8,730 | |||||||
| Moncler SpA |
Textiles, Apparel & Luxury Goods | 276 | 19,053 | |||||||
| a,bNexi SpA |
IT Services | 804 | 6,539 | |||||||
| bPirelli & C SpA |
Automobile Components | 687 | 3,450 | |||||||
| bPoste Italiane SpA |
Insurance | 618 | 6,319 | |||||||
| Prysmian SpA |
Electrical Equipment | 360 | 15,136 | |||||||
| Recordati Industria Chimica e Farmaceutica SpA |
Pharmaceuticals | 138 | 5,841 | |||||||
| Reply SpA |
IT Services | 33 | 4,141 | |||||||
| Snam SpA |
Gas Utilities | 3,021 | 16,046 | |||||||
| aTelecom Italia SpA |
Diversified Telecommunication Services | 13,335 | 4,407 | |||||||
| aTelecom Italia SpA |
Diversified Telecommunication Services | 7,782 | 2,508 | |||||||
| Tenaris SA |
Energy Equipment & Services | 639 | 9,095 | |||||||
| Terna - Rete Elettrica Nazionale |
Electric Utilities | 1,953 | 16,054 | |||||||
| UniCredit SpA |
Banks | 2,559 | 48,404 | |||||||
| UnipolSai Assicurazioni SpA |
Insurance | 480 | 1,214 | |||||||
|
|
|
|||||||||
| 486,822 | ||||||||||
|
|
|
|||||||||
| Luxembourg 0.2% |
||||||||||
| ArcelorMittal SA |
Metals & Mining | 645 | 19,530 | |||||||
| Eurofins Scientific SE |
Life Sciences Tools & Services | 168 | 11,251 | |||||||
| RTL Group SA |
Media | 48 | 2,369 | |||||||
| aSUSE SA |
Software | 63 | 1,144 | |||||||
|
|
|
|||||||||
| 34,294 | ||||||||||
|
|
|
|||||||||
| Mexico 0.0%† |
||||||||||
| Fresnillo PLC |
Metals & Mining | 237 | 2,186 | |||||||
|
|
|
|||||||||
| Netherlands 9.0% |
||||||||||
| Aalberts NV |
Machinery | 138 | 6,508 | |||||||
| bABN AMRO Bank NV |
Banks | 534 | 8,482 | |||||||
| a,bAdyen NV |
IT Services | 41 | 64,999 | |||||||
| Aegon NV |
Insurance | 2,268 | 9,736 | |||||||
| Akzo Nobel NV |
Chemicals | 237 | 18,534 | |||||||
| aArgenx SE |
Biotechnology | 75 | 27,762 | |||||||
| ASM International NV |
Semiconductors & Semiconductor Equipment | 63 | 25,455 | |||||||
| ASML Holding NV |
Semiconductors & Semiconductor Equipment | 549 | 372,907 | |||||||
| ASR Nederland NV |
Insurance | 189 | 7,544 | |||||||
| 226 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Netherlands (continued) |
||||||||||
| BE Semiconductor Industries NV |
Semiconductors & Semiconductor Equipment | 105 | $ | 9,138 | ||||||
| bCTP NV |
Real Estate Management & Development | 165 | 2,137 | |||||||
| bEuronext NV |
Capital Markets | 108 | 8,282 | |||||||
| aEXOR NV |
Financial Services | 141 | 11,618 | |||||||
| Heineken Holding NV |
Beverages | 165 | 15,157 | |||||||
| Heineken NV |
Beverages | 339 | 36,484 | |||||||
| IMCD NV |
Trading Companies & Distributors | 78 | 12,745 | |||||||
| ING Groep NV |
Banks | 4,941 | 58,674 | |||||||
| JDE Peet’s NV |
Food Products | 111 | 3,234 | |||||||
| Koninklijke Ahold Delhaize NV |
Consumer Staples Distribution & Retail | 1,299 | 44,442 | |||||||
| Koninklijke DSM NV |
Chemicals | 231 | 27,280 | |||||||
| Koninklijke KPN NV |
Diversified Telecommunication Services | 4,446 | 15,728 | |||||||
| Koninklijke Philips NV |
Health Care Equipment & Supplies | 1,200 | 21,950 | |||||||
| Koninklijke Vopak NV |
Oil, Gas & Consumable Fuels | 90 | 3,177 | |||||||
| NN Group NV |
Insurance | 393 | 14,287 | |||||||
| OCI NV |
Chemicals | 135 | 4,585 | |||||||
| Prosus NV |
Internet & Direct Marketing Retail | 1,008 | 78,784 | |||||||
| aQIAGEN NV |
Life Sciences Tools & Services | 297 | 13,523 | |||||||
| Randstad NV |
Professional Services | 150 | 8,898 | |||||||
| Shell PLC |
Oil, Gas & Consumable Fuels | 9,501 | 271,191 | |||||||
| bSignify NV |
Electrical Equipment | 168 | 5,593 | |||||||
| Universal Music Group NV |
Entertainment | 1,017 | 25,750 | |||||||
| Wolters Kluwer NV |
Professional Services | 342 | 43,232 | |||||||
|
|
|
|||||||||
| 1,277,816 | ||||||||||
|
|
|
|||||||||
| Nigeria 0.0%† |
||||||||||
| bAirtel Africa PLC |
Wireless Telecommunication Services | 1,425 | 1,876 | |||||||
|
|
|
|||||||||
| Norway 1.1% |
||||||||||
| aAdevinta ASA, Class B |
Interactive Media & Services | 369 | 2,616 | |||||||
| Aker ASA, Class A |
Financial Services | 33 | 2,117 | |||||||
| Aker BP ASA |
Oil, Gas & Consumable Fuels | 420 | 10,278 | |||||||
| a,bAutoStore Holdings Ltd. |
Machinery | 1,041 | 2,234 | |||||||
| DNB Bank ASA |
Banks | 1,392 | 24,901 | |||||||
| Equinor ASA |
Oil, Gas & Consumable Fuels | 1,260 | 35,936 | |||||||
| Gjensidige Forsikring ASA |
Insurance | 243 | 3,975 | |||||||
| Kongsberg Gruppen ASA |
Aerospace & Defense | 105 | 4,239 | |||||||
| Leroy Seafood Group ASA |
Food Products | 309 | 1,602 | |||||||
| Mowi ASA |
Food Products | 603 | 11,135 | |||||||
| aNordic Semiconductor ASA |
Semiconductors & Semiconductor Equipment | 225 | 3,427 | |||||||
| Norsk Hydro ASA |
Metals & Mining | 1,866 | 13,862 | |||||||
| Orkla ASA |
Food Products | 1,032 | 7,317 | |||||||
| Salmar ASA |
Food Products | 93 | 4,048 | |||||||
| Schibsted ASA, Class A |
Media | 99 | 1,671 | |||||||
| Schibsted ASA, Class B |
Media | 108 | 1,728 | |||||||
| Telenor ASA |
Diversified Telecommunication Services | 849 | 9,947 | |||||||
| TOMRA Systems ASA |
Commercial Services & Supplies | 312 | 5,243 | |||||||
| Var Energi ASA |
Oil, Gas & Consumable Fuels | 495 | 1,206 | |||||||
| Yara International ASA |
Chemicals | 216 | 9,361 | |||||||
|
|
|
|||||||||
| 156,843 | ||||||||||
|
|
|
|||||||||
| Poland 0.4% |
||||||||||
| a,bAllegro.eu SA |
Internet & Direct Marketing Retail | 534 | 3,632 | |||||||
| Bank Polska Kasa Opieki SA |
Banks | 204 | 4,047 | |||||||
| a,bDino Polska SA |
Consumer Staples Distribution & Retail | 63 | 5,719 | |||||||
| aInPost SA |
Air Freight & Logistics | 255 | 2,331 | |||||||
| KGHM Polska Miedz SA |
Metals & Mining | 180 | 5,108 | |||||||
| LPP SA |
Textiles, Apparel & Luxury Goods | 2 | 4,448 | |||||||
| franklintempleton.com | Annual Report |
227 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Poland (continued) |
||||||||||
| Polski Koncern Naftowy ORLEN SA |
Oil, Gas & Consumable Fuels | 792 | $ | 10,707 | ||||||
| Powszechna Kasa Oszczednosci Bank Polski SA |
Banks | 1,152 | 7,626 | |||||||
| Powszechny Zaklad Ubezpieczen SA |
Insurance | 807 | 6,571 | |||||||
| Santander Bank Polska SA |
Banks | 39 | 2,642 | |||||||
|
|
|
|||||||||
| 52,831 | ||||||||||
|
|
|
|||||||||
| Portugal 0.3% |
||||||||||
| EDP - Energias de Portugal SA |
Electric Utilities | 3,819 | 20,812 | |||||||
| Galp Energia SGPS SA, Class B |
Oil, Gas & Consumable Fuels | 696 | 7,909 | |||||||
| Jeronimo Martins SGPS SA |
Consumer Staples Distribution & Retail | 351 | 8,245 | |||||||
|
|
|
|||||||||
| 36,966 | ||||||||||
|
|
|
|||||||||
| Russia 0.0%† |
||||||||||
| aEvraz PLC |
Metals & Mining | 1,168 | — | |||||||
|
|
|
|||||||||
| Spain 3.9% |
||||||||||
| Acciona SA |
Electric Utilities | 33 | 6,622 | |||||||
| ACS Actividades de Construccion y Servicios SA |
Construction & Engineering | 286 | 9,120 | |||||||
| a,bAena SME SA |
Transportation Infrastructure | 93 | 15,045 | |||||||
| aAmadeus IT Group SA |
IT Services | 612 | 40,998 | |||||||
| Banco Bilbao Vizcaya Argentaria SA |
Banks | 8,217 | 58,662 | |||||||
| Banco Santander SA |
Banks | 22,329 | 83,112 | |||||||
| Bankinter SA |
Banks | 879 | 4,991 | |||||||
| CaixaBank SA |
Banks | 5,301 | 20,641 | |||||||
| bCellnex Telecom SA |
Diversified Telecommunication Services | 765 | 29,721 | |||||||
| Corp. ACCIONA Energias Renovables SA |
Independent Power Producers & Energy Traders | 75 | 2,914 | |||||||
| EDP Renovaveis SA |
Independent Power Producers & Energy Traders | 318 | 7,286 | |||||||
| Enagas SA |
Gas Utilities | 351 | 6,750 | |||||||
| Endesa SA |
Electric Utilities | 432 | 9,387 | |||||||
| Ferrovial SA |
Construction & Engineering | 651 | 19,160 | |||||||
| aGrifols SA |
Biotechnology | 441 | 4,364 | |||||||
| Iberdrola SA |
Electric Utilities | 8,136 | 101,520 | |||||||
| Industria de Diseno Textil SA |
Specialty Retail | 1,434 | 48,141 | |||||||
| Inmobiliaria Colonial Socimi SA |
Diversified REITs | 477 | 3,019 | |||||||
| Mapfre SA |
Insurance | 1,338 | 2,701 | |||||||
| Merlin Properties Socimi SA |
Diversified REITs | 495 | 4,335 | |||||||
| Naturgy Energy Group SA |
Gas Utilities | 195 | 5,879 | |||||||
| Red Electrica Corp. SA |
Electric Utilities | 579 | 10,191 | |||||||
| Repsol SA |
Oil, Gas & Consumable Fuels | 1,743 | 26,862 | |||||||
| Telefonica SA |
Diversified Telecommunication Services | 6,804 | 29,369 | |||||||
|
|
|
|||||||||
| 550,790 | ||||||||||
|
|
|
|||||||||
| Sweden 4.9% |
||||||||||
| Alfa Laval AB |
Machinery | 420 | 14,974 | |||||||
| Assa Abloy AB, Class B |
Building Products | 1,323 | 31,679 | |||||||
| Atlas Copco AB, Class A |
Machinery | 3,447 | 43,726 | |||||||
| Atlas Copco AB, Class B |
Machinery | 2,055 | 23,619 | |||||||
| Axfood AB |
Consumer Staples Distribution & Retail | 153 | 3,736 | |||||||
| Beijer Ref AB |
Trading Companies & Distributors | 432 | 7,570 | |||||||
| Boliden AB |
Metals & Mining | 381 | 14,984 | |||||||
| Castellum AB |
Real Estate Management & Development | 342 | 3,971 | |||||||
| Electrolux AB, Class B |
Household Durables | 282 | 3,424 | |||||||
| Epiroc AB, Class A |
Machinery | 846 | 16,790 | |||||||
| Epiroc AB, Class B |
Machinery | 513 | 8,729 | |||||||
| EQT AB |
Capital Markets | 462 | 9,383 | |||||||
| Essity AB, Class B |
Household Products | 828 | 23,667 | |||||||
| bEvolution AB |
Hotels, Restaurants & Leisure | 216 | 28,917 | |||||||
| aFastighets AB Balder, Class B, B |
Real Estate Management & Development | 858 | 3,517 | |||||||
| Getinge AB, Class B |
Health Care Equipment & Supplies | 297 | 7,238 | |||||||
| 228 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Sweden (continued) |
||||||||||
| H & M Hennes & Mauritz AB, Class B |
Specialty Retail | 900 | $ | 12,830 | ||||||
| Hexagon AB, Class B |
Electronic Equipment, Instruments & Components | 2,556 | 29,296 | |||||||
| Holmen AB, Class B |
Paper & Forest Products | 129 | 4,966 | |||||||
| Husqvarna AB, Class B |
Household Durables | 582 | 5,042 | |||||||
| Industrivarden AB, Class A |
Financial Services | 186 | 5,017 | |||||||
| Industrivarden AB, Class C |
Financial Services | 201 | 5,412 | |||||||
| Indutrade AB |
Machinery | 381 | 8,087 | |||||||
| Investment AB Latour, Class B |
Industrial Conglomerates | 207 | 4,204 | |||||||
| Investor AB, Class A |
Financial Services | 717 | 14,603 | |||||||
| Investor AB, Class B |
Financial Services | 2,481 | 49,299 | |||||||
| aKinnevik AB, Class B |
Financial Services | 348 | 5,185 | |||||||
| L E Lundbergforetagen AB, Class B |
Financial Services | 105 | 4,746 | |||||||
| Lifco AB, Class B |
Industrial Conglomerates | 303 | 6,516 | |||||||
| Nibe Industrier AB, Class B |
Building Products | 1,968 | 22,357 | |||||||
| Saab AB, Class B |
Aerospace & Defense | 120 | 7,302 | |||||||
| Sagax AB, Class B |
Real Estate Management & Development | 231 | 5,320 | |||||||
| Sagax AB, Class D |
Real Estate Management & Development | 165 | 417 | |||||||
| Sandvik AB |
Machinery | 1,467 | 31,096 | |||||||
| Securitas AB, Class B |
Commercial Services & Supplies | 648 | 5,767 | |||||||
| Skandinaviska Enskilda Banken AB, Class A |
Banks | 2,217 | 24,448 | |||||||
| Skandinaviska Enskilda Banken AB, Class C |
Banks | 30 | 384 | |||||||
| Skanska AB, Class B |
Construction & Engineering | 489 | 7,477 | |||||||
| SKF AB, Class B |
Machinery | 513 | 10,092 | |||||||
| SSAB AB, Class A |
Metals & Mining | 333 | 2,455 | |||||||
| SSAB AB, Class B |
Metals & Mining | 918 | 6,544 | |||||||
| Svenska Cellulosa AB SCA, Class B |
Paper & Forest Products | 795 | 10,461 | |||||||
| Svenska Handelsbanken AB, Class A |
Banks | 2,004 | 17,362 | |||||||
| Svenska Handelsbanken AB, Class B |
Banks | 60 | 643 | |||||||
| Sweco AB, Class B |
Construction & Engineering | 282 | 3,576 | |||||||
| Swedbank AB, Class A |
Banks | 1,392 | 22,841 | |||||||
| aSwedish Orphan Biovitrum AB |
Biotechnology | 249 | 5,799 | |||||||
| Tele2 AB, Class B |
Wireless Telecommunication Services | 777 | 7,737 | |||||||
| Telefonaktiebolaget LM Ericsson, Class A |
Communications Equipment | 72 | 460 | |||||||
| Telefonaktiebolaget LM Ericsson, Class B |
Communications Equipment | 4,089 | 23,896 | |||||||
| Telia Co. AB |
Diversified Telecommunication Services | 3,387 | 8,613 | |||||||
| Trelleborg AB, Class B |
Machinery | 312 | 8,873 | |||||||
| Volvo AB, Class A |
Machinery | 273 | 5,871 | |||||||
| Volvo AB, Class B |
Machinery | 2,061 | 42,504 | |||||||
| aVolvo Car AB, Class B |
Automobiles | 732 | 3,190 | |||||||
|
|
|
|||||||||
| 686,612 | ||||||||||
|
|
|
|||||||||
| Switzerland 14.5% |
||||||||||
| ABB Ltd. |
Electrical Equipment | 2,076 | 71,287 | |||||||
| Adecco Group AG |
Professional Services | 213 | 7,729 | |||||||
| Alcon, Inc. |
Health Care Equipment & Supplies | 627 | 44,406 | |||||||
| Bachem Holding AG, Class B |
Life Sciences Tools & Services | 39 | 3,902 | |||||||
| Baloise Holding AG |
Insurance | 60 | 9,353 | |||||||
| Banque Cantonale Vaudoise |
Banks | 39 | 3,684 | |||||||
| Barry Callebaut AG |
Food Products | 5 | 10,612 | |||||||
| Belimo Holding AG |
Building Products | 12 | 5,793 | |||||||
| BKW AG |
Electric Utilities | 24 | 3,778 | |||||||
| Chocoladefabriken Lindt & Spruengli AG |
Food Products | 3 | 35,466 | |||||||
| Cie Financiere Richemont SA, Class A |
Textiles, Apparel & Luxury Goods | 696 | 111,156 | |||||||
| Clariant AG |
Chemicals | 321 | 5,309 | |||||||
| Coca-Cola HBC AG |
Beverages | 261 | 7,142 | |||||||
| Credit Suisse Group AG |
Capital Markets | 4,275 | 3,849 | |||||||
| DKSH Holding AG |
Professional Services | 48 | 3,870 | |||||||
| Emmi AG |
Food Products | 3 | 3,015 | |||||||
| franklintempleton.com | Annual Report |
229 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Switzerland (continued) |
||||||||||
| EMS-Chemie Holding AG |
Chemicals | 9 | $ | 7,428 | ||||||
| aFlughafen Zurich AG |
Transportation Infrastructure | 27 | 4,951 | |||||||
| Geberit AG |
Building Products | 45 | 25,082 | |||||||
| Georg Fischer AG |
Machinery | 110 | 8,537 | |||||||
| Givaudan SA |
Chemicals | 11 | 35,798 | |||||||
| Helvetia Holding AG |
Insurance | 48 | 6,694 | |||||||
| Julius Baer Group Ltd. |
Capital Markets | 282 | 19,237 | |||||||
| Kuehne & Nagel International AG |
Marine Transportation | 69 | 20,537 | |||||||
| Logitech International SA |
Technology Hardware, Storage & Peripherals | 195 | 11,334 | |||||||
| Lonza Group AG |
Life Sciences Tools & Services | 102 | 61,119 | |||||||
| Nestle SA |
Food Products | 3,675 | 448,378 | |||||||
| Novartis AG |
Pharmaceuticals | 2,715 | 248,928 | |||||||
| Partners Group Holding AG |
Capital Markets | 30 | 28,136 | |||||||
| PSP Swiss Property AG |
Real Estate Management & Development | 63 | 7,172 | |||||||
| Roche Holding AG |
Pharmaceuticals | 948 | 270,790 | |||||||
| Roche Holding AG |
Pharmaceuticals | 39 | 11,740 | |||||||
| Schindler Holding AG, PC |
Machinery | 57 | 12,610 | |||||||
| Schindler Holding AG |
Machinery | 27 | 5,704 | |||||||
| SGS SA |
Professional Services | 8 | 17,610 | |||||||
| SIG Group AG |
Containers & Packaging | 447 | 11,508 | |||||||
| Sika AG |
Chemicals | 198 | 55,376 | |||||||
| Sonova Holding AG |
Health Care Equipment & Supplies | 69 | 20,287 | |||||||
| STMicroelectronics NV |
Semiconductors & Semiconductor Equipment | 864 | 45,954 | |||||||
| Straumann Holding AG |
Health Care Equipment & Supplies | 144 | 21,492 | |||||||
| Swatch Group AG |
Textiles, Apparel & Luxury Goods | 39 | 13,379 | |||||||
| Swatch Group AG |
Textiles, Apparel & Luxury Goods | 63 | 3,986 | |||||||
| Swiss Life Holding AG |
Insurance | 42 | 25,893 | |||||||
| Swiss Prime Site AG |
Real Estate Management & Development | 102 | 8,491 | |||||||
| Swiss Re AG |
Insurance | 393 | 40,369 | |||||||
| Swisscom AG |
Diversified Telecommunication Services | 35 | 22,344 | |||||||
| Tecan Group AG |
Life Sciences Tools & Services | 17 | 7,429 | |||||||
| Temenos AG |
Software | 75 | 5,195 | |||||||
| UBS Group AG |
Capital Markets | 3,903 | 82,414 | |||||||
| bVAT Group AG |
Machinery | 36 | 12,933 | |||||||
| Zurich Insurance Group AG |
Insurance | 201 | 96,303 | |||||||
|
|
|
|||||||||
| 2,055,489 | ||||||||||
|
|
|
|||||||||
| United Kingdom 19.2% |
||||||||||
| 3i Group PLC |
Capital Markets | 1,293 | 26,939 | |||||||
| abrdn PLC |
Capital Markets | 2,751 | 6,922 | |||||||
| Admiral Group PLC |
Insurance | 387 | 9,752 | |||||||
| Allfunds Group PLC |
Capital Markets | 405 | 2,675 | |||||||
| Anglo American PLC |
Metals & Mining | 1,647 | 54,536 | |||||||
| Ashtead Group PLC |
Trading Companies & Distributors | 597 | 36,598 | |||||||
| Associated British Foods PLC |
Food Products | 471 | 11,298 | |||||||
| AstraZeneca PLC |
Pharmaceuticals | 2,016 | 279,978 | |||||||
| bAuto Trader Group PLC |
Interactive Media & Services | 1,236 | 9,417 | |||||||
| Aviva PLC |
Insurance | 3,780 | 18,891 | |||||||
| B&M European Value Retail SA |
Broadline Retail | 1,320 | 7,868 | |||||||
| BAE Systems PLC |
Aerospace & Defense | 4,173 | 50,699 | |||||||
| Barclays PLC |
Banks | 21,567 | 38,880 | |||||||
| Barratt Developments PLC |
Household Durables | 1,317 | 7,596 | |||||||
| Beazley PLC |
Insurance | 921 | 6,804 | |||||||
| Berkeley Group Holdings PLC |
Household Durables | 144 | 7,473 | |||||||
| BP PLC |
Oil, Gas & Consumable Fuels | 24,147 | 152,507 | |||||||
| British American Tobacco PLC |
Tobacco | 3,057 | 107,366 | |||||||
| British Land Co. PLC |
Diversified REITs | 1,248 | 5,984 | |||||||
| BT Group PLC |
Diversified Telecommunication Services | 9,483 | 17,095 | |||||||
| 230 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| United Kingdom (continued) |
||||||||||
| Bunzl PLC |
Trading Companies & Distributors | 459 | $ | 17,349 | ||||||
| Burberry Group PLC |
Textiles, Apparel & Luxury Goods | 525 | 16,787 | |||||||
| Centrica PLC |
Multi-Utilities | 8,067 | 10,578 | |||||||
| CNH Industrial NV |
Machinery | 1,338 | 20,468 | |||||||
| Compass Group PLC |
Hotels, Restaurants & Leisure | 2,394 | 60,178 | |||||||
| bConvaTec Group PLC |
Health Care Equipment & Supplies | 2,178 | 6,156 | |||||||
| Croda International PLC |
Chemicals | 189 | 15,185 | |||||||
| Dechra Pharmaceuticals PLC |
Pharmaceuticals | 141 | 4,620 | |||||||
| Derwent London PLC |
Diversified REITs | 153 | 4,461 | |||||||
| Diageo PLC |
Beverages | 3,030 | 135,396 | |||||||
| Direct Line Insurance Group PLC |
Insurance | 1,884 | 3,203 | |||||||
| DS Smith PLC |
Containers & Packaging | 1,728 | 6,720 | |||||||
| Endeavour Mining PLC |
Metals & Mining | 243 | 6,003 | |||||||
| Ferguson PLC |
Trading Companies & Distributors | 282 | 37,134 | |||||||
| GSK PLC |
Pharmaceuticals | 5,454 | 96,366 | |||||||
| aHaleon PLC |
Personal Products | 6,813 | 27,125 | |||||||
| Halma PLC |
Electronic Equipment, Instruments & Components | 510 | 14,056 | |||||||
| Hargreaves Lansdown PLC |
Capital Markets | 501 | 4,952 | |||||||
| Hikma Pharmaceuticals PLC |
Pharmaceuticals | 228 | 4,722 | |||||||
| Howden Joinery Group PLC |
Trading Companies & Distributors | 765 | 6,602 | |||||||
| HSBC Holdings PLC |
Banks | 27,471 | 186,714 | |||||||
| IMI PLC |
Machinery | 372 | 7,056 | |||||||
| Imperial Brands PLC |
Tobacco | 1,263 | 29,109 | |||||||
| Informa PLC |
Media | 1,944 | 16,648 | |||||||
| InterContinental Hotels Group PLC |
Hotels, Restaurants & Leisure | 237 | 15,566 | |||||||
| Intermediate Capital Group PLC |
Capital Markets | 378 | 5,688 | |||||||
| a International Consolidated Airlines Group SA |
Airlines | 1,392 | 2,599 | |||||||
| Intertek Group PLC |
Professional Services | 219 | 10,975 | |||||||
| ITV PLC |
Media | 5,340 | 5,467 | |||||||
| J Sainsbury PLC |
Consumer Staples Distribution & Retail | 2,421 | 8,343 | |||||||
| JD Sports Fashion PLC |
Specialty Retail | 3,489 | 7,668 | |||||||
| Johnson Matthey PLC |
Chemicals | 243 | 5,960 | |||||||
| a,bJust Eat Takeaway.com NV |
Internet & Direct Marketing Retail | 288 | 5,485 | |||||||
| Kingfisher PLC |
Specialty Retail | 2,769 | 8,943 | |||||||
| Land Securities Group PLC |
Diversified REITs | 1,008 | 7,742 | |||||||
| Legal & General Group PLC |
Insurance | 8,208 | 24,245 | |||||||
| Lloyds Banking Group PLC |
Banks | 91,629 | 54,013 | |||||||
| London Stock Exchange Group PLC |
Capital Markets | 534 | 51,950 | |||||||
| M&G PLC |
Financial Services | 2,922 | 7,154 | |||||||
| Melrose Industries PLC |
Industrial Conglomerates | 5,463 | 11,247 | |||||||
| Mondi PLC |
Paper & Forest Products | 663 | 10,509 | |||||||
| National Grid PLC |
Multi-Utilities | 4,974 | 67,436 | |||||||
| NatWest Group PLC |
Banks | 7,332 | 23,897 | |||||||
| Next PLC |
Broadline Retail | 168 | 13,652 | |||||||
| aNMC Health PLC |
Health Care Providers & Services | 60 | — | |||||||
| aOcado Group PLC |
Consumer Staples Distribution & Retail | 762 | 5,041 | |||||||
| Pearson PLC |
Media | 981 | 10,242 | |||||||
| aPepco Group NV |
Broadline Retail | 225 | 2,167 | |||||||
| Persimmon PLC |
Household Durables | 426 | 6,616 | |||||||
| Phoenix Group Holdings PLC |
Insurance | 987 | 6,668 | |||||||
| Prudential PLC |
Insurance | 3,750 | 51,096 | |||||||
| Reckitt Benckiser Group PLC |
Household Products | 975 | 74,237 | |||||||
| RELX PLC |
Professional Services | 2,622 | 84,875 | |||||||
| Renishaw PLC |
Electronic Equipment, Instruments & Components | 45 | 2,278 | |||||||
| Rentokil Initial PLC |
Commercial Services & Supplies | 3,411 | 24,951 | |||||||
| Rightmove PLC |
Interactive Media & Services | 1,080 | 7,518 | |||||||
| aRolls-Royce Holdings PLC |
Aerospace & Defense | 11,364 | 20,939 | |||||||
| franklintempleton.com | Annual Report |
231 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| United Kingdom (continued) |
||||||||||
| RS GROUP PLC |
Trading Companies & Distributors | 621 | $ | 7,018 | ||||||
| Sage Group PLC |
Software | 1,392 | 13,339 | |||||||
| Schroders PLC |
Capital Markets | 1,209 | 6,876 | |||||||
| Segro PLC |
Diversified REITs | 1,662 | 15,774 | |||||||
| Severn Trent PLC |
Water Utilities | 348 | 12,388 | |||||||
| Smith & Nephew PLC |
Health Care Equipment & Supplies | 1,206 | 16,731 | |||||||
| Smiths Group PLC |
Industrial Conglomerates | 474 | 10,060 | |||||||
| Spirax-Sarco Engineering PLC |
Machinery | 99 | 14,512 | |||||||
| SSE PLC |
Electric Utilities | 1,476 | 32,905 | |||||||
| St. James’s Place PLC |
Capital Markets | 735 | 11,005 | |||||||
| Standard Chartered PLC |
Banks | 3,282 | 24,924 | |||||||
| Tate & Lyle PLC |
Food Products | 567 | 5,501 | |||||||
| Taylor Wimpey PLC |
Household Durables | 4,701 | 6,914 | |||||||
| Tesco PLC |
Consumer Staples Distribution & Retail | 9,768 | 32,090 | |||||||
| Unilever PLC |
Personal Products | 3,426 | 177,492 | |||||||
| UNITE Group PLC |
Diversified REITs | 429 | 5,090 | |||||||
| United Utilities Group PLC |
Water Utilities | 933 | 12,228 | |||||||
| Vodafone Group PLC |
Wireless Telecommunication Services | 32,193 | 35,546 | |||||||
| Weir Group PLC |
Machinery | 351 | 8,068 | |||||||
| Whitbread PLC |
Hotels, Restaurants & Leisure | 267 | 9,861 | |||||||
| aWise PLC, Class A |
IT Services | 1,023 | 6,878 | |||||||
| WPP PLC |
Media | 1,413 | 16,748 | |||||||
|
|
|
|||||||||
| 2,723,981 | ||||||||||
|
|
|
|||||||||
| United States 0.7% |
||||||||||
| Holcim AG, Class B |
Construction Materials | 744 | 47,968 | |||||||
| Stellantis NV |
Automobiles | 2,832 | 51,494 | |||||||
|
|
|
|||||||||
| 99,462 | ||||||||||
|
|
|
|||||||||
| Total Common Stocks |
13,933,965 | |||||||||
|
|
|
|||||||||
| Preferred Stocks 0.6% |
||||||||||
| Germany 0.6% |
||||||||||
| cBayerische Motoren Werke AG, 6.172%, pfd. |
Automobiles | 75 | 7,684 | |||||||
| cFuchs Petrolub SE, 2.744%, pfd. |
Chemicals | 96 | 3,916 | |||||||
| cHenkel AG & Co. KGaA, 2.567%, pfd. |
Household Products | 231 | 18,085 | |||||||
| cSartorius AG, 0.372%, pfd. |
Health Care Equipment & Supplies | 33 | 13,875 | |||||||
| cSixt SE, 4.98%, pfd. |
Ground Transportation | 21 | 1,704 | |||||||
| cVolkswagen AG, 21.188%, pfd. |
Automobiles | 273 | 37,265 | |||||||
|
|
|
|||||||||
| 82,529 | ||||||||||
|
|
|
|||||||||
| Spain 0.0%† |
||||||||||
| aGrifols SA, Class B, pfd.,B |
Biotechnology | 351 | 2,505 | |||||||
|
|
|
|||||||||
| Total Preferred Stocks |
85,034 | |||||||||
|
|
|
|||||||||
| Total Investments before Short-Term |
14,018,999 | |||||||||
|
|
|
|||||||||
| 232 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Industry | Shares | Value | ||||||||
| Short-Term Investments 0.0%† |
||||||||||
| Money Market Funds 0.0%† |
||||||||||
| United States 0.0%† |
||||||||||
| c,dInstitutional Fiduciary Trust - Money Market Portfolio, 4.47% |
Money Market Funds | 4,136 | $ | 4,136 | ||||||
|
|
|
|||||||||
| Total Short-Term Investments |
4,136 | |||||||||
|
|
|
|||||||||
| Total Investments (Cost $14,099,425) 99.0% |
14,023,135 | |||||||||
| Other Assets, less Liabilities 1.0% |
139,757 | |||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 14,162,892 | ||||||||
|
|
|
|||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $344,465, representing 2.4% of net assets.
cVariable rate security. The rate shown represents the yield at period end.
dSee Note 3(c) regarding investments in affiliated management investment companies.
At March 31, 2023 the Fund had the following forward exchange contracts outstanding. See Note 1(c).
| Forward Exchange Contracts | ||||||||||||||||||||||||||||
| Currency | Counterparty | Type | Quantity | Contract Amount |
Settlement Date |
Unrealized Appreciation |
Unrealized Depreciation |
|||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
| OTC Forward Exchange Contracts | ||||||||||||||||||||||||||||
| Danish Krone |
BOFA | 4,271,400 | $ | 609,997 | 4/04/23 | $ — | $ (12,969 | ) | ||||||||||||||||||||
| Danish Krone |
BOFA | 4,271,400 | 622,957 | 4/04/23 | 9 | — | ||||||||||||||||||||||
| Euro |
UBSW | 2,223,642 | 2,362,780 | 4/04/23 | — | (53,096 | ) | |||||||||||||||||||||
| Euro |
BOFA | 2,223,642 | 2,362,784 | 4/04/23 | — | (53,091 | ) | |||||||||||||||||||||
| Euro |
HSBK | 2,223,642 | 2,362,784 | 4/04/23 | — | (53,091 | ) | |||||||||||||||||||||
| Euro |
BOFA | 2,223,642 | 2,415,911 | 4/04/23 | — | (36 | ) | |||||||||||||||||||||
| Euro |
HSBK | 2,223,642 | 2,415,911 | 4/04/23 | — | (36 | ) | |||||||||||||||||||||
| Euro |
UBSW | 2,223,642 | 2,415,900 | 4/04/23 | — | (25 | ) | |||||||||||||||||||||
| Great British Pound |
UBSW | 2,882,000 | 3,491,114 | 4/04/23 | — | (72,335 | ) | |||||||||||||||||||||
| Great British Pound |
UBSW | 2,882,000 | 3,563,483 | 4/04/23 | — | (34 | ) | |||||||||||||||||||||
| Norwegian Krone |
BOFA | 1,743,300 | 166,458 | 4/04/23 | — | (2 | ) | |||||||||||||||||||||
| Norwegian Krone |
BOFA | 1,743,300 | 168,776 | 4/04/23 | 2,321 | — | ||||||||||||||||||||||
| Polish Zloty |
BOFA | 234,100 | 52,634 | 4/04/23 | — | (1,706 | ) | |||||||||||||||||||||
| Polish Zloty |
BOFA | 234,100 | 54,341 | 4/04/23 | — | (1 | ) | |||||||||||||||||||||
| Swedish Krona |
BOFA | 7,218,100 | 693,309 | 4/04/23 | — | (2,777 | ) | |||||||||||||||||||||
| Swedish Krona |
BOFA | 7,218,100 | 696,097 | 4/04/23 | — | (10 | ) | |||||||||||||||||||||
| Swiss Franc |
UBSW | 1,925,000 | 2,061,284 | 4/04/23 | — | (45,881 | ) | |||||||||||||||||||||
| Swiss Franc |
UBSW | 1,925,000 | 2,107,185 | 4/04/23 | — | (21 | ) | |||||||||||||||||||||
| Danish Krone |
BOFA | 4,306,300 | 629,171 | 5/02/23 | — | (38 | ) | |||||||||||||||||||||
| Euro |
BOFA | 2,195,672 | 2,389,343 | 5/03/23 | — | (25 | ) | |||||||||||||||||||||
| Euro |
HSBK | 2,195,672 | 2,389,365 | 5/03/23 | — | (3 | ) | |||||||||||||||||||||
| Euro |
UBSW | 2,195,672 | 2,389,365 | 5/03/23 | — | (3 | ) | |||||||||||||||||||||
| Great British Pound |
UBSW | 2,746,700 | 3,398,220 | 5/03/23 | 24 | — | ||||||||||||||||||||||
| Norwegian Krone |
BOFA | 1,667,400 | 159,417 | 5/03/23 | — | (6 | ) | |||||||||||||||||||||
| Swedish Krona |
BOFA | 7,130,000 | 688,729 | 5/03/23 | — | (2 | ) | |||||||||||||||||||||
| Swiss Franc |
UBSW | 1,882,900 | 2,067,449 | 5/03/23 | — | (62 | ) | |||||||||||||||||||||
| franklintempleton.com | Annual Report |
233 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Europe Hedged ETF (continued)
| Forward Exchange Contracts (continued) | ||||||||||||||||||||||||||||
| Currency | Counterparty | Type | Quantity | Contract Amount |
Settlement Date |
Unrealized Appreciation |
Unrealized Depreciation |
|||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
| OTC Forward Exchange Contracts (continued) |
|
|||||||||||||||||||||||||||
| Polish Zloty |
BOFA | 227,000 | $ 52,591 | 5/04/23 | $ — | $ (3 | ) | |||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
| Total Forward Exchange Contracts |
$2,354 | $(295,253 | ) | |||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
| Net unrealized appreciation (depreciation) |
|
$(292,899 | ) | |||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
At March 31, 2023, 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 | 3 | $138,881 | 6/16/23 | $2,816 | |||||||||||||||
*As of year end.
See Note 7 regarding other derivative information.
See Abbreviations on page 355.
| 234 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE France ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$28.82 | $28.44 | $19.34 | $23.86 | $25.33 | |||||||||||||||
| Income from investment operationsa: | ||||||||||||||||||||
| Net investment incomeb |
1.01 | 0.85 | 0.40 | 0.52 | 0.70 | |||||||||||||||
| Net realized and unrealized gains (losses) |
1.63 | 0.41 | 9.10 | (4.47 | ) | (1.48 | ) | |||||||||||||
| Total from investment operations |
2.64 | 1.26 | 9.50 | (3.95 | ) | (0.78 | ) | |||||||||||||
| Less distributions from net investment income |
(0.79 | ) | (0.88 | ) | (0.40 | ) | (0.57 | ) | (0.69 | ) | ||||||||||
| Net asset value, end of year |
$30.67 | $28.82 | $28.44 | $19.34 | $23.86 | |||||||||||||||
| Total returnc |
9.84% | 4.23% | 49.47% | (17.08)% | (3.07)% | |||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||
| Total expenses |
0.38%e | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
| Net investment income |
3.87% | 2.77% | 1.68% | 2.14% | 2.90% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$6,134 | $10,088 | $7,111 | $8,702 | $2,386 | |||||||||||||||
| Portfolio turnover ratef |
4.87%g | 5.94%g | 4.56%g | 2.60%g | 5.80% | |||||||||||||||
|
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund. bBased on average daily shares outstanding. cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. dRatios are annualized for periods less than one year, except for non-recurring expenses, if any. eExpense ratios are including non-recurring European Union tax reclaim contingent fees that were incurred by the Fund during the period. Without these fees, the gross and net expense ratios would have been 0.09% and 0.09%, respectively, for the year ended March 31, 2023. 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: | 4.87 | % | 5.94 | % | 4.56 | % | 2.60 | % | — | |||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
235 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE France ETF
| Industry | Shares | Value | ||||||||
| Common Stocks 98.6% |
||||||||||
| France 96.0% |
||||||||||
| aAccor SA |
Hotels, Restaurants & Leisure | 604 | $ | 19,667 | ||||||
| aAeroports de Paris |
Transportation Infrastructure | 108 | 15,447 | |||||||
| Air Liquide SA |
Chemicals | 1,676 | 280,781 | |||||||
| Airbus SE |
Aerospace & Defense | 1,828 | 244,838 | |||||||
| bALD SA |
Ground Transportation | 440 | 5,163 | |||||||
| Alstom SA |
Machinery | 992 | 27,030 | |||||||
| bAmundi SA |
Capital Markets | 184 | 11,605 | |||||||
| Arkema SA |
Chemicals | 212 | 20,914 | |||||||
| AXA SA |
Insurance | 6,132 | 187,638 | |||||||
| BioMerieux |
Health Care Equipment & Supplies | 140 | 14,754 | |||||||
| BNP Paribas SA |
Banks | 3,620 | 217,138 | |||||||
| Bollore SE |
Entertainment | 3,260 | 20,153 | |||||||
| Bouygues SA |
Construction & Engineering | 684 | 23,104 | |||||||
| Bureau Veritas SA |
Professional Services | 936 | 26,918 | |||||||
| Capgemini SE |
IT Services | 524 | 97,208 | |||||||
| Carrefour SA |
Consumer Staples Distribution & Retail | 1,940 | 39,267 | |||||||
| Cie de L’Odet SE |
Air Freight & Logistics | 1 | 1,554 | |||||||
| Cie de Saint-Gobain |
Building Products | 1,508 | 85,719 | |||||||
| Cie Generale des Etablissements Michelin SCA |
Automobile Components | 2,288 | 69,963 | |||||||
| Covivio SA |
Diversified REITs | 164 | 9,550 | |||||||
| Credit Agricole SA |
Banks | 3,968 | 44,826 | |||||||
| Danone SA |
Food Products | 2,000 | 124,529 | |||||||
| Dassault Aviation SA |
Aerospace & Defense | 76 | 15,077 | |||||||
| Dassault Systemes SE |
Software | 2,188 | 90,035 | |||||||
| Edenred |
IT Services | 820 | 48,589 | |||||||
| Eiffage SA |
Construction & Engineering | 240 | 26,007 | |||||||
| Engie SA |
Multi-Utilities | 5,448 | 86,263 | |||||||
| EssilorLuxottica SA |
Textiles, Apparel & Luxury Goods | 976 | 176,022 | |||||||
| Eurazeo SE |
Financial Services | 160 | 11,386 | |||||||
| Gecina SA |
Diversified REITs | 168 | 17,440 | |||||||
| Getlink SE |
Transportation Infrastructure | 1,144 | 18,880 | |||||||
| Hermes International |
Textiles, Apparel & Luxury Goods | 102 | 206,565 | |||||||
| ICADE |
Diversified REITs | 104 | 4,897 | |||||||
| Ipsen SA |
Pharmaceuticals | 112 | 12,351 | |||||||
| aJCDecaux SE |
Media | 236 | 4,951 | |||||||
| Kering SA |
Textiles, Apparel & Luxury Goods | 236 | 153,841 | |||||||
| Klepierre SA |
Diversified REITs | 628 | 14,226 | |||||||
| bLa Francaise des Jeux SAEM |
Hotels, Restaurants & Leisure | 288 | 12,012 | |||||||
| Legrand SA |
Electrical Equipment | 876 | 80,022 | |||||||
| L’Oreal SA |
Personal Products | 808 | 361,017 | |||||||
| LVMH Moet Hennessy Louis Vuitton SE |
Textiles, Apparel & Luxury Goods | 809 | 742,175 | |||||||
| bNeoen SA |
Independent Power Producers & Energy Traders | 200 | 6,291 | |||||||
| Orange SA |
Diversified Telecommunication Services | 6,292 | 74,867 | |||||||
| Pernod Ricard SA |
Beverages | 672 | 152,371 | |||||||
| Publicis Groupe SA |
Media | 740 | 57,709 | |||||||
| Remy Cointreau SA |
Beverages | 80 | 14,602 | |||||||
| aRenault SA |
Automobiles | 628 | 25,654 | |||||||
| Rexel SA |
Trading Companies & Distributors | 792 | 18,887 | |||||||
| Safran SA |
Aerospace & Defense | 1,144 | 169,705 | |||||||
| Sanofi |
Pharmaceuticals | 3,572 | 389,011 | |||||||
| Sartorius Stedim Biotech |
Life Sciences Tools & Services | 79 | 24,204 | |||||||
| Schneider Electric SE |
Electrical Equipment | 1,744 | 291,188 | |||||||
| SCOR SE |
Insurance | 488 | 11,102 | |||||||
| SEB SA |
Household Durables | 100 | 11,386 | |||||||
| Societe Generale SA |
Banks | 2,412 | 54,468 | |||||||
| Sodexo SA |
Hotels, Restaurants & Leisure | 284 | 27,788 | |||||||
| aSOITEC |
Semiconductors & Semiconductor Equipment | 84 | 13,470 | |||||||
| 236 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE France ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| France (continued) |
||||||||||
| Teleperformance |
Professional Services | 191 | $ | 46,005 | ||||||
| Thales SA |
Aerospace & Defense | 328 | 48,589 | |||||||
| TotalEnergies SE |
Oil, Gas & Consumable Fuels | 7,460 | 440,583 | |||||||
| aUbisoft Entertainment SA |
Entertainment | 312 | 8,291 | |||||||
| Valeo SA |
Automobile Components | 784 | 16,107 | |||||||
| Veolia Environnement SA |
Multi-Utilities | 2,088 | 64,426 | |||||||
| Vinci SA |
Construction & Engineering | 1,628 | 186,991 | |||||||
| Vivendi SE |
Media | 2,280 | 23,037 | |||||||
| Wendel SE |
Financial Services | 88 | 9,307 | |||||||
| a,bWorldline SA |
IT Services | 800 | 33,993 | |||||||
|
|
|
|||||||||
| 5,889,554 | ||||||||||
|
|
|
|||||||||
| Luxembourg 0.5% |
||||||||||
| Eurofins Scientific SE |
Life Sciences Tools & Services | 404 | 27,055 | |||||||
|
|
|
|||||||||
| Netherlands 0.3% |
||||||||||
| bEuronext NV |
Capital Markets | 268 | 20,551 | |||||||
|
|
|
|||||||||
| Switzerland 1.8% |
||||||||||
| STMicroelectronics NV |
Semiconductors & Semiconductor Equipment | 2,076 | 110,417 | |||||||
|
|
|
|||||||||
| Total Investments |
6,047,577 | |||||||||
| Other Assets, less Liabilities 1.4% |
86,204 | |||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 6,133,781 | ||||||||
|
|
|
|||||||||
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $89,615, representing 1.5% of net assets.
At March 31, 2023, 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 | ||||||||||||||||||||
| CAC40 10 Euro |
1 | $79,680 | 4/21/23 | $2,470 | ||||||||||||||||
*As of year end.
See Note 7 regarding other derivative information.
See Abbreviations on page 355.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
237 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Germany ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$22.37 | $25.98 | $16.73 | $20.70 | $24.60 | |||||||||||||||
| Income from investment operationsa: | ||||||||||||||||||||
| Net investment incomeb |
0.60 | 0.70 | 0.61 | 0.52 | 0.53 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(0.20 | ) | (3.63 | ) | 9.29 | (3.92 | ) | (3.83 | ) | |||||||||||
| Total from investment operations |
0.40 | (2.93 | ) | 9.90 | (3.40 | ) | (3.30 | ) | ||||||||||||
| Less distributions from net investment income |
(0.67 | ) | (0.68 | ) | (0.65 | ) | (0.57 | ) | (0.60 | ) | ||||||||||
| Net asset value, end of year |
$22.10 | $22.37 | $25.98 | $16.73 | $20.70 | |||||||||||||||
| Total returnc |
2.41% | (11.68)% | 59.79% | (17.00)% | (13.72)% | |||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||
| Total expenses |
0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
| Net investment income |
3.11% | 2.73% | 2.66% | 2.46% | 2.44% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$17,683 | $16,775 | $9,093 | $4,182 | $4,140 | |||||||||||||||
| Portfolio turnover ratee |
4.21%f | 6.70%f | 5.79%f | 5.74%f | 10.75% | |||||||||||||||
|
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund. bBased on average daily shares outstanding. cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. dRatios are annualized for periods less than one year. ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”). |
| |||||||||||||||||||
| fPortfolio turnover rate excluding cash creations was as follows: | 4.21% | 6.70% | 5.79% | 5.74% | — | |||||||||||||||
| 238 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE Germany ETF
| Industry | Shares | Value | ||||||||
| Common Stocks 95.4% |
||||||||||
| Germany 94.5% |
||||||||||
| adidas AG |
Textiles, Apparel & Luxury Goods | 2,208 | $ | 390,490 | ||||||
| Allianz SE |
Insurance | 5,296 | 1,224,417 | |||||||
| BASF SE |
Chemicals | 12,064 | 633,851 | |||||||
| Bayer AG |
Pharmaceuticals | 12,960 | 826,801 | |||||||
| Bayerische Motoren Werke AG |
Automobiles | 4,176 | 457,966 | |||||||
| Bechtle AG |
IT Services | 1,088 | 51,999 | |||||||
| Beiersdorf AG |
Personal Products | 1,312 | 170,979 | |||||||
| Brenntag SE |
Trading Companies & Distributors | 2,048 | 153,973 | |||||||
| Carl Zeiss Meditec AG |
Health Care Equipment & Supplies | 480 | 66,752 | |||||||
| aCommerzbank AG |
Banks | 13,728 | 144,703 | |||||||
| Continental AG |
Automobile Components | 1,424 | 106,626 | |||||||
| bCovestro AG |
Chemicals | 2,336 | 96,772 | |||||||
| aCTS Eventim AG & Co. KGaA |
Entertainment | 768 | 47,936 | |||||||
| aDaimler Truck Holding AG |
Machinery | 5,536 | 187,114 | |||||||
| a,bDelivery Hero SE |
Internet & Direct Marketing Retail | 2,464 | 83,978 | |||||||
| Deutsche Bank AG |
Capital Markets | 26,704 | 271,442 | |||||||
| Deutsche Boerse AG |
Capital Markets | 2,416 | 471,032 | |||||||
| aDeutsche Lufthansa AG |
Airlines | 7,872 | 87,749 | |||||||
| Deutsche Post AG |
Air Freight & Logistics | 12,752 | 596,987 | |||||||
| Deutsche Telekom AG |
Diversified Telecommunication Services | 44,592 | 1,082,790 | |||||||
| Deutsche Wohnen SE |
Real Estate Management & Development | 672 | 13,207 | |||||||
| bDWS Group GmbH & Co. KGaA |
Capital Markets | 448 | 13,784 | |||||||
| E.ON SE |
Multi-Utilities | 29,184 | 364,630 | |||||||
| Evonik Industries AG |
Chemicals | 2,512 | 52,837 | |||||||
| Fielmann AG |
Specialty Retail | 320 | 13,343 | |||||||
| aFraport AG Frankfurt Airport Services Worldwide |
Transportation Infrastructure | 464 | 23,345 | |||||||
| Fresenius Medical Care AG & Co. KGaA |
Health Care Providers & Services | 2,672 | 113,507 | |||||||
| Fresenius SE & Co. KGaA |
Health Care Providers & Services | 5,376 | 145,143 | |||||||
| Fuchs Petrolub SE |
Chemicals | 448 | 15,356 | |||||||
| GEA Group AG |
Machinery | 2,160 | 98,445 | |||||||
| Hannover Rueck SE |
Insurance | 800 | 156,753 | |||||||
| HeidelbergCement AG |
Construction Materials | 1,904 | 139,134 | |||||||
| Hella GmbH & Co. KGaA |
Automobile Components | 304 | 26,472 | |||||||
| aHelloFresh SE |
Internet & Direct Marketing Retail | 2,160 | 51,417 | |||||||
| Henkel AG & Co. KGaA |
Household Products | 1,328 | 96,668 | |||||||
| HOCHTIEF AG |
Construction & Engineering | 272 | 22,713 | |||||||
| Infineon Technologies AG |
Semiconductors & Semiconductor Equipment | 17,168 | 702,814 | |||||||
| KION Group AG |
Machinery | 944 | 36,522 | |||||||
| Knorr-Bremse AG |
Machinery | 864 | 57,523 | |||||||
| LANXESS AG |
Chemicals | 1,136 | 46,690 | |||||||
| LEG Immobilien SE |
Real Estate Management & Development | 976 | 53,528 | |||||||
| Mercedes-Benz Group AG |
Automobiles | 11,072 | 851,425 | |||||||
| Merck KGaA |
Pharmaceuticals | 1,712 | 319,083 | |||||||
| aMETRO AG |
Consumer Staples Distribution & Retail | 1,728 | 14,869 | |||||||
| MTU Aero Engines AG |
Aerospace & Defense | 704 | 176,377 | |||||||
| Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen |
Insurance | 1,840 | 644,699 | |||||||
| Nemetschek SE |
Software | 704 | 48,400 | |||||||
| Puma SE |
Textiles, Apparel & Luxury Goods | 1,312 | 81,050 | |||||||
| Rational AG |
Machinery | 64 | 42,902 | |||||||
| Rheinmetall AG |
Industrial Conglomerates | 576 | 171,218 | |||||||
| RWE AG |
Multi-Utilities | 8,320 | 358,316 | |||||||
| SAP SE |
Software | 14,608 | 1,841,972 | |||||||
| Sartorius AG |
Health Care Equipment & Supplies | 32 | 11,038 | |||||||
| bScout24 SE |
Interactive Media & Services | 1,024 | 60,855 | |||||||
| Siemens AG |
Industrial Conglomerates | 9,824 | 1,593,094 | |||||||
| franklintempleton.com | Annual Report |
239 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Germany ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Germany (continued) |
||||||||||
| aSiemens Energy AG |
Electrical Equipment | 6,208 | $ | 136,512 | ||||||
| bSiemens Healthineers AG |
Health Care Equipment & Supplies | 3,648 | 210,138 | |||||||
| Sixt SE |
Ground Transportation | 176 | 23,443 | |||||||
| Symrise AG |
Chemicals | 1,712 | 186,372 | |||||||
| Talanx AG |
Insurance | 720 | 33,402 | |||||||
| Telefonica Deutschland Holding AG |
Diversified Telecommunication Services | 11,728 | 36,149 | |||||||
| thyssenkrupp AG |
Metals & Mining | 6,416 | 46,118 | |||||||
| Traton SE |
Machinery | 656 | 12,850 | |||||||
| United Internet AG |
Diversified Telecommunication Services | 1,136 | 19,587 | |||||||
| Volkswagen AG |
Automobiles | 384 | 65,917 | |||||||
| Vonovia SE |
Real Estate Management & Development | 9,312 | 175,429 | |||||||
| Wacker Chemie AG |
Chemicals | 192 | 31,165 | |||||||
| a,bZalando SE |
Internet & Direct Marketing Retail | 2,912 | 121,931 | |||||||
|
|
|
|||||||||
| 16,712,499 | ||||||||||
|
|
|
|||||||||
| Luxembourg 0.2% |
||||||||||
| RTL Group SA |
Media | 496 | 24,487 | |||||||
| aSUSE SA |
Software | 512 | 9,295 | |||||||
|
|
|
|||||||||
| 33,782 | ||||||||||
|
|
|
|||||||||
| Netherlands 0.7% |
||||||||||
| aQIAGEN NV |
Life Sciences Tools & Services | 2,896 | 131,864 | |||||||
|
|
|
|||||||||
| Total Common Stocks (Cost $18,187,050) |
. | 16,878,145 | ||||||||
|
|
|
|||||||||
| Preferred Stocks 4.6% |
||||||||||
| Germany 4.6% |
||||||||||
| cBayerische Motoren Werke AG, 6.172%, pfd. |
Automobiles | 768 | 78,683 | |||||||
| cFuchs Petrolub SE, 2.744%, pfd. |
Chemicals | 912 | 37,196 | |||||||
| cHenkel AG & Co. KGaA, 2.567%, pfd. |
Household Products | 2,224 | 174,116 | |||||||
| cSartorius AG, 0.372%, pfd. |
Health Care Equipment & Supplies | 320 | 134,546 | |||||||
| cSixt SE, 4.98%, pfd. |
Ground Transportation | 224 | 18,180 | |||||||
| cVolkswagen AG, 21.188%, pfd. |
Automobiles | 2,656 | 362,548 | |||||||
|
|
|
|||||||||
| Total Preferred Stocks (Cost $1,027,645) |
805,269 | |||||||||
|
|
|
|||||||||
| Total Investments (Cost $19,214,695) 100.0% |
17,683,414 | |||||||||
| Other Assets, less Liabilities 0.0%† |
(201 | ) | ||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 17,683,213 | ||||||||
|
|
|
|||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $587,458, representing 3.3% of net assets.
cVariable rate security. The rate shown represents the yield at period end.
| 240 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Hong Kong ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$23.43 | $28.10 | $20.58 | $26.82 | $26.17 | |||||||||||||||
| Income from investment operationsa: | ||||||||||||||||||||
| Net investment incomeb |
0.77 | 0.74 | 0.72 | 0.77 | 0.66 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(2.03 | ) | (4.72 | ) | 7.61 | (6.25 | ) | 0.59 | ||||||||||||
| Total from investment operations |
(1.26 | ) | (3.98 | ) | 8.33 | (5.48 | ) | 1.25 | ||||||||||||
| Less distributions from net investment income |
(0.83 | ) | (0.69 | ) | (0.81 | ) | (0.76 | ) | (0.60 | ) | ||||||||||
| Net asset value, end of year |
$21.34 | $23.43 | $28.10 | $20.58 | $26.82 | |||||||||||||||
| Total returnc |
(5.39)% | (14.41)% | 41.14% | (20.90)% | 4.97% | |||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||
| Total expenses |
0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
| Net investment income |
3.60% | 2.79% | 2.99% | 3.10% | 2.67% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$17,069 | $17,573 | $16,862 | $15,433 | $20,118 | |||||||||||||||
| Portfolio turnover ratee |
9.00%f | 9.91%f | 14.84%f | 5.99%f | 5.33% | |||||||||||||||
|
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
dRatios are annualized for periods less than one year.
ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
|
| |||||||||||||||||||
| fPortfolio turnover rate excluding cash creations was as follows: | 8.84% | 9.74% | 14.84% | 5.99% | — | |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
241 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE Hong Kong ETF
| Industry | Shares | Value | ||||||||
| Common Stocks 99.8% |
||||||||||
| Cambodia 0.3% |
||||||||||
| aNagaCorp Ltd. |
Hotels, Restaurants & Leisure | 58,378 | $ | 45,513 | ||||||
|
|
|
|||||||||
| China 9.8% |
||||||||||
| aAAC Technologies Holdings, Inc., Class H |
Electronic Equipment, Instruments & Components | 26,500 | 65,356 | |||||||
| BOC Hong Kong Holdings Ltd. |
Banks | 140,000 | 436,054 | |||||||
| bBudweiser Brewing Co. APAC Ltd., Class H |
Beverages | 65,600 | 200,144 | |||||||
| aChina Travel International Investment Hong Kong Ltd., Class A |
Hotels, Restaurants & Leisure | 96,000 | 19,689 | |||||||
| Chow Tai Fook Jewellery Group Ltd., Class A |
Specialty Retail | 67,200 | 133,374 | |||||||
| bESR Group Ltd., Class H |
Real Estate Management & Development | 76,800 | 137,752 | |||||||
| aHUTCHMED China Ltd. |
Pharmaceuticals | 20,000 | 52,612 | |||||||
| Kerry Logistics Network Ltd. |
Air Freight & Logistics | 10,500 | 16,318 | |||||||
| Lenovo Group Ltd. |
Technology Hardware, Storage & Peripherals | 288,000 | 311,849 | |||||||
| aMMG Ltd. |
Metals & Mining | 96,000 | 28,127 | |||||||
| Nexteer Automotive Group Ltd. |
Automobile Components | 32,000 | 20,178 | |||||||
| aShangri-La Asia Ltd. |
Hotels, Restaurants & Leisure | 42,000 | 39,379 | |||||||
| SITC International Holdings Co. Ltd. |
Marine Transportation | 46,000 | 98,798 | |||||||
| Want Want China Holdings Ltd. |
Food Products | 168,000 | 108,077 | |||||||
|
|
|
|||||||||
| 1,667,707 | ||||||||||
|
|
|
|||||||||
| Hong Kong 77.1% |
||||||||||
| AIA Group Ltd. |
Insurance | 318,800 | 3,356,559 | |||||||
| ASMPT Ltd., Class A |
Semiconductors & Semiconductor Equipment | 12,000 | 118,778 | |||||||
| Bank of East Asia Ltd., Class A |
Banks | 36,800 | 46,786 | |||||||
| Cafe de Coral Holdings Ltd., Class A |
Hotels, Restaurants & Leisure | 12,000 | 15,898 | |||||||
| aCathay Pacific Airways Ltd., Class A |
Airlines | 40,000 | 38,472 | |||||||
| Champion REIT, Class A |
Diversified REITs | 80,000 | 34,344 | |||||||
| CK Asset Holdings Ltd. |
Real Estate Management & Development | 75,500 | 458,293 | |||||||
| CK Infrastructure Holdings Ltd., Class A |
Electric Utilities | 22,700 | 123,477 | |||||||
| CLP Holdings Ltd. |
Electric Utilities | 63,500 | 458,659 | |||||||
| Dah Sing Banking Group Ltd., Class A |
Banks | 16,000 | 12,250 | |||||||
| Dah Sing Financial Holdings Ltd., Class H |
Banks | 6,400 | 16,428 | |||||||
| DFI Retail Group Holdings Ltd., Class A |
Consumer Staples Distribution & Retail | 12,000 | 36,360 | |||||||
| Guotai Junan International Holdings Ltd. |
Capital Markets | 96,000 | 7,827 | |||||||
| aHaitong International Securities Group Ltd. |
Capital Markets | 120,000 | 9,936 | |||||||
| Hang Lung Group Ltd. |
Real Estate Management & Development | 33,000 | 58,265 | |||||||
| Hang Lung Properties Ltd. |
Real Estate Management & Development | 72,000 | 134,645 | |||||||
| Hang Seng Bank Ltd. |
Banks | 28,000 | 398,423 | |||||||
| Henderson Land Development Co. Ltd. |
Real Estate Management & Development | 50,000 | 172,931 | |||||||
| Hong Kong & China Gas Co. Ltd. |
Gas Utilities | 424,000 | 373,230 | |||||||
| Hong Kong Exchanges & Clearing Ltd. |
Capital Markets | 49,250 | 2,184,581 | |||||||
| Hongkong Land Holdings Ltd. |
Real Estate Management & Development | 43,200 | 189,648 | |||||||
| Huabao International Holdings Ltd. |
Chemicals | 37,000 | 17,298 | |||||||
| Hutchison Telecommunications Hong Kong Holdings Ltd. |
Diversified Telecommunication Services | 48,000 | 7,582 | |||||||
| Hysan Development Co. Ltd. |
Real Estate Management & Development | 24,000 | 68,179 | |||||||
| Jardine Matheson Holdings Ltd. |
Industrial Conglomerates | 7,610 | 369,618 | |||||||
| Johnson Electric Holdings Ltd. |
Electrical Equipment | 13,500 | 15,306 | |||||||
| Kerry Properties Ltd. |
Real Estate Management & Development | 24,000 | 61,300 | |||||||
| Link REIT |
Diversified REITs | 98,020 | 630,579 | |||||||
| Man Wah Holdings Ltd. |
Household Durables | 57,600 | 47,474 | |||||||
| aMelco International Development Ltd. |
Hotels, Restaurants & Leisure | 32,000 | 37,300 | |||||||
| MTR Corp. Ltd. |
Ground Transportation | 56,000 | 270,014 | |||||||
| New World Development Co. Ltd. |
Real Estate Management & Development | 54,000 | 144,803 | |||||||
| NWS Holdings Ltd. |
Industrial Conglomerates | 56,000 | 50,151 | |||||||
| Orient Overseas International Ltd. |
Marine Transportation | 5,050 | 96,626 | |||||||
| PCCW Ltd. |
Diversified Telecommunication Services | 160,000 | 79,899 | |||||||
| Power Assets Holdings Ltd. |
Electric Utilities | 53,000 | 284,244 | |||||||
| 242 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Hong Kong ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Hong Kong (continued) |
||||||||||
| Sino Land Co. Ltd. |
Real Estate Management & Development | 146,900 | $ | 198,737 | ||||||
| Sun Hung Kai Properties Ltd. |
Real Estate Management & Development | 54,966 | 770,229 | |||||||
| aSuper Hi International Holding Ltd. |
Hotels, Restaurants & Leisure | 6,000 | 15,073 | |||||||
| Swire Pacific Ltd., Class A |
Real Estate Management & Development | 16,500 | 126,746 | |||||||
| Swire Pacific Ltd., Class B |
Real Estate Management & Development | 35,000 | 43,293 | |||||||
| Swire Properties Ltd. |
Real Estate Management & Development | 41,000 | 105,504 | |||||||
| Techtronic Industries Co. Ltd. |
Household Durables | 51,000 | 551,258 | |||||||
| aUnited Energy Group Ltd. |
Oil, Gas & Consumable Fuels | 288,000 | 34,120 | |||||||
| Vitasoy International Holdings Ltd. |
Food Products | 32,000 | 61,962 | |||||||
| VTech Holdings Ltd. |
Communications Equipment | 6,400 | 38,278 | |||||||
| bWH Group Ltd. |
Food Products | 300,000 | 178,855 | |||||||
| Wharf Holdings Ltd. |
Real Estate Management & Development | 37,523 | 85,849 | |||||||
| Wharf Real Estate Investment Co. Ltd. |
Real Estate Management & Development | 60,571 | 347,996 | |||||||
| Xinyi Glass Holdings Ltd. |
Automobile Components | 80,152 | 143,560 | |||||||
| Yue Yuen Industrial Holdings Ltd. |
Textiles, Apparel & Luxury Goods | 28,000 | 39,450 | |||||||
|
|
|
|||||||||
| 13,167,073 | ||||||||||
|
|
|
|||||||||
| Indonesia 0.2% |
||||||||||
| First Pacific Co. Ltd. |
Financial Services | 96,000 | 30,818 | |||||||
|
|
|
|||||||||
| Italy 0.8% |
||||||||||
| PRADA SpA |
Textiles, Apparel & Luxury Goods | 20,000 | 141,784 | |||||||
|
|
|
|||||||||
| Luxembourg 0.3% |
||||||||||
| L’Occitane International SA |
Specialty Retail | 18,000 | 44,943 | |||||||
|
|
|
|||||||||
| Macau 6.0% |
||||||||||
| aGalaxy Entertainment Group Ltd. |
Hotels, Restaurants & Leisure | 83,300 | 556,575 | |||||||
| aMGM China Holdings Ltd. |
Hotels, Restaurants & Leisure | 28,800 | 35,588 | |||||||
| a Sands China Ltd. |
Hotels, Restaurants & Leisure | 92,800 | 322,733 | |||||||
| aSJM Holdings Ltd. |
Hotels, Restaurants & Leisure | 96,000 | 47,939 | |||||||
| aWynn Macau Ltd. |
Hotels, Restaurants & Leisure | 57,600 | 56,793 | |||||||
|
|
|
|||||||||
| 1,019,628 | ||||||||||
|
|
|
|||||||||
| Singapore 0.3% |
||||||||||
| bBOC Aviation Ltd., Class A |
Trading Companies & Distributors | 8,000 | 61,809 | |||||||
|
|
|
|||||||||
| Taiwan 0.1% |
||||||||||
| a,bFIT Hon Teng Ltd. |
Electronic Equipment, Instruments & Components | 48,000 | 11,251 | |||||||
|
|
|
|||||||||
| United Kingdom 3.7% |
||||||||||
| CK Hutchison Holdings Ltd., Class A |
Real Estate Management & Development | 103,000 | 638,998 | |||||||
|
|
|
|||||||||
| United States 1.2% |
||||||||||
| bJS Global Lifestyle Co. Ltd. |
Household Durables | 48,000 | 49,285 | |||||||
| a,bSamsonite International SA |
Textiles, Apparel & Luxury Goods | 50,400 | 155,695 | |||||||
|
|
|
|||||||||
| 204,980 | ||||||||||
|
|
|
|||||||||
| Total Investments (Cost $18,872,342) 99.8% |
17,034,504 | |||||||||
| Other Assets, less Liabilities 0.2% |
34,369 | |||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 17,068,873 | ||||||||
|
|
|
|||||||||
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $794,791, representing 4.7% of net assets.
| franklintempleton.com | Annual Report |
243 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Hong Kong ETF (continued)
At March 31, 2023, 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 |
1 | $26,091 | 4/27/23 | $1,064 | ||||||||||||||||
*As of year end.
See Note 7 regarding other derivative information.
See Abbreviations on page 355.
| 244 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE India ETF
| Year Ended March 31, |
||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$31.34 | $27.70 | $15.98 | $23.36 | $22.74 | |||||||||||||||
| Income from investment operationsa: | ||||||||||||||||||||
| Net investment incomeb |
0.28 | 0.27 | 0.20 | 0.26 | 0.29 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(3.92 | ) | 4.09 | 11.70 | (7.43 | ) | 0.53 | |||||||||||||
| Total from investment operations |
(3.64 | ) | 4.36 | 11.90 | (7.17 | ) | 0.82 | |||||||||||||
| Less distributions from net investment income |
(0.21 | ) | (0.72 | ) | (0.18 | ) | (0.21 | ) | (0.20 | ) | ||||||||||
| Net asset value, end of year |
$27.49 | $31.34 | $27.70 | $15.98 | $23.36 | |||||||||||||||
| Total returnc |
(11.65)% | 15.75% | 74.87% | (30.98)% | 3.66% | |||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||
| Total expenses |
0.19% | 0.19% | 0.19% | 0.19% | 0.19% | |||||||||||||||
| Net investment income |
0.98% | 0.86% | 0.89% | 1.20% | 1.33% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$98,977 | $50,140 | $23,544 | $8,790 | $7,007 | |||||||||||||||
| Portfolio turnover ratee |
6.73%f | 10.73%f | 23.48%f | 36.55%f | 8.03% | |||||||||||||||
|
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
dRatios are annualized for periods less than one year.
ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
|
| |||||||||||||||||||
| fPortfolio turnover rate excluding cash creations was as follows: | 6.23% | 8.16% | 16.91% | 6.83% | — | |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
245 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE India ETF
| Industry | Shares | Value | ||||||||
| Common Stocks 100.1% |
||||||||||
| India 100.1% |
||||||||||
| 3M India Ltd. |
Industrial Conglomerates | 288 | $ | 80,474 | ||||||
| Aarti Industries Ltd. |
Chemicals | 19,656 | 123,929 | |||||||
| ABB India Ltd. |
Electrical Equipment | 5,400 | 221,115 | |||||||
| ACC Ltd. |
Construction Materials | 8,568 | 173,815 | |||||||
| Adani Enterprises Ltd. |
Trading Companies & Distributors | 27,504 | 585,823 | |||||||
| aAdani Green Energy Ltd. |
Independent Power Producers & Energy Traders | 40,032 | 429,218 | |||||||
| Adani Ports & Special Economic Zone Ltd. |
Transportation Infrastructure | 81,576 | 627,237 | |||||||
| aAdani Power Ltd. |
Independent Power Producers & Energy Traders | 97,272 | 226,780 | |||||||
| Adani Total Gas Ltd. |
Gas Utilities | 27,936 | 294,971 | |||||||
| aAdani Transmission Ltd. |
Electric Utilities | 25,488 | 307,984 | |||||||
| aAdani Wilmar Ltd. |
Food Products | 15,912 | 78,580 | |||||||
| aAditya Birla Capital Ltd. |
Financial Services | 45,288 | 84,616 | |||||||
| Alkem Laboratories Ltd. |
Pharmaceuticals | 2,520 | 104,136 | |||||||
| Ambuja Cements Ltd. |
Construction Materials | 69,192 | 307,768 | |||||||
| APL Apollo Tubes Ltd. |
Metals & Mining | 17,208 | 252,385 | |||||||
| Apollo Hospitals Enterprise Ltd. |
Health Care Providers & Services | 10,008 | 524,972 | |||||||
| Ashok Leyland Ltd. |
Machinery | 144,432 | 244,638 | |||||||
| Asian Paints Ltd. |
Chemicals | 45,432 | 1,526,691 | |||||||
| Astral Ltd. |
Building Products | 12,000 | 195,224 | |||||||
| bAU Small Finance Bank Ltd. |
Banks | 32,544 | 229,361 | |||||||
| Aurobindo Pharma Ltd. |
Pharmaceuticals | 27,000 | 170,215 | |||||||
| a,bAvenue Supermarts Ltd. |
Consumer Staples Distribution & Retail | 14,976 | 619,769 | |||||||
| Axis Bank Ltd. |
Banks | 229,104 | 2,393,281 | |||||||
| Bajaj Auto Ltd. |
Automobiles | 6,840 | 323,325 | |||||||
| Bajaj Finance Ltd. |
Consumer Finance | 23,760 | 1,623,873 | |||||||
| Bajaj Finserv Ltd. |
Financial Services | 38,520 | 593,625 | |||||||
| Bajaj Holdings & Investment Ltd. |
Financial Services | 2,664 | 191,904 | |||||||
| Balkrishna Industries Ltd. |
Automobile Components | 8,136 | 193,192 | |||||||
| a,bBandhan Bank Ltd. |
Banks | 78,768 | 187,617 | |||||||
| Bank of Baroda |
Banks | 105,408 | 216,569 | |||||||
| Bank of India |
Banks | 76,752 | 69,717 | |||||||
| Bata India Ltd. |
Textiles, Apparel & Luxury Goods | 6,048 | 104,380 | |||||||
| Bayer CropScience Ltd. |
Chemicals | 1,296 | 64,304 | |||||||
| Berger Paints India Ltd. |
Chemicals | 24,264 | 171,744 | |||||||
| Bharat Electronics Ltd. |
Aerospace & Defense | 329,760 | 391,423 | |||||||
| Bharat Forge Ltd. |
Automobile Components | 25,416 | 238,272 | |||||||
| Bharat Heavy Electricals Ltd. |
Electrical Equipment | 128,016 | 109,117 | |||||||
| Bharat Petroleum Corp. Ltd. |
Oil, Gas & Consumable Fuels | 100,656 | 421,694 | |||||||
| Bharti Airtel Ltd. |
Wireless Telecommunication Services | 14,760 | 65,859 | |||||||
| Bharti Airtel Ltd. |
Wireless Telecommunication Services | 232,848 | 2,122,145 | |||||||
| Biocon Ltd. |
Biotechnology | 46,224 | 116,063 | |||||||
| Bosch Ltd. |
Automobile Components | 864 | 203,639 | |||||||
| Britannia Industries Ltd. |
Food Products | 11,952 | 628,581 | |||||||
| Canara Bank |
Banks | 36,720 | 127,095 | |||||||
| Castrol India Ltd. |
Chemicals | 48,888 | 66,001 | |||||||
| aCG Power & Industrial Solutions Ltd. |
Electrical Equipment | 70,200 | 256,302 | |||||||
| Cholamandalam Investment & Finance Co. Ltd. |
Consumer Finance | 40,536 | 375,506 | |||||||
| Cipla Ltd. |
Pharmaceuticals | 51,552 | 564,872 | |||||||
| Coal India Ltd. |
Oil, Gas & Consumable Fuels | 209,808 | 545,438 | |||||||
| Coforge Ltd. |
IT Services | 4,248 | 197,150 | |||||||
| Colgate-Palmolive India Ltd. |
Personal Products | 13,392 | 245,629 | |||||||
| Container Corp. Of India Ltd. |
Ground Transportation | 27,648 | 195,209 | |||||||
| Coromandel International Ltd. |
Chemicals | 10,800 | 115,547 | |||||||
| Cummins India Ltd. |
Machinery | 13,608 | 269,834 | |||||||
| Dabur India Ltd. |
Personal Products | 58,176 | 385,728 | |||||||
| Dalmia Bharat Ltd. |
Construction Materials | 8,208 | 196,580 | |||||||
| Deepak Nitrite Ltd. |
Chemicals | 7,560 | 169,501 | |||||||
| 246 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE India ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| India (continued) |
||||||||||
| Divi’s Laboratories Ltd. |
Life Sciences Tools & Services | 12,816 | $ | 440,289 | ||||||
| Dixon Technologies India Ltd. |
Household Durables | 3,528 | 122,832 | |||||||
| DLF Ltd. |
Real Estate Management & Development | 62,208 | 270,004 | |||||||
| bDr Lal PathLabs Ltd. |
Health Care Providers & Services | 3,456 | 76,877 | |||||||
| Dr Reddy’s Laboratories Ltd. |
Pharmaceuticals | 12,168 | 684,448 | |||||||
| Eicher Motors Ltd. |
Automobiles | 13,968 | 501,196 | |||||||
| Emami Ltd. |
Personal Products | 20,952 | 91,410 | |||||||
| Embassy Office Parks REIT |
Diversified REITs | 61,344 | 233,015 | |||||||
| Exide Industries Ltd. |
Automobile Components | 45,936 | 99,465 | |||||||
| Federal Bank Ltd. |
Banks | 157,032 | 252,795 | |||||||
| aFSN E-Commerce Ventures Ltd. |
Specialty Retail | 136,440 | 206,281 | |||||||
| GAIL India Ltd. |
Gas Utilities | 265,194 | 339,308 | |||||||
| bGeneral Insurance Corp. of India |
Insurance | 10,944 | 17,798 | |||||||
| GlaxoSmithKline Pharmaceuticals Ltd. |
Pharmaceuticals | 4,392 | 70,797 | |||||||
| Glenmark Pharmaceuticals Ltd. |
Pharmaceuticals | 15,552 | 87,939 | |||||||
| aGMR Airports Infrastructure Ltd. |
Construction & Engineering | 247,032 | 121,889 | |||||||
| aGodrej Consumer Products Ltd. |
Personal Products | 36,720 | 432,580 | |||||||
| aGodrej Industries Ltd. |
Chemicals | 8,280 | 40,688 | |||||||
| a Godrej Properties Ltd. |
Real Estate Management & Development | 8,928 | 112,009 | |||||||
| Grasim Industries Ltd. |
Construction Materials | 38,664 | 768,128 | |||||||
| Gujarat Fluorochemicals Ltd. |
Chemicals | 4,032 | 148,176 | |||||||
| Gujarat Gas Ltd. |
Gas Utilities | 20,232 | 113,146 | |||||||
| Havells India Ltd. |
Electrical Equipment | 24,120 | 348,817 | |||||||
| HCL Technologies Ltd. |
IT Services | 109,368 | 1,444,244 | |||||||
| bHDFC Asset Management Co. Ltd. |
Capital Markets | 7,920 | 164,587 | |||||||
| bHDFC Life Insurance Co. Ltd. |
Insurance | 99,360 | 603,541 | |||||||
| Hero MotoCorp Ltd. |
Automobiles | 13,176 | 376,341 | |||||||
| Hindalco Industries Ltd. |
Metals & Mining | 142,056 | 700,665 | |||||||
| Hindustan Aeronautics Ltd. |
Aerospace & Defense | 9,504 | 315,838 | |||||||
| Hindustan Petroleum Corp. Ltd. |
Oil, Gas & Consumable Fuels | 61,200 | 176,341 | |||||||
| Hindustan Unilever Ltd. |
Household Products | 89,352 | 2,783,712 | |||||||
| Hindustan Zinc Ltd. |
Metals & Mining | 23,256 | 83,012 | |||||||
| Honeywell Automation India Ltd. |
Electronic Equipment, Instruments & Components | 224 | 99,173 | |||||||
| Housing Development Finance Corp. Ltd. |
Financial Services | 176,544 | 5,640,085 | |||||||
| ICICI Bank Ltd. |
Banks | 157,608 | 1,682,373 | |||||||
| bICICI Lombard General Insurance Co. Ltd. |
Insurance | 24,264 | 315,765 | |||||||
| bICICI Prudential Life Insurance Co. Ltd. |
Insurance | 38,376 | 203,455 | |||||||
| aIDBI Bank Ltd. |
Banks | 57,384 | 31,421 | |||||||
| aIDFC First Bank Ltd. |
Banks | 327,024 | 219,057 | |||||||
| Indian Bank |
Banks | 19,944 | 70,025 | |||||||
| Indian Hotels Co. Ltd. |
Hotels, Restaurants & Leisure | 83,376 | 329,060 | |||||||
| Indian Oil Corp. Ltd. |
Oil, Gas & Consumable Fuels | 413,208 | 391,676 | |||||||
| Indian Railway Catering & Tourism Corp. Ltd. |
Commercial Services & Supplies | 30,240 | 210,768 | |||||||
| bIndian Railway Finance Corp. Ltd. |
Financial Services | 180,360 | 58,377 | |||||||
| Indraprastha Gas Ltd. |
Gas Utilities | 35,280 | 184,036 | |||||||
| Indus Towers Ltd. |
Diversified Telecommunication Services | 89,352 | 155,475 | |||||||
| Info Edge India Ltd. |
Interactive Media & Services | 7,632 | 345,793 | |||||||
| Infosys Ltd. |
IT Services | 357,768 | 6,216,346 | |||||||
| a,bInterGlobe Aviation Ltd. |
Airlines | 12,456 | 289,588 | |||||||
| Ipca Laboratories Ltd. |
Pharmaceuticals | 13,896 | 137,020 | |||||||
| ITC Ltd. |
Tobacco | 298,152 | 1,391,310 | |||||||
| Jindal Steel & Power Ltd. |
Metals & Mining | 39,096 | 259,839 | |||||||
| JSW Energy Ltd. |
Independent Power Producers & Energy Traders | 38,664 | 113,312 | |||||||
| JSW Steel Ltd. |
Metals & Mining | 100,944 | 845,187 | |||||||
| Jubilant Foodworks Ltd. |
Hotels, Restaurants & Leisure | 36,288 | 194,328 | |||||||
| Kansai Nerolac Paints Ltd. |
Chemicals | 13,392 | 63,031 | |||||||
| Kotak Mahindra Bank Ltd. |
Banks | 10,008 | 211,023 | |||||||
| franklintempleton.com | Annual Report |
247 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE India ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| India (continued) |
||||||||||
| L&T Finance Holdings Ltd. |
Financial Services | 89,136 | $ | 88,992 | ||||||
| bL&T Technology Services Ltd. |
Professional Services | 2,592 | 106,558 | |||||||
| Larsen & Toubro Ltd. |
Construction & Engineering | 69,408 | 1,827,795 | |||||||
| bLaurus Labs Ltd. |
Pharmaceuticals | 39,024 | 139,106 | |||||||
| LIC Housing Finance Ltd. |
Financial Services | 30,384 | 121,543 | |||||||
| Linde India Ltd. |
Chemicals | 2,160 | 105,916 | |||||||
| bLTIMindtree Ltd. |
IT Services | 9,257 | 536,125 | |||||||
| Lupin Ltd. |
Pharmaceuticals | 23,904 | 188,597 | |||||||
| Macrotech Developers Ltd. |
Real Estate Management & Development | 11,304 | 127,960 | |||||||
| Mahindra & Mahindra Financial Services Ltd. |
Consumer Finance | 59,256 | 167,026 | |||||||
| Mahindra & Mahindra Ltd. |
Automobiles | 92,736 | 1,307,495 | |||||||
| aMangalore Refinery & Petrochemicals Ltd. |
Oil, Gas & Consumable Fuels | 22,464 | 14,364 | |||||||
| Marico Ltd. |
Personal Products | 52,272 | 305,176 | |||||||
| Maruti Suzuki India Ltd. |
Automobiles | 13,320 | 1,343,978 | |||||||
| aMax Financial Services Ltd. |
Insurance | 24,624 | 190,262 | |||||||
| aMax Healthcare Institute Ltd. |
Health Care Providers & Services | 74,520 | 399,973 | |||||||
| Mphasis Ltd. |
IT Services | 8,208 | 179,351 | |||||||
| MRF Ltd. |
Automobile Components | 273 | 279,194 | |||||||
| Muthoot Finance Ltd. |
Consumer Finance | 10,728 | 127,921 | |||||||
| Nestle India Ltd. |
Food Products | 3,600 | 863,155 | |||||||
| NHPC Ltd. |
Independent Power Producers & Energy Traders | 228,528 | 111,786 | |||||||
| bNippon Life India Asset Management Ltd. |
Capital Markets | 16,488 | 42,142 | |||||||
| NMDC Ltd. |
Metals & Mining | 115,848 | 157,246 | |||||||
| NTPC Ltd. |
Independent Power Producers & Energy Traders | 476,928 | 1,016,154 | |||||||
| Oberoi Realty Ltd. |
Real Estate Management & Development | 12,024 | 123,280 | |||||||
| Oil & Natural Gas Corp. Ltd. |
Oil, Gas & Consumable Fuels | 371,592 | 682,980 | |||||||
| Oil India Ltd. |
Oil, Gas & Consumable Fuels | 33,408 | 102,298 | |||||||
| One 97 Communications Ltd. |
IT Services | 14,904 | 115,485 | |||||||
| Oracle Financial Services Software Ltd. |
Software | 2,232 | 88,640 | |||||||
| Page Industries Ltd. |
Textiles, Apparel & Luxury Goods | 586 | 270,268 | |||||||
| Patanjali Foods Ltd. |
Food Products | 6,984 | 82,364 | |||||||
| aPB Fintech Ltd. |
Insurance | 35,928 | 279,310 | |||||||
| Persistent Systems Ltd. |
IT Services | 4,896 | 274,610 | |||||||
| Petronet LNG Ltd. |
Oil, Gas & Consumable Fuels | 75,024 | 208,916 | |||||||
| PI Industries Ltd. |
Chemicals | 8,136 | 299,987 | |||||||
| Pidilite Industries Ltd. |
Chemicals | 15,336 | 439,091 | |||||||
| Piramal Enterprises Ltd. |
Pharmaceuticals | 12,466 | 102,897 | |||||||
| Polycab India Ltd. |
Electrical Equipment | 4,752 | 166,532 | |||||||
| Power Finance Corp. Ltd. |
Financial Services | 116,856 | 215,775 | |||||||
| Power Grid Corp. of India Ltd. |
Electric Utilities | 316,656 | 869,641 | |||||||
| Punjab National Bank |
Banks | 113,616 | 64,424 | |||||||
| Rajesh Exports Ltd. |
Textiles, Apparel & Luxury Goods | 13,608 | 101,022 | |||||||
| a,bRBL Bank Ltd. |
Banks | 44,424 | 76,272 | |||||||
| REC Ltd. |
Financial Services | 126,588 | 177,831 | |||||||
| Relaxo Footwears Ltd. |
Textiles, Apparel & Luxury Goods | 7,128 | 73,806 | |||||||
| Reliance Industries Ltd. |
Oil, Gas & Consumable Fuels | 329,256 | 9,339,120 | |||||||
| Samvardhana Motherson International Ltd. |
Automobile Components | 218,448 | 178,357 | |||||||
| SBI Cards & Payment Services Ltd. |
Consumer Finance | 29,016 | 261,341 | |||||||
| bSBI Life Insurance Co. Ltd. |
Insurance | 42,336 | 567,227 | |||||||
| Schaeffler India Ltd. |
Machinery | 4,032 | 140,686 | |||||||
| Shree Cement Ltd. |
Construction Materials | 1,368 | 435,905 | |||||||
| Shriram Finance Ltd. |
Consumer Finance | 24,984 | 382,866 | |||||||
| Siemens Ltd. |
Industrial Conglomerates | 8,928 | 361,449 | |||||||
| Solar Industries India Ltd. |
Chemicals | 2,160 | 99,678 | |||||||
| bSona Blw Precision Forgings Ltd. |
Automobile Components | 35,136 | 176,786 | |||||||
| SRF Ltd. |
Chemicals | 14,256 | 418,378 | |||||||
| aStar Health & Allied Insurance Co. Ltd. |
Insurance | 22,896 | 144,398 | |||||||
| 248 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE India ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| India (continued) |
||||||||||
| State Bank of India |
Banks | 179,928 | $ | 1,146,683 | ||||||
| Steel Authority of India Ltd. |
Metals & Mining | 146,592 | 147,515 | |||||||
| Sun Pharmaceutical Industries Ltd. |
Pharmaceuticals | 109,584 | 1,310,888 | |||||||
| Sun TV Network Ltd. |
Media | 10,008 | 50,641 | |||||||
| Supreme Industries Ltd. |
Chemicals | 6,480 | 198,191 | |||||||
| Tata Communications Ltd. |
Diversified Telecommunication Services | 11,304 | 171,315 | |||||||
| Tata Consultancy Services Ltd. |
IT Services | 102,744 | 4,007,994 | |||||||
| Tata Consumer Products Ltd. |
Food Products | 60,984 | 526,006 | |||||||
| Tata Elxsi Ltd. |
Software | 3,456 | 250,597 | |||||||
| aTata Motors Ltd., Class A |
Automobiles | 185,904 | 951,886 | |||||||
| aTata Motors Ltd., Class A |
Automobiles | 37,800 | 96,015 | |||||||
| Tata Power Co. Ltd. |
Electric Utilities | 166,896 | 386,359 | |||||||
| Tata Steel Ltd. |
Metals & Mining | 820,944 | 1,043,880 | |||||||
| aTata Teleservices Maharashtra Ltd. |
Diversified Telecommunication Services | 53,280 | 35,949 | |||||||
| Tech Mahindra Ltd. |
IT Services | 60,984 | 817,634 | |||||||
| Titan Co. Ltd. |
Textiles, Apparel & Luxury Goods | 41,976 | 1,284,525 | |||||||
| Torrent Pharmaceuticals Ltd. |
Pharmaceuticals | 9,648 | 180,457 | |||||||
| Torrent Power Ltd. |
Electric Utilities | 21,960 | 136,384 | |||||||
| Trent Ltd. |
Broadline Retail | 18,288 | 305,966 | |||||||
| Tube Investments of India Ltd. |
Automobile Components | 9,864 | 305,657 | |||||||
| TVS Motor Co. Ltd. |
Automobiles | 23,832 | 312,376 | |||||||
| UltraTech Cement Ltd. |
Construction Materials | 11,520 | 1,068,441 | |||||||
| Union Bank of India Ltd. |
Banks | 111,816 | 90,547 | |||||||
| United Breweries Ltd. |
Beverages | 7,056 | 122,300 | |||||||
| aUnited Spirits Ltd. |
Beverages | 28,944 | 266,363 | |||||||
| UNO Minda Ltd. |
Automobile Components | 16,560 | 96,923 | |||||||
| UPL Ltd. |
Chemicals | 53,136 | 464,005 | |||||||
| Varun Beverages Ltd. |
Beverages | 20,394 | 344,191 | |||||||
| Vedant Fashions Ltd. |
Textiles, Apparel & Luxury Goods | 3,744 | 51,896 | |||||||
| Vedanta Ltd. |
Metals & Mining | 123,552 | 412,604 | |||||||
| aVodafone Idea Ltd. |
Wireless Telecommunication Services | 780,408 | 55,077 | |||||||
| Voltas Ltd. |
Construction & Engineering | 23,112 | 230,115 | |||||||
| Whirlpool of India Ltd. |
Household Durables | 2,952 | 47,237 | |||||||
| Wipro Ltd. |
IT Services | 127,152 | 565,111 | |||||||
| aYes Bank Ltd. |
Banks | 2,011,557 | 368,374 | |||||||
| Zee Entertainment Enterprises Ltd. |
Media | 83,304 | 215,146 | |||||||
| aZomato Ltd. |
Hotels, Restaurants & Leisure | 561,960 | 348,736 | |||||||
| Zydus Lifesciences Ltd. |
Pharmaceuticals | 25,560 | 152,879 | |||||||
|
|
|
|||||||||
| Total Investments (Cost $98,043,841) 100.1% |
99,072,406 | |||||||||
| Other Assets, less Liabilities (0.1)% |
(94,964 | ) | ||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 98,977,442 | ||||||||
|
|
|
|||||||||
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $4,410,951, representing 4.5% of net assets.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
249 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Italy ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$24.65 | $26.50 | $17.61 | $23.13 | $26.27 | |||||||||||||||
| Income from investment operationsa: | ||||||||||||||||||||
| Net investment incomeb |
0.87 | 0.85 | 0.67 | 0.90 | 0.46 | |||||||||||||||
| Net realized and unrealized gains (losses) |
0.74 | (1.59 | ) | 8.80 | (5.52 | ) | (2.99 | ) | ||||||||||||
| Total from investment operations |
1.61 | (0.74 | ) | 9.47 | (4.62 | ) | (2.53 | ) | ||||||||||||
| Less distributions from net investment income |
(1.07 | ) | (1.11 | ) | (0.58 | ) | (0.90 | ) | (0.61 | ) | ||||||||||
| Net asset value, end of year |
$25.19 | $24.65 | $26.50 | $17.61 | $23.13 | |||||||||||||||
| Total returnc |
7.51% | (3.15)% | 54.64% | (20.84)% | (9.67)% | |||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||
| Total expenses |
0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
| Net investment income |
3.96% | 3.15% | 3.04% | 3.85% | 2.05% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$5,039 | $3,698 | $3,974 | $2,641 | $10,410 | |||||||||||||||
| Portfolio turnover ratee |
18.04%f | 12.75%f | 17.45%f | 9.89%f | 16.67% | |||||||||||||||
|
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund. bBased on average daily shares outstanding. cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. dRatios are annualized for periods less than one year.
ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”). |
| |||||||||||||||||||
| fPortfolio turnover rate excluding cash creations was as follows: | 18.04% | 12.75% | 17.45% | 9.89% | — | |||||||||||||||
| 250 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE Italy ETF
| Industry | Shares | Value | ||||||||
| Common Stocks 100.0% |
||||||||||
| Italy 88.6% |
||||||||||
| A2A SpA |
Multi-Utilities | 25,408 | $ | 40,579 | ||||||
| Amplifon SpA |
Health Care Providers & Services | 2,148 | 74,538 | |||||||
| Assicurazioni Generali SpA |
Insurance | 11,428 | 228,205 | |||||||
| Banca Mediolanum SpA |
Financial Services | 4,008 | 36,395 | |||||||
| Banco BPM SpA |
Banks | 22,892 | 89,660 | |||||||
| Buzzi Unicem SpA |
Construction Materials | 1,432 | 34,788 | |||||||
| Davide Campari-Milano NV |
Beverages | 8,292 | 101,349 | |||||||
| De’ Longhi SpA |
Household Durables | 1,152 | 26,359 | |||||||
| DiaSorin SpA |
Health Care Equipment & Supplies | 368 | 38,806 | |||||||
| Enel SpA |
Electric Utilities | 80,852 | 494,285 | |||||||
| Eni SpA |
Oil, Gas & Consumable Fuels | 24,188 | 339,157 | |||||||
| Ferrari NV |
Automobiles | 1,314 | 355,899 | |||||||
| FinecoBank Banca Fineco SpA |
Banks | 9,740 | 149,630 | |||||||
| Hera SpA |
Multi-Utilities | 13,096 | 37,022 | |||||||
| aInfrastrutture Wireless Italiane SpA |
Diversified Telecommunication Services | 5,864 | 77,216 | |||||||
| Interpump Group SpA |
Machinery | 1,328 | 74,521 | |||||||
| Intesa Sanpaolo SpA |
Banks | 169,256 | 435,355 | |||||||
| Italgas SpA |
Gas Utilities | 8,168 | 49,917 | |||||||
| Leonardo SpA |
Aerospace & Defense | 6,664 | 78,338 | |||||||
| Mediobanca Banca di Credito Finanziario SpA |
Banks | 10,588 | 106,613 | |||||||
| Moncler SpA |
Textiles, Apparel & Luxury Goods | 2,616 | 180,590 | |||||||
| a,bNexi SpA |
IT Services | 9,252 | 75,248 | |||||||
| aPirelli & C SpA |
Automobile Components | 8,152 | 40,936 | |||||||
| aPoste Italiane SpA |
Insurance | 7,604 | 77,756 | |||||||
| Prysmian SpA |
Electrical Equipment | 3,896 | 163,810 | |||||||
| Recordati Industria Chimica e Farmaceutica SpA |
Pharmaceuticals | 1,616 | 68,402 | |||||||
| Reply SpA |
IT Services | 376 | 47,182 | |||||||
| Snam SpA |
Gas Utilities | 32,420 | 172,204 | |||||||
| bTelecom Italia SpA |
Diversified Telecommunication Services | 178,828 | 59,102 | |||||||
| bTelecom Italia SpA |
Diversified Telecommunication Services | 100,524 | 32,393 | |||||||
| Tenaris SA |
Energy Equipment & Services | 7,788 | 110,843 | |||||||
| Terna - Rete Elettrica Nazionale |
Electric Utilities | 20,720 | 170,320 | |||||||
| UniCredit SpA |
Banks | 19,980 | 377,924 | |||||||
| UnipolSai Assicurazioni SpA |
Insurance | 7,092 | 17,937 | |||||||
|
|
|
|||||||||
| 4,463,279 | ||||||||||
|
|
|
|||||||||
| United Kingdom 3.4% |
||||||||||
| CNH Industrial NV |
Machinery | 11,264 | 172,308 | |||||||
|
|
|
|||||||||
| United States 8.0% |
||||||||||
| Stellantis NV |
Automobiles | 22,100 | 401,840 | |||||||
|
|
|
|||||||||
| Total Investments (Cost $4,459,161) 100.0% |
5,037,427 | |||||||||
| Other Assets, less Liabilities 0.0%† |
1,387 | |||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 5,038,814 | ||||||||
|
|
|
|||||||||
†Rounds to less than 0.1% of net assets.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $271,156, representing 5.4% of net assets.
bNon-income producing.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
251 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Japan ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$27.42 | $30.25 | $21.93 | $24.18 | $26.69 | |||||||||||||||
| Income from investment operationsa: | ||||||||||||||||||||
| Net investment incomeb |
0.63 | 0.63 | 0.53 | 0.56 | 0.59 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(1.93 | ) | (2.76 | ) | 8.24 | (2.22 | ) | (2.76 | ) | |||||||||||
| Total from investment operations |
(1.30 | ) | (2.13 | ) | 8.77 | (1.66 | ) | (2.17 | ) | |||||||||||
| Less distributions from net investment income |
(0.46 | ) | (0.70 | ) | (0.45 | ) | (0.59 | ) | (0.34 | ) | ||||||||||
| Net asset value, end of year |
$25.66 | $27.42 | $30.25 | $21.93 | $24.18 | |||||||||||||||
| Total returnc |
(4.61)% | (7.21)% | 40.23% | (7.15)% | (8.10)% | |||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||
| Expenses before waiver and payments by affiliates |
0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
| Expenses net of waiver and payments by affiliates |
0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
| Net investment income |
2.60% | 2.14% | 1.98% | 2.30% | 2.39% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$1,000,803 | $789,637 | $598,934 | $315,851 | $290,205 | |||||||||||||||
| Portfolio turnover ratee |
3.01%f | 2.95%f | 5.76%f | 4.59%f | 4.35% | |||||||||||||||
|
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
dRatios are annualized for periods less than one year.
ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
|
| |||||||||||||||||||
| fPortfolio turnover rate excluding cash creations was as follows: | 3.00% | 2.80% | 5.76% | 4.51% | — | |||||||||||||||
| 252 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE Japan ETF
| Industry | Shares | Value | ||||||||
| Common Stocks 98.8% |
||||||||||
| Japan 98.8% |
||||||||||
| ABC-Mart, Inc. |
Specialty Retail | 6,500 | $ | 357,502 | ||||||
| Acom Co. Ltd. |
Consumer Finance | 97,500 | 233,695 | |||||||
| Activia Properties, Inc. |
Diversified REITs | 195 | 553,836 | |||||||
| Advance Residence Investment Corp. |
Diversified REITs | 325 | 772,879 | |||||||
| Advantest Corp. |
Semiconductors & Semiconductor Equipment | 48,400 | 4,422,150 | |||||||
| Aeon Co. Ltd. |
Consumer Staples Distribution & Retail | 182,000 | 3,508,994 | |||||||
| AEON Financial Service Co. Ltd. |
Consumer Finance | 32,500 | 301,337 | |||||||
| Aeon Mall Co. Ltd. |
Real Estate Management & Development | 32,500 | 424,168 | |||||||
| AEON REIT Investment Corp. |
Diversified REITs | 455 | 495,375 | |||||||
| AGC, Inc. |
Building Products | 45,500 | 1,683,729 | |||||||
| Aica Kogyo Co. Ltd. |
Building Products | 13,000 | 296,454 | |||||||
| Ain Holdings, Inc. |
Consumer Staples Distribution & Retail | 6,500 | 271,057 | |||||||
| Air Water, Inc. |
Chemicals | 45,500 | 567,511 | |||||||
| Aisin Corp. |
Automobile Components | 45,500 | 1,246,130 | |||||||
| Ajinomoto Co., Inc. |
Food Products | 123,500 | 4,274,108 | |||||||
| Alfresa Holdings Corp. |
Health Care Providers & Services | 45,500 | 579,818 | |||||||
| Alps Alpine Co. Ltd. |
Electronic Equipment, Instruments & Components | 52,000 | 495,815 | |||||||
| Amada Co. Ltd. |
Machinery | 78,000 | 725,554 | |||||||
| Amano Corp. |
Electronic Equipment, Instruments & Components | 19,500 | 365,561 | |||||||
| Amvis Holdings, Inc. |
Health Care Providers & Services | 6,500 | 149,936 | |||||||
| aANA Holdings, Inc. |
Airlines | 39,000 | 842,768 | |||||||
| Anritsu Corp. |
Electronic Equipment, Instruments & Components | 32,500 | 298,163 | |||||||
| Aozora Bank Ltd. |
Banks | 32,500 | 585,825 | |||||||
| Ariake Japan Co. Ltd. |
Food Products | 6,500 | 238,335 | |||||||
| AS One Corp. |
Health Care Providers & Services | 6,500 | 273,988 | |||||||
| Asahi Group Holdings Ltd. |
Beverages | 123,500 | 4,569,194 | |||||||
| Asahi Intecc Co. Ltd. |
Health Care Equipment & Supplies | 52,000 | 908,017 | |||||||
| Asahi Kasei Corp. |
Chemicals | 318,500 | 2,216,745 | |||||||
| Asics Corp. |
Textiles, Apparel & Luxury Goods | 45,500 | 1,282,027 | |||||||
| ASKUL Corp. |
Internet & Direct Marketing Retail | 6,500 | 84,150 | |||||||
| Astellas Pharma, Inc. |
Pharmaceuticals | 474,500 | 6,713,378 | |||||||
| Azbil Corp. |
Electronic Equipment, Instruments & Components | 32,500 | 881,546 | |||||||
| AZ-COM MARUWA Holdings, Inc. |
Air Freight & Logistics | 13,000 | 194,380 | |||||||
| Bandai Namco Holdings, Inc. |
Leisure Products | 147,540 | 3,157,771 | |||||||
| Bank of Kyoto Ltd. |
Banks | 19,500 | 915,734 | |||||||
| BayCurrent Consulting, Inc. |
Professional Services | 32,500 | 1,330,866 | |||||||
| Benefit One, Inc. |
Professional Services | 13,000 | 183,244 | |||||||
| Benesse Holdings, Inc. |
Diversified Consumer Services | 19,500 | 284,244 | |||||||
| Bic Camera, Inc. |
Specialty Retail | 39,000 | 326,148 | |||||||
| BIPROGY, Inc. |
IT Services | 19,500 | 476,182 | |||||||
| Bridgestone Corp. |
Automobile Components | 143,000 | 5,766,632 | |||||||
| Brother Industries Ltd. |
Technology Hardware, Storage & Peripherals | 58,500 | 875,588 | |||||||
| Calbee, Inc. |
Food Products | 19,500 | 406,000 | |||||||
| Canon Marketing Japan, Inc. |
Electronic Equipment, Instruments & Components | 13,000 | 307,687 | |||||||
| Canon, Inc. |
Technology Hardware, Storage & Peripherals | 253,500 | 5,629,418 | |||||||
| Capcom Co. Ltd. |
Entertainment | 45,500 | 1,618,773 | |||||||
| Casio Computer Co. Ltd. |
Household Durables | 52,000 | 507,146 | |||||||
| Central Japan Railway Co. |
Ground Transportation | 46,600 | 5,535,698 | |||||||
| Chiba Bank Ltd. |
Banks | 156,000 | 1,002,179 | |||||||
| Chubu Electric Power Co., Inc. |
Electric Utilities | 182,000 | 1,913,126 | |||||||
| Chugai Pharmaceutical Co. Ltd. |
Pharmaceuticals | 169,000 | 4,152,303 | |||||||
| Chugin Financial Group, Inc. |
Banks | 45,500 | 303,926 | |||||||
| aChugoku Electric Power Co., Inc. |
Electric Utilities | 78,000 | 394,425 | |||||||
| Coca-Cola Bottlers Japan Holdings, Inc. |
Beverages | 39,000 | 423,435 | |||||||
| COMSYS Holdings Corp. |
Construction & Engineering | 26,000 | 477,256 | |||||||
| Concordia Financial Group Ltd. |
Banks | 286,000 | 1,048,674 | |||||||
| Cosmo Energy Holdings Co. Ltd. |
Oil, Gas & Consumable Fuels | 19,500 | 627,827 | |||||||
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Franklin FTSE Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Japan (continued) |
||||||||||
| Cosmos Pharmaceutical Corp. |
Consumer Staples Distribution & Retail | 4,340 | $ | 388,705 | ||||||
| Credit Saison Co. Ltd. |
Consumer Finance | 39,000 | 492,298 | |||||||
| CyberAgent, Inc. |
Media | 110,500 | 925,746 | |||||||
| Dai Nippon Printing Co. Ltd. |
Commercial Services & Supplies | 65,000 | 1,809,490 | |||||||
| Daicel Corp. |
Chemicals | 65,000 | 488,391 | |||||||
| Daido Steel Co. Ltd. |
Metals & Mining | 8,700 | 339,920 | |||||||
| Daifuku Co. Ltd. |
Machinery | 78,000 | 1,431,768 | |||||||
| Dai-ichi Life Holdings, Inc. |
Insurance | 247,000 | 4,519,085 | |||||||
| Daiichi Sankyo Co. Ltd. |
Pharmaceuticals | 487,500 | 17,662,672 | |||||||
| Daiichikosho Co. Ltd. |
Entertainment | 26,000 | 426,659 | |||||||
| Daikin Industries Ltd. |
Building Products | 68,770 | 12,222,965 | |||||||
| Daio Paper Corp. |
Paper & Forest Products | 19,500 | 151,499 | |||||||
| Daito Trust Construction Co. Ltd. |
Real Estate Management & Development | 16,715 | 1,656,555 | |||||||
| Daiwa House Industry Co. Ltd. |
Real Estate Management & Development | 169,000 | 3,954,211 | |||||||
| Daiwa House REIT Investment Corp. |
Diversified REITs | 520 | 1,060,786 | |||||||
| Daiwa Office Investment Corp. |
Diversified REITs | 65 | 295,965 | |||||||
| Daiwa Securities Group, Inc. |
Capital Markets | 377,000 | 1,759,088 | |||||||
| Daiwa Securities Living Investments Corp. |
Diversified REITs | 520 | 425,487 | |||||||
| aDeNA Co. Ltd. |
Entertainment | 19,500 | 264,903 | |||||||
| Denka Co. Ltd. |
Chemicals | 19,500 | 400,725 | |||||||
| Denso Corp. |
Automobile Components | 117,000 | 6,543,174 | |||||||
| Dentsu Group, Inc. |
Media | 52,000 | 1,816,816 | |||||||
| Descente Ltd. |
Textiles, Apparel & Luxury Goods | 13,000 | 404,388 | |||||||
| DIC Corp. |
Chemicals | 19,500 | 348,711 | |||||||
| Disco Corp. |
Semiconductors & Semiconductor Equipment | 21,372 | 2,456,921 | |||||||
| DMG Mori Co. Ltd. |
Machinery | 26,000 | 435,254 | |||||||
| Dowa Holdings Co. Ltd. |
Metals & Mining | 13,000 | 414,644 | |||||||
| East Japan Railway Co. |
Ground Transportation | 92,720 | 5,110,085 | |||||||
| Ebara Corp. |
Machinery | 26,000 | 1,197,536 | |||||||
| Eisai Co. Ltd. |
Pharmaceuticals | 67,420 | 3,801,335 | |||||||
| Electric Power Development Co. Ltd. |
Independent Power Producers & Energy Traders | 39,000 | 624,457 | |||||||
| ENEOS Holdings, Inc. |
Oil, Gas & Consumable Fuels | 734,500 | 2,567,356 | |||||||
| EXEO Group, Inc. |
Construction & Engineering | 26,000 | 468,270 | |||||||
| Ezaki Glico Co. Ltd. |
Food Products | 13,000 | 325,757 | |||||||
| Fancl Corp. |
Personal Products | 19,500 | 356,477 | |||||||
| FANUC Corp. |
Machinery | 248,000 | 8,869,787 | |||||||
| Fast Retailing Co. Ltd. |
Specialty Retail | 40,128 | 8,707,616 | |||||||
| Food & Life Cos. Ltd. |
Hotels, Restaurants & Leisure | 26,000 | 672,026 | |||||||
| FP Corp. |
Containers & Packaging | 13,000 | 320,385 | |||||||
| Frontier Real Estate Investment Corp. |
Diversified REITs | 130 | 463,972 | |||||||
| Fuji Electric Co. Ltd. |
Electrical Equipment | 32,500 | 1,269,817 | |||||||
| Fuji Kyuko Co. Ltd. |
Hotels, Restaurants & Leisure | 6,500 | 214,404 | |||||||
| Fuji Media Holdings, Inc. |
Media | 13,000 | 116,726 | |||||||
| Fuji Oil Holdings, Inc. |
Food Products | 13,000 | 187,835 | |||||||
| FUJIFILM Holdings Corp. |
Technology Hardware, Storage & Peripherals | 91,000 | 4,579,743 | |||||||
| Fujikura Ltd. |
Electrical Equipment | 71,500 | 503,922 | |||||||
| Fujitsu General Ltd. |
Household Durables | 13,000 | 364,828 | |||||||
| Fujitsu Ltd. |
IT Services | 48,160 | 6,453,780 | |||||||
| Fukuoka Financial Group, Inc. |
Banks | 39,000 | 746,946 | |||||||
| Furukawa Electric Co. Ltd. |
Electrical Equipment | 13,000 | 240,386 | |||||||
| Fuyo General Lease Co. Ltd. |
Financial Services | 6,500 | 439,552 | |||||||
| GLP J-Reit |
Diversified REITs | 1,170 | 1,257,998 | |||||||
| GMO internet group, Inc. |
IT Services | 13,000 | 250,740 | |||||||
| GMO Payment Gateway, Inc. |
IT Services | 9,720 | 831,119 | |||||||
| Goldwin, Inc. |
Textiles, Apparel & Luxury Goods | 8,580 | 812,292 | |||||||
| GS Yuasa Corp. |
Electrical Equipment | 19,500 | 349,004 | |||||||
| aGungHo Online Entertainment, Inc. |
Entertainment | 6,500 | 118,288 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Japan (continued) |
||||||||||
| H.U. Group Holdings, Inc. |
Health Care Providers & Services | 13,000 | $ | 260,410 | ||||||
| Hachijuni Bank Ltd. |
Banks | 117,000 | 505,485 | |||||||
| Hakuhodo DY Holdings, Inc. |
Media | 58,500 | 657,131 | |||||||
| Hamamatsu Photonics KK |
Electronic Equipment, Instruments & Components | 32,500 | 1,736,231 | |||||||
| Hankyu Hanshin Holdings, Inc. |
Ground Transportation | 58,500 | 1,725,242 | |||||||
| Harmonic Drive Systems, Inc. |
Machinery | 13,000 | 429,296 | |||||||
| Haseko Corp. |
Household Durables | 65,000 | 751,634 | |||||||
| Heiwa Corp. |
Leisure Products | 13,000 | 256,796 | |||||||
| Hikari Tsushin, Inc. |
Specialty Retail | 5,550 | 774,390 | |||||||
| aHino Motors Ltd. |
Machinery | 71,500 | 297,088 | |||||||
| Hirogin Holdings, Inc. |
Banks | 78,000 | 366,880 | |||||||
| Hirose Electric Co. Ltd. |
Electronic Equipment, Instruments & Components | 8,060 | 1,045,880 | |||||||
| Hisamitsu Pharmaceutical Co., Inc. |
Pharmaceuticals | 19,500 | 553,836 | |||||||
| Hitachi Construction Machinery Co. Ltd. |
Machinery | 26,000 | 600,721 | |||||||
| Hitachi Ltd. |
Industrial Conglomerates | 234,000 | 12,750,530 | |||||||
| Honda Motor Co. Ltd. |
Automobiles | 429,000 | 11,314,073 | |||||||
| Horiba Ltd. |
Electronic Equipment, Instruments & Components | 9,200 | 546,788 | |||||||
| Hoshizaki Corp. |
Machinery | 32,500 | 1,192,896 | |||||||
| House Foods Group, Inc. |
Food Products | 19,500 | 411,714 | |||||||
| Hoya Corp. |
Health Care Equipment & Supplies | 89,450 | 9,785,799 | |||||||
| Hulic Co. Ltd. |
Real Estate Management & Development | 110,500 | 902,498 | |||||||
| Ibiden Co. Ltd. |
Electronic Equipment, Instruments & Components | 26,000 | 1,027,575 | |||||||
| Idemitsu Kosan Co. Ltd. |
Oil, Gas & Consumable Fuels | 58,500 | 1,274,701 | |||||||
| IHI Corp. |
Machinery | 32,500 | 810,730 | |||||||
| Iida Group Holdings Co. Ltd. |
Household Durables | 39,000 | 632,662 | |||||||
| Industrial & Infrastructure Fund Investment Corp. |
Diversified REITs | 455 | 492,982 | |||||||
| Information Services International-Dentsu Ltd. |
IT Services | 6,500 | 253,963 | |||||||
| INFRONEER Holdings, Inc. |
Construction & Engineering | 58,500 | 449,222 | |||||||
| Inpex Corp. |
Oil, Gas & Consumable Fuels | 247,000 | 2,592,674 | |||||||
| Internet Initiative Japan, Inc. |
Diversified Telecommunication Services | 26,000 | 536,840 | |||||||
| Invincible Investment Corp. |
Hotel & Resort REITs | 1,235 | 516,865 | |||||||
| Isetan Mitsukoshi Holdings Ltd. |
Broadline Retail | 91,000 | 1,013,314 | |||||||
| Isuzu Motors Ltd. |
Automobiles | 136,500 | 1,619,457 | |||||||
| Ito En Ltd. |
Beverages | 13,000 | 422,458 | |||||||
| ITOCHU Corp. |
Trading Companies & Distributors | 344,500 | 11,133,027 | |||||||
| Itochu Techno-Solutions Corp. |
IT Services | 26,000 | 635,885 | |||||||
| Itoham Yonekyu Holdings, Inc. |
Food Products | 32,500 | 170,937 | |||||||
| Iwatani Corp. |
Oil, Gas & Consumable Fuels | 13,000 | 565,557 | |||||||
| Iyogin Holdings, Inc. |
Banks | 71,500 | 403,997 | |||||||
| Izumi Co. Ltd. |
Broadline Retail | 13,000 | 307,198 | |||||||
| J Front Retailing Co. Ltd. |
Broadline Retail | 65,000 | 645,653 | |||||||
| aJapan Airlines Co. Ltd. |
Airlines | 39,000 | 756,616 | |||||||
| aJapan Airport Terminal Co. Ltd. |
Transportation Infrastructure | 13,000 | 644,677 | |||||||
| Japan Aviation Electronics Industry Ltd. |
Electronic Equipment, Instruments & Components | 13,000 | 224,465 | |||||||
| Japan Exchange Group, Inc. |
Capital Markets | 136,500 | 2,070,218 | |||||||
| Japan Hotel REIT Investment Corp. |
Diversified REITs | 1,170 | 660,207 | |||||||
| Japan Logistics Fund, Inc. |
Diversified REITs | 260 | 575,325 | |||||||
| Japan Metropolitan Fund Invest |
Diversified REITs | 1,755 | 1,275,141 | |||||||
| bJapan Post Bank Co. Ltd. |
Banks | 390,000 | 3,173,567 | |||||||
| Japan Post Holdings Co. Ltd. |
Insurance | 546,000 | 4,416,327 | |||||||
| Japan Post Insurance Co. Ltd. |
Insurance | 52,000 | 807,604 | |||||||
| Japan Prime Realty Investment Corp. |
Diversified REITs | 260 | 681,794 | |||||||
| Japan Real Estate Investment Corp. |
Diversified REITs | 325 | 1,289,353 | |||||||
| Japan Steel Works Ltd. |
Machinery | 19,500 | 363,217 | |||||||
| Japan Tobacco, Inc. |
Tobacco | 305,500 | 6,422,639 | |||||||
| JCR Pharmaceuticals Co. Ltd. |
Pharmaceuticals | 13,000 | 138,019 | |||||||
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Japan (continued) |
||||||||||
| Jeol Ltd. |
Health Care Equipment & Supplies | 13,000 | $ | 414,644 | ||||||
| JFE Holdings, Inc. |
Metals & Mining | 130,000 | 1,640,018 | |||||||
| JGC Holdings Corp. |
Construction & Engineering | 52,000 | 641,160 | |||||||
| JMDC, Inc. |
Health Care Technology | 6,500 | 222,218 | |||||||
| JSR Corp. |
Chemicals | 45,500 | 1,064,937 | |||||||
| JTEKT Corp. |
Automobile Components | 58,500 | 448,783 | |||||||
| Justsystems Corp. |
Software | 6,500 | 171,670 | |||||||
| Kadokawa Corp. |
Media | 26,000 | 550,515 | |||||||
| Kagome Co. Ltd. |
Food Products | 19,500 | 452,739 | |||||||
| Kajima Corp. |
Construction & Engineering | 110,500 | 1,326,764 | |||||||
| Kakaku.com, Inc. |
Interactive Media & Services | 32,500 | 440,773 | |||||||
| Kaken Pharmaceutical Co. Ltd. |
Pharmaceuticals | 6,500 | 180,461 | |||||||
| Kamigumi Co. Ltd. |
Transportation Infrastructure | 26,000 | 543,091 | |||||||
| Kandenko Co. Ltd. |
Construction & Engineering | 26,000 | 182,658 | |||||||
| Kaneka Corp. |
Chemicals | 13,000 | 336,990 | |||||||
| Kansai Electric Power Co., Inc. |
Electric Utilities | 188,500 | 1,828,488 | |||||||
| Kansai Paint Co. Ltd. |
Chemicals | 45,500 | 611,271 | |||||||
| Kao Corp. |
Personal Products | 117,000 | 4,542,332 | |||||||
| Katitas Co. Ltd. |
Real Estate Management & Development | 13,000 | 251,912 | |||||||
| Kawasaki Heavy Industries Ltd. |
Machinery | 39,000 | 848,043 | |||||||
| Kawasaki Kisen Kaisha Ltd. |
Marine Transportation | 58,500 | 1,329,645 | |||||||
| KDDI Corp. |
Wireless Telecommunication Services | 416,000 | 12,793,508 | |||||||
| Keihan Holdings Co. Ltd. |
Industrial Conglomerates | 26,000 | 674,957 | |||||||
| Keikyu Corp. |
Ground Transportation | 65,000 | 614,885 | |||||||
| Keio Corp. |
Ground Transportation | 29,120 | 1,016,323 | |||||||
| Keisei Electric Railway Co. Ltd. |
Ground Transportation | 32,500 | 995,097 | |||||||
| Kenedix Office Investment Corp. |
Diversified REITs | 195 | 449,076 | |||||||
| Kewpie Corp. |
Food Products | 26,000 | 435,254 | |||||||
| Keyence Corp. |
Electronic Equipment, Instruments & Components | 50,617 | 24,511,726 | |||||||
| Kikkoman Corp. |
Food Products | 45,500 | 2,304,230 | |||||||
| Kinden Corp. |
Construction & Engineering | 32,500 | 389,492 | |||||||
| Kintetsu Group Holdings Co. Ltd. |
Ground Transportation | 45,500 | 1,458,092 | |||||||
| Kirin Holdings Co. Ltd. |
Beverages | 195,000 | 3,071,005 | |||||||
| Kobayashi Pharmaceutical Co. Ltd. |
Personal Products | 15,080 | 916,652 | |||||||
| Kobe Bussan Co. Ltd. |
Consumer Staples Distribution & Retail | 39,000 | 1,079,833 | |||||||
| Kobe Steel Ltd. |
Metals & Mining | 84,500 | 668,559 | |||||||
| Koei Tecmo Holdings Co. Ltd. |
Entertainment | 39,000 | 699,767 | |||||||
| Koito Manufacturing Co. Ltd. |
Automobile Components | 59,540 | 1,118,416 | |||||||
| Kokuyo Co. Ltd. |
Commercial Services & Supplies | 19,500 | 275,160 | |||||||
| Komatsu Ltd. |
Machinery | 240,500 | 5,921,696 | |||||||
| Konami Group Corp. |
Entertainment | 26,000 | 1,185,814 | |||||||
| Konica Minolta, Inc. |
Technology Hardware, Storage & Peripherals | 117,000 | 500,210 | |||||||
| Kose Corp. |
Personal Products | 7,280 | 857,693 | |||||||
| Kotobuki Spirits Co. Ltd. |
Food Products | 6,500 | 457,623 | |||||||
| K’s Holdings Corp. |
Specialty Retail | 39,000 | 340,799 | |||||||
| Kubota Corp. |
Machinery | 279,500 | 4,198,065 | |||||||
| Kuraray Co. Ltd. |
Chemicals | 84,500 | 772,684 | |||||||
| Kurita Water Industries Ltd. |
Machinery | 26,000 | 1,179,953 | |||||||
| Kusuri No. Aoki Holdings Co. Ltd. |
Consumer Staples Distribution & Retail | 3,420 | 172,426 | |||||||
| Kyocera Corp. |
Electronic Equipment, Instruments & Components | 78,700 | 4,073,075 | |||||||
| Kyowa Kirin Co. Ltd. |
Pharmaceuticals | 65,000 | 1,409,497 | |||||||
| Kyudenko Corp. |
Construction & Engineering | 13,000 | 328,687 | |||||||
| aKyushu Electric Power Co., Inc. |
Electric Utilities | 117,000 | 665,482 | |||||||
| Kyushu Financial Group, Inc. |
Banks | 97,500 | 349,444 | |||||||
| Kyushu Railway Co. |
Ground Transportation | 39,000 | 864,160 | |||||||
| LaSalle Logiport REIT |
Diversified REITs | 455 | 525,460 | |||||||
| Lasertec Corp. |
Semiconductors & Semiconductor Equipment | 19,500 | 3,410,925 | |||||||
| 256 | Annual Report |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Japan (continued) |
||||||||||
| Lawson, Inc. |
Consumer Staples Distribution & Retail | 13,000 | $ | 547,975 | ||||||
| Lintec Corp. |
Chemicals | 13,000 | 211,473 | |||||||
| Lion Corp. |
Household Products | 65,000 | 698,888 | |||||||
| Lixil Corp. |
Building Products | 65,000 | 1,063,228 | |||||||
| M3, Inc. |
Health Care Technology | 107,972 | 2,678,004 | |||||||
| Mabuchi Motor Co. Ltd. |
Electrical Equipment | 13,000 | 376,550 | |||||||
| Makita Corp. |
Machinery | 65,000 | 1,601,924 | |||||||
| Mani, Inc. |
Health Care Equipment & Supplies | 13,000 | 176,407 | |||||||
| Marubeni Corp. |
Trading Companies & Distributors | 396,500 | 5,349,130 | |||||||
| Marui Group Co. Ltd. |
Broadline Retail | 45,500 | 691,611 | |||||||
| Maruichi Steel Tube Ltd. |
Metals & Mining | 13,000 | 284,244 | |||||||
| Matsui Securities Co. Ltd. |
Capital Markets | 26,000 | 152,964 | |||||||
| MatsukiyoCocokara & Co. |
Consumer Staples Distribution & Retail | 32,500 | 1,711,812 | |||||||
| Mazda Motor Corp. |
Automobiles | 149,500 | 1,376,043 | |||||||
| McDonald’s Holdings Co. Japan Ltd. |
Hotels, Restaurants & Leisure | 19,500 | 808,776 | |||||||
| Mebuki Financial Group, Inc. |
Banks | 260,000 | 632,955 | |||||||
| Medipal Holdings Corp. |
Health Care Providers & Services | 39,000 | 528,635 | |||||||
| MEIJI Holdings Co. Ltd. |
Food Products | 65,000 | 1,540,875 | |||||||
| Menicon Co. Ltd. |
Health Care Equipment & Supplies | 13,000 | 274,183 | |||||||
| aMercari, Inc. |
Broadline Retail | 32,500 | 563,848 | |||||||
| MINEBEA MITSUMI, Inc. |
Machinery | 104,000 | 1,962,161 | |||||||
| MISUMI Group, Inc. |
Machinery | 71,500 | 1,772,860 | |||||||
| Mitsubishi Chemical Group Corp. |
Chemicals | 331,500 | 1,957,018 | |||||||
| Mitsubishi Corp. |
Trading Companies & Distributors | 305,500 | 10,905,632 | |||||||
| Mitsubishi Electric Corp. |
Electrical Equipment | 500,500 | 5,936,128 | |||||||
| Mitsubishi Estate Co. Ltd. |
Real Estate Management & Development | 286,000 | 3,387,775 | |||||||
| Mitsubishi Gas Chemical Co., Inc. |
Chemicals | 45,500 | 671,099 | |||||||
| Mitsubishi HC Capital, Inc. |
Financial Services | 169,000 | 868,555 | |||||||
| Mitsubishi Heavy Industries Ltd. |
Machinery | 71,500 | 2,619,536 | |||||||
| Mitsubishi Logistics Corp. |
Transportation Infrastructure | 13,000 | 303,779 | |||||||
| Mitsubishi Materials Corp. |
Metals & Mining | 32,500 | 526,730 | |||||||
| aMitsubishi Motors Corp. |
Automobiles | 162,500 | 637,351 | |||||||
| Mitsubishi UFJ Financial Group, Inc. |
Banks | 3,009,500 | 19,173,154 | |||||||
| Mitsui & Co. Ltd. |
Trading Companies & Distributors | 390,000 | 12,061,312 | |||||||
| Mitsui Chemicals, Inc. |
Chemicals | 45,500 | 1,165,790 | |||||||
| Mitsui Fudosan Co. Ltd. |
Real Estate Management & Development | 234,000 | 4,367,391 | |||||||
| Mitsui Fudosan Logistics Park, Inc. |
Diversified REITs | 130 | 454,204 | |||||||
| Mitsui High-Tec, Inc. |
Semiconductors & Semiconductor Equipment | 6,500 | 408,295 | |||||||
| Mitsui Mining & Smelting Co. Ltd. |
Metals & Mining | 13,000 | 314,036 | |||||||
| bMitsui OSK Lines Ltd. |
Marine Transportation | 84,500 | 2,101,548 | |||||||
| Miura Co. Ltd. |
Machinery | 26,000 | 660,305 | |||||||
| Mizuho Financial Group, Inc. |
Banks | 656,500 | 9,263,709 | |||||||
| aMoney Forward, Inc. |
Software | 13,000 | 445,901 | |||||||
| MonotaRO Co. Ltd. |
Trading Companies & Distributors | 60,580 | 754,234 | |||||||
| Mori Hills REIT Investment Corp. |
Diversified REITs | 390 | 432,519 | |||||||
| Morinaga & Co. Ltd. |
Food Products | 13,000 | 366,782 | |||||||
| Morinaga Milk Industry Co. Ltd. |
Food Products | 6,500 | 232,963 | |||||||
| MS&AD Insurance Group Holdings, Inc. |
Insurance | 118,660 | 3,660,816 | |||||||
| Murata Manufacturing Co. Ltd. |
Electronic Equipment, Instruments & Components | 143,000 | 8,638,666 | |||||||
| Nabtesco Corp. |
Machinery | 32,500 | 791,194 | |||||||
| Nagase & Co. Ltd. |
Trading Companies & Distributors | 26,000 | 397,551 | |||||||
| Nagoya Railroad Co. Ltd. |
Ground Transportation | 52,000 | 798,617 | |||||||
| Nankai Electric Railway Co. Ltd. |
Ground Transportation | 26,000 | 571,418 | |||||||
| NEC Corp. |
IT Services | 65,000 | 2,490,796 | |||||||
| NEC Networks & System Integration Corp. |
IT Services | 13,000 | 157,750 | |||||||
| NET One Systems Co. Ltd. |
IT Services | 19,500 | 463,728 | |||||||
| Nexon Co. Ltd. |
Entertainment | 104,000 | 2,465,399 | |||||||
| franklintempleton.com | Annual Report |
257 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Japan (continued) |
||||||||||
| NGK Insulators Ltd. |
Machinery | 65,000 | $ | 855,662 | ||||||
| NGK Spark Plug Co. Ltd. |
Automobile Components | 52,000 | 1,068,991 | |||||||
| NH Foods Ltd. |
Food Products | 26,000 | 749,192 | |||||||
| NHK Spring Co. Ltd. |
Automobile Components | 39,000 | 277,504 | |||||||
| Nichirei Corp. |
Food Products | 26,000 | 524,337 | |||||||
| Nidec Corp. |
Electrical Equipment | 117,650 | 6,050,900 | |||||||
| Nifco, Inc. |
Automobile Components | 19,500 | 549,440 | |||||||
| Nihon Kohden Corp. |
Health Care Equipment & Supplies | 19,500 | 525,997 | |||||||
| Nihon M&A Center Holdings, Inc. |
Professional Services | 67,060 | 495,808 | |||||||
| Nikon Corp. |
Household Durables | 78,000 | 794,124 | |||||||
| Nintendo Co. Ltd. |
Entertainment | 273,000 | 10,524,931 | |||||||
| Nippon Accommodations Fund, Inc. |
Diversified REITs | 130 | 583,139 | |||||||
| Nippon Building Fund, Inc. |
Diversified REITs | 390 | 1,614,622 | |||||||
| Nippon Electric Glass Co. Ltd. |
Electronic Equipment, Instruments & Components | 19,500 | 373,473 | |||||||
| Nippon Express Co. Ltd. |
Ground Transportation | 19,500 | 1,167,744 | |||||||
| Nippon Kayaku Co. Ltd. |
Chemicals | 45,500 | 409,223 | |||||||
| Nippon Paint Holdings Co. Ltd. |
Chemicals | 260,000 | 2,418,514 | |||||||
| Nippon Prologis REIT, Inc. |
Diversified REITs | 650 | 1,368,961 | |||||||
| Nippon Sanso Holdings Corp. |
Chemicals | 39,000 | 698,009 | |||||||
| Nippon Shinyaku Co. Ltd. |
Pharmaceuticals | 13,000 | 569,464 | |||||||
| Nippon Shokubai Co. Ltd. |
Chemicals | 6,500 | 257,871 | |||||||
| Nippon Steel Corp. |
Metals & Mining | 214,500 | 5,028,477 | |||||||
| Nippon Steel Trading Corp. |
Trading Companies & Distributors | 6,500 | 453,716 | |||||||
| Nippon Telegraph & Telephone Corp. |
Diversified Telecommunication Services | 299,000 | 8,901,029 | |||||||
| bNippon Yusen KK |
Marine Transportation | 124,170 | 2,881,968 | |||||||
| Nipro Corp. |
Health Care Equipment & Supplies | 32,500 | 248,835 | |||||||
| Nishi-Nippon Railroad Co. Ltd. |
Ground Transportation | 19,500 | 350,470 | |||||||
| Nissan Chemical Corp. |
Chemicals | 34,260 | 1,541,945 | |||||||
| Nissan Motor Co. Ltd. |
Automobiles | 494,000 | 1,859,970 | |||||||
| Nisshin Seifun Group, Inc. |
Food Products | 65,000 | 757,495 | |||||||
| Nissin Foods Holdings Co. Ltd. |
Food Products | 19,500 | 1,777,256 | |||||||
| Nitori Holdings Co. Ltd. |
Specialty Retail | 19,500 | 2,334,022 | |||||||
| Nitto Denko Corp. |
Chemicals | 39,000 | 2,505,447 | |||||||
| Noevir Holdings Co. Ltd. |
Personal Products | 6,500 | 263,731 | |||||||
| NOF Corp. |
Chemicals | 19,500 | 904,012 | |||||||
| NOK Corp. |
Automobile Components | 26,000 | 285,807 | |||||||
| Nomura Holdings, Inc. |
Capital Markets | 780,000 | 2,987,197 | |||||||
| Nomura Real Estate Holdings, Inc. |
Real Estate Management & Development | 26,000 | 572,395 | |||||||
| Nomura Real Estate Master Fund, Inc. |
Diversified REITs | 1,170 | 1,305,470 | |||||||
| Nomura Research Institute Ltd. |
IT Services | 110,500 | 2,544,763 | |||||||
| NS Solutions Corp. |
IT Services | 6,500 | 172,891 | |||||||
| NSK Ltd. |
Machinery | 117,000 | 664,603 | |||||||
| NTT Data Corp. |
IT Services | 162,500 | 2,114,734 | |||||||
| Obayashi Corp. |
Construction & Engineering | 175,500 | 1,335,799 | |||||||
| OBIC Business Consultants Co. Ltd. |
Software | 6,500 | 243,707 | |||||||
| Obic Co. Ltd. |
IT Services | 17,500 | 2,748,140 | |||||||
| Odakyu Electric Railway Co. Ltd. |
Ground Transportation | 78,000 | 1,008,040 | |||||||
| Oji Holdings Corp. |
Paper & Forest Products | 227,500 | 895,710 | |||||||
| OKUMA Corp. |
Machinery | 6,500 | 288,639 | |||||||
| Olympus Corp. |
Health Care Equipment & Supplies | 318,500 | 5,548,443 | |||||||
| Omron Corp. |
Electronic Equipment, Instruments & Components | 47,300 | 2,739,057 | |||||||
| Ono Pharmaceutical Co. Ltd. |
Pharmaceuticals | 110,500 | 2,294,853 | |||||||
| Open House Group Co. Ltd. |
Household Durables | 19,500 | 725,261 | |||||||
| Oracle Corp. Japan |
Software | 8,320 | 595,759 | |||||||
| Orient Corp. |
Consumer Finance | 14,200 | 117,684 | |||||||
| Oriental Land Co. Ltd. |
Hotels, Restaurants & Leisure | 238,600 | 8,117,671 | |||||||
| ORIX Corp. |
Financial Services | 305,500 | 4,996,023 | |||||||
| 258 | Annual Report |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Japan (continued) |
||||||||||
| Orix JREIT, Inc. |
Diversified REITs | 650 | $ | 820,497 | ||||||
| Osaka Gas Co. Ltd. |
Gas Utilities | 104,000 | 1,704,290 | |||||||
| OSG Corp. |
Machinery | 19,500 | 291,277 | |||||||
| Otsuka Corp. |
IT Services | 26,000 | 915,245 | |||||||
| Otsuka Holdings Co. Ltd. |
Pharmaceuticals | 110,500 | 3,489,605 | |||||||
| PALTAC Corp. |
Distributors | 6,500 | 245,172 | |||||||
| Pan Pacific International Holdings Corp. |
Broadline Retail | 104,000 | 1,999,669 | |||||||
| Panasonic Holdings Corp. |
Household Durables | 552,500 | 4,906,868 | |||||||
| aPark24 Co. Ltd. |
Commercial Services & Supplies | 32,500 | 472,519 | |||||||
| Penta-Ocean Construction Co. Ltd. |
Construction & Engineering | 71,500 | 339,530 | |||||||
| aPeptiDream, Inc. |
Biotechnology | 21,200 | 299,307 | |||||||
| Persol Holdings Co. Ltd. |
Professional Services | 45,500 | 907,333 | |||||||
| Pigeon Corp. |
Household Products | 26,000 | 400,286 | |||||||
| Pola Orbis Holdings, Inc. |
Personal Products | 19,500 | 252,303 | |||||||
| Rakus Co. Ltd. |
Software | 26,000 | 370,787 | |||||||
| aRakuten Group, Inc. |
Internet & Direct Marketing Retail | 208,000 | 959,591 | |||||||
| Recruit Holdings Co. Ltd. |
Professional Services | 351,000 | 9,626,193 | |||||||
| Relo Group, Inc. |
Real Estate Management & Development | 26,000 | 411,225 | |||||||
| aRenesas Electronics Corp. |
Semiconductors & Semiconductor Equipment | 312,000 | 4,485,777 | |||||||
| Rengo Co. Ltd. |
Containers & Packaging | 52,000 | 335,623 | |||||||
| aRENOVA, Inc. |
Independent Power Producers & Energy Traders | 13,000 | 194,380 | |||||||
| Resona Holdings, Inc. |
Banks | 552,500 | 2,654,773 | |||||||
| Resonac Holdings Corp. |
Chemicals | 45,500 | 743,918 | |||||||
| Resorttrust, Inc. |
Hotels, Restaurants & Leisure | 19,500 | 309,005 | |||||||
| Ricoh Co. Ltd. |
Technology Hardware, Storage & Peripherals | 149,500 | 1,113,190 | |||||||
| Rinnai Corp. |
Household Durables | 25,500 | 619,825 | |||||||
| Rohm Co. Ltd. |
Semiconductors & Semiconductor Equipment | 21,060 | 1,735,879 | |||||||
| Rohto Pharmaceutical Co. Ltd. |
Personal Products | 52,000 | 1,082,275 | |||||||
| Ryohin Keikaku Co. Ltd. |
Broadline Retail | 58,500 | 661,086 | |||||||
| Sankyo Co. Ltd. |
Leisure Products | 13,000 | 540,161 | |||||||
| Sankyu, Inc. |
Ground Transportation | 13,000 | 479,112 | |||||||
| Sanrio Co. Ltd. |
Specialty Retail | 13,000 | 579,232 | |||||||
| Santen Pharmaceutical Co. Ltd. |
Pharmaceuticals | 84,500 | 717,447 | |||||||
| Sanwa Holdings Corp. |
Building Products | 52,000 | 553,250 | |||||||
| Sapporo Holdings Ltd. |
Beverages | 13,000 | 332,594 | |||||||
| Sawai Group Holdings Co. Ltd. |
Pharmaceuticals | 6,500 | 178,263 | |||||||
| SBI Holdings, Inc. |
Capital Markets | 65,000 | 1,281,539 | |||||||
| aSBI Shinsei Bank Ltd. |
Banks | 13,000 | 227,786 | |||||||
| SCREEN Holdings Co. Ltd. |
Semiconductors & Semiconductor Equipment | 10,200 | 892,854 | |||||||
| SCSK Corp. |
IT Services | 32,500 | 472,519 | |||||||
| Secom Co. Ltd. |
Commercial Services & Supplies | 52,000 | 3,189,781 | |||||||
| Sega Sammy Holdings, Inc. |
Leisure Products | 39,000 | 736,396 | |||||||
| Seibu Holdings, Inc. |
Industrial Conglomerates | 52,000 | 530,979 | |||||||
| Seiko Epson Corp. |
Technology Hardware, Storage & Peripherals | 65,000 | 918,664 | |||||||
| Seino Holdings Co. Ltd. |
Ground Transportation | 32,500 | 356,526 | |||||||
| Sekisui Chemical Co. Ltd. |
Household Durables | 84,500 | 1,191,089 | |||||||
| Sekisui House Ltd. |
Household Durables | 143,000 | 2,898,895 | |||||||
| Sekisui House Reit, Inc. |
Diversified REITs | 1,040 | 561,845 | |||||||
| Seven & i Holdings Co. Ltd. |
Consumer Staples Distribution & Retail | 201,500 | 9,046,228 | |||||||
| Seven Bank Ltd. |
Banks | 169,000 | 336,502 | |||||||
| SG Holdings Co. Ltd. |
Air Freight & Logistics | 110,500 | 1,627,320 | |||||||
| aSharp Corp. |
Household Durables | 52,000 | 364,535 | |||||||
| aSHIFT, Inc. |
IT Services | 2,600 | 458,306 | |||||||
| aShikoku Electric Power Co., Inc. |
Electric Utilities | 39,000 | 220,655 | |||||||
| Shimadzu Corp. |
Electronic Equipment, Instruments & Components | 71,500 | 2,224,134 | |||||||
| Shimamura Co. Ltd. |
Specialty Retail | 6,500 | 659,328 | |||||||
| Shimano, Inc. |
Leisure Products | 19,483 | 3,343,540 | |||||||
| franklintempleton.com | Annual Report |
259 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Japan (continued) |
||||||||||
| Shimizu Corp. |
Construction & Engineering | 136,500 | $ | 769,216 | ||||||
| Shin-Etsu Chemical Co. Ltd. |
Chemicals | 502,400 | 16,137,651 | |||||||
| Shinko Electric Industries Co. Ltd. |
Semiconductors & Semiconductor Equipment | 19,500 | 597,791 | |||||||
| Shionogi & Co. Ltd. |
Pharmaceuticals | 71,500 | 3,211,026 | |||||||
| Ship Healthcare Holdings, Inc. |
Health Care Providers & Services | 19,500 | 357,063 | |||||||
| Shiseido Co. Ltd. |
Personal Products | 99,400 | 4,616,360 | |||||||
| Shizuoka Financial Group, Inc. |
Banks | 130,000 | 928,920 | |||||||
| SHO-BOND Holdings Co. Ltd. |
Construction & Engineering | 13,000 | 535,277 | |||||||
| aShochiku Co. Ltd. |
Entertainment | 1,820 | 156,305 | |||||||
| aSkylark Holdings Co. Ltd. |
Hotels, Restaurants & Leisure | 58,500 | 760,425 | |||||||
| SMC Corp. |
Machinery | 14,456 | 7,584,811 | |||||||
| SMS Co. Ltd. |
Professional Services | 13,000 | 312,082 | |||||||
| SoftBank Corp. |
Wireless Telecommunication Services | 708,500 | 8,139,578 | |||||||
| SoftBank Group Corp. |
Wireless Telecommunication Services | 251,100 | 9,776,844 | |||||||
| Sohgo Security Services Co. Ltd. |
Commercial Services & Supplies | 19,500 | 522,335 | |||||||
| Sojitz Corp. |
Trading Companies & Distributors | 60,720 | 1,260,571 | |||||||
| Sompo Holdings, Inc. |
Insurance | 78,000 | 3,078,037 | |||||||
| Sony Group Corp. |
Household Durables | 321,000 | 28,906,642 | |||||||
| Sotetsu Holdings, Inc. |
Ground Transportation | 19,500 | 332,301 | |||||||
| Square Enix Holdings Co. Ltd. |
Entertainment | 19,500 | 931,851 | |||||||
| Stanley Electric Co. Ltd. |
Automobile Components | 39,000 | 858,885 | |||||||
| Subaru Corp. |
Automobiles | 156,000 | 2,478,488 | |||||||
| Sugi Holdings Co. Ltd. |
Consumer Staples Distribution & Retail | 8,620 | 368,531 | |||||||
| SUMCO Corp. |
Semiconductors & Semiconductor Equipment | 91,000 | 1,354,504 | |||||||
| Sumitomo Bakelite Co. Ltd. |
Chemicals | 6,500 | 252,010 | |||||||
| Sumitomo Chemical Co. Ltd. |
Chemicals | 390,000 | 1,304,005 | |||||||
| Sumitomo Corp. |
Trading Companies & Distributors | 292,500 | 5,144,958 | |||||||
| Sumitomo Electric Industries Ltd. |
Automobile Components | 195,000 | 2,486,400 | |||||||
| Sumitomo Forestry Co. Ltd. |
Household Durables | 32,500 | 639,793 | |||||||
| Sumitomo Heavy Industries Ltd. |
Machinery | 32,500 | 791,194 | |||||||
| Sumitomo Metal Mining Co. Ltd. |
Metals & Mining | 58,500 | 2,219,299 | |||||||
| Sumitomo Mitsui Financial Group, Inc. |
Banks | 331,500 | 13,196,236 | |||||||
| Sumitomo Mitsui Trust Holdings, Inc. |
Banks | 91,000 | 3,104,899 | |||||||
| Sumitomo Pharma Co. Ltd. |
Pharmaceuticals | 45,500 | 276,918 | |||||||
| Sumitomo Realty & Development Co. Ltd. |
Real Estate Management & Development | 104,000 | 2,330,213 | |||||||
| Sumitomo Rubber Industries Ltd. |
Automobile Components | 45,500 | 408,881 | |||||||
| Sundrug Co. Ltd. |
Consumer Staples Distribution & Retail | 16,640 | 454,477 | |||||||
| Suntory Beverage & Food Ltd. |
Beverages | 32,500 | 1,205,106 | |||||||
| Suzuken Co. Ltd. |
Health Care Providers & Services | 19,500 | 490,101 | |||||||
| Suzuki Motor Corp. |
Automobiles | 117,000 | 4,223,217 | |||||||
| Sysmex Corp. |
Health Care Equipment & Supplies | 48,240 | 3,132,755 | |||||||
| T&D Holdings, Inc. |
Insurance | 130,000 | 1,602,900 | |||||||
| Taiheiyo Cement Corp. |
Construction Materials | 32,500 | 607,315 | |||||||
| Taisei Corp. |
Construction & Engineering | 45,500 | 1,399,974 | |||||||
| Taisho Pharmaceutical Holdings Co. Ltd. |
Pharmaceuticals | 13,000 | 539,184 | |||||||
| Taiyo Yuden Co. Ltd. |
Electronic Equipment, Instruments & Components | 32,500 | 1,084,229 | |||||||
| Takara Bio, Inc. |
Biotechnology | 13,000 | 169,276 | |||||||
| Takara Holdings, Inc. |
Beverages | 45,500 | 349,395 | |||||||
| Takashimaya Co. Ltd. |
Broadline Retail | 39,000 | 566,436 | |||||||
| Takeda Pharmaceutical Co. Ltd. |
Pharmaceuticals | 390,000 | 12,747,013 | |||||||
| TBS Holdings, Inc. |
Media | 13,000 | 186,077 | |||||||
| TDK Corp. |
Electronic Equipment, Instruments & Components | 93,200 | 3,308,814 | |||||||
| TechnoPro Holdings, Inc. |
Professional Services | 27,160 | 743,844 | |||||||
| Teijin Ltd. |
Chemicals | 45,500 | 477,256 | |||||||
| Terumo Corp. |
Health Care Equipment & Supplies | 169,000 | 4,538,327 | |||||||
| THK Co. Ltd. |
Machinery | 32,500 | 746,018 | |||||||
| TIS, Inc. |
IT Services | 58,500 | 1,534,037 | |||||||
| 260 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) | ||||||||||
| Japan (continued) |
||||||||||
| Tobu Railway Co. Ltd. |
Ground Transportation | 52,000 | $ | 1,238,560 | ||||||
| Toda Corp. |
Construction & Engineering | 58,500 | 303,731 | |||||||
| Toei Animation Co. Ltd. |
Entertainment | 1,500 | 148,321 | |||||||
| Toho Co. Ltd. |
Entertainment | 26,000 | 990,458 | |||||||
| Toho Gas Co. Ltd. |
Gas Utilities | 22,900 | 423,794 | |||||||
| aTohoku Electric Power Co., Inc. |
Electric Utilities | 123,500 | 611,515 | |||||||
| Tokai Carbon Co. Ltd. |
Chemicals | 52,000 | 492,298 | |||||||
| Tokio Marine Holdings, Inc. |
Insurance | 481,000 | 9,205,102 | |||||||
| Tokyo Century Corp. |
Financial Services | 15,410 | 510,039 | |||||||
| aTokyo Electric Power Co. Holdings, Inc. |
Electric Utilities | 403,000 | 1,432,256 | |||||||
| Tokyo Electron Ltd. |
Semiconductors & Semiconductor Equipment | 115,125 | 13,874,859 | |||||||
| Tokyo Gas Co. Ltd. |
Gas Utilities | 110,500 | 2,072,342 | |||||||
| Tokyo Ohka Kogyo Co. Ltd. |
Chemicals | 9,100 | 525,802 | |||||||
| Tokyo Tatemono Co. Ltd. |
Real Estate Management & Development | 52,000 | 631,002 | |||||||
| Tokyu Corp. |
Ground Transportation | 156,000 | 2,065,309 | |||||||
| Tokyu Fudosan Holdings Corp. |
Real Estate Management & Development | 156,000 | 744,308 | |||||||
| TOPPAN, Inc. |
Commercial Services & Supplies | 71,500 | 1,431,719 | |||||||
| Toray Industries, Inc. |
Chemicals | 396,500 | 2,253,457 | |||||||
| Toshiba Corp. |
Industrial Conglomerates | 110,500 | 3,690,529 | |||||||
| Toshiba TEC Corp. |
Technology Hardware, Storage & Peripherals | 6,500 | 190,961 | |||||||
| Tosoh Corp. |
Chemicals | 71,500 | 965,403 | |||||||
| TOTO Ltd. |
Building Products | 39,000 | 1,295,214 | |||||||
| Toyo Seikan Group Holdings Ltd. |
Containers & Packaging | 32,500 | 445,901 | |||||||
| Toyo Suisan Kaisha Ltd. |
Food Products | 26,000 | 1,084,229 | |||||||
| Toyo Tire Corp. |
Automobile Components | 26,000 | 301,826 | |||||||
| Toyoda Gosei Co. Ltd. |
Automobile Components | 19,500 | 334,060 | |||||||
| Toyota Boshoku Corp. |
Automobile Components | 13,000 | 208,738 | |||||||
| Toyota Industries Corp. |
Automobile Components | 39,000 | 2,153,806 | |||||||
| Toyota Motor Corp. |
Automobiles | 3,107,000 | 43,888,797 | |||||||
| Toyota Tsusho Corp. |
Trading Companies & Distributors | 58,500 | 2,470,283 | |||||||
| aTrend Micro, Inc. |
Software | 32,500 | 1,579,946 | |||||||
| TS Tech Co. Ltd. |
Automobile Components | 26,000 | 328,004 | |||||||
| Tsumura & Co. |
Pharmaceuticals | 19,500 | 385,341 | |||||||
| Tsuruha Holdings, Inc. |
Consumer Staples Distribution & Retail | 8,750 | 581,843 | |||||||
| UBE Corp. |
Chemicals | 26,000 | 401,458 | |||||||
| Ulvac, Inc. |
Semiconductors & Semiconductor Equipment | 13,000 | 561,650 | |||||||
| Unicharm Corp. |
Household Products | 97,500 | 3,986,006 | |||||||
| United Urban Investment Corp. |
Diversified REITs | 780 | 838,080 | |||||||
| Ushio, Inc. |
Electrical Equipment | 26,000 | 325,269 | |||||||
| USS Co. Ltd. |
Specialty Retail | 52,000 | 896,686 | |||||||
| Welcia Holdings Co. Ltd. |
Consumer Staples Distribution & Retail | 26,000 | 553,640 | |||||||
| West Japan Railway Co. |
Ground Transportation | 58,500 | 2,398,636 | |||||||
| Workman Co. Ltd. |
Specialty Retail | 13,000 | 546,998 | |||||||
| Yakult Honsha Co. Ltd. |
Food Products | 32,500 | 2,351,604 | |||||||
| aYamada Holdings Co. Ltd. |
Specialty Retail | 156,000 | 534,495 | |||||||
| Yamaguchi Financial Group, Inc. |
Banks | 52,000 | 317,259 | |||||||
| Yamaha Corp. |
Leisure Products | 39,000 | 1,491,547 | |||||||
| Yamaha Motor Co. Ltd. |
Automobiles | 78,000 | 2,027,801 | |||||||
| Yamato Holdings Co. Ltd. |
Air Freight & Logistics | 84,500 | 1,440,608 | |||||||
| Yamato Kogyo Co. Ltd. |
Metals & Mining | 6,500 | 260,801 | |||||||
| Yamazaki Baking Co. Ltd. |
Food Products | 32,500 | 391,690 | |||||||
| Yaoko Co. Ltd. |
Consumer Staples Distribution & Retail | 6,500 | 336,990 | |||||||
| Yaskawa Electric Corp. |
Machinery | 65,000 | 2,818,018 | |||||||
| Yokogawa Electric Corp. |
Electronic Equipment, Instruments & Components | 65,000 | 1,050,041 | |||||||
| Yokohama Rubber Co. Ltd. |
Automobile Components | 32,500 | 683,015 | |||||||
| Z Holdings Corp. |
Interactive Media & Services | 682,500 | 1,911,759 | |||||||
| Zenkoku Hosho Co. Ltd. |
Financial Services | 13,000 | 487,903 | |||||||
| franklintempleton.com | Annual Report |
261 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) | ||||||||||
| Japan (continued) |
||||||||||
| Zensho Holdings Co. Ltd. |
Hotels, Restaurants & Leisure | 26,000 | $ | 766,774 | ||||||
| Zeon Corp. |
Chemicals | 39,000 | 409,956 | |||||||
| ZOZO, Inc. |
Internet & Direct Marketing Retail | 26,000 | 589,000 | |||||||
|
|
|
|||||||||
| Total Investments before Short-Term Investments |
988,568,241 | |||||||||
|
|
|
|||||||||
| Short-Term Investments 0.4% |
||||||||||
| Investments from Cash Collateral Received for Loaned Securities 0.4% |
||||||||||
| United States 0.4% |
||||||||||
| c,dInstitutional Fiduciary Trust Portfolio, 4.47% |
Money Market Funds | 4,355,834 | 4,355,834 | |||||||
|
|
|
|||||||||
| Money Market Funds 0.0%† |
||||||||||
| United States 0.0%† |
||||||||||
|
c,dInstitutional Fiduciary Trust - Money Market Portfolio, 4.47% |
Money Market Funds | 61,459 | 61,459 | |||||||
|
|
|
|||||||||
| Total Short-Term Investments |
4,417,293 | |||||||||
|
|
|
|||||||||
| Total Investments |
992,985,534 | |||||||||
| Other Assets, less Liabilities 0.8% |
. | 7,817,688 | ||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 1,000,803,222 | ||||||||
|
|
|
|||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bA portion or all of the security is on loan at March 31, 2023 Note 1(c).
cThe rate shown is the annualized seven-day effective yield at period end.
dSee Note 3(c) regarding investments in affiliated management investment companies.
At March 31, 2023, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts
| Value/Unrealized | ||||||||||||||||||||
| Description | Type | |
Number of Contracts |
|
|
Notional Amount |
* |
|
Expiration Date |
|
|
Appreciation (Depreciation) |
| |||||||
|
|
||||||||||||||||||||
| Index Contracts |
||||||||||||||||||||
| Nikkei 225 Mini |
52 | $10,955,594 | 6/08/23 | $162,284 | ||||||||||||||||
*As of year end.
See Note 7 regarding other derivative information.
See Abbreviations on page 355.
| 262 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Japan Hedged ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance | ||||||||||||||||||||
| (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$30.90 | $30.70 | $21.35 | $23.12 | $25.11 | |||||||||||||||
| Income from investment operationsa: | ||||||||||||||||||||
| Net investment incomeb |
0.58 | 0.68 | 0.88 | 0.38 | 0.38 | |||||||||||||||
| Net realized and unrealized gains (losses) |
1.56 | (0.08 | ) | 8.47 | (2.15 | ) | (1.11 | ) | ||||||||||||
| Total from investment operations |
2.14 | 0.60 | 9.35 | (1.77 | ) | (0.73 | ) | |||||||||||||
| Less distributions from: |
||||||||||||||||||||
| Net investment income |
(0.92 | ) | (0.40 | ) | — | — | (0.01 | ) | ||||||||||||
| Net realized gains |
(5.55 | ) | — | — | — | (1.25 | ) | |||||||||||||
| Total distributions |
(6.47 | ) | (0.40 | ) | — | — | (1.26 | ) | ||||||||||||
| Net asset value, end of year |
$26.57 | $30.90 | $30.70 | $21.35 | $23.12 | |||||||||||||||
| Total returnc |
8.15% | 1.93% | 43.84% | (7.66)% | (2.59)% | |||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||
| Expenses before waiver and payments by affiliates |
0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
| Expenses net of waiver and payments by affiliates |
0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
| Net investment income |
1.99% | 2.22% | 3.29% | 1.59% | 1.51% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$13,284 | $24,720 | $24,563 | $4,269 | $13,870 | |||||||||||||||
| Portfolio turnover ratee |
31.96%f | 5.46%f | 6.31%f | 10.06%f | 19.78% | |||||||||||||||
| aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund. bBased on average daily shares outstanding. cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. dRatios are annualized for periods less than one year. ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”). |
| |||||||||||||||||||
| fPortfolio turnover rate excluding cash creations was as follows: | 31.39% | 5.03% | 6.31% | 10.06% | — | |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
263 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE Japan Hedged ETF
| Industry | Shares | Value | ||||||||
| Common Stocks 98.1% |
||||||||||
| Japan 98.1% |
||||||||||
| ABC-Mart, Inc. |
Specialty Retail | 70 | $ | 3,850 | ||||||
| Acom Co. Ltd. |
Consumer Finance | 1,500 | 3,595 | |||||||
| Activia Properties, Inc. |
Diversified REITs | 2 | 5,680 | |||||||
| Advance Residence Investment Corp. |
Diversified REITs | 5 | 11,890 | |||||||
| Advantest Corp. |
Semiconductors & Semiconductor Equipment | 625 | 57,104 | |||||||
| Aeon Co. Ltd. |
Consumer Staples Distribution & Retail | 2,500 | 48,200 | |||||||
| AEON Financial Service Co. Ltd. |
Consumer Finance | 415 | 3,848 | |||||||
| Aeon Mall Co. Ltd. |
Real Estate Management & Development | 400 | 5,221 | |||||||
| AEON REIT Investment Corp. |
Diversified REITs | 6 | 6,532 | |||||||
| AGC, Inc. |
Building Products | 635 | 23,498 | |||||||
| Aica Kogyo Co. Ltd. |
Building Products | 185 | 4,219 | |||||||
| Ain Holdings, Inc. |
Consumer Staples Distribution & Retail | 100 | 4,170 | |||||||
| Air Water, Inc. |
Chemicals | 615 | 7,671 | |||||||
| Aisin Corp. |
Automobile Components | 585 | 16,022 | |||||||
| Ajinomoto Co., Inc. |
Food Products | 1,589 | 54,992 | |||||||
| Alfresa Holdings Corp. |
Health Care Providers & Services | 534 | 6,805 | |||||||
| Alps Alpine Co. Ltd. |
Electronic Equipment, Instruments & Components | 720 | 6,865 | |||||||
| Amada Co. Ltd. |
Machinery | 1,115 | 10,372 | |||||||
| Amano Corp. |
Electronic Equipment, Instruments & Components | 198 | 3,712 | |||||||
| Amvis Holdings, Inc. |
Health Care Providers & Services | 100 | 2,307 | |||||||
| aANA Holdings, Inc. |
Airlines | 540 | 11,669 | |||||||
| Anritsu Corp. |
Electronic Equipment, Instruments & Components | 500 | 4,587 | |||||||
| Aozora Bank Ltd. |
Banks | 400 | 7,210 | |||||||
| Ariake Japan Co. Ltd. |
Food Products | 60 | 2,200 | |||||||
| AS One Corp. |
Health Care Providers & Services | 95 | 4,004 | |||||||
| Asahi Group Holdings Ltd. |
Beverages | 1,720 | 63,636 | |||||||
| Asahi Intecc Co. Ltd. |
Health Care Equipment & Supplies | 650 | 11,350 | |||||||
| Asahi Kasei Corp. |
Chemicals | 4,000 | 27,840 | |||||||
| Asics Corp. |
Textiles, Apparel & Luxury Goods | 550 | 15,497 | |||||||
| ASKUL Corp. |
Internet & Direct Marketing Retail | 120 | 1,554 | |||||||
| Astellas Pharma, Inc. |
Pharmaceuticals | 6,259 | 88,554 | |||||||
| Azbil Corp. |
Electronic Equipment, Instruments & Components | 445 | 12,070 | |||||||
| AZ-COM MARUWA Holdings, Inc. |
Air Freight & Logistics | 125 | 1,869 | |||||||
| Bandai Namco Holdings, Inc. |
Leisure Products | 1,944 | 41,607 | |||||||
| Bank of Kyoto Ltd. |
Banks | 243 | 11,411 | |||||||
| BayCurrent Consulting, Inc. |
Professional Services | 500 | 20,475 | |||||||
| Benefit One, Inc. |
Professional Services | 179 | 2,523 | |||||||
| Benesse Holdings, Inc. |
Diversified Consumer Services | 265 | 3,863 | |||||||
| Bic Camera, Inc. |
Specialty Retail | 500 | 4,181 | |||||||
| BIPROGY, Inc. |
IT Services | 210 | 5,128 | |||||||
| Bridgestone Corp. |
Automobile Components | 1,900 | 76,620 | |||||||
| Brother Industries Ltd. |
Technology Hardware, Storage & Peripherals | 750 | 11,225 | |||||||
| Calbee, Inc. |
Food Products | 215 | 4,476 | |||||||
| Canon Marketing Japan, Inc. |
Electronic Equipment, Instruments & Components | 135 | 3,195 | |||||||
| Canon, Inc. |
Technology Hardware, Storage & Peripherals | 3,265 | 72,505 | |||||||
| Capcom Co. Ltd. |
Entertainment | 580 | 20,635 | |||||||
| Casio Computer Co. Ltd. |
Household Durables | 700 | 6,827 | |||||||
| Central Japan Railway Co. |
Ground Transportation | 630 | 74,839 | |||||||
| Chiba Bank Ltd. |
Banks | 2,000 | 12,848 | |||||||
| Chubu Electric Power Co., Inc. |
Electric Utilities | 2,500 | 26,279 | |||||||
| Chugai Pharmaceutical Co. Ltd. |
Pharmaceuticals | 2,268 | 55,724 | |||||||
| Chugin Financial Group, Inc. |
Banks | 525 | 3,507 | |||||||
| aChugoku Electric Power Co., Inc. |
Electric Utilities | 1,000 | 5,057 | |||||||
| Coca-Cola Bottlers Japan Holdings, Inc. |
Beverages | 500 | 5,429 | |||||||
| COMSYS Holdings Corp. |
Construction & Engineering | 360 | 6,608 | |||||||
| Concordia Financial Group Ltd. |
Banks | 4,000 | 14,667 | |||||||
| Cosmo Energy Holdings Co. Ltd. |
Oil, Gas & Consumable Fuels | 225 | 7,244 | |||||||
| 264 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan Hedged ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) | ||||||||||
| Japan (continued) |
||||||||||
| Cosmos Pharmaceutical Corp. |
Consumer Staples Distribution & Retail | 61 | $ | 5,463 | ||||||
| Credit Saison Co. Ltd. |
Consumer Finance | 525 | 6,627 | |||||||
| CyberAgent, Inc. |
Media | 1,500 | 12,567 | |||||||
| Dai Nippon Printing Co. Ltd. |
Commercial Services & Supplies | 870 | 24,219 | |||||||
| Daicel Corp. |
Chemicals | 1,000 | 7,514 | |||||||
| Daido Steel Co. Ltd. |
Metals & Mining | 120 | 4,689 | |||||||
| Daifuku Co. Ltd. |
Machinery | 1,023 | 18,778 | |||||||
| Dai-ichi Life Holdings, Inc. |
Insurance | 3,300 | 60,376 | |||||||
| Daiichi Sankyo Co. Ltd. |
Pharmaceuticals | 6,400 | 231,879 | |||||||
| Daiichikosho Co. Ltd. |
Entertainment | 230 | 3,774 | |||||||
| Daikin Industries Ltd. |
Building Products | 920 | 163,518 | |||||||
| Daio Paper Corp. |
Paper & Forest Products | 315 | 2,447 | |||||||
| Daito Trust Construction Co. Ltd. |
Real Estate Management & Development | 200 | 19,821 | |||||||
| Daiwa House Industry Co. Ltd. |
Real Estate Management & Development | 2,243 | 52,481 | |||||||
| Daiwa House REIT Investment Corp. |
Diversified REITs | 7 | 14,280 | |||||||
| Daiwa Office Investment Corp. |
Diversified REITs | 1 | 4,553 | |||||||
| Daiwa Securities Group, Inc. |
Capital Markets | 5,000 | 23,330 | |||||||
| Daiwa Securities Living Investments Corp. |
Diversified REITs | 7 | 5,728 | |||||||
| aDeNA Co. Ltd. |
Entertainment | 300 | 4,075 | |||||||
| Denka Co. Ltd. |
Chemicals | 265 | 5,446 | |||||||
| Denso Corp. |
Automobile Components | 1,500 | 83,887 | |||||||
| Dentsu Group, Inc. |
Media | 690 | 24,108 | |||||||
| Descente Ltd. |
Textiles, Apparel & Luxury Goods | 140 | 4,355 | |||||||
| DIC Corp. |
Chemicals | 275 | 4,918 | |||||||
| Disco Corp. |
Semiconductors & Semiconductor Equipment | 300 | 34,488 | |||||||
| DMG Mori Co. Ltd. |
Machinery | 360 | 6,027 | |||||||
| Dowa Holdings Co. Ltd. |
Metals & Mining | 135 | 4,306 | |||||||
| East Japan Railway Co. |
Ground Transportation | 1,215 | 66,962 | |||||||
| Ebara Corp. |
Machinery | 275 | 12,666 | |||||||
| Eisai Co. Ltd. |
Pharmaceuticals | 893 | 50,350 | |||||||
| Electric Power Development Co. Ltd. |
Independent Power Producers & Energy Traders | 550 | 8,806 | |||||||
| ENEOS Holdings, Inc. |
Oil, Gas & Consumable Fuels | 10,000 | 34,954 | |||||||
| EXEO Group, Inc. |
Construction & Engineering | 350 | 6,304 | |||||||
| Ezaki Glico Co. Ltd. |
Food Products | 185 | 4,636 | |||||||
| Fancl Corp. |
Personal Products | 220 | 4,022 | |||||||
| FANUC Corp. |
Machinery | 3,325 | 118,920 | |||||||
| Fast Retailing Co. Ltd. |
Specialty Retail | 540 | 117,178 | |||||||
| Food & Life Cos. Ltd. |
Hotels, Restaurants & Leisure | 315 | 8,142 | |||||||
| FP Corp. |
Containers & Packaging | 135 | 3,327 | |||||||
| Frontier Real Estate Investment Corp. |
Diversified REITs | 2 | 7,138 | |||||||
| Fuji Electric Co. Ltd. |
Electrical Equipment | 400 | 15,629 | |||||||
| Fuji Kyuko Co. Ltd. |
Hotels, Restaurants & Leisure | 75 | 2,474 | |||||||
| Fuji Media Holdings, Inc. |
Media | 170 | 1,526 | |||||||
| Fuji Oil Holdings, Inc. |
Food Products | 170 | 2,456 | |||||||
| FUJIFILM Holdings Corp. |
Technology Hardware, Storage & Peripherals | 1,200 | 60,392 | |||||||
| Fujikura Ltd. |
Electrical Equipment | 1,000 | 7,048 | |||||||
| Fujitsu General Ltd. |
Household Durables | 185 | 5,192 | |||||||
| Fujitsu Ltd. |
IT Services | 630 | 84,424 | |||||||
| Fukuoka Financial Group, Inc. |
Banks | 540 | 10,342 | |||||||
| Furukawa Electric Co. Ltd. |
Electrical Equipment | 210 | 3,883 | |||||||
| Fuyo General Lease Co. Ltd. |
Financial Services | 75 | 5,072 | |||||||
| GLP J-Reit |
Diversified REITs | 15 | 16,128 | |||||||
| GMO internet group, Inc. |
IT Services | 200 | 3,858 | |||||||
| GMO Payment Gateway, Inc. |
IT Services | 139 | 11,885 | |||||||
| Goldwin, Inc. |
Textiles, Apparel & Luxury Goods | 125 | 11,834 | |||||||
| GS Yuasa Corp. |
Electrical Equipment | 265 | 4,743 | |||||||
| aGungHo Online Entertainment, Inc. |
Entertainment | 125 | 2,275 | |||||||
| franklintempleton.com | Annual Report |
265 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan Hedged ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Japan (continued) |
||||||||||
| H.U. Group Holdings, Inc. |
Health Care Providers & Services | 185 | $ | 3,706 | ||||||
| Hachijuni Bank Ltd. |
Banks | 1,500 | 6,481 | |||||||
| Hakuhodo DY Holdings, Inc. |
Media | 800 | 8,986 | |||||||
| Hamamatsu Photonics KK |
Electronic Equipment, Instruments & Components | 400 | 21,369 | |||||||
| Hankyu Hanshin Holdings, Inc. |
Ground Transportation | 740 | 21,824 | |||||||
| Harmonic Drive Systems, Inc. |
Machinery | 100 | 3,302 | |||||||
| Haseko Corp. |
Household Durables | 875 | 10,118 | |||||||
| Heiwa Corp. |
Leisure Products | 185 | 3,654 | |||||||
| Hikari Tsushin, Inc. |
Specialty Retail | 70 | 9,767 | |||||||
| aHino Motors Ltd. |
Machinery | 1,000 | 4,155 | |||||||
| Hirogin Holdings, Inc. |
Banks | 1,000 | 4,704 | |||||||
| Hirose Electric Co. Ltd. |
Electronic Equipment, Instruments & Components | 102 | 13,236 | |||||||
| Hisamitsu Pharmaceutical Co., Inc. |
Pharmaceuticals | 215 | 6,106 | |||||||
| Hitachi Construction Machinery Co. Ltd. |
Machinery | 360 | 8,318 | |||||||
| Hitachi Ltd. |
Industrial Conglomerates | 3,115 | 169,735 | |||||||
| Honda Motor Co. Ltd. |
Automobiles | 5,700 | 150,327 | |||||||
| Horiba Ltd. |
Electronic Equipment, Instruments & Components | 140 | 8,321 | |||||||
| Hoshizaki Corp. |
Machinery | 380 | 13,948 | |||||||
| House Foods Group, Inc. |
Food Products | 215 | 4,539 | |||||||
| Hoya Corp. |
Health Care Equipment & Supplies | 1,200 | 131,280 | |||||||
| Hulic Co. Ltd. |
Real Estate Management & Development | 1,500 | 12,251 | |||||||
| Ibiden Co. Ltd. |
Electronic Equipment, Instruments & Components | 360 | 14,228 | |||||||
| Idemitsu Kosan Co. Ltd. |
Oil, Gas & Consumable Fuels | 805 | 17,541 | |||||||
| IHI Corp. |
Machinery | 445 | 11,101 | |||||||
| Iida Group Holdings Co. Ltd. |
Household Durables | 500 | 8,111 | |||||||
| Industrial & Infrastructure Fund Investment Corp. |
Diversified REITs | 7 | 7,584 | |||||||
| Information Services International-Dentsu Ltd. |
IT Services | 75 | 2,930 | |||||||
| INFRONEER Holdings, Inc. |
Construction & Engineering | 795 | 6,105 | |||||||
| Inpex Corp. |
Oil, Gas & Consumable Fuels | 3,200 | 33,589 | |||||||
| Internet Initiative Japan, Inc. |
Diversified Telecommunication Services | 350 | 7,227 | |||||||
| Invincible Investment Corp. |
Hotel & Resort REITs | 15 | 6,278 | |||||||
| Isetan Mitsukoshi Holdings Ltd. |
Broadline Retail | 1,200 | 13,362 | |||||||
| Isuzu Motors Ltd. |
Automobiles | 1,800 | 21,355 | |||||||
| Ito En Ltd. |
Beverages | 185 | 6,012 | |||||||
| ITOCHU Corp. |
Trading Companies & Distributors | 4,579 | 147,977 | |||||||
| Itochu Techno-Solutions Corp. |
IT Services | 340 | 8,315 | |||||||
| Itoham Yonekyu Holdings, Inc. |
Food Products | 500 | 2,630 | |||||||
| Iwatani Corp. |
Oil, Gas & Consumable Fuels | 150 | 6,526 | |||||||
| Iyogin Holdings, Inc. |
Banks | 1,000 | 5,650 | |||||||
| Izumi Co. Ltd. |
Broadline Retail | 145 | 3,426 | |||||||
| J Front Retailing Co. Ltd. |
Broadline Retail | 865 | 8,592 | |||||||
| aJapan Airlines Co. Ltd. |
Airlines | 500 | 9,700 | |||||||
| aJapan Airport Terminal Co. Ltd. |
Transportation Infrastructure | 190 | 9,422 | |||||||
| Japan Aviation Electronics Industry Ltd. |
Electronic Equipment, Instruments & Components | 170 | 2,935 | |||||||
| Japan Exchange Group, Inc. |
Capital Markets | 1,800 | 27,300 | |||||||
| Japan Hotel REIT Investment Corp. |
Diversified REITs | 15 | 8,464 | |||||||
| Japan Logistics Fund, Inc. |
Diversified REITs | 3 | 6,638 | |||||||
| Japan Metropolitan Fund Invest |
Diversified REITs | 24 | 17,438 | |||||||
| Japan Post Bank Co. Ltd. |
Banks | 5,000 | 40,687 | |||||||
| Japan Post Holdings Co. Ltd. |
Insurance | 7,000 | 56,620 | |||||||
| Japan Post Insurance Co. Ltd. |
Insurance | 635 | 9,862 | |||||||
| Japan Prime Realty Investment Corp. |
Diversified REITs | 3 | 7,867 | |||||||
| Japan Real Estate Investment Corp. |
Diversified REITs | 4 | 15,869 | |||||||
| Japan Steel Works Ltd. |
Machinery | 200 | 3,725 | |||||||
| Japan Tobacco, Inc. |
Tobacco | 4,000 | 84,093 | |||||||
| JCR Pharmaceuticals Co. Ltd. |
Pharmaceuticals | 200 | 2,123 | |||||||
| Jeol Ltd. |
Health Care Equipment & Supplies | 140 | 4,465 | |||||||
| 266 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan Hedged ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Japan (continued) |
||||||||||
| JFE Holdings, Inc. |
Metals & Mining | 1,709 | $ | 21,560 | ||||||
| JGC Holdings Corp. |
Construction & Engineering | 750 | 9,248 | |||||||
| JMDC, Inc. |
Health Care Technology | 115 | 3,932 | |||||||
| JSR Corp. |
Chemicals | 575 | 13,458 | |||||||
| JTEKT Corp. |
Automobile Components | 800 | 6,137 | |||||||
| Justsystems Corp. |
Software | 125 | 3,301 | |||||||
| Kadokawa Corp. |
Media | 325 | 6,881 | |||||||
| Kagome Co. Ltd. |
Food Products | 265 | 6,153 | |||||||
| Kajima Corp. |
Construction & Engineering | 1,500 | 18,010 | |||||||
| Kakaku.com, Inc. |
Interactive Media & Services | 400 | 5,425 | |||||||
| Kaken Pharmaceutical Co. Ltd. |
Pharmaceuticals | 115 | 3,193 | |||||||
| Kamigumi Co. Ltd. |
Transportation Infrastructure | 300 | 6,266 | |||||||
| Kandenko Co. Ltd. |
Construction & Engineering | 300 | 2,108 | |||||||
| Kaneka Corp. |
Chemicals | 195 | 5,055 | |||||||
| Kansai Electric Power Co., Inc. |
Electric Utilities | 2,500 | 24,251 | |||||||
| Kansai Paint Co. Ltd. |
Chemicals | 605 | 8,128 | |||||||
| Kao Corp. |
Personal Products | 1,613 | 62,622 | |||||||
| Katitas Co. Ltd. |
Real Estate Management & Development | 140 | 2,713 | |||||||
| Kawasaki Heavy Industries Ltd. |
Machinery | 500 | 10,872 | |||||||
| Kawasaki Kisen Kaisha Ltd. |
Marine Transportation | 715 | 16,251 | |||||||
| KDDI Corp. |
Wireless Telecommunication Services | 5,430 | 166,992 | |||||||
| Keihan Holdings Co. Ltd. |
Industrial Conglomerates | 335 | 8,697 | |||||||
| Keikyu Corp. |
Ground Transportation | 800 | 7,568 | |||||||
| Keio Corp. |
Ground Transportation | 400 | 13,960 | |||||||
| Keisei Electric Railway Co. Ltd. |
Ground Transportation | 500 | 15,309 | |||||||
| Kenedix Office Investment Corp. |
Diversified REITs | 3 | 6,909 | |||||||
| Kewpie Corp. |
Food Products | 360 | 6,027 | |||||||
| Keyence Corp. |
Electronic Equipment, Instruments & Components | 668 | 323,485 | |||||||
| Kikkoman Corp. |
Food Products | 600 | 30,385 | |||||||
| Kinden Corp. |
Construction & Engineering | 400 | 4,794 | |||||||
| Kintetsu Group Holdings Co. Ltd. |
Ground Transportation | 610 | 19,548 | |||||||
| Kirin Holdings Co. Ltd. |
Beverages | 2,609 | 41,088 | |||||||
| Kobayashi Pharmaceutical Co. Ltd. |
Personal Products | 215 | 13,069 | |||||||
| Kobe Bussan Co. Ltd. |
Consumer Staples Distribution & Retail | 500 | 13,844 | |||||||
| Kobe Steel Ltd. |
Metals & Mining | 1,036 | 8,197 | |||||||
| Koei Tecmo Holdings Co. Ltd. |
Entertainment | 500 | 8,971 | |||||||
| Koito Manufacturing Co. Ltd. |
Automobile Components | 841 | 15,798 | |||||||
| Kokuyo Co. Ltd. |
Commercial Services & Supplies | 259 | 3,655 | |||||||
| Komatsu Ltd. |
Machinery | 3,175 | 78,176 | |||||||
| Konami Group Corp. |
Entertainment | 325 | 14,823 | |||||||
| Konica Minolta, Inc. |
Technology Hardware, Storage & Peripherals | 1,500 | 6,413 | |||||||
| Kose Corp. |
Personal Products | 102 | 12,017 | |||||||
| Kotobuki Spirits Co. Ltd. |
Food Products | 65 | 4,576 | |||||||
| K’s Holdings Corp. |
Specialty Retail | 540 | 4,719 | |||||||
| Kubota Corp. |
Machinery | 3,750 | 56,325 | |||||||
| Kuraray Co. Ltd. |
Chemicals | 1,092 | 9,985 | |||||||
| Kurita Water Industries Ltd. |
Machinery | 375 | 17,019 | |||||||
| Kusuri No. Aoki Holdings Co. Ltd. |
Consumer Staples Distribution & Retail | 50 | 2,521 | |||||||
| Kyocera Corp. |
Electronic Equipment, Instruments & Components | 1,020 | 52,790 | |||||||
| Kyowa Kirin Co. Ltd. |
Pharmaceuticals | 865 | 18,757 | |||||||
| Kyudenko Corp. |
Construction & Engineering | 125 | 3,160 | |||||||
| aKyushu Electric Power Co., Inc. |
Electric Utilities | 1,550 | 8,816 | |||||||
| Kyushu Financial Group, Inc. |
Banks | 1,000 | 3,584 | |||||||
| Kyushu Railway Co. |
Ground Transportation | 540 | 11,965 | |||||||
| LaSalle Logiport REIT |
Diversified REITs | 6 | 6,929 | |||||||
| Lasertec Corp. |
Semiconductors & Semiconductor Equipment | 255 | 44,604 | |||||||
| Lawson, Inc. |
Consumer Staples Distribution & Retail | 170 | 7,166 | |||||||
| franklintempleton.com | Annual Report |
267 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan Hedged ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Japan (continued) |
||||||||||
| Lintec Corp. |
Chemicals | 170 | $ | 2,765 | ||||||
| Lion Corp. |
Household Products | 1,000 | 10,752 | |||||||
| Lixil Corp. |
Building Products | 900 | 14,722 | |||||||
| M3, Inc. |
Health Care Technology | 1,400 | 34,724 | |||||||
| Mabuchi Motor Co. Ltd. |
Electrical Equipment | 185 | 5,359 | |||||||
| Makita Corp. |
Machinery | 830 | 20,455 | |||||||
| Mani, Inc. |
Health Care Equipment & Supplies | 200 | 2,714 | |||||||
| Marubeni Corp. |
Trading Companies & Distributors | 5,200 | 70,153 | |||||||
| Marui Group Co. Ltd. |
Broadline Retail | 660 | 10,032 | |||||||
| Maruichi Steel Tube Ltd. |
Metals & Mining | 210 | 4,592 | |||||||
| Matsui Securities Co. Ltd. |
Capital Markets | 300 | 1,765 | |||||||
| MatsukiyoCocokara & Co. |
Consumer Staples Distribution & Retail | 415 | 21,859 | |||||||
| Mazda Motor Corp. |
Automobiles | 2,000 | 18,409 | |||||||
| McDonald’s Holdings Co. Japan Ltd. |
Hotels, Restaurants & Leisure | 300 | 12,443 | |||||||
| Mebuki Financial Group, Inc. |
Banks | 3,500 | 8,521 | |||||||
| Medipal Holdings Corp. |
Health Care Providers & Services | 500 | 6,777 | |||||||
| MEIJI Holdings Co. Ltd. |
Food Products | 900 | 21,335 | |||||||
| Menicon Co. Ltd. |
Health Care Equipment & Supplies | 165 | 3,480 | |||||||
| aMercari, Inc. |
Broadline Retail | 400 | 6,940 | |||||||
| MINEBEA MITSUMI, Inc. |
Machinery | 1,400 | 26,414 | |||||||
| MISUMI Group, Inc. |
Machinery | 1,000 | 24,795 | |||||||
| Mitsubishi Chemical Group Corp. |
Chemicals | 4,500 | 26,566 | |||||||
| Mitsubishi Corp. |
Trading Companies & Distributors | 3,986 | 142,291 | |||||||
| Mitsubishi Electric Corp. |
Electrical Equipment | 6,700 | 79,465 | |||||||
| Mitsubishi Estate Co. Ltd. |
Real Estate Management & Development | 3,800 | 45,012 | |||||||
| Mitsubishi Gas Chemical Co., Inc. |
Chemicals | 569 | 8,392 | |||||||
| Mitsubishi HC Capital, Inc. |
Financial Services | 2,000 | 10,279 | |||||||
| Mitsubishi Heavy Industries Ltd. |
Machinery | 1,000 | 36,637 | |||||||
| Mitsubishi Logistics Corp. |
Transportation Infrastructure | 215 | 5,024 | |||||||
| Mitsubishi Materials Corp. |
Metals & Mining | 400 | 6,483 | |||||||
| aMitsubishi Motors Corp. |
Automobiles | 2,500 | 9,805 | |||||||
| Mitsubishi UFJ Financial Group, Inc. |
Banks | 39,700 | 252,924 | |||||||
| Mitsui & Co. Ltd. |
Trading Companies & Distributors | 5,073 | 156,890 | |||||||
| Mitsui Chemicals, Inc. |
Chemicals | 575 | 14,733 | |||||||
| Mitsui Fudosan Co. Ltd. |
Real Estate Management & Development | 3,148 | 58,754 | |||||||
| Mitsui Fudosan Logistics Park, Inc. |
Diversified REITs | 2 | 6,988 | |||||||
| Mitsui High-Tec, Inc. |
Semiconductors & Semiconductor Equipment | 90 | 5,653 | |||||||
| Mitsui Mining & Smelting Co. Ltd. |
Metals & Mining | 185 | 4,469 | |||||||
| Mitsui OSK Lines Ltd. |
Marine Transportation | 1,145 | 28,477 | |||||||
| Miura Co. Ltd. |
Machinery | 325 | 8,254 | |||||||
| Mizuho Financial Group, Inc. |
Banks | 8,700 | 122,764 | |||||||
| aMoney Forward, Inc. |
Software | 140 | 4,802 | |||||||
| MonotaRO Co. Ltd. |
Trading Companies & Distributors | 815 | 10,147 | |||||||
| Mori Hills REIT Investment Corp. |
Diversified REITs | 6 | 6,654 | |||||||
| Morinaga & Co. Ltd. |
Food Products | 90 | 2,539 | |||||||
| Morinaga Milk Industry Co. Ltd. |
Food Products | 95 | 3,405 | |||||||
| MS&AD Insurance Group Holdings, Inc. |
Insurance | 1,500 | 46,277 | |||||||
| Murata Manufacturing Co. Ltd. |
Electronic Equipment, Instruments & Components | 1,900 | 114,779 | |||||||
| Nabtesco Corp. |
Machinery | 385 | 9,373 | |||||||
| Nagase & Co. Ltd. |
Trading Companies & Distributors | 340 | 5,199 | |||||||
| Nagoya Railroad Co. Ltd. |
Ground Transportation | 675 | 10,367 | |||||||
| Nankai Electric Railway Co. Ltd. |
Ground Transportation | 360 | 7,912 | |||||||
| NEC Corp. |
IT Services | 900 | 34,488 | |||||||
| NEC Networks & System Integration Corp. |
IT Services | 225 | 2,730 | |||||||
| NET One Systems Co. Ltd. |
IT Services | 275 | 6,540 | |||||||
| Nexon Co. Ltd. |
Entertainment | 1,335 | 31,647 | |||||||
| NGK Insulators Ltd. |
Machinery | 890 | 11,716 | |||||||
| 268 | Annual Report |
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FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan Europe ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Japan (continued) |
||||||||||
| NGK Spark Plug Co. Ltd. |
Automobile Components | 675 | $ | 13,876 | ||||||
| NH Foods Ltd. |
Food Products | 310 | 8,933 | |||||||
| NHK Spring Co. Ltd. |
Automobile Components | 540 | 3,842 | |||||||
| Nichirei Corp. |
Food Products | 360 | 7,260 | |||||||
| Nidec Corp. |
Electrical Equipment | 1,615 | 83,062 | |||||||
| Nifco, Inc. |
Automobile Components | 275 | 7,749 | |||||||
| Nihon Kohden Corp. |
Health Care Equipment & Supplies | 265 | 7,148 | |||||||
| Nihon M&A Center Holdings, Inc. |
Professional Services | 1,000 | 7,393 | |||||||
| Nikon Corp. |
Household Durables | 1,125 | 11,454 | |||||||
| Nintendo Co. Ltd. |
Entertainment | 3,547 | 136,747 | |||||||
| Nippon Accommodations Fund, Inc. |
Diversified REITs | 2 | 8,971 | |||||||
| Nippon Building Fund, Inc. |
Diversified REITs | 5 | 20,700 | |||||||
| Nippon Electric Glass Co. Ltd. |
Electronic Equipment, Instruments & Components | 265 | 5,075 | |||||||
| Nippon Express Co. Ltd. |
Ground Transportation | 215 | 12,875 | |||||||
| Nippon Kayaku Co. Ltd. |
Chemicals | 500 | 4,497 | |||||||
| Nippon Paint Holdings Co. Ltd. |
Chemicals | 3,500 | 32,557 | |||||||
| Nippon Prologis REIT, Inc. |
Diversified REITs | 8 | 16,849 | |||||||
| Nippon Sanso Holdings Corp. |
Chemicals | 500 | 8,949 | |||||||
| Nippon Shinyaku Co. Ltd. |
Pharmaceuticals | 160 | 7,009 | |||||||
| Nippon Shokubai Co. Ltd. |
Chemicals | 110 | 4,364 | |||||||
| Nippon Steel Corp. |
Metals & Mining | 2,800 | 65,640 | |||||||
| Nippon Steel Trading Corp. |
Trading Companies & Distributors | 50 | 3,490 | |||||||
| Nippon Telegraph & Telephone Corp. |
Diversified Telecommunication Services | 4,000 | 119,077 | |||||||
| Nippon Yusen KK |
Marine Transportation | 1,625 | 37,716 | |||||||
| Nipro Corp. |
Health Care Equipment & Supplies | 500 | 3,828 | |||||||
| Nishi-Nippon Railroad Co. Ltd. |
Ground Transportation | 265 | 4,763 | |||||||
| Nissan Chemical Corp. |
Chemicals | 400 | 18,003 | |||||||
| Nissan Motor Co. Ltd. |
Automobiles | 7,000 | 26,356 | |||||||
| Nisshin Seifun Group, Inc. |
Food Products | 859 | 10,011 | |||||||
| Nissin Foods Holdings Co. Ltd. |
Food Products | 235 | 21,418 | |||||||
| Nitori Holdings Co. Ltd. |
Specialty Retail | 254 | 30,402 | |||||||
| Nitto Denko Corp. |
Chemicals | 500 | 32,121 | |||||||
| Noevir Holdings Co. Ltd. |
Personal Products | 60 | 2,434 | |||||||
| NOF Corp. |
Chemicals | 215 | 9,967 | |||||||
| NOK Corp. |
Automobile Components | 395 | 4,342 | |||||||
| Nomura Holdings, Inc. |
Capital Markets | 10,500 | 40,212 | |||||||
| Nomura Real Estate Holdings, Inc. |
Real Estate Management & Development | 350 | 7,705 | |||||||
| Nomura Real Estate Master Fund, Inc. |
Diversified REITs | 16 | 17,853 | |||||||
| Nomura Research Institute Ltd. |
IT Services | 1,500 | 34,544 | |||||||
| NS Solutions Corp. |
IT Services | 100 | 2,660 | |||||||
| NSK Ltd. |
Machinery | 1,500 | 8,521 | |||||||
| NTT Data Corp. |
IT Services | 2,115 | 27,524 | |||||||
| Obayashi Corp. |
Construction & Engineering | 2,300 | 17,506 | |||||||
| OBIC Business Consultants Co. Ltd. |
Software | 65 | 2,437 | |||||||
| Obic Co. Ltd. |
IT Services | 224 | 35,176 | |||||||
| Odakyu Electric Railway Co. Ltd. |
Ground Transportation | 1,025 | 13,247 | |||||||
| Oji Holdings Corp. |
Paper & Forest Products | 3,000 | 11,812 | |||||||
| OKUMA Corp. |
Machinery | 100 | 4,441 | |||||||
| Olympus Corp. |
Health Care Equipment & Supplies | 4,200 | 73,166 | |||||||
| Omron Corp. |
Electronic Equipment, Instruments & Components | 625 | 36,193 | |||||||
| Ono Pharmaceutical Co. Ltd. |
Pharmaceuticals | 1,400 | 29,075 | |||||||
| Open House Group Co. Ltd. |
Household Durables | 215 | 7,996 | |||||||
| Oracle Corp. Japan |
Software | 115 | 8,235 | |||||||
| Orient Corp. |
Consumer Finance | 225 | 1,865 | |||||||
| Oriental Land Co. Ltd. |
Hotels, Restaurants & Leisure | 3,250 | 110,572 | |||||||
| ORIX Corp. |
Financial Services | 4,000 | 65,414 | |||||||
| Orix JREIT, Inc. |
Diversified REITs | 9 | 11,361 | |||||||
| franklintempleton.com | Annual Report |
269 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan Hedged ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Japan (continued) |
||||||||||
| Osaka Gas Co. Ltd. |
Gas Utilities | 1,350 | $ | 22,123 | ||||||
| OSG Corp. |
Machinery | 275 | 4,108 | |||||||
| Otsuka Corp. |
IT Services | 360 | 12,673 | |||||||
| Otsuka Holdings Co. Ltd. |
Pharmaceuticals | 1,400 | 44,212 | |||||||
| PALTAC Corp. |
Distributors | 115 | 4,338 | |||||||
| Pan Pacific International Holdings Corp. |
Broadline Retail | 1,370 | 26,342 | |||||||
| Panasonic Holdings Corp. |
Household Durables | 7,200 | 63,945 | |||||||
| aPark24 Co. Ltd. |
Commercial Services & Supplies | 445 | 6,470 | |||||||
| Penta-Ocean Construction Co. Ltd. |
Construction & Engineering | 1,000 | 4,749 | |||||||
| aPeptiDream, Inc. |
Biotechnology | 315 | 4,447 | |||||||
| Persol Holdings Co. Ltd. |
Professional Services | 600 | 11,965 | |||||||
| Pigeon Corp. |
Household Products | 360 | 5,542 | |||||||
| Pola Orbis Holdings, Inc. |
Personal Products | 275 | 3,558 | |||||||
| Rakus Co. Ltd. |
Software | 325 | 4,635 | |||||||
| aRakuten Group, Inc. |
Internet & Direct Marketing Retail | 2,500 | 11,534 | |||||||
| Recruit Holdings Co. Ltd. |
Professional Services | 4,660 | 127,801 | |||||||
| Relo Group, Inc. |
Real Estate Management & Development | 360 | 5,694 | |||||||
| aRenesas Electronics Corp. |
Semiconductors & Semiconductor Equipment | 4,115 | 59,163 | |||||||
| Rengo Co. Ltd. |
Containers & Packaging | 740 | 4,776 | |||||||
| aRENOVA, Inc. |
Independent Power Producers & Energy Traders | 140 | 2,093 | |||||||
| Resona Holdings, Inc. |
Banks | 7,000 | 33,635 | |||||||
| Resonac Holdings Corp. |
Chemicals | 595 | 9,728 | |||||||
| Resorttrust, Inc. |
Hotels, Restaurants & Leisure | 200 | 3,169 | |||||||
| Ricoh Co. Ltd. |
Technology Hardware, Storage & Peripherals | 2,000 | 14,892 | |||||||
| Rinnai Corp. |
Household Durables | 285 | 6,927 | |||||||
| Rohm Co. Ltd. |
Semiconductors & Semiconductor Equipment | 300 | 24,728 | |||||||
| Rohto Pharmaceutical Co. Ltd. |
Personal Products | 670 | 13,945 | |||||||
| Ryohin Keikaku Co. Ltd. |
Broadline Retail | 815 | 9,210 | |||||||
| Sankyo Co. Ltd. |
Leisure Products | 120 | 4,986 | |||||||
| Sankyu, Inc. |
Ground Transportation | 135 | 4,975 | |||||||
| Sanrio Co. Ltd. |
Specialty Retail | 200 | 8,911 | |||||||
| Santen Pharmaceutical Co. Ltd. |
Pharmaceuticals | 1,000 | 8,491 | |||||||
| Sanwa Holdings Corp. |
Building Products | 715 | 7,607 | |||||||
| Sapporo Holdings Ltd. |
Beverages | 200 | 5,117 | |||||||
| Sawai Group Holdings Co. Ltd. |
Pharmaceuticals | 130 | 3,565 | |||||||
| SBI Holdings, Inc. |
Capital Markets | 820 | 16,167 | |||||||
| aSBI Shinsei Bank Ltd. |
Banks | 200 | 3,504 | |||||||
| SCREEN Holdings Co. Ltd. |
Semiconductors & Semiconductor Equipment | 135 | 11,817 | |||||||
| SCSK Corp. |
IT Services | 445 | 6,470 | |||||||
| Secom Co. Ltd. |
Commercial Services & Supplies | 660 | 40,486 | |||||||
| Sega Sammy Holdings, Inc. |
Leisure Products | 520 | 9,819 | |||||||
| Seibu Holdings, Inc. |
Industrial Conglomerates | 673 | 6,872 | |||||||
| Seiko Epson Corp. |
Technology Hardware, Storage & Peripherals | 900 | 12,720 | |||||||
| Seino Holdings Co. Ltd. |
Ground Transportation | 500 | 5,485 | |||||||
| Sekisui Chemical Co. Ltd. |
Household Durables | 1,140 | 16,069 | |||||||
| Sekisui House Ltd. |
Household Durables | 1,900 | 38,517 | |||||||
| Sekisui House Reit, Inc. |
Diversified REITs | 15 | 8,104 | |||||||
| Seven & i Holdings Co. Ltd. |
Consumer Staples Distribution & Retail | 2,650 | 118,970 | |||||||
| Seven Bank Ltd. |
Banks | 2,500 | 4,978 | |||||||
| SG Holdings Co. Ltd. |
Air Freight & Logistics | 1,400 | 20,618 | |||||||
| aSharp Corp. |
Household Durables | 725 | 5,082 | |||||||
| aSHIFT, Inc. |
IT Services | 40 | 7,051 | |||||||
| aShikoku Electric Power Co., Inc. |
Electric Utilities | 500 | 2,829 | |||||||
| Shimadzu Corp. |
Electronic Equipment, Instruments & Components | 900 | 27,996 | |||||||
| Shimamura Co. Ltd. |
Specialty Retail | 75 | 7,608 | |||||||
| Shimano, Inc. |
Leisure Products | 266 | 45,649 | |||||||
| Shimizu Corp. |
Construction & Engineering | 2,000 | 11,271 | |||||||
| 270 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan Hedged ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Japan (continued) |
||||||||||
| Shin-Etsu Chemical Co. Ltd. |
Chemicals | 6,650 | $ | 213,605 | ||||||
| Shinko Electric Industries Co. Ltd. |
Semiconductors & Semiconductor Equipment | 215 | 6,591 | |||||||
| Shionogi & Co. Ltd. |
Pharmaceuticals | 900 | 40,419 | |||||||
| Ship Healthcare Holdings, Inc. |
Health Care Providers & Services | 265 | 4,852 | |||||||
| Shiseido Co. Ltd. |
Personal Products | 1,305 | 60,607 | |||||||
| Shizuoka Financial Group, Inc. |
Banks | 1,665 | 11,897 | |||||||
| SHO-BOND Holdings Co. Ltd. |
Construction & Engineering | 165 | 6,794 | |||||||
| aShochiku Co. Ltd. |
Entertainment | 35 | 3,006 | |||||||
| aSkylark Holdings Co. Ltd. |
Hotels, Restaurants & Leisure | 740 | 9,619 | |||||||
| SMC Corp. |
Machinery | 195 | 102,313 | |||||||
| SMS Co. Ltd. |
Professional Services | 190 | 4,561 | |||||||
| SoftBank Corp. |
Wireless Telecommunication Services | 9,500 | 109,140 | |||||||
| SoftBank Group Corp. |
Wireless Telecommunication Services | 3,265 | 127,126 | |||||||
| Sohgo Security Services Co. Ltd. |
Commercial Services & Supplies | 230 | 6,161 | |||||||
| Sojitz Corp. |
Trading Companies & Distributors | 800 | 16,608 | |||||||
| Sompo Holdings, Inc. |
Insurance | 1,050 | 41,435 | |||||||
| Sony Group Corp. |
Household Durables | 4,220 | 380,019 | |||||||
| Sotetsu Holdings, Inc. |
Ground Transportation | 265 | 4,516 | |||||||
| Square Enix Holdings Co. Ltd. |
Entertainment | 245 | 11,708 | |||||||
| Stanley Electric Co. Ltd. |
Automobile Components | 500 | 11,011 | |||||||
| Subaru Corp. |
Automobiles | 2,123 | 33,730 | |||||||
| Sugi Holdings Co. Ltd. |
Consumer Staples Distribution & Retail | 130 | 5,558 | |||||||
| SUMCO Corp. |
Semiconductors & Semiconductor Equipment | 1,140 | 16,969 | |||||||
| Sumitomo Bakelite Co. Ltd. |
Chemicals | 100 | 3,877 | |||||||
| Sumitomo Chemical Co. Ltd. |
Chemicals | 5,500 | 18,390 | |||||||
| Sumitomo Corp. |
Trading Companies & Distributors | 3,800 | 66,840 | |||||||
| Sumitomo Electric Industries Ltd. |
Automobile Components | 2,609 | 33,267 | |||||||
| Sumitomo Forestry Co. Ltd. |
Household Durables | 500 | 9,843 | |||||||
| Sumitomo Heavy Industries Ltd. |
Machinery | 360 | 8,764 | |||||||
| Sumitomo Metal Mining Co. Ltd. |
Metals & Mining | 815 | 30,918 | |||||||
| Sumitomo Mitsui Financial Group, Inc. |
Banks | 4,400 | 175,154 | |||||||
| Sumitomo Mitsui Trust Holdings, Inc. |
Banks | 1,210 | 41,285 | |||||||
| Sumitomo Pharma Co. Ltd. |
Pharmaceuticals | 515 | 3,134 | |||||||
| Sumitomo Realty & Development Co. Ltd. |
Real Estate Management & Development | 1,350 | 30,248 | |||||||
| Sumitomo Rubber Industries Ltd. |
Automobile Components | 650 | 5,841 | |||||||
| Sundrug Co. Ltd. |
Consumer Staples Distribution & Retail | 225 | 6,145 | |||||||
| Suntory Beverage & Food Ltd. |
Beverages | 440 | 16,315 | |||||||
| Suzuken Co. Ltd. |
Health Care Providers & Services | 265 | 6,660 | |||||||
| Suzuki Motor Corp. |
Automobiles | 1,520 | 54,866 | |||||||
| Sysmex Corp. |
Health Care Equipment & Supplies | 643 | 41,757 | |||||||
| T&D Holdings, Inc. |
Insurance | 1,700 | 20,961 | |||||||
| Taiheiyo Cement Corp. |
Construction Materials | 400 | 7,475 | |||||||
| Taisei Corp. |
Construction & Engineering | 590 | 18,154 | |||||||
| Taisho Pharmaceutical Holdings Co. Ltd. |
Pharmaceuticals | 150 | 6,221 | |||||||
| Taiyo Yuden Co. Ltd. |
Electronic Equipment, Instruments & Components | 426 | 14,212 | |||||||
| Takara Bio, Inc. |
Biotechnology | 170 | 2,214 | |||||||
| Takara Holdings, Inc. |
Beverages | 600 | 4,607 | |||||||
| Takashimaya Co. Ltd. |
Broadline Retail | 500 | 7,262 | |||||||
| Takeda Pharmaceutical Co. Ltd. |
Pharmaceuticals | 5,179 | 169,274 | |||||||
| TBS Holdings, Inc. |
Media | 110 | 1,575 | |||||||
| TDK Corp. |
Electronic Equipment, Instruments & Components | 1,200 | 42,603 | |||||||
| TechnoPro Holdings, Inc. |
Professional Services | 355 | 9,723 | |||||||
| Teijin Ltd. |
Chemicals | 650 | 6,818 | |||||||
| Terumo Corp. |
Health Care Equipment & Supplies | 2,215 | 59,482 | |||||||
| THK Co. Ltd. |
Machinery | 390 | 8,952 | |||||||
| TIS, Inc. |
IT Services | 750 | 19,667 | |||||||
| Tobu Railway Co. Ltd. |
Ground Transportation | 670 | 15,958 | |||||||
| franklintempleton.com | Annual Report |
271 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan Hedged ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Japan (continued) |
||||||||||
| Toda Corp. |
Construction & Engineering | 500 | $ | 2,596 | ||||||
| Toho Co. Ltd. |
Entertainment | 375 | 14,285 | |||||||
| Toho Gas Co. Ltd. |
Gas Utilities | 316 | 5,848 | |||||||
| aTohoku Electric Power Co., Inc. |
Electric Utilities | 1,500 | 7,427 | |||||||
| Tokai Carbon Co. Ltd. |
Chemicals | 603 | 5,709 | |||||||
| Tokio Marine Holdings, Inc. |
Insurance | 6,400 | 122,480 | |||||||
| Tokyo Century Corp. |
Financial Services | 220 | 7,282 | |||||||
| aTokyo Electric Power Co. Holdings, Inc. |
Electric Utilities | 5,500 | 19,547 | |||||||
| Tokyo Electron Ltd. |
Semiconductors & Semiconductor Equipment | 1,520 | 183,190 | |||||||
| Tokyo Gas Co. Ltd. |
Gas Utilities | 1,400 | 26,256 | |||||||
| Tokyo Ohka Kogyo Co. Ltd. |
Chemicals | 135 | 7,800 | |||||||
| Tokyo Tatemono Co. Ltd. |
Real Estate Management & Development | 670 | 8,130 | |||||||
| Tokyu Corp. |
Ground Transportation | 2,000 | 26,478 | |||||||
| Tokyu Fudosan Holdings Corp. |
Real Estate Management & Development | 2,000 | 9,542 | |||||||
| TOPPAN, Inc. |
Commercial Services & Supplies | 900 | 18,022 | |||||||
| Toray Industries, Inc. |
Chemicals | 5,500 | 31,259 | |||||||
| Toshiba Corp. |
Industrial Conglomerates | 1,400 | 46,758 | |||||||
| Toshiba TEC Corp. |
Technology Hardware, Storage & Peripherals | 90 | 2,644 | |||||||
| Tosoh Corp. |
Chemicals | 1,000 | 13,502 | |||||||
| TOTO Ltd. |
Building Products | 500 | 16,605 | |||||||
| Toyo Seikan Group Holdings Ltd. |
Containers & Packaging | 500 | 6,860 | |||||||
| Toyo Suisan Kaisha Ltd. |
Food Products | 271 | 11,301 | |||||||
| Toyo Tire Corp. |
Automobile Components | 350 | 4,063 | |||||||
| Toyoda Gosei Co. Ltd. |
Automobile Components | 265 | 4,540 | |||||||
| Toyota Boshoku Corp. |
Automobile Components | 200 | 3,211 | |||||||
| Toyota Industries Corp. |
Automobile Components | 540 | 29,822 | |||||||
| Toyota Motor Corp. |
Automobiles | 41,000 | 579,157 | |||||||
| Toyota Tsusho Corp. |
Trading Companies & Distributors | 750 | 31,670 | |||||||
| aTrend Micro, Inc. |
Software | 405 | 19,689 | |||||||
| TS Tech Co. Ltd. |
Automobile Components | 350 | 4,415 | |||||||
| Tsumura & Co. |
Pharmaceuticals | 215 | 4,249 | |||||||
| Tsuruha Holdings, Inc. |
Consumer Staples Distribution & Retail | 110 | 7,315 | |||||||
| UBE Corp. |
Chemicals | 350 | 5,404 | |||||||
| Ulvac, Inc. |
Semiconductors & Semiconductor Equipment | 135 | 5,833 | |||||||
| Unicharm Corp. |
Household Products | 1,300 | 53,147 | |||||||
| United Urban Investment Corp. |
Diversified REITs | 10 | 10,745 | |||||||
| Ushio, Inc. |
Electrical Equipment | 390 | 4,879 | |||||||
| USS Co. Ltd. |
Specialty Retail | 690 | 11,898 | |||||||
| Welcia Holdings Co. Ltd. |
Consumer Staples Distribution & Retail | 355 | 7,559 | |||||||
| West Japan Railway Co. |
Ground Transportation | 765 | 31,367 | |||||||
| Workman Co. Ltd. |
Specialty Retail | 150 | 6,312 | |||||||
| Yakult Honsha Co. Ltd. |
Food Products | 400 | 28,943 | |||||||
| aYamada Holdings Co. Ltd. |
Specialty Retail | 2,000 | 6,853 | |||||||
| Yamaguchi Financial Group, Inc. |
Banks | 740 | 4,515 | |||||||
| Yamaha Corp. |
Leisure Products | 500 | 19,122 | |||||||
| Yamaha Motor Co. Ltd. |
Automobiles | 1,025 | 26,647 | |||||||
| Yamato Holdings Co. Ltd. |
Air Freight & Logistics | 1,100 | 18,753 | |||||||
| Yamato Kogyo Co. Ltd. |
Metals & Mining | 100 | 4,012 | |||||||
| Yamazaki Baking Co. Ltd. |
Food Products | 435 | 5,243 | |||||||
| Yaoko Co. Ltd. |
Consumer Staples Distribution & Retail | 85 | 4,407 | |||||||
| Yaskawa Electric Corp. |
Machinery | 930 | 40,319 | |||||||
| Yokogawa Electric Corp. |
Electronic Equipment, Instruments & Components | 815 | 13,166 | |||||||
| Yokohama Rubber Co. Ltd. |
Automobile Components | 465 | 9,772 | |||||||
| Z Holdings Corp. |
Interactive Media & Services | 9,000 | 25,210 | |||||||
| Zenkoku Hosho Co. Ltd. |
Financial Services | 175 | 6,568 | |||||||
| Zensho Holdings Co. Ltd. |
Hotels, Restaurants & Leisure | 340 | 10,027 | |||||||
| Zeon Corp. |
Chemicals | 500 | 5,256 | |||||||
| 272 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan Hedged ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Japan (continued) |
||||||||||
| ZOZO, Inc. |
Internet & Direct Marketing Retail | 360 | $ | 8,155 | ||||||
|
|
|
|||||||||
| Total Investments before Short-Term Investments (Cost $13,750,298) |
13,036,206 | |||||||||
|
|
|
|||||||||
| Short-Term Investments 0.0%† |
||||||||||
| Money Market Funds 0.0%† |
||||||||||
| United States 0.0%† |
||||||||||
| b,c Institutional Fiduciary Trust - Money Market Portfolio, 4.47% |
Money Market Funds | 721 | 721 | |||||||
|
|
|
|||||||||
| Total Short-Term Investments |
721 | |||||||||
|
|
|
|||||||||
| Total Investments (Cost $13,751,019) 98.1% |
13,036,927 | |||||||||
| Other Assets, less Liabilities 1.9% |
247,567 | |||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 13,284,494 | ||||||||
|
|
|
|||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bThe rate shown is the annualized seven-day effective yield at period end.
cSee Note 3(c) regarding investments in affiliated management investment companies.
At March 31, 2023 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 |
UBSW | Buy | 890,914,000 | $ | 6,694,137 | 4/04/23 | $— | $ (65 | ) | |||||||||||||||||||
| Japanese Yen |
HSBK | Buy | 445,457,000 | 3,347,086 | 4/04/23 | — | (50 | ) | ||||||||||||||||||||
| Japanese Yen |
BOFA | Buy | 445,457,000 | 3,347,086 | 4/04/23 | — | (50 | ) | ||||||||||||||||||||
| Japanese Yen |
UBSW | Sell | 890,914,000 | 6,570,681 | 4/04/23 | — | (123,391 | ) | ||||||||||||||||||||
| Japanese Yen |
BOFA | Sell | 445,457,000 | 3,285,323 | 4/04/23 | — | (61,712 | ) | ||||||||||||||||||||
| Japanese Yen |
HSBK | Sell | 445,457,000 | 3,285,336 | 4/04/23 | — | (61,700 | ) | ||||||||||||||||||||
| Japanese Yen |
UBSW | Sell | 885,309,000 | 6,678,684 | 5/02/23 | — | (133 | ) | ||||||||||||||||||||
| Japanese Yen |
BOFA | Sell | 442,654,000 | 3,339,323 | 5/02/23 | — | (82 | ) | ||||||||||||||||||||
| Japanese Yen |
HSBK | Sell | 442,654,000 | 3,339,336 | 5/02/23 | — | (69 | ) | ||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
| Total Forward Exchange Contracts |
|
$ - | $(247,252 | ) | ||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
| Net unrealized appreciation (depreciation) |
|
$(247,252 | ) | |||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||
aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.
| franklintempleton.com | Annual Report |
273 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Japan Hedged ETF (continued)
At March 31, 2023, 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 |
8 | $168,548 | 6/08/23 | $2,278 | ||||||||||||||||
*As of year end.
See Note 7 regarding other derivative information.
See Abbreviations on page 355.
| 274 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Latin America ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$25.25 | $22.40 | $15.20 | $26.41 | $26.17 | |||||||||||||||
| Income from investment operationsb: | ||||||||||||||||||||
| Net investment incomec |
1.66 | 1.54 | 0.57 | 0.77 | 0.38 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(4.62 | ) | 2.83 | 7.13 | (11.08 | ) | (0.02 | ) | ||||||||||||
| Total from investment operations |
(2.96 | ) | 4.37 | 7.70 | (10.31 | ) | 0.36 | |||||||||||||
| Less distributions from net investment income |
(1.87 | ) | (1.52 | ) | (0.50 | ) | (0.90 | ) | (0.12 | ) | ||||||||||
| Net asset value, end of year |
$20.42 | $25.25 | $22.40 | $15.20 | $26.41 | |||||||||||||||
| Total returnd |
(11.05)% | 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 |
8.09% | 6.75% | 2.86% | 2.97% | 3.08% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$67,372 | $7,575 | $4,480 | $1,520 | $2,641 | |||||||||||||||
| Portfolio turnover ratef |
10.49%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: | 10.49% | 18.50% | 10.21% | 12.74% | — | |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
275 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE Latin America ETF
| Industry | Shares | Value | ||||||||
| Common Stocks 82.3% |
||||||||||
| Brazil 43.0% |
||||||||||
| Ambev SA |
Beverages | 485,100 | $ | 1,371,034 | ||||||
| Atacadao SA |
Consumer Staples Distribution & Retail | 59,400 | 145,154 | |||||||
| Auren Energia SA |
Independent Power Producers & Energy Traders | 39,600 | 114,577 | |||||||
| B3 SA - Brasil Bolsa Balcao |
Capital Markets | 676,500 | 1,380,953 | |||||||
| Banco Bradesco SA |
Banks | 168,300 | 393,345 | |||||||
| Banco BTG Pactual S.A |
Capital Markets | 128,700 | 498,783 | |||||||
| Banco do Brasil SA |
Banks | 95,700 | 738,194 | |||||||
| Banco Santander Brasil SA |
Banks | 42,900 | 226,758 | |||||||
| BB Seguridade Participacoes SA |
Insurance | 75,900 | 486,664 | |||||||
| Bradespar SA |
Metals & Mining | 3,300 | 15,978 | |||||||
| aBRF SA |
Food Products | 89,100 | 109,129 | |||||||
| Caixa Seguridade Participacoes SA |
Insurance | 49,500 | 85,913 | |||||||
| CCR SA |
Transportation Infrastructure | 125,400 | 316,576 | |||||||
| Centrais Eletricas Brasileiras SA |
Electric Utilities | 146,800 | 963,563 | |||||||
| Cia de Saneamento Basico do Estado de Sao Paulo SABESP |
Water Utilities | 37,900 | 378,309 | |||||||
| Cia Energetica de Minas Gerais |
Electric Utilities | 36,300 | 122,569 | |||||||
| Cia Paranaense de Energia |
Electric Utilities | 36,300 | 44,675 | |||||||
| Cia Siderurgica Nacional SA |
Metals & Mining | 69,300 | 211,033 | |||||||
| Cielo SA |
IT Services | 128,700 | 123,109 | |||||||
| Cosan SA |
Oil, Gas & Consumable Fuels | 132,000 | 392,856 | |||||||
| CPFL Energia SA |
Electric Utilities | 19,800 | 123,597 | |||||||
| CSN Mineracao SA |
Metals & Mining | 59,400 | 56,703 | |||||||
| Dexco SA |
Paper & Forest Products | 36,300 | 42,097 | |||||||
| Diagnosticos da America SA |
Health Care Providers & Services | 9,900 | 14,586 | |||||||
| EDP - Energias do Brasil SA |
Electric Utilities | 29,700 | 130,861 | |||||||
| aEmbraer SA |
Aerospace & Defense | 82,500 | 338,282 | |||||||
| Energisa SA |
Electric Utilities | 33,000 | 261,514 | |||||||
| aEneva SA |
Independent Power Producers & Energy Traders | 135,300 | 279,393 | |||||||
| Engie Brasil Energia SA |
Independent Power Producers & Energy Traders | 19,800 | 156,869 | |||||||
| Equatorial Energia SA |
Electric Utilities | 105,600 | 561,506 | |||||||
| a,bGPS Participacoes e Empreendimentos SA |
Commercial Services & Supplies | 46,200 | 110,255 | |||||||
| GRUPO DE MODA SOMA SA |
Textiles, Apparel & Luxury Goods | 49,500 | 79,177 | |||||||
| aGrupo Mateus SA |
Consumer Staples Distribution & Retail | 42,900 | 48,398 | |||||||
| a,bHapvida Participacoes e Investimentos SA |
Health Care Providers & Services | 445,500 | 230,208 | |||||||
| Hypera SA |
Pharmaceuticals | 44,400 | 330,138 | |||||||
| Intelbras SA Industria de Telecomunicacao Eletronica Brasileira |
Communications Equipment | 6,600 | 29,757 | |||||||
| Itau Unibanco Holding SA |
Banks | 49,500 | 205,605 | |||||||
| Klabin SA |
Containers & Packaging | 85,800 | 306,123 | |||||||
| Localiza Rent a Car SA |
Ground Transportation | 87,081 | 917,139 | |||||||
| Lojas Renner SA |
Broadline Retail | 105,600 | 345,110 | |||||||
| M Dias Branco SA |
Food Products | 13,200 | 65,658 | |||||||
| aMagazine Luiza SA |
Broadline Retail | 339,900 | 221,896 | |||||||
| Marfrig Global Foods SA |
Food Products | 36,300 | 47,538 | |||||||
| Multiplan Empreendimentos Imobiliarios SA |
Real Estate Management & Development | 29,700 | 144,334 | |||||||
| Natura & Co. Holding SA |
Personal Products | 105,600 | 274,921 | |||||||
| Neoenergia SA |
Electric Utilities | 26,400 | 78,103 | |||||||
| aPetro Rio SA |
Oil, Gas & Consumable Fuels | 74,700 | 459,522 | |||||||
| Petroleo Brasileiro SA |
Oil, Gas & Consumable Fuels | 412,500 | 2,155,145 | |||||||
| Petroreconcavo SA |
Oil, Gas & Consumable Fuels | 23,100 | 92,623 | |||||||
| Porto Seguro SA |
Insurance | 19,800 | 91,849 | |||||||
| Raia Drogasil SA |
Consumer Staples Distribution & Retail | 118,800 | 572,883 | |||||||
| bRede D’Or Sao Luiz SA |
Health Care Providers & Services | 85,800 | 359,428 | |||||||
| Rumo SA |
Ground Transportation | 138,600 | 515,282 | |||||||
| Sao Martinho SA |
Food Products | 16,500 | 87,931 | |||||||
| Sendas Distribuidora SA |
Consumer Staples Distribution & Retail | 132,000 | 404,572 | |||||||
| 276 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Latin America ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Brazil (continued) |
||||||||||
| SLC Agricola SA |
Food Products | 10,800 | $ | 97,110 | ||||||
| aSmartfit Escola de Ginastica e Danca SA |
Hotels, Restaurants & Leisure | 13,200 | 34,730 | |||||||
| Suzano SA |
Paper & Forest Products | 78,400 | 643,250 | |||||||
| Telefonica Brasil SA |
Diversified Telecommunication Services | 49,500 | 377,431 | |||||||
| TIM SA |
Wireless Telecommunication Services | 89,100 | 221,070 | |||||||
| TOTVS SA |
Software | 49,500 | 274,921 | |||||||
| Transmissora Alianca de Energia Eletrica SA |
Electric Utilities | 23,100 | 158,685 | |||||||
| Ultrapar Participacoes SA |
Oil, Gas & Consumable Fuels | 92,400 | 254,406 | |||||||
| Usinas Siderurgicas de Minas Gerais SA |
Metals & Mining | 19,800 | 31,124 | |||||||
| Vale SA |
Metals & Mining | 432,400 | 6,847,275 | |||||||
| Vamos Locacao de Caminhoes Maquinas e Equipamentos SA |
Ground Transportation | 36,300 | 95,578 | |||||||
| Vibra Energia SA |
Specialty Retail | 125,400 | 356,395 | |||||||
| WEG SA |
Machinery | 165,000 | 1,319,609 | |||||||
|
|
|
|||||||||
| 28,969,759 | ||||||||||
|
|
|
|||||||||
| Chile 4.9% |
||||||||||
| Banco de Chile |
Banks | 4,861,560 | 474,712 | |||||||
| Banco de Credito e Inversiones SA |
Banks | 5,973 | 176,037 | |||||||
| Banco Santander Chile |
Banks | 6,898,980 | 307,597 | |||||||
| CAP SA |
Metals & Mining | 8,217 | 68,689 | |||||||
| Cencosud SA |
Consumer Staples Distribution & Retail | 147,411 | 286,391 | |||||||
| Cencosud Shopping SA |
Real Estate Management & Development | 53,922 | 87,300 | |||||||
| Cia Cervecerias Unidas SA |
Beverages | 14,718 | 113,930 | |||||||
| Cia Sud Americana de Vapores SA |
Marine Transportation | 1,944,921 | 194,440 | |||||||
| Colbun SA |
Independent Power Producers & Energy Traders | 806,619 | 107,126 | |||||||
| Empresas CMPC SA |
Paper & Forest Products | 133,320 | 224,007 | |||||||
| Empresas Copec SA |
Oil, Gas & Consumable Fuels | 54,285 | 385,195 | |||||||
| Enel Americas SA |
Electric Utilities | 2,117,313 | 280,394 | |||||||
| Enel Chile SA |
Electric Utilities | 2,768,898 | 151,857 | |||||||
| Falabella SA |
Broadline Retail | 88,341 | 204,257 | |||||||
| Itau CorpBanca Chile SA |
Banks | 36,141,501 | 89,553 | |||||||
| Plaza SA |
Real Estate Management & Development | 33,231 | 43,886 | |||||||
| Quinenco SA |
Industrial Conglomerates | 29,634 | 115,258 | |||||||
|
|
|
|||||||||
| 3,310,629 | ||||||||||
|
|
|
|||||||||
| Colombia 1.0% |
||||||||||
| Bancolombia SA |
Banks | 30,624 | 229,977 | |||||||
| Ecopetrol SA |
Oil, Gas & Consumable Fuels | 527,010 | 277,117 | |||||||
| Interconexion Electrica SA ESP |
Electric Utilities | 49,104 | 159,665 | |||||||
|
|
|
|||||||||
| 666,759 | ||||||||||
|
|
|
|||||||||
| Mexico 32.4% |
||||||||||
| Alfa SAB de CV, Class A, A |
Industrial Conglomerates | 403,887 | 255,449 | |||||||
| Alpek SAB de CV |
Chemicals | 41,646 | 46,176 | |||||||
| America Movil SAB de CV |
Wireless Telecommunication Services | 3,139,092 | 3,291,040 | |||||||
| Arca Continental SAB de CV |
Beverages | 49,137 | 445,324 | |||||||
| bBanco del Bajio SA |
Banks | 78,969 | 286,906 | |||||||
| Becle SAB de CV |
Beverages | 60,060 | 155,173 | |||||||
| aCemex SAB de CV |
Construction Materials | 1,685,838 | 923,402 | |||||||
| Coca-Cola Femsa SAB de CV |
Beverages | 58,476 | 468,721 | |||||||
| Concentradora Fibra Danhos SA de CV |
Diversified REITs | 26,664 | 35,427 | |||||||
| El Puerto de Liverpool SAB de CV, Class C1 |
Broadline Retail | 22,011 | 138,020 | |||||||
| Fibra Uno Administracion SA de CV |
Diversified REITs | 319,869 | 445,896 | |||||||
| Fomento Economico Mexicano SAB de CV |
Beverages | 202,884 | 1,930,409 | |||||||
| Gruma SAB de CV, Class B |
Food Products | 21,714 | 319,697 | |||||||
| Grupo Aeroportuario del Centro Norte SAB de CV |
Transportation Infrastructure | 30,657 | 341,733 | |||||||
| franklintempleton.com | Annual Report |
277 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Latin America ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Mexico (continued) |
||||||||||
| Grupo Aeroportuario del Pacifico SAB de CV, Class B |
Transportation Infrastructure | 38,214 | $ | 742,037 | ||||||
| Grupo Aeroportuario del Sureste SAB de CV, Class B |
Transportation Infrastructure | 22,242 | 679,012 | |||||||
| Grupo Bimbo SAB de CV |
Food Products | 246,345 | 1,237,182 | |||||||
| Grupo Carso SAB de CV, A1 |
Industrial Conglomerates | 50,160 | 248,800 | |||||||
| Grupo Comercial Chedraui SA de CV |
Consumer Staples Distribution & Retail | 51,315 | 294,146 | |||||||
| Grupo Elektra SAB de CV |
Banks | 6,699 | 379,950 | |||||||
| Grupo Financiero Banorte SAB de CV, Class O |
Banks | 321,123 | 2,701,517 | |||||||
| aGrupo Financiero Inbursa SAB de CV, Class O |
Banks | 221,958 | 476,344 | |||||||
| Grupo Mexico SAB de CV, Class B |
Metals & Mining | 351,450 | 1,660,901 | |||||||
| Grupo Televisa SAB |
Media | 267,564 | 282,590 | |||||||
| Industrias Bachoco SAB de CV |
Food Products | 8,283 | 44,631 | |||||||
| aIndustrias Penoles SAB de CV |
Metals & Mining | 13,794 | 203,060 | |||||||
| Kimberly-Clark de Mexico SAB de CV, Class A |
Household Products | 92,697 | 194,881 | |||||||
| Megacable Holdings SAB de CV |
Media | 33,297 | 84,662 | |||||||
| Operadora De Sites Mexicanos SAB de CV, A-1 |
Diversified Telecommunication Services | 139,524 | 137,700 | |||||||
| Orbia Advance Corp. SAB de CV |
Chemicals | 108,009 | 234,370 | |||||||
| Prologis Property Mexico SA de CV |
Diversified REITs | 59,994 | 216,671 | |||||||
| Promotora y Operadora de Infraestructura SAB de CV |
Transportation Infrastructure | 24,354 | 242,717 | |||||||
| Qualitas Controladora SAB de CV |
Insurance | 18,777 | 119,894 | |||||||
| Regional SAB de CV |
Banks | 26,367 | 201,053 | |||||||
| aSitios Latinoamerica SAB de CV |
Construction & Engineering | 197,340 | 81,533 | |||||||
| Wal-Mart de Mexico SAB de CV, Class V |
Consumer Staples Distribution & Retail | 573,507 | 2,287,866 | |||||||
|
|
|
|||||||||
| 21,834,890 | ||||||||||
|
|
|
|||||||||
| United States 1.0% |
||||||||||
| GCC SAB de CV |
Construction Materials | 18,117 | 143,333 | |||||||
| JBS SA |
Food Products | 151,800 | 534,417 | |||||||
|
|
|
|||||||||
| 677,750 | ||||||||||
|
|
|
|||||||||
| Total Common Stocks |
55,459,787 | |||||||||
|
|
|
|||||||||
| Preferred Stocks 17.4% |
||||||||||
| Brazil 14.8% |
||||||||||
| aAlpargatas SA, pfd. |
Textiles, Apparel & Luxury Goods | 26,400 | 42,436 | |||||||
| cBanco Bradesco SA, 6.492%, pfd. |
Banks | 577,500 | 1,500,059 | |||||||
| cBradespar SA, 11.708%, pfd. |
Metals & Mining | 26,400 | 139,647 | |||||||
| cBraskem SA, Class A, 8.76%, pfd. |
Chemicals | 19,800 | 75,603 | |||||||
| cCentrais Eletricas Brasileiras SA, Class B, 4.449%,pfd. |
Electric Utilities | 29,700 | 212,517 | |||||||
| cCia Energetica de Minas Gerais, 11.32%, pfd. |
Electric Utilities | 141,900 | 320,169 | |||||||
| cCia Paranaense de Energia, 11.974%, pfd. |
Electric Utilities | 148,500 | 203,262 | |||||||
| cCTEEP-Cia de Transmissao de Energia Eletrica Paulista, 4.167%, pfd. |
Electric Utilities | 19,800 | 84,624 | |||||||
| cGerdau SA, 13.863%, pfd. |
Metals & Mining | 121,275 | 604,910 | |||||||
| c Itau Unibanco Holding SA, 4.349%, pfd. |
Banks | 537,900 | 2,624,653 | |||||||
| cItausa SA, 4.745%, pfd. |
Banks | 580,800 | 941,606 | |||||||
| cMetalurgica Gerdau SA, 10.025%, pfd. |
Metals & Mining | 72,600 | 169,392 | |||||||
| cPetroleo Brasileiro SA, 43.945%, pfd. |
Oil, Gas & Consumable Fuels | 623,700 | 2,884,624 | |||||||
| cUnipar Carbocloro SA, Class B, 19.565%, pfd |
Chemicals | 5,340 | 73,777 | |||||||
| cUsinas Siderurgicas de Minas Gerais SA, Class A, 8.628%, pfd. |
Metals & Mining | 52,800 | 75,916 | |||||||
|
|
|
|||||||||
| 9,953,195 | ||||||||||
|
|
|
|||||||||
| 278 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Latin America ETF (continued)
| Industry | Shares | Value | ||||||||
| Preferred Stocks (continued) |
||||||||||
| Chile 2.0% |
||||||||||
| cEmbotelladora Andina SA, Class B, 13.254%, pfd. |
Beverages | 41,811 | $ | 108,413 | ||||||
| cSociedad Quimica y Minera de Chile SA, Class B, 0.012%, pfd. |
Chemicals | 15,147 | 1,222,320 | |||||||
|
|
|
|||||||||
| 1,330,733 | ||||||||||
|
|
|
|||||||||
| Colombia 0.6% |
||||||||||
| cBancolombia SA, 11.049%, pfd. |
Banks | 50,028 | 313,312 | |||||||
| cGrupo Aval Acciones y Valores SA, 0.75%, pfd. |
Banks | 482,361 | 57,861 | |||||||
| cGrupo de Inversiones Suramericana SA, 6.944%,pfd. |
Financial Services | 8,910 | 21,590 | |||||||
|
|
|
|||||||||
| 392,763 | ||||||||||
|
|
|
|||||||||
| Total Preferred Stocks |
11,676,691 | |||||||||
|
|
|
|||||||||
| Right 0.0%† |
||||||||||
| Brazil 0.0%† |
||||||||||
| Localiza Rent a Car SA |
Ground Transportation | 389 | 1,007 | |||||||
|
|
|
|||||||||
| Total Rights (Cost $0) |
1,007 | |||||||||
|
|
|
|||||||||
| Total Investments (Cost $61,702,938) 99.7% |
67,137,485 | |||||||||
| Other Assets, less Liabilities 0.3% |
234,747 | |||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 67,372,232 | ||||||||
|
|
|
|||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $986,797, representing 1.5% of net assets.
cVariable rate security. The rate shown represents the yield at period end.
At March 31, 2023, 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 | $201,426 | 4/12/23 | $(14,879 | ) | ||||||||||||||
*As of year end.
See Note 7 regarding other derivative information.
See Abbreviations on page 355.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
279 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Mexico ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$27.49 | $22.14 | $14.35 | $22.11 | $24.98 | |||||||||||||||
| Income from investment operationsa: |
||||||||||||||||||||
| Net investment incomeb |
0.91 | 0.66 | 0.33 | 0.64 | 0.51 | |||||||||||||||
| Net realized and unrealized gains (losses) |
1.91 | 5.48 | 7.78 | (7.73 | ) | (2.86 | ) | |||||||||||||
| Total from investment operations |
2.82 | 6.14 | 8.11 | (7.09 | ) | (2.35 | ) | |||||||||||||
| Less distributions from net investment income |
(1.03 | ) | (0.79 | ) | (0.32 | ) | (0.67 | ) | (0.52 | ) | ||||||||||
| Net asset value, end of year |
$29.28 | $27.49 | $22.14 | $14.35 | $22.11 | |||||||||||||||
| Total returnc |
11.15% | 28.33% | 56.94% | (33.13)% | (9.28)% | |||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||
| Total expenses |
0.19% | 0.19% | 0.19% | 0.19% | 0.19% | |||||||||||||||
| Net investment income |
3.55% | 2.73% | 1.80% | 2.93% | 2.21% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$24,890 | $12,372 | $5,536 | $2,871 | $4,422 | |||||||||||||||
| Portfolio turnover ratee |
11.16%f | 22.39%f | 18.32%f | 19.32%f | 10.31% | |||||||||||||||
|
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
dRatios are annualized for periods less than one year.
ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
|
| |||||||||||||||||||
| fPortfolio turnover rate excluding cash creations was as follows: | 11.16% | 22.39% | 18.32% | 19.32% | — | |||||||||||||||
| 280 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE Mexico ETF
| Industry | Shares | Value | ||||||||
| Common Stocks 100.0% |
||||||||||
| Mexico 99.2% |
||||||||||
| Alfa SAB de CV, Class A, A |
Industrial Conglomerates | 573,461 | $ | 362,701 | ||||||
| Alpek SAB de CV |
Chemicals | 59,109 | 65,538 | |||||||
| America Movil SAB de CV |
Wireless Telecommunication Services | 3,016,718 | 3,162,742 | |||||||
| Arca Continental SAB de CV |
Beverages | 69,751 | 632,147 | |||||||
| aBanco del Bajio SA |
Banks | 111,996 | 406,897 | |||||||
| Becle SAB de CV |
Beverages | 85,187 | 220,092 | |||||||
| bCemex SAB de CV |
Construction Materials | 1,804,890 | 988,611 | |||||||
| Coca-Cola Femsa SAB de CV |
Beverages | 83,045 | 665,657 | |||||||
| Concentradora Fibra Danhos SA de CV |
Diversified REITs | 37,961 | 50,437 | |||||||
| El Puerto de Liverpool SAB de CV, Class C1 |
Broadline Retail | 31,229 | 195,821 | |||||||
| Fibra Uno Administracion SA de CV |
Diversified REITs | 454,308 | 633,304 | |||||||
| Fomento Economico Mexicano SAB de CV |
Beverages | 206,618 | 1,965,938 | |||||||
| Gruma SAB de CV, Class B |
Food Products | 30,787 | 453,280 | |||||||
| Grupo Aeroportuario del Centro Norte SAB de CV |
Transportation Infrastructure | 43,503 | 484,927 | |||||||
| Grupo Aeroportuario del Pacifico SAB de CV, Class B |
Transportation Infrastructure | 44,472 | 863,554 | |||||||
| Grupo Aeroportuario del Sureste SAB de CV, Class B |
Transportation Infrastructure | 26,588 | 811,688 | |||||||
| Grupo Bimbo SAB de CV |
Food Products | 237,048 | 1,190,491 | |||||||
| Grupo Carso SAB de CV, A1 |
Industrial Conglomerates | 71,230 | 353,310 | |||||||
| Grupo Comercial Chedraui SA de CV |
Consumer Staples Distribution & Retail | 72,879 | 417,754 | |||||||
| Grupo Elektra SAB de CV |
Banks | 9,521 | 540,007 | |||||||
| Grupo Financiero Banorte SAB de CV, Class O |
Banks | 314,143 | 2,642,796 | |||||||
| bGrupo Financiero Inbursa SAB de CV, Class O |
Banks | 314,806 | 675,605 | |||||||
| Grupo Mexico SAB de CV, Class B |
Metals & Mining | 365,381 | 1,726,737 | |||||||
| Grupo Televisa SAB |
Media | 379,457 | 400,767 | |||||||
| Industrias Bachoco SAB de CV |
Food Products | 11,730 | 63,204 | |||||||
| bIndustrias Penoles SAB de CV |
Metals & Mining | 19,601 | 288,544 | |||||||
| Kimberly-Clark de Mexico SAB de CV, Class A |
Household Products | 131,461 | 276,377 | |||||||
| Megacable Holdings SAB de CV |
Media | 47,481 | 120,727 | |||||||
| Operadora De Sites Mexicanos SAB de CV, A-1 |
Diversified Telecommunication Services | 198,033 | 195,445 | |||||||
| Orbia Advance Corp. SAB de CV |
Chemicals | 153,425 | 332,919 | |||||||
| Prologis Property Mexico SA de CV |
Diversified REITs | 85,085 | 307,288 | |||||||
| Promotora y Operadora de Infraestructura SAB de CV |
Transportation Infrastructure | 34,561 | 344,442 | |||||||
| Qualitas Controladora SAB de CV |
Insurance | 26,639 | 170,094 | |||||||
| Regional SAB de CV |
Banks | 37,383 | 285,052 | |||||||
| bSitios Latinoamerica SAB de CV |
Construction & Engineering | 279,803 | 115,603 | |||||||
| Wal-Mart de Mexico SAB de CV, Class V |
Consumer Staples Distribution & Retail | 569,058 | 2,270,118 | |||||||
|
|
|
|||||||||
| 24,680,614 | ||||||||||
|
|
|
|||||||||
| United States 0.8% |
||||||||||
| GCC SAB de CV |
Construction Materials | 25,840 | 204,433 | |||||||
|
|
|
|||||||||
| Total Investments (Cost $21,033,038) 100.0% |
24,885,047 | |||||||||
| Other Assets, less Liabilities 0.0%† |
4,801 | |||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 24,889,848 | ||||||||
|
|
|
|||||||||
†Rounds to less than 0.1% of net assets.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $406,897, representing 1.6% of net assets.
bNon-income producing.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
281 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Saudi Arabia ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$41.30 | $30.33 | $20.15 | $27.89 | $24.71 | |||||||||||||||
| Income from investment operationsb: | ||||||||||||||||||||
| Net investment incomec |
1.38 | 0.62 | 0.52 | 0.89 | 0.11 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(8.40 | ) | 11.03 | 10.23 | (7.80 | ) | 3.07 | |||||||||||||
| Total from investment operations |
(7.02 | ) | 11.65 | 10.75 | (6.91 | ) | 3.18 | |||||||||||||
| Less distributions from net investment income |
(0.63 | ) | (0.68 | ) | (0.57 | ) | (0.83 | ) | — | |||||||||||
| Net asset value, end of year |
$33.65 | $41.30 | $30.33 | $20.15 | $27.89 | |||||||||||||||
| Total returnd |
(17.04)% | 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 |
3.97% | 1.77% | 2.11% | 3.46% | 0.93% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$21,874 | $4,130 | $3,033 | $2,015 | $2,789 | |||||||||||||||
| Portfolio turnover ratef |
5.44%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: | 5.44% | 15.51% | 16.74% | 32.37% | — | |||||||||||||||
| 282 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE Saudi Arabia ETF
| Industry | Shares | Value | ||||||||
| Common Stocks 99.3% |
||||||||||
| Saudi Arabia 99.3% |
||||||||||
| Abdullah Al Othaim Markets Co. |
Consumer Staples Distribution & Retail | 3,718 | $ | 126,783 | ||||||
| ACWA Power Co. |
Independent Power Producers & Energy Traders | 11,245 | 421,197 | |||||||
| Advanced Petrochemical Co. |
Chemicals | 10,764 | 137,070 | |||||||
| aAl Rajhi Bank |
Banks | 134,589 | 2,635,344 | |||||||
| Alinma Bank |
Banks | 82,745 | 649,183 | |||||||
| Almarai Co. JSC |
Food Products | 21,281 | 319,751 | |||||||
| Arab National Bank |
Banks | 56,238 | 386,536 | |||||||
| Arabian Centres Co. Ltd. |
Real Estate Management & Development | 13,533 | 73,475 | |||||||
| Arabian Internet & Communications Services Co. |
IT Services | 2,132 | 141,312 | |||||||
| aBank AlBilad |
Banks | 41,379 | 438,736 | |||||||
| Bank Al-Jazira |
Banks | 33,943 | 164,393 | |||||||
| Banque Saudi Fransi |
Banks | 49,647 | 478,787 | |||||||
| BinDawood Holding Co. |
Consumer Staples Distribution & Retail | 2,470 | 43,363 | |||||||
| Bupa Arabia for Cooperative Insurance Co. |
Insurance | 6,045 | 279,889 | |||||||
| aCo. for Cooperative Insurance |
Insurance | 5,161 | 144,640 | |||||||
| Dallah Healthcare Co. |
Health Care Providers & Services | 3,458 | 141,869 | |||||||
| aDar Al Arkan Real Estate Development Co. |
Real Estate Management & Development | 44,720 | 190,855 | |||||||
| Dr Sulaiman Al Habib Medical Services Group Co. |
Health Care Providers & Services | 7,748 | 601,478 | |||||||
| Elm Co. |
IT Services | 2,158 | 253,991 | |||||||
| aEmaar Economic City |
Real Estate Management & Development | 30,862 | 66,267 | |||||||
| Etihad Etisalat Co. |
Wireless Telecommunication Services | 31,863 | 350,147 | |||||||
| Jarir Marketing Co. |
Specialty Retail | 4,966 | 215,643 | |||||||
| aMobile Telecommunications Co. Saudi Arabia |
Wireless Telecommunication Services | 37,206 | 128,854 | |||||||
| Mouwasat Medical Services Co. |
Health Care Providers & Services | 4,004 | 250,670 | |||||||
| Nahdi Medical Co. |
Consumer Staples Distribution & Retail | 3,289 | 161,747 | |||||||
| aNational Industrialization Co. |
Chemicals | 27,599 | 89,847 | |||||||
| Qassim Cement Co. |
Construction Materials | 3,718 | 66,660 | |||||||
| aRabigh Refining & Petrochemical Co. |
Oil, Gas & Consumable Fuels | 35,178 | 94,465 | |||||||
| Riyad Bank |
Banks | 123,747 | 979,110 | |||||||
| SABIC Agri-Nutrients Co. |
Chemicals | 19,695 | 668,445 | |||||||
| Sahara International Petrochemical Co. |
Chemicals | 30,342 | 305,950 | |||||||
| aSaudi Airlines Catering Co. |
Commercial Services & Supplies | 3,380 | 77,258 | |||||||
| aSaudi Arabian Mining Co. |
Metals & Mining | 61,568 | 1,049,725 | |||||||
| bSaudi Arabian Oil Co. |
Oil, Gas & Consumable Fuels | 199,160 | 1,713,741 | |||||||
| Saudi Basic Industries Corp. |
Chemicals | 64,805 | 1,558,966 | |||||||
| Saudi British Bank |
Banks | 84,448 | 793,029 | |||||||
| Saudi Cement Co. |
Construction Materials | 6,331 | 94,450 | |||||||
| Saudi Electricity Co. |
Electric Utilities | 66,027 | 410,899 | |||||||
| Saudi Industrial Investment Group |
Chemicals | 31,252 | 207,975 | |||||||
| Saudi Investment Bank |
Banks | 41,392 | 182,607 | |||||||
| aSaudi Kayan Petrochemical Co. |
Chemicals | 62,088 | 200,140 | |||||||
| Saudi National Bank |
Banks | 153,335 | 1,872,928 | |||||||
| aSaudi Research & Media Group |
Media | 2,717 | 142,737 | |||||||
| Saudi Tadawul Group Holding Co. |
Capital Markets | 4,043 | 155,529 | |||||||
| Saudi Telecom Co. |
Diversified Telecommunication Services | 131,911 | 1,407,421 | |||||||
| Saudia Dairy & Foodstuff Co. |
Food Products | 1,300 | 82,218 | |||||||
| Savola Group |
Food Products | 22,113 | 164,653 | |||||||
| aSeera Group Holding |
Hotels, Restaurants & Leisure | 12,376 | 73,391 | |||||||
| Southern Province Cement Co. |
Construction Materials | 5,798 | 77,153 | |||||||
| United Electronics Co. |
Specialty Retail | 3,302 | 68,350 | |||||||
| aYamama Cement Co. |
Construction Materials | 8,385 | 68,801 | |||||||
| Yanbu Cement Co. |
Construction Materials | 6,500 | 60,607 | |||||||
| franklintempleton.com | Annual Report |
283 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Saudi Arabia ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Saudi Arabia (continued) |
||||||||||
| Yanbu National Petrochemical Co. |
Chemicals | 23,283 | $ | 261,443 | ||||||
|
|
|
|||||||||
| Total Investments (Cost $20,984,820) 99.3% |
21,730,478 | |||||||||
| Other Assets, less Liabilities 0.7% |
143,154 | |||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 21,873,632 | ||||||||
|
|
|
|||||||||
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $1,713,741, representing 7.8% of net assets.
| 284 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE South Africa ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019a | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$29.79 | $26.22 | $14.81 | $26.62 | $24.42 | |||||||||||||||
| Income from investment operationsb: | ||||||||||||||||||||
| Net investment incomec |
0.94 | 0.94 | 1.03 | 2.65 | 0.22 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(7.21 | ) | 3.35 | 11.33 | (11.76 | ) | 2.04 | |||||||||||||
| Total from investment operations |
(6.27 | ) | 4.29 | 12.36 | (9.11 | ) | 2.26 | |||||||||||||
| Less distributions from net investment income |
(1.08 | ) | (0.72 | ) | (0.95 | ) | (2.70 | ) | (0.06 | ) | ||||||||||
| Net asset value, end of year |
$22.44 | $29.79 | $26.22 | $14.81 | $26.62 | |||||||||||||||
| Total returnd |
(20.97)% | 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 |
4.03% | 3.56% | 4.94% | 10.42% | 1.75% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$2,244 | $5,958 | $2,622 | $1,481 | $2,662 | |||||||||||||||
| Portfolio turnover ratef |
7.91%g | 13.19%g | 11.08%g | 21.44%g | 7.12% | |||||||||||||||
|
aFor the period October 10, 2018 (commencement of operations) to March 31, 2019. bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund. cBased on average daily shares outstanding. dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. eRatios are annualized for periods less than one year. fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”). |
| |||||||||||||||||||
| gPortfolio turnover rate excluding cash creations was as follows: | 7.91% | 13.19% | 11.08% | 21.44% | — | |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
285 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE South Africa ETF
| Industry | Shares | Value | ||||||||
| Common Stocks 99.9% |
||||||||||
| Luxembourg 1.2% |
||||||||||
| Reinet Investments SCA |
Capital Markets | 1,278 | $ | 26,296 | ||||||
|
|
|
|||||||||
| Romania 1.1% |
||||||||||
| NEPI Rockcastle NV |
Real Estate Management & Development | 4,370 | 25,445 | |||||||
|
|
|
|||||||||
| South Africa 97.6% |
||||||||||
| Absa Group Ltd. |
Banks | 7,824 | 80,160 | |||||||
| African Rainbow Minerals Ltd. |
Metals & Mining | 994 | 12,922 | |||||||
| Anglo American Platinum Ltd. |
Metals & Mining | 528 | 28,390 | |||||||
| AngloGold Ashanti Ltd. |
Metals & Mining | 3,942 | 95,848 | |||||||
| Aspen Pharmacare Holdings Ltd. |
Pharmaceuticals | 3,492 | 36,053 | |||||||
| AVI Ltd. |
Food Products | 3,084 | 12,202 | |||||||
| Bid Corp. Ltd. |
Consumer Staples Distribution & Retail | 3,134 | 70,390 | |||||||
| Bidvest Group Ltd. |
Industrial Conglomerates | 3,198 | 45,678 | |||||||
| Capitec Bank Holdings Ltd. |
Banks | 800 | 76,097 | |||||||
| Clicks Group Ltd. |
Consumer Staples Distribution & Retail | 2,298 | 33,303 | |||||||
| aDis-Chem Pharmacies Ltd. |
Consumer Staples Distribution & Retail | 3,484 | 5,094 | |||||||
| bDiscovery Ltd. |
Insurance | 4,950 | 38,905 | |||||||
| Exxaro Resources Ltd. |
Oil, Gas & Consumable Fuels | 2,274 | 23,909 | |||||||
| FirstRand Ltd. |
Financial Services | 46,756 | 159,117 | |||||||
| Foschini Group Ltd. |
Specialty Retail | 3,032 | 15,542 | |||||||
| Gold Fields Ltd. |
Metals & Mining | 8,274 | 110,522 | |||||||
| Growthpoint Properties Ltd. |
Diversified REITs | 31,978 | 23,539 | |||||||
| Harmony Gold Mining Co. Ltd. |
Metals & Mining | 5,048 | 20,821 | |||||||
| Impala Platinum Holdings Ltd. |
Metals & Mining | 7,658 | 70,712 | |||||||
| Investec Ltd. |
Capital Markets | 2,632 | 14,556 | |||||||
| Kumba Iron Ore Ltd. |
Metals & Mining | 508 | 12,875 | |||||||
| Life Healthcare Group Holdings Ltd. |
Health Care Providers & Services | 13,076 | 14,216 | |||||||
| Momentum Metropolitan Holdings |
Insurance | 11,740 | 11,666 | |||||||
| Mr Price Group Ltd. |
Specialty Retail | 2,420 | 19,668 | |||||||
| MTN Group Ltd. |
Wireless Telecommunication Services | 16,962 | 121,863 | |||||||
| MultiChoice Group |
Media | 2,752 | 19,134 | |||||||
| Naspers Ltd., Class N |
Internet & Direct Marketing Retail | 1,812 | 336,302 | |||||||
| Nedbank Group Ltd. |
Banks | 3,952 | 48,302 | |||||||
| Netcare Ltd. |
Health Care Providers & Services | 13,500 | 11,269 | |||||||
| bNortham Platinum Holdings Ltd. |
Metals & Mining | 3,486 | 28,442 | |||||||
| Old Mutual Ltd. |
Insurance | 42,392 | 28,194 | |||||||
| OUTsurance Group Ltd. |
Insurance | 7,934 | 15,620 | |||||||
| aPepkor Holdings Ltd. |
Specialty Retail | 19,460 | 18,909 | |||||||
| Pick n Pay Stores Ltd. |
Consumer Staples Distribution & Retail | 3,250 | 7,743 | |||||||
| Redefine Properties Ltd. |
Diversified REITs | 61,912 | 12,702 | |||||||
| Remgro Ltd. |
Financial Services | 4,790 | 36,292 | |||||||
| Royal Bafokeng Platinum Ltd. |
Metals & Mining | 702 | 5,672 | |||||||
| Sanlam Ltd. |
Insurance | 16,536 | 52,537 | |||||||
| Santam Ltd. |
Insurance | 382 | 6,136 | |||||||
| Sappi Ltd. |
Paper & Forest Products | 5,370 | 13,865 | |||||||
| Sasol Ltd. |
Chemicals | 5,254 | 71,070 | |||||||
| Shoprite Holdings Ltd. |
Consumer Staples Distribution & Retail | 4,572 | 57,273 | |||||||
| Sibanye Stillwater Ltd. |
Metals & Mining | 26,388 | 54,479 | |||||||
| Standard Bank Group Ltd. |
Banks | 12,516 | 121,904 | |||||||
| Tiger Brands Ltd. |
Food Products | 1,486 | 16,794 | |||||||
| Transaction Capital Ltd. |
Consumer Finance | 5,506 | 3,957 | |||||||
| Vodacom Group Ltd. |
Wireless Telecommunication Services | 5,620 | 38,657 | |||||||
| 286 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE South Africa ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| South Africa (continued) |
||||||||||
| Woolworths Holdings Ltd. |
Broadline Retail | 8,658 | $ | 31,197 | ||||||
|
|
|
|||||||||
| 2,190,498 | ||||||||||
|
|
|
|||||||||
| Total Investments (Cost $2,702,285) 99.9% |
2,242,239 | |||||||||
| Other Assets, less Liabilities 0.1% |
1,388 | |||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 2,243,627 | ||||||||
|
|
|
|||||||||
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $24,003, representing 1.1% of net assets.
bNon-income producing.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
287 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE South Korea ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$25.57 | $31.48 | $16.52 | $21.19 | $25.98 | |||||||||||||||
| Income from investment operationsa: | ||||||||||||||||||||
| Net investment incomeb |
0.49 | 0.55 | 0.54 | 0.36 | 0.40 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(4.37 | ) | (5.87 | ) | 14.72 | (4.58 | ) | (4.81 | ) | |||||||||||
| Total from investment operations |
(3.88 | ) | (5.32 | ) | 15.26 | (4.22 | ) | (4.41 | ) | |||||||||||
| Less distributions from net investment income |
(0.61 | ) | (0.59 | ) | (0.30 | ) | (0.45 | ) | (0.38 | ) | ||||||||||
| Net asset value, end of year |
$21.08 | $25.57 | $31.48 | $16.52 | $21.19 | |||||||||||||||
| Total returnc |
(15.00)% | (17.15)% | 92.55% | (20.24)% | (16.92)% | |||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||
| Expenses before waiver and payments by affiliates |
0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
| Expenses net of waiver and payments by affiliates |
0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
| Net investment income |
2.36% | 1.86% | 2.07% | 1.78% | 1.74% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$293,049 | $61,361 | $62,966 | $11,562 | $16,948 | |||||||||||||||
| Portfolio turnover ratee |
5.97%f | 27.38%f | 8.65%f | 21.72%f | 5.21% | |||||||||||||||
|
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund. bBased on average daily shares outstanding. cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. dRatios are annualized for periods less than one year. ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”). |
| |||||||||||||||||||
| fPortfolio turnover rate excluding cash creations was as follows: | 5.97% | 10.53% | 8.65% | 8.02% | — | |||||||||||||||
| 288 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE South Korea ETF
| Industry | Shares | Value | ||||||||
| Common Stocks 95.4% |
||||||||||
| South Korea 95.4% |
||||||||||
| aAlteogen, Inc., Class A |
Biotechnology | 14,178 | $ | 431,814 | ||||||
| Amorepacific Corp., Class H |
Personal Products | 12,232 | 1,285,354 | |||||||
| AMOREPACIFIC Group, Class A |
Personal Products | 11,954 | 353,519 | |||||||
| BGF retail Co. Ltd. |
Consumer Staples Distribution & Retail | 2,641 | 368,606 | |||||||
| BNK Financial Group, Inc., Class H |
Banks | 122,042 | 610,280 | |||||||
| Celltrion Healthcare Co. Ltd., Class A |
Health Care Providers & Services | 41,561 | 1,921,859 | |||||||
| aCelltrion Pharm, Inc., Class A |
Pharmaceuticals | 8,479 | 539,931 | |||||||
| Celltrion, Inc., Class A |
Biotechnology | 46,287 | 5,326,107 | |||||||
| Cheil Worldwide, Inc., Class A |
Media | 29,051 | 415,508 | |||||||
| aCJ CheilJedang Corp., Class A |
Food Products | 3,336 | 835,377 | |||||||
| CJ Corp., Class A |
Industrial Conglomerates | 5,421 | 434,313 | |||||||
| aCJ ENM Co. Ltd., Class A |
Entertainment | 4,309 | 284,321 | |||||||
| a CJ Logistics Corp., Class A |
Ground Transportation | 3,475 | 213,275 | |||||||
| Coway Co. Ltd. |
Household Durables | 23,630 | 952,932 | |||||||
| aDaewoo Engineering & Construction Co. Ltd., Class A |
Construction & Engineering | 74,365 | 230,204 | |||||||
| aDaewoo Shipbuilding & Marine Engineering Co. Ltd., Class A |
Machinery | 20,016 | 376,689 | |||||||
| DB Insurance Co. Ltd., Class A |
Insurance | 18,765 | 1,079,616 | |||||||
| DGB Financial Group, Inc., Class A |
Banks | 64,218 | 340,365 | |||||||
| DL E&C Co. Ltd., Class A |
Construction & Engineering | 12,649 | 314,318 | |||||||
| DL Holdings Co. Ltd., Class A |
Construction & Engineering | 5,004 | 204,872 | |||||||
| Dongsuh Cos., Inc., Class A |
Consumer Staples Distribution & Retail | 12,927 | 194,920 | |||||||
| Doosan Bobcat, Inc., Class A |
Machinery | 10,147 | 340,611 | |||||||
| aDoosan Enerbility Co. Ltd., Class H |
Electrical Equipment | 175,557 | 2,292,483 | |||||||
| Ecopro BM Co. Ltd. |
Electrical Equipment | 16,541 | 2,852,444 | |||||||
| aE-MART, Inc., Class A |
Consumer Staples Distribution & Retail | 8,062 | 653,952 | |||||||
| F&F Co. Ltd. |
Textiles, Apparel & Luxury Goods | 6,672 | 714,940 | |||||||
| Fila Holdings Corp. |
Textiles, Apparel & Luxury Goods | 21,545 | 604,058 | |||||||
| Green Cross Corp. |
Biotechnology | 2,224 | 208,588 | |||||||
| GS Engineering & Construction Corp. |
Construction & Engineering | 26,271 | 416,712 | |||||||
| aGS Holdings Corp. |
Oil, Gas & Consumable Fuels | 21,406 | 664,287 | |||||||
| GS Retail Co. Ltd. |
Consumer Staples Distribution & Retail | 16,263 | 354,155 | |||||||
| Hana Financial Group, Inc. |
Banks | 120,791 | 3,776,313 | |||||||
| aHanjin Kal Corp. |
Airlines | 8,896 | 313,993 | |||||||
| Hankook Tire & Technology Co. Ltd. |
Automobile Components | 30,997 | 828,587 | |||||||
| aHanmi Pharm Co. Ltd. |
Pharmaceuticals | 3,197 | 628,668 | |||||||
| aHanmi Science Co. Ltd. |
Pharmaceuticals | 10,286 | 307,746 | |||||||
| Hanon Systems |
Automobile Components | 67,554 | 455,601 | |||||||
| Hanwha Aerospace Co. Ltd. |
Aerospace & Defense | 14,456 | 1,101,536 | |||||||
| Hanwha Corp. |
Industrial Conglomerates | 17,653 | 355,948 | |||||||
| Hanwha Corp. |
Industrial Conglomerates | 9,730 | 104,561 | |||||||
| Hanwha Galleria Co. Ltd. |
Broadline Retail | 48,672 | 79,634 | |||||||
| aHanwha Life Insurance Co. Ltd. |
Insurance | 115,648 | 213,201 | |||||||
| a Hanwha Solutions Corp. |
Chemicals | 43,156 | 1,780,141 | |||||||
| HD Hyundai Co. Ltd. |
Machinery | 21,128 | 942,917 | |||||||
| aHite Jinro Co. Ltd. |
Beverages | 12,649 | 217,642 | |||||||
| HL Mando Co. Ltd. |
Automobile Components | 13,761 | 484,650 | |||||||
| aHLB, Inc. |
Leisure Products | 42,256 | 1,127,930 | |||||||
| aHMM Co. Ltd. |
Marine Transportation | 122,459 | 1,914,230 | |||||||
| Hotel Shilla Co. Ltd. |
Specialty Retail | 12,927 | 809,272 | |||||||
| aHYBE Co. Ltd. |
Entertainment | 7,645 | 1,109,299 | |||||||
| Hyundai Department Store Co. Ltd. |
Broadline Retail | 6,116 | 256,977 | |||||||
| aHyundai Doosan Infracore Co. Ltd. |
Machinery | 56,851 | 328,831 | |||||||
| Hyundai Engineering & Construction Co. Ltd. |
Construction & Engineering | 30,580 | 856,198 | |||||||
| Hyundai Glovis Co. Ltd. |
Air Freight & Logistics | 7,784 | 947,701 | |||||||
| aHyundai Heavy Industries Co. Ltd. |
Machinery | 7,923 | 608,595 | |||||||
| franklintempleton.com | Annual Report |
289 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE South Korea ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| South Korea (continued) |
||||||||||
| Hyundai Marine & Fire Insurance Co. Ltd. |
Insurance | 25,020 | $ | 649,596 | ||||||
| aHyundai Mipo Dockyard Co. Ltd. |
Machinery | 8,479 | 457,215 | |||||||
| Hyundai Mobis Co. Ltd. |
Automobile Components | 26,271 | 4,358,825 | |||||||
| Hyundai Motor Co. |
Automobiles | 58,380 | 8,273,695 | |||||||
| Hyundai Steel Co. |
Metals & Mining | 31,553 | 841,026 | |||||||
| Hyundai Wia Corp. |
Automobile Components | 6,533 | 281,022 | |||||||
| aIndustrial Bank of Korea |
Banks | 106,613 | 827,124 | |||||||
| aKakao Corp. |
Interactive Media & Services | 126,907 | 5,956,153 | |||||||
| aKakao Games Corp. |
Entertainment | 12,510 | 400,712 | |||||||
| a KakaoBank Corp. |
Banks | 71,168 | 1,320,204 | |||||||
| aKakaopay Corp. |
IT Services | 8,757 | 373,998 | |||||||
| aKangwon Land, Inc. |
Hotels, Restaurants & Leisure | 44,758 | 684,168 | |||||||
| KB Financial Group, Inc. |
Banks | 162,908 | 5,962,719 | |||||||
| KCC Corp. |
Building Products | 1,807 | 308,141 | |||||||
| aKEPCO Plant Service & Engineering Co. Ltd. |
Commercial Services & Supplies | 8,757 | 254,265 | |||||||
| Kia Corp. |
Automobiles | 108,003 | 6,719,855 | |||||||
| aKorea Aerospace Industries Ltd. |
Aerospace & Defense | 29,468 | 1,072,922 | |||||||
| aKorea Electric Power Corp. |
Electric Utilities | 107,169 | 1,482,593 | |||||||
| aKorea Gas Corp. |
Gas Utilities | 10,703 | 222,799 | |||||||
| aKorea Investment Holdings Co. Ltd. |
Capital Markets | 15,985 | 675,327 | |||||||
| a Korea Shipbuilding & Offshore Engineering Co. Ltd. |
Machinery | 18,070 | 1,075,719 | |||||||
| Korea Zinc Co. Ltd. |
Metals & Mining | 4,031 | 1,712,289 | |||||||
| aKorean Air Lines Co. Ltd. |
Airlines | 77,423 | 1,379,739 | |||||||
| aKrafton, Inc. |
Entertainment | 12,232 | 1,724,140 | |||||||
| aKT&G Corp. |
Tobacco | 45,036 | 2,902,424 | |||||||
| aKumho Petrochemical Co. Ltd. |
Chemicals | 7,089 | 782,494 | |||||||
| L&F Co. Ltd. |
Electronic Equipment, Instruments & Components | 9,730 | 2,343,093 | |||||||
| LG Chem Ltd. |
Chemicals | 19,460 | 10,642,947 | |||||||
| LG Corp. |
Industrial Conglomerates | 36,696 | 2,333,932 | |||||||
| aLG Display Co. Ltd. |
Electronic Equipment, Instruments & Components | 93,825 | 1,184,119 | |||||||
| LG Electronics, Inc. |
Household Durables | 45,175 | 4,000,981 | |||||||
| aLG Energy Solution Ltd. |
Electrical Equipment | 14,595 | 6,547,206 | |||||||
| LG H&H Co. Ltd. |
Personal Products | 3,753 | 1,729,692 | |||||||
| LG Innotek Co. Ltd. |
Electronic Equipment, Instruments & Components | 5,977 | 1,241,908 | |||||||
| LG Uplus Corp. |
Diversified Telecommunication Services | 88,821 | 738,896 | |||||||
| Lotte Chemical Corp. |
Chemicals | 7,645 | 1,120,456 | |||||||
| Lotte Chilsung Beverage Co. Ltd. |
Beverages | 1,251 | 158,459 | |||||||
| Lotte Corp. |
Industrial Conglomerates | 10,981 | 242,504 | |||||||
| aLotte Energy Materials Corp. |
Electronic Equipment, Instruments & Components | 9,035 | 477,481 | |||||||
| LOTTE Fine Chemical Co. Ltd. |
Chemicals | 7,367 | 330,478 | |||||||
| Lotte Shopping Co. Ltd. |
Broadline Retail | 4,726 | 297,315 | |||||||
| LS Corp. |
Electrical Equipment | 7,228 | 441,947 | |||||||
| Meritz Financial Group, Inc. |
Financial Services | 54,905 | 1,627,939 | |||||||
| Mirae Asset Securities Co. Ltd. |
Capital Markets | 110,088 | 546,275 | |||||||
| Mirae Asset Securities Co. Ltd. |
Capital Markets | 56,712 | 154,647 | |||||||
| NAVER Corp. |
Interactive Media & Services | 60,465 | 9,381,979 | |||||||
| NCSoft Corp. |
Entertainment | 6,672 | 1,903,943 | |||||||
| a,bNetmarble Corp. |
Software | 7,089 | 361,025 | |||||||
| aNH Investment & Securities Co. Ltd. |
Capital Markets | 56,851 | 384,291 | |||||||
| aNHN Corp. |
Software | 6,672 | 134,788 | |||||||
| NongShim Co. Ltd. |
Food Products | 1,390 | 404,663 | |||||||
| aOCI Co. Ltd. |
Chemicals | 7,645 | 600,748 | |||||||
| Orion Corp. |
Food Products | 9,035 | 948,021 | |||||||
| aOttogi Corp. |
Food Products | 556 | 191,334 | |||||||
| Pan Ocean Co. Ltd. |
Marine Transportation | 78,535 | 350,492 | |||||||
| aParadise Co. Ltd. |
Hotels, Restaurants & Leisure | 19,182 | 247,391 | |||||||
| 290 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE South Korea ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| South Korea (continued) |
||||||||||
| aPearl Abyss Corp. |
Entertainment | 12,927 | $ | 459,249 | ||||||
| POSCO Chemical Co. Ltd. |
Construction Materials | 11,398 | 2,385,801 | |||||||
| POSCO Holdings, Inc. |
Metals & Mining | 31,414 | 8,879,942 | |||||||
| Posco International Corp. |
Trading Companies & Distributors | 19,043 | 326,196 | |||||||
| S-1 Corp. |
Commercial Services & Supplies | 7,923 | 336,553 | |||||||
| a,bSamsung Biologics Co. Ltd. |
Life Sciences Tools & Services | 7,724 | 4,675,279 | |||||||
| Samsung C&T Corp. |
Industrial Conglomerates | 35,167 | 2,922,817 | |||||||
| Samsung Card Co. Ltd. |
Consumer Finance | 12,510 | 292,126 | |||||||
| Samsung Electro-Mechanics Co. Ltd. |
Electronic Equipment, Instruments & Components | 23,352 | 2,739,064 | |||||||
| Samsung Electronics Co. Ltd. |
Technology Hardware, Storage & Peripherals | 1,063,767 | 52,295,647 | |||||||
| aSamsung Engineering Co. Ltd. |
Construction & Engineering | 66,164 | 1,611,091 | |||||||
| Samsung Fire & Marine Insurance Co. Ltd. |
Insurance | 13,761 | 2,177,490 | |||||||
| aSamsung Heavy Industries Co. Ltd. |
Machinery | 258,679 | 1,027,285 | |||||||
| Samsung Life Insurance Co. Ltd. |
Insurance | 31,136 | 1,501,971 | |||||||
| Samsung SDI Co. Ltd. |
Electronic Equipment, Instruments & Components | 22,101 | 12,477,809 | |||||||
| Samsung SDS Co. Ltd. |
IT Services | 15,290 | 1,362,400 | |||||||
| Samsung Securities Co. Ltd. |
Capital Markets | 26,410 | 643,083 | |||||||
| SD Biosensor, Inc. |
Health Care Equipment & Supplies | 13,900 | 225,287 | |||||||
| aSeegene, Inc. |
Biotechnology | 11,537 | 219,778 | |||||||
| a Shin Poong Pharmaceutical Co. Ltd. |
Pharmaceuticals | 14,178 | 196,141 | |||||||
| Shinhan Financial Group Co. Ltd. |
Banks | 208,917 | 5,672,862 | |||||||
| aShinsegae, Inc. |
Broadline Retail | 2,919 | 483,193 | |||||||
| aSK Biopharmaceuticals Co. Ltd. |
Pharmaceuticals | 10,286 | 500,137 | |||||||
| aSK Bioscience Co. Ltd. |
Biotechnology | 8,340 | 461,892 | |||||||
| SK Chemicals Co. Ltd. |
Chemicals | 4,170 | 238,633 | |||||||
| SK Hynix, Inc. |
Semiconductors & Semiconductor Equipment | 226,848 | 15,438,593 | |||||||
| a,bSK IE Technology Co. Ltd. |
Chemicals | 10,703 | 585,362 | |||||||
| aSK Innovation Co. Ltd. |
Oil, Gas & Consumable Fuels | 21,958 | 3,024,211 | |||||||
| SK Networks Co. Ltd. |
Trading Companies & Distributors | 56,156 | 194,326 | |||||||
| aSK Square Co. Ltd. |
Semiconductors & Semiconductor Equipment | 41,422 | 1,264,757 | |||||||
| SK Telecom Co. Ltd. |
Wireless Telecommunication Services | 5,282 | 195,968 | |||||||
| SK, Inc. |
Industrial Conglomerates | 15,151 | 2,007,564 | |||||||
| SKC Co. Ltd. |
Chemicals | 8,062 | 707,829 | |||||||
| S-Oil Corp. |
Oil, Gas & Consumable Fuels | 17,236 | 1,060,494 | |||||||
| Solus Advanced Materials Co. Ltd. |
Electronic Equipment, Instruments & Components | 5,560 | 200,730 | |||||||
| SSANGYONG C&E Co. Ltd. |
Construction Materials | 46,426 | 220,032 | |||||||
| aWemade Co. Ltd. |
Entertainment | 7,089 | 273,355 | |||||||
| Woori Financial Group, Inc. |
Banks | 265,351 | 2,325,656 | |||||||
| Yuhan Corp. |
Pharmaceuticals | 22,240 | 864,419 | |||||||
|
|
|
|||||||||
| Total Common Stocks |
279,609,717 | |||||||||
|
|
|
|||||||||
| Preferred Stocks 3.8% |
||||||||||
| South Korea 3.8% | ||||||||||
| c Amorepacific Corp., 1.546%, pfd. |
Personal Products | 4,448 | 151,359 | |||||||
| a,cCJ CheilJedang Corp., 1.780%,pfd. |
Food Products | 556 | 66,412 | |||||||
| cHyundai Motor Co., 7.411%, pfd. |
Automobiles | 14,595 | 1,074,011 | |||||||
| c Hyundai Motor Co., 7.468%, pfd. |
Automobiles | 9,313 | 675,306 | |||||||
| cLG Chem Ltd., 3.237%, pfd. |
Chemicals | 3,197 | 762,506 | |||||||
| cLG Electronics, Inc., 1.54%, pfd. |
Household Durables | 7,228 | 270,387 | |||||||
| cLG H&H Co. Ltd., 1.636%, pfd. |
Personal Products | 834 | 158,555 | |||||||
| cSamsung Electronics Co. Ltd., 2.681%, pfd. |
Technology Hardware, Storage & Peripherals | 185,148 | 7,665,612 | |||||||
| cSamsung Fire & Marine Insurance Co. Ltd., 8.666%, pfd. |
Insurance | 1,112 | 136,069 | |||||||
| franklintempleton.com | Annual Report |
291 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE South Korea ETF (continued)
| Industry | Shares | Value | ||||||||
| Preferred Stocks (continued) |
||||||||||
| South Korea (continued) |
||||||||||
| cSamsung SDI Co. Ltd., 0.325%, pfd. |
Electronic Equipment, Instruments & Components | 556 | $ | 142,006 | ||||||
|
|
|
|||||||||
| Total Preferred Stocks |
11,102,223 | |||||||||
|
|
|
|||||||||
| Total Investments |
290,711,940 | |||||||||
| Other Assets, less Liabilities 0.8% |
2,336,853 | |||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 293,048,793 | ||||||||
|
|
|
|||||||||
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $5,621,666, representing 1.9% of net assets.
cVariable rate security. The rate shown represents the yield at period end.
At March 31, 2023, 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 | 35 | $2,175,654 | 6/08/23 | $25,029 | |||||||||||||||
*As of year end.
See Note 7 regarding other derivative information.
See Abbreviations on page 355.
| 292 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Switzerland ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$34.00 | $30.36 | $24.44 | $23.86 | $23.11 | |||||||||||||||
| Income from investment operationsa: | ||||||||||||||||||||
| Net investment incomeb |
0.66 | 0.70 | 0.88 | 1.06 | 0.53 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(2.86 | ) | 3.62 | 5.74 | (0.16 | ) | 0.83 | |||||||||||||
| Total from investment operations |
(2.20 | ) | 4.32 | 6.62 | 0.90 | 1.36 | ||||||||||||||
| Less distributions from net investment income |
(0.59 | ) | (0.68 | ) | (0.70 | ) | (0.32 | ) | (0.61 | ) | ||||||||||
| Net asset value, end of year |
$31.21 | $34.00 | $30.36 | $24.44 | $23.86 | |||||||||||||||
| Total returnc |
(6.23)% | 14.22% | 27.54% | 3.70% | 6.13% | |||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||
| Total expenses |
0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
| Net investment income |
2.24% | 2.07% | 3.13% | 4.12% | 2.35% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$49,941 | $47,593 | $48,570 | $34,213 | $2,386 | |||||||||||||||
| Portfolio turnover ratee |
7.89%f | 13.99%f | 12.59%f | 16.25%f | 14.06% | |||||||||||||||
|
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
dRatios are annualized for periods less than one year.
ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
|
| |||||||||||||||||||
| fPortfolio turnover rate excluding cash creations was as follows: | 7.89% | 13.99% | 12.59% | 16.25% | — | |||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
293 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE Switzerland ETF
| Industry | Shares | Value | ||||||||
| Common Stocks 98.2% |
||||||||||
| Switzerland 95.6% |
||||||||||
| ABB Ltd. |
Electrical Equipment | 49,776 | $ | 1,709,237 | ||||||
| Adecco Group AG |
Professional Services | 6,016 | 218,303 | |||||||
| Alcon, Inc. |
Health Care Equipment & Supplies | 17,456 | 1,236,279 | |||||||
| Bachem Holding AG, Class B |
Life Sciences Tools & Services | 1,168 | 116,857 | |||||||
| Baloise Holding AG |
Insurance | 1,712 | 266,859 | |||||||
| Banque Cantonale Vaudoise |
Banks | 1,056 | 99,757 | |||||||
| Barry Callebaut AG |
Food Products | 135 | 286,536 | |||||||
| Belimo Holding AG |
Building Products | 352 | 169,922 | |||||||
| BKW AG |
Electric Utilities | 688 | 108,297 | |||||||
| Chocoladefabriken Lindt & Spruengli AG |
Food Products | 78 | 922,117 | |||||||
| Cie Financiere Richemont SA, Class A |
Textiles, Apparel & Luxury Goods | 16,304 | 2,603,857 | |||||||
| Clariant AG |
Chemicals | 8,576 | 141,846 | |||||||
| Credit Suisse Group AG |
Capital Markets | 136,864 | 123,238 | |||||||
| DKSH Holding AG |
Professional Services | 1,360 | 109,643 | |||||||
| Emmi AG |
Food Products | 80 | 80,390 | |||||||
| EMS-Chemie Holding AG |
Chemicals | 269 | 222,020 | |||||||
| aFlughafen Zurich AG |
Transportation Infrastructure | 720 | 132,012 | |||||||
| Geberit AG |
Building Products | 1,292 | 720,143 | |||||||
| Georg Fischer AG |
Machinery | 3,106 | 241,055 | |||||||
| Givaudan SA |
Chemicals | 301 | 979,556 | |||||||
| Helvetia Holding AG |
Insurance | 1,328 | 185,197 | |||||||
| Julius Baer Group Ltd. |
Capital Markets | 8,016 | 546,831 | |||||||
| Kuehne & Nagel International AG |
Marine Transportation | 1,872 | 557,164 | |||||||
| Logitech International SA |
Technology Hardware, Storage & Peripherals | 5,392 | 313,409 | |||||||
| Lonza Group AG |
Life Sciences Tools & Services | 2,542 | 1,523,169 | |||||||
| Nestle SA |
Food Products | 79,088 | 9,649,333 | |||||||
| Novartis AG |
Pharmaceuticals | 60,000 | 5,501,177 | |||||||
| Partners Group Holding AG |
Capital Markets | 841 | 788,757 | |||||||
| PSP Swiss Property AG |
Real Estate Management & Development | 1,712 | 194,897 | |||||||
| Roche Holding AG |
Pharmaceuticals | 20,672 | 5,904,831 | |||||||
| Roche Holding AG |
Pharmaceuticals | 864 | 260,084 | |||||||
| Schindler Holding AG, PC |
Machinery | 1,552 | 343,341 | |||||||
| Schindler Holding AG |
Machinery | 720 | 152,110 | |||||||
| SGS SA |
Professional Services | 223 | 490,890 | |||||||
| SIG Group AG |
Containers & Packaging | 12,496 | 321,718 | |||||||
| Sika AG |
Chemicals | 5,072 | 1,418,528 | |||||||
| Sonova Holding AG |
Health Care Equipment & Supplies | 1,920 | 564,514 | |||||||
| Straumann Holding AG |
Health Care Equipment & Supplies | 4,042 | 603,280 | |||||||
| Swatch Group AG |
Textiles, Apparel & Luxury Goods | 1,088 | 373,246 | |||||||
| Swatch Group AG |
Textiles, Apparel & Luxury Goods | 1,648 | 104,268 | |||||||
| Swiss Life Holding AG |
Insurance | 1,152 | 710,203 | |||||||
| Swiss Prime Site AG |
Real Estate Management & Development | 2,880 | 239,750 | |||||||
| Swiss Re AG |
Insurance | 10,944 | 1,124,169 | |||||||
| Swisscom AG |
Diversified Telecommunication Services | 960 | 612,853 | |||||||
| Tecan Group AG |
Life Sciences Tools & Services | 480 | 209,749 | |||||||
| Temenos AG |
Software | 2,288 | 158,486 | |||||||
| UBS Group AG |
Capital Markets | 90,096 | 1,902,416 | |||||||
| bVAT Group AG |
Machinery | 976 | 350,636 | |||||||
| Zurich Insurance Group AG |
Insurance | 4,512 | 2,161,789 | |||||||
|
|
|
|||||||||
| 47,754,719 | ||||||||||
|
|
|
|||||||||
| 294 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Switzerland ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| United States 2.6% |
||||||||||
| Holcim AG, Class B |
Construction Materials | 20,112 | $ | 1,296,696 | ||||||
|
|
|
|||||||||
| Total Investments (Cost $48,952,282) 98.2% |
49,051,415 | |||||||||
| Other Assets, less Liabilities 1.8% |
889,334 | |||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 49,940,749 | ||||||||
|
|
|
|||||||||
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $350,636, representing 0.7% of net assets.
At March 31, 2023, 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 |
7 | $842,559 | 6/16/23 | $38,313 | ||||||||||||||||
*As of year end.
See Note 7 regarding other derivative information.
See Abbreviations on page 355.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
295 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE Taiwan ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$43.67 | $41.12 | $23.18 | $24.72 | $26.34 | |||||||||||||||
| Income from investment operationsa: | ||||||||||||||||||||
| Net investment incomeb |
1.25 | 0.98 | 0.74 | 0.89 | 0.47 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(6.84 | ) | 2.64 | 17.99 | (1.56 | ) | (1.85 | ) | ||||||||||||
| Total from investment operations |
(5.59 | ) | 3.62 | 18.73 | (0.67 | ) | (1.38 | ) | ||||||||||||
| Less distributions from net investment income |
(1.03 | ) | (1.07 | ) | (0.79 | ) | (0.87 | ) | (0.24 | ) | ||||||||||
| Net asset value, end of year |
$37.05 | $43.67 | $41.12 | $23.18 | $24.72 | |||||||||||||||
| Total returnc |
(12.55)% | 8.72% | 81.35% | (3.29)% | (5.15)% | |||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||
| Total expenses |
0.19% | 0.19% | 0.19% | 0.19% | 0.19% | |||||||||||||||
| Net investment income |
3.52% | 2.20% | 2.24% | 3.39% | 1.96% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$137,094 | $43,667 | $32,897 | $13,906 | $14,834 | |||||||||||||||
| Portfolio turnover ratee |
11.88%f | 17.76%f | 10.63%f | 12.57%f | 8.71% | |||||||||||||||
|
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
dRatios are annualized for periods less than one year.
ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
|
| |||||||||||||||||||
| fPortfolio turnover rate excluding cash creations was as follows: | 5.40% | 7.86% | 10.63% | 12.57% | — | |||||||||||||||
| 296 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE Taiwan ETF
| Industry | Shares | Value | ||||||||
| Common Stocks 99.8% |
||||||||||
| China 1.4% |
||||||||||
| Airtac International Group, Class A |
Machinery | 27,750 | $ | 1,080,015 | ||||||
| Silergy Corp. |
Semiconductors & Semiconductor Equipment | 57,290 | 902,227 | |||||||
|
|
|
|||||||||
| 1,982,242 | ||||||||||
|
|
|
|||||||||
| Taiwan 98.1% |
||||||||||
| Accton Technology Corp. |
Communications Equipment | 93,710 | 981,804 | |||||||
| Acer, Inc., Class H |
Technology Hardware, Storage & Peripherals | 489,000 | 452,101 | |||||||
| Advanced Energy Solution Holding Co. Ltd. |
Electrical Equipment | 4,440 | 104,702 | |||||||
| Advantech Co. Ltd. |
Technology Hardware, Storage & Peripherals | 74,000 | 901,683 | |||||||
| ASE Technology Holding Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 599,700 | 2,215,822 | |||||||
| Asia Cement Corp. |
Construction Materials | 434,060 | 617,285 | |||||||
| ASMedia Technology, Inc. |
Semiconductors & Semiconductor Equipment | 7,040 | 264,744 | |||||||
| ASPEED Technology, Inc. |
Semiconductors & Semiconductor Equipment | 5,380 | 465,598 | |||||||
| Asustek Computer, Inc. |
Technology Hardware, Storage & Peripherals | 124,460 | 1,113,896 | |||||||
| AUO Corp., Class H |
Electronic Equipment, Instruments & Components | 1,258,000 | 760,233 | |||||||
| Capital Securities Corp., Class A |
Capital Markets | 339,000 | 133,607 | |||||||
| Catcher Technology Co. Ltd. |
Technology Hardware, Storage & Peripherals | 121,460 | 757,941 | |||||||
| Cathay Financial Holding Co. Ltd., Class A |
Insurance | 1,628,000 | 2,235,008 | |||||||
| Chailease Holding Co. Ltd., Class A |
Financial Services | 243,162 | 1,784,932 | |||||||
| Chang Hwa Commercial Bank Ltd., Class A |
Banks | 1,184,033 | 674,701 | |||||||
| Cheng Shin Rubber Industry Co. Ltd., Class A |
Automobile Components | 322,700 | 387,378 | |||||||
| Chicony Electronics Co. Ltd. |
Technology Hardware, Storage & Peripherals | 108,840 | 340,667 | |||||||
| China Airlines Ltd., Class A |
Airlines | 518,000 | 331,751 | |||||||
| China Development Financial Holding Corp., Class A |
Banks | 2,778,000 | 1,145,050 | |||||||
| China Motor Corp., Class A |
Automobiles | 47,020 | 98,681 | |||||||
| China Steel Corp., Class A |
Metals & Mining | 2,183,000 | 2,215,443 | |||||||
| Chunghwa Telecom Co. Ltd. |
Diversified Telecommunication Services | 671,680 | 2,636,202 | |||||||
| Compal Electronics, Inc., Class H |
Technology Hardware, Storage & Peripherals | 740,000 | 613,679 | |||||||
| CTBC Financial Holding Co. Ltd., Class A |
Banks | 3,219,000 | 2,310,047 | |||||||
| Delta Electronics, Inc., Class A |
Electronic Equipment, Instruments & Components | 382,090 | 3,777,292 | |||||||
| E Ink Holdings, Inc. |
Electronic Equipment, Instruments & Components | 155,700 | 943,481 | |||||||
| E.Sun Financial Holding Co. Ltd., Class A |
Banks | 2,405,000 | 1,998,407 | |||||||
| Eclat Textile Co. Ltd., Class A |
Textiles, Apparel & Luxury Goods | 35,260 | 573,239 | |||||||
| eMemory Technology, Inc. |
Semiconductors & Semiconductor Equipment | 12,247 | 748,154 | |||||||
| ENNOSTAR, Inc., Class H |
Semiconductors & Semiconductor Equipment | 124,340 | 217,256 | |||||||
| Eternal Materials Co. Ltd., Class H |
Chemicals | 168,985 | 173,994 | |||||||
| Eva Airways Corp., Class H |
Airlines | 447,000 | 394,185 | |||||||
| Evergreen Marine Corp. Taiwan Ltd. |
Marine Transportation | 177,600 | 924,529 | |||||||
| Far Eastern International Bank |
Banks | 413,091 | 150,597 | |||||||
| Far Eastern New Century Corp. |
Industrial Conglomerates | 677,508 | 696,478 | |||||||
| Far EasTone Telecommunications Co. Ltd. |
Wireless Telecommunication Services | 283,000 | 698,961 | |||||||
| Feng TAY Enterprise Co. Ltd. |
Textiles, Apparel & Luxury Goods | 78,100 | 495,059 | |||||||
| First Financial Holding Co. Ltd. |
Banks | 1,850,000 | 1,607,111 | |||||||
| Formosa Chemicals & Fibre Corp. |
Chemicals | 603,400 | 1,369,404 | |||||||
| Formosa Petrochemical Corp. |
Oil, Gas & Consumable Fuels | 243,880 | 680,838 | |||||||
| Formosa Plastics Corp. |
Chemicals | 657,900 | 1,983,586 | |||||||
| Formosa Sumco Technology Corp. |
Semiconductors & Semiconductor Equipment | 10,020 | 54,629 | |||||||
| Formosa Taffeta Co. Ltd. |
Textiles, Apparel & Luxury Goods | 185,000 | 170,737 | |||||||
| Foxconn Technology Co. Ltd. |
Technology Hardware, Storage & Peripherals | 198,720 | 364,839 | |||||||
| Fubon Financial Holding Co. Ltd. |
Insurance | 1,302,749 | 2,417,450 | |||||||
| Genius Electronic Optical Co. Ltd. |
Electronic Equipment, Instruments & Components | 15,170 | 192,069 | |||||||
| Giant Manufacturing Co. Ltd. |
Leisure Products | 53,035 | 306,566 | |||||||
| Globalwafers Co. Ltd. |
Semiconductors & Semiconductor Equipment | 37,370 | 635,772 | |||||||
| Hiwin Technologies Corp. |
Machinery | 50,189 | 412,919 | |||||||
| Hon Hai Precision Industry Co. Ltd. |
Electronic Equipment, Instruments & Components | 2,106,600 | 7,195,546 | |||||||
| Hotai Motor Co. Ltd. |
Specialty Retail | 55,550 | 1,171,298 | |||||||
| franklintempleton.com | Annual Report |
297 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Fanklin FTSE Taiwan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Taiwan (continued) |
||||||||||
| aHTC Corp. |
Technology Hardware, Storage & Peripherals | 129,500 | $ | 266,252 | ||||||
| Hua Nan Financial Holdings Co. Ltd. |
Banks | 1,787,029 | 1,311,769 | |||||||
| Innolux Corp. |
Electronic Equipment, Instruments & Components | 1,451,155 | 691,083 | |||||||
| Inventec Corp. |
Technology Hardware, Storage & Peripherals | 518,000 | 543,562 | |||||||
| Largan Precision Co. Ltd. |
Electronic Equipment, Instruments & Components | 18,130 | 1,295,106 | |||||||
| Lite-On Technology Corp. |
Technology Hardware, Storage & Peripherals | 374,200 | 900,858 | |||||||
| MediaTek, Inc. |
Semiconductors & Semiconductor Equipment | 262,700 | 6,790,209 | |||||||
| Mega Financial Holding Co. Ltd. |
Banks | 1,962,150 | 2,126,643 | |||||||
| Micro-Star International Co. Ltd. |
Technology Hardware, Storage & Peripherals | 119,700 | 566,115 | |||||||
| momo.com, Inc. |
Broadline Retail | 9,998 | 296,517 | |||||||
| Nan Ya Plastics Corp. |
Chemicals | 999,000 | 2,542,820 | |||||||
| Nan Ya Printed Circuit Board Corp. |
Electronic Equipment, Instruments & Components | 37,000 | 343,903 | |||||||
| Nanya Technology Corp. |
Semiconductors & Semiconductor Equipment | 143,670 | 313,788 | |||||||
| Nien Made Enterprise Co. Ltd. |
Household Durables | 24,420 | 262,266 | |||||||
| Novatek Microelectronics Corp. |
Semiconductors & Semiconductor Equipment | 101,010 | 1,431,507 | |||||||
| aOneness Biotech Co. Ltd. |
Pharmaceuticals | 53,400 | 468,275 | |||||||
| Pegatron Corp. |
Technology Hardware, Storage & Peripherals | 356,000 | 814,950 | |||||||
| Pou Chen Corp. |
Textiles, Apparel & Luxury Goods | 481,000 | 492,888 | |||||||
| Powerchip Semiconductor Manufacturing Corp. |
Semiconductors & Semiconductor Equipment | 518,000 | 563,127 | |||||||
| Powertech Technology, Inc. |
Semiconductors & Semiconductor Equipment | 119,100 | 355,960 | |||||||
| President Chain Store Corp. |
Consumer Staples Distribution & Retail | 99,580 | 881,413 | |||||||
| Quanta Computer, Inc. |
Technology Hardware, Storage & Peripherals | 471,380 | 1,379,422 | |||||||
| Realtek Semiconductor Corp. |
Semiconductors & Semiconductor Equipment | 83,596 | 1,063,912 | |||||||
| Ruentex Development Co. Ltd. |
Real Estate Management & Development | 414,900 | 481,705 | |||||||
| Shanghai Commercial & Savings Bank Ltd. |
Banks | 666,000 | 1,026,971 | |||||||
| Shin Kong Financial Holding Co. Ltd. |
Insurance | 2,368,000 | 654,850 | |||||||
| Sino-American Silicon Products, Inc. |
Semiconductors & Semiconductor Equipment | 92,880 | 475,878 | |||||||
| SinoPac Financial Holdings Co. Ltd. |
Banks | 1,997,969 | 1,089,294 | |||||||
| Synnex Technology International Corp. |
Electronic Equipment, Instruments & Components | 237,500 | 478,159 | |||||||
| Taishin Financial Holding Co. Ltd. |
Banks | 2,001,872 | 1,091,422 | |||||||
| Taiwan Business Bank |
Banks | 931,631 | 411,542 | |||||||
| Taiwan Cement Corp. |
Construction Materials | 1,111,418 | 1,328,701 | |||||||
| Taiwan Cooperative Financial Holding Co. Ltd. |
Banks | 1,776,000 | 1,522,411 | |||||||
| Taiwan Fertilizer Co. Ltd. |
Chemicals | 133,200 | 244,986 | |||||||
| Taiwan Glass Industry Corp. |
Building Products | 296,000 | 199,780 | |||||||
| Taiwan High Speed Rail Corp. |
Transportation Infrastructure | 370,000 | 367,600 | |||||||
| Taiwan Mobile Co. Ltd. |
Wireless Telecommunication Services | 304,140 | 1,008,889 | |||||||
| Taiwan Secom Co. Ltd. |
Commercial Services & Supplies | 50,360 | 174,496 | |||||||
| Taiwan Semiconductor Manufacturing Co. Ltd. |
Semiconductors & Semiconductor Equipment | 1,591,400 | 27,858,320 | |||||||
| Teco Electric & Machinery Co. Ltd. |
Electrical Equipment | 346,000 | 482,962 | |||||||
| Transcend Information, Inc. |
Technology Hardware, Storage & Peripherals | 50,360 | 120,907 | |||||||
| U-Ming Marine Transport Corp. |
Marine Transportation | 74,000 | 135,617 | |||||||
| Unimicron Technology Corp. |
Electronic Equipment, Instruments & Components | 222,000 | 1,075,458 | |||||||
| Uni-President Enterprises Corp. |
Food Products | 851,000 | 2,009,587 | |||||||
| United Microelectronics Corp. |
Semiconductors & Semiconductor Equipment | 2,072,000 | 3,599,928 | |||||||
| Vanguard International Semiconductor Corp. |
Semiconductors & Semiconductor Equipment | 158,400 | 504,112 | |||||||
| Voltronic Power Technology Corp. |
Electrical Equipment | 11,470 | 651,715 | |||||||
| Walsin Lihwa Corp. |
Electrical Equipment | 606,289 | 970,739 | |||||||
| Walsin Technology Corp. |
Electronic Equipment, Instruments & Components | 87,360 | 277,452 | |||||||
| Wan Hai Lines Ltd. |
Marine Transportation | 160,130 | 360,256 | |||||||
| Win Semiconductors Corp. |
Semiconductors & Semiconductor Equipment | 72,150 | 432,462 | |||||||
| Winbond Electronics Corp. |
Semiconductors & Semiconductor Equipment | 522,000 | 454,323 | |||||||
| Wistron Corp. |
Technology Hardware, Storage & Peripherals | 518,000 | 711,990 | |||||||
| Wiwynn Corp. |
Technology Hardware, Storage & Peripherals | 15,580 | 575,663 | |||||||
| Yageo Corp. |
Electronic Equipment, Instruments & Components | 68,729 | 1,194,109 | |||||||
| Yang Ming Marine Transport Corp. |
Marine Transportation | 308,326 | 651,133 | |||||||
| Yuanta Financial Holding Co. Ltd. |
Capital Markets | 2,110,406 | 1,549,144 | |||||||
| 298 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE Taiwan ETF (continued)
| Industry | Shares | Value | ||||||||
| Common Stocks (continued) |
||||||||||
| Taiwan (continued) |
||||||||||
| Yulon Motor Co. Ltd. |
Automobiles | 95,979 | $ | 237,051 | ||||||
| Yulon Nissan Motor Co. Ltd. |
Automobiles | 4,070 | 26,267 | |||||||
| Zhen Ding Technology Holding Ltd. |
Electronic Equipment, Instruments & Components | 112,160 | 419,944 | |||||||
|
|
|
|||||||||
| 134,455,519 | ||||||||||
|
|
|
|||||||||
| United States 0.3% |
||||||||||
| Parade Technologies Ltd. |
Semiconductors & Semiconductor Equipment | 12,580 | 433,828 | |||||||
|
|
|
|||||||||
| Total Investments |
136,871,589 | |||||||||
| Other Assets, less Liabilities 0.2% |
222,238 | |||||||||
|
|
|
|||||||||
| Net Assets 100.0% |
$ | 137,093,827 | ||||||||
|
|
|
|||||||||
aNon-income producing.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
299 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin FTSE United Kingdom ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$ | 25.46 | $ | 23.78 | $ | 17.92 | $ | 24.23 | $ | 25.23 | ||||||||||
|
|
|
|||||||||||||||||||
| Income from investment operationsa: | ||||||||||||||||||||
| Net investment incomeb |
0.94 | 0.95 | 0.84 | 1.08 | 1.05 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(1.22 | ) | 1.47 | 5.62 | (6.30 | ) | (1.21 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| Total from investment operations |
(0.28 | ) | 2.42 | 6.46 | (5.22 | ) | (0.16 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| Less distributions from net investment income |
(0.97 | ) | (0.74 | ) | (0.60 | ) | (1.09 | ) | (0.84 | ) | ||||||||||
|
|
|
|||||||||||||||||||
| Net asset value, end of year |
$ | 24.21 | $ | 25.46 | $ | 23.78 | $ | 17.92 | $ | 24.23 | ||||||||||
|
|
|
|||||||||||||||||||
| Total returnc |
(0.71)% | 10.27% | 36.19% | (22.42)% | (0.51)% | |||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||
| Expenses before waiver and payments by affiliates |
0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
| Expenses net of waiver and payments by affiliates |
0.09% | 0.09% | 0.09% | 0.09% | 0.09% | |||||||||||||||
| Net investment income |
4.10% | 3.77% | 3.98% | 4.84% | 4.46% | |||||||||||||||
| Supplemental data |
| |||||||||||||||||||
| Net assets, end of year (000’s) |
$ | 568,961 | $ | 613,573 | $ | 205,673 | $ | 89,624 | $ | 29,076 | ||||||||||
| Portfolio turnover ratee |
5.61% | f | 5.76% | f | 7.26% | f | 4.41% | f | 10.10% | |||||||||||
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
dRatios are annualized for periods less than one year.
ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| f Portfolio turnover rate excluding cash creations was as follows: | 5.60% | 5.76% | 7.26% | 4.41% | — |
| 300 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE United Kingdom ETF
| Industry | Shares | Value | ||||||||||
| Common Stocks 99.1% | ||||||||||||
| Australia 5.9% |
| |||||||||||
| Glencore PLC | Metals & Mining | 2,891,440 | $ | 16,610,013 | ||||||||
| Rio Tinto PLC | Metals & Mining | 249,100 | 16,872,224 | |||||||||
|
|
|
|||||||||||
| 33,482,237 | ||||||||||||
|
|
|
|||||||||||
| Bermuda 0.2% |
| |||||||||||
| Hiscox Ltd. | Insurance | 77,080 | 1,056,939 | |||||||||
|
|
|
|||||||||||
| Chile 0.3% |
| |||||||||||
| Antofagasta PLC | Metals & Mining | 79,430 | 1,552,719 | |||||||||
|
|
|
|||||||||||
| Ireland 4.6% |
| |||||||||||
| CRH PLC | Construction Materials | 171,080 | 8,633,673 | |||||||||
| DCC PLC | Industrial Conglomerates | 22,560 | 1,316,054 | |||||||||
| Experian PLC | Professional Services | 210,560 | 6,925,228 | |||||||||
| a |
Flutter Entertainment PLC | Hotels, Restaurants & Leisure | 40,420 | 7,311,681 | ||||||||
| Smurfit Kappa Group PLC | Containers & Packaging | 59,690 | 2,159,496 | |||||||||
|
|
|
|||||||||||
| 26,346,132 | ||||||||||||
|
|
|
|||||||||||
| Isle Of Man 0.4% |
| |||||||||||
| Entain PLC | Hotels, Restaurants & Leisure | 133,950 | 2,081,047 | |||||||||
|
|
|
|||||||||||
| Mexico 0.1% |
| |||||||||||
| Fresnillo PLC | Metals & Mining | 42,300 | 390,172 | |||||||||
|
|
|
|||||||||||
| Netherlands 8.0% |
| |||||||||||
| Shell PLC | Oil, Gas & Consumable Fuels | 1,594,710 | 45,518,524 | |||||||||
|
|
|
|||||||||||
| Nigeria 0.0%† |
| |||||||||||
| b |
Airtel Africa PLC | Wireless Telecommunication Services | 249,570 | 328,639 | ||||||||
|
|
|
|||||||||||
| Russia 0.0%† |
| |||||||||||
| a |
Evraz PLC | Metals & Mining | 128,818 | — | ||||||||
|
|
|
|||||||||||
| Switzerland 0.2% |
| |||||||||||
| Coca-Cola HBC AG | Beverages | 45,120 | 1,234,602 | |||||||||
|
|
|
|||||||||||
| United Kingdom 79.4% |
| |||||||||||
| 3i Group PLC | Capital Markets | 218,080 | 4,543,519 | |||||||||
| abrdn PLC | Capital Markets | 452,610 | 1,138,846 | |||||||||
| Admiral Group PLC | Insurance | 65,330 | 1,646,241 | |||||||||
| Anglo American PLC | Metals & Mining | 276,360 | 9,150,869 | |||||||||
| Ashtead Group PLC | Trading Companies & Distributors | 100,110 | 6,137,063 | |||||||||
| Associated British Foods PLC | Food Products | 79,430 | 1,905,298 | |||||||||
| AstraZeneca PLC | Pharmaceuticals | 338,400 | 46,996,339 | |||||||||
| b |
Auto Trader Group PLC | Interactive Media & Services | 206,330 | 1,572,029 | ||||||||
| Aviva PLC | Insurance | 638,730 | 3,192,201 | |||||||||
| B&M European Value Retail SA | Broadline Retail | 212,910 | 1,269,141 | |||||||||
| BAE Systems PLC | Aerospace & Defense | 699,830 | 8,502,485 | |||||||||
| Barclays PLC | Banks | 3,619,940 | 6,525,826 | |||||||||
| Barratt Developments PLC | Household Durables | 227,480 | 1,312,114 | |||||||||
| Beazley PLC | Insurance | 151,810 | 1,121,540 | |||||||||
| Berkeley Group Holdings PLC | Household Durables | 24,440 | 1,268,285 | |||||||||
| BP PLC | Oil, Gas & Consumable Fuels | 4,053,280 | 25,599,653 | |||||||||
| British American Tobacco PLC | Tobacco | 513,240 | 18,025,689 | |||||||||
| British Land Co. PLC | Diversified REITs | 211,970 | 1,016,386 | |||||||||
| BT Group PLC | Diversified Telecommunication Services | 1,589,540 | 2,865,534 | |||||||||
| Bunzl PLC | Trading Companies & Distributors | 77,080 | 2,913,491 | |||||||||
| Burberry Group PLC | Textiles, Apparel & Luxury Goods | 86,010 | 2,750,135 | |||||||||
| Centrica PLC | Multi-Utilities | 1,331,980 | 1,746,566 | |||||||||
| Compass Group PLC | Hotels, Restaurants & Leisure | 401,850 | 10,101,315 | |||||||||
| b |
ConvaTec Group PLC | Health Care Equipment & Supplies | 373,180 | 1,054,803 | ||||||||
| franklintempleton.com | Annual Report |
301 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE United Kingdom ETF (continued)
| Industry | Shares | Value | ||||||||||
| Common Stocks (continued) | ||||||||||||
| United Kingdom (continued) |
| |||||||||||
| Croda International PLC | Chemicals | 31,960 | $ | 2,567,811 | ||||||||
| Dechra Pharmaceuticals PLC | Pharmaceuticals | 25,380 | 831,599 | |||||||||
| Derwent London PLC | Diversified REITs | 25,380 | 739,966 | |||||||||
| Diageo PLC | Beverages | 508,540 | 22,724,265 | |||||||||
| Direct Line Insurance Group PLC | Insurance | 304,090 | 516,989 | |||||||||
| DS Smith PLC | Containers & Packaging | 293,280 | 1,140,459 | |||||||||
| Endeavour Mining PLC | Metals & Mining | 41,360 | 1,021,769 | |||||||||
| Ferguson PLC | Trading Companies & Distributors | 47,470 | 6,250,941 | |||||||||
| GSK PLC | Pharmaceuticals | 915,090 | 16,168,607 | |||||||||
| a |
Haleon PLC | Personal Products | 1,143,040 | 4,550,864 | ||||||||
| Halma PLC | Electronic Equipment, Instruments & Components | 86,950 | 2,396,383 | |||||||||
| Hargreaves Lansdown PLC | Capital Markets | 86,480 | 854,784 | |||||||||
| Hikma Pharmaceuticals PLC | Pharmaceuticals | 37,130 | 768,982 | |||||||||
| Howden Joinery Group PLC | Trading Companies & Distributors | 122,200 | 1,054,637 | |||||||||
| HSBC Holdings PLC | Banks | 4,611,170 | 31,341,043 | |||||||||
| IMI PLC | Machinery | 58,750 | 1,114,320 | |||||||||
| Imperial Brands PLC | Tobacco | 211,970 | 4,885,364 | |||||||||
| Informa PLC | Media | 322,890 | 2,765,118 | |||||||||
| InterContinental Hotels Group PLC | Hotels, Restaurants & Leisure | 40,420 | 2,654,795 | |||||||||
| Intermediate Capital Group PLC | Capital Markets | 63,450 | 954,770 | |||||||||
| a |
International Consolidated Airlines Group SA | Airlines | 252,390 | 471,160 | ||||||||
| Intertek Group PLC | Professional Services | 37,130 | 1,860,708 | |||||||||
| ITV PLC | Media | 857,750 | 878,148 | |||||||||
| J Sainsbury PLC | Consumer Staples Distribution & Retail | 392,920 | 1,353,997 | |||||||||
| JD Sports Fashion PLC | Specialty Retail | 567,290 | 1,246,784 | |||||||||
| Johnson Matthey PLC | Chemicals | 41,360 | 1,014,353 | |||||||||
| Kingfisher PLC | Specialty Retail | 445,090 | 1,437,466 | |||||||||
| Land Securities Group PLC | Diversified REITs | 169,200 | 1,299,596 | |||||||||
| Legal & General Group PLC | Insurance | 1,357,830 | 4,010,866 | |||||||||
| Lloyds Banking Group PLC | Banks | 15,373,230 | 9,062,174 | |||||||||
| London Stock Exchange Group PLC | Capital Markets | 89,300 | 8,687,451 | |||||||||
| M&G PLC | Financial Services | 495,850 | 1,213,926 | |||||||||
| Melrose Industries PLC | Industrial Conglomerates | 916,500 | 1,886,789 | |||||||||
| Mondi PLC | Paper & Forest Products | 110,920 | 1,758,225 | |||||||||
| National Grid PLC | Multi-Utilities | 834,720 | 11,316,862 | |||||||||
| NatWest Group PLC | Banks | 1,239,390 | 4,039,522 | |||||||||
| Next PLC | Broadline Retail | 28,200 | 2,291,518 | |||||||||
| a |
NMC Health PLC | Health Care Providers & Services | 3,705 | — | ||||||||
| a |
Ocado Group PLC | Consumer Staples Distribution & Retail | 138,650 | 917,171 | ||||||||
| Pearson PLC | Media | 164,970 | 1,722,383 | |||||||||
| Persimmon PLC | Household Durables | 72,380 | 1,124,048 | |||||||||
| Phoenix Group Holdings PLC | Insurance | 167,790 | 1,133,583 | |||||||||
| Prudential PLC | Insurance | 629,800 | 8,581,453 | |||||||||
| Reckitt Benckiser Group PLC | Household Products | 164,030 | 12,489,342 | |||||||||
| RELX PLC | Professional Services | 439,920 | 14,240,326 | |||||||||
| Renishaw PLC | Electronic Equipment, Instruments & Components | 7,990 | 404,456 | |||||||||
| Rentokil Initial PLC | Commercial Services & Supplies | 573,400 | 4,194,328 | |||||||||
| Rightmove PLC | Interactive Media & Services | 188,940 | 1,315,252 | |||||||||
| a |
Rolls-Royce Holdings PLC | Aerospace & Defense | 1,917,600 | 3,533,289 | ||||||||
| RS GROUP PLC | Trading Companies & Distributors | 107,630 | 1,216,343 | |||||||||
| Sage Group PLC | Software | 233,120 | 2,233,870 | |||||||||
| Schroders PLC | Capital Markets | 198,340 | 1,128,093 | |||||||||
| Segro PLC | Diversified REITs | 274,950 | 2,609,548 | |||||||||
| Severn Trent PLC | Water Utilities | 57,340 | 2,041,155 | |||||||||
| Smith & Nephew PLC | Health Care Equipment & Supplies | 200,220 | 2,777,646 | |||||||||
| Smiths Group PLC | Industrial Conglomerates | 81,310 | 1,725,696 | |||||||||
| Spirax-Sarco Engineering PLC | Machinery | 16,920 | 2,480,153 | |||||||||
| 302 | Annual Report |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin FTSE United Kingdom ETF (continued)
| Industry | Shares | Value | ||||||||||
| Common Stocks (continued) | ||||||||||||
| United Kingdom (continued) |
| |||||||||||
| SSE PLC |
Electric Utilities | 248,160 | $ | 5,532,279 | ||||||||
| St. James’s Place PLC |
Capital Markets | 122,670 | 1,836,788 | |||||||||
| Standard Chartered PLC |
Banks | 543,320 | 4,126,122 | |||||||||
| Tate & Lyle PLC |
Food Products | 91,650 | 889,114 | |||||||||
| Taylor Wimpey PLC |
Household Durables | 806,520 | 1,186,195 | |||||||||
| Tesco PLC |
Consumer Staples Distribution & Retail | 1,658,160 | 5,447,466 | |||||||||
| Unilever PLC |
Personal Products | 575,280 | 29,803,679 | |||||||||
| UNITE Group PLC |
Diversified REITs | 73,320 | 869,849 | |||||||||
| United Utilities Group PLC |
Water Utilities | 156,040 | 2,045,118 | |||||||||
| Vodafone Group PLC |
Wireless Telecommunication Services | 5,403,590 | 5,966,373 | |||||||||
| Weir Group PLC |
Machinery | 59,220 | 1,361,208 | |||||||||
| Whitbread PLC |
Hotels, Restaurants & Leisure | 46,060 | 1,701,123 | |||||||||
| a |
Wise PLC, Class A |
IT Services | 161,210 | 1,083,946 | ||||||||
| WPP PLC |
Media | 238,760 | 2,829,929 | |||||||||
|
|
|
|||||||||||
| 452,035,703 | ||||||||||||
|
|
|
|||||||||||
| Total Investments before Short- Term Investments |
564,026,714 | |||||||||||
|
|
|
|||||||||||
| Short-Term Investments 0.0% | ||||||||||||
| Money Market Funds 0.0% | ||||||||||||
| United States 0.0% | ||||||||||||
| c,d |
Institutional Fiduciary Trust - Money Market |
Money Market Funds | 10 | 10 | ||||||||
|
|
|
|||||||||||
| Total Short-Term Investments |
10 | |||||||||||
|
|
|
|||||||||||
| Total Investments |
564,026,724 | |||||||||||
| Other Assets, less Liabilities 0.9% |
4,934,191 | |||||||||||
|
|
|
|||||||||||
| Net Assets 100.0% |
$ | 568,960,915 | ||||||||||
|
|
|
|||||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $2,955,471, representing 0.5% of net assets.
cSee Note 3(c) regarding investments in affiliated management investment companies.
dVariable rate security. The rate shown represents the yield at period end.
At March 31, 2023, 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 | 53 | $ | 5,005,978 | 6/16/23 | $27,481 | ||||||||||||||
*As of year end.
See Note 7 regarding other derivative information.
See Abbreviations on page 355.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
303 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Statements of Assets and Liabilities
March 31, 2023
| 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 |
$32,145,017 | $27,816,869 | $ 268,034,332 | $298,943,761 | ||||||||||||
| Value – Unaffiliated issuers |
$30,033,178 | $28,942,982 | $ 266,560,670 | $279,121,167 | ||||||||||||
| Cash |
— | 60 | 22,230 | 67,820 | ||||||||||||
| Foreign currency, at value (cost $47,250, $191,523, $793,582 and $612,335, respectively) |
47,486 | 191,862 | 821,952 | 614,983 | ||||||||||||
| Receivables: |
||||||||||||||||
| Dividends |
86,933 | 256,240 | 1,170,621 | 625,313 | ||||||||||||
| Variation margin on futures contracts |
— | 8,037 | — | 6,231 | ||||||||||||
| Deposits with brokers for: |
||||||||||||||||
| Futures contracts |
49 | 40,024 | 427,274 | 50,360 | ||||||||||||
|
|
|
|||||||||||||||
| Total assets |
30,167,646 | 29,439,205 | 269,002,747 | 280,485,874 | ||||||||||||
|
|
|
|||||||||||||||
| Liabilities: |
||||||||||||||||
| Payables: |
||||||||||||||||
| Investment securities purchased |
6,233 | — | — | 537,862 | ||||||||||||
| Management fees |
4,716 | 2,269 | 47,523 | 20,964 | ||||||||||||
| Variation margin on futures contracts |
— | — | 41,448 | — | ||||||||||||
| Funds advanced by custodian |
81,349 | — | — | — | ||||||||||||
| Deferred tax |
95,019 | — | — | — | ||||||||||||
|
|
|
|||||||||||||||
| Total liabilities |
187,317 | 2,269 | 88,971 | 558,826 | ||||||||||||
|
|
|
|||||||||||||||
| Net assets, at value |
$29,980,329 | $29,436,936 | $ 268,913,776 | $279,927,048 | ||||||||||||
|
|
|
|||||||||||||||
| Net assets consist of: |
||||||||||||||||
| Paid-in capital |
$36,318,823 | $29,526,662 | $ 422,644,770 | $301,211,266 | ||||||||||||
| Total distributable earnings (loss) |
(6,338,494 | ) | (89,726 | ) | (153,730,994 | ) | (21,284,218 | ) | ||||||||
|
|
|
|||||||||||||||
| Net assets, at value |
$29,980,329 | $29,436,936 | $ 268,913,776 | $279,927,048 | ||||||||||||
|
|
|
|||||||||||||||
| Shares outstanding |
1,400,000 | 1,100,000 | 16,000,000 | 9,100,000 | ||||||||||||
|
|
|
|||||||||||||||
| Net asset value per share |
$ 21.41 | $ 26.76 | $ 16.81 | $ 30.76 | ||||||||||||
|
|
|
|||||||||||||||
| 304 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
March 31, 2023
| Franklin FTSE China ETF |
Franklin FTSE Europe ETF |
Franklin FTSE Europe Hedged ETF |
Franklin FTSE France ETF |
|||||||||||||
|
|
||||||||||||||||
| Assets: |
||||||||||||||||
| Investments in securities: |
||||||||||||||||
| Cost – Unaffiliated issuers |
$140,465,875 | $113,790,301 | $14,095,289 | $5,871,994 | ||||||||||||
| Cost – Non-controlled affiliates (Note 3c) |
— | — | 4,136 | — | ||||||||||||
| Value – Unaffiliated issuers |
$114,257,538 | $110,175,895 | $14,018,999 | $6,047,577 | ||||||||||||
| Value – Non-controlled affiliates (Note 3c) |
— | — | 4,136 | — | ||||||||||||
| Cash |
— | 37,235 | — | — | ||||||||||||
| Foreign currency, at value (cost $3,687, $202,826, $27,374 and $43,026, respectively) |
3,687 | 203,722 | 27,481 | 43,711 | ||||||||||||
| Receivables: |
||||||||||||||||
| Dividends and interest |
5,406 | 685,581 | 67,832 | 4,940 | ||||||||||||
| European Union tax reclaims receivable (Note 1e) |
— | 497,518 | 38,729 | 84,224 | ||||||||||||
| Investment securities sold |
— | — | 301,126 | — | ||||||||||||
| Variation margin on futures contracts |
— | 598 | — | 636 | ||||||||||||
| Deposits with brokers for: |
||||||||||||||||
| Futures contracts |
4 | 90,197 | 11,471 | 5,975 | ||||||||||||
| Unrealized appreciation on OTC forward exchange contracts |
— | — | 2,354 | — | ||||||||||||
|
|
|
|||||||||||||||
| Total assets |
114,266,635 | 111,690,746 | 14,472,128 | 6,187,063 | ||||||||||||
|
|
|
|||||||||||||||
| Liabilities: |
||||||||||||||||
| Payables: |
||||||||||||||||
| Investment securities purchased |
— | — | 21 | 31,582 | ||||||||||||
| European Union tax reclaim contingent fees payable (Note 1e) |
— | 124,379 | 9,682 | 21,056 | ||||||||||||
| Management fees |
17,826 | 8,219 | 1,057 | 450 | ||||||||||||
| Variation margin on futures contracts |
— | — | 3,223 | — | ||||||||||||
| Funds advanced by custodian |
14,453 | — | — | 194 | ||||||||||||
| Unrealized depreciation on OTC forward exchange contracts |
— | — | 295,253 | — | ||||||||||||
| Total liabilities |
32,279 | 132,598 | 309,236 | 53,282 | ||||||||||||
|
|
|
|||||||||||||||
| Net assets, at value |
$114,234,356 | $111,558,148 | $14,162,892 | $6,133,781 | ||||||||||||
|
|
|
|||||||||||||||
| Net assets consist of: |
||||||||||||||||
| Paid-in capital |
$161,465,654 | $118,847,959 | $17,715,519 | $6,219,484 | ||||||||||||
| Total distributable earnings (loss) |
(47,231,298 | ) | (7,289,811 | ) | (3,552,627 | ) | (85,703 | ) | ||||||||
|
|
|
|||||||||||||||
| Net assets, at value |
$114,234,356 | $111,558,148 | $14,162,892 | $6,133,781 | ||||||||||||
|
|
|
|||||||||||||||
| Shares outstanding |
5,800,000 | 4,200,000 | 600,000 | 200,000 | ||||||||||||
|
|
|
|||||||||||||||
| Net asset value per share |
$ 19.70 | $ 26.56 | $ 23.60 | $ 30.67 | ||||||||||||
|
|
|
|||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
305 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
March 31, 2023
| Franklin FTSE Germany ETF |
Franklin FTSE Hong Kong ETF |
Franklin FTSE India ETF |
Franklin FTSE Italy ETF |
|||||||||||||
|
|
||||||||||||||||
| Assets: |
||||||||||||||||
| Investments in securities: |
| |||||||||||||||
| Cost – Unaffiliated issuers |
$ | 19,214,695 | $ | 18,872,342 | $ | 98,043,841 | $ | 4,459,161 | ||||||||
| Value – Unaffiliated issuers |
$ | 17,683,414 | $ | 17,034,504 | $ | 99,072,406 | $ | 5,037,427 | ||||||||
| Cash |
— | 893 | — | 251 | ||||||||||||
| Foreign currency, at value (cost $760, $4,657, $299,561 and $1,492, respectively) |
766 | 4,657 | 300,634 | 1,502 | ||||||||||||
| Receivables: |
||||||||||||||||
| Dividends |
468 | 27,141 | 11,662 | — | ||||||||||||
| Variation margin on futures contracts |
— | 247 | — | — | ||||||||||||
| Deposits with brokers for: |
| |||||||||||||||
| Futures contracts |
— | 2,648 | 13 | — | ||||||||||||
|
|
|
|||||||||||||||
| Total assets |
17,684,648 | 17,070,090 | 99,384,715 | 5,039,180 | ||||||||||||
|
|
|
|||||||||||||||
| Liabilities: |
||||||||||||||||
| Due to Custodian |
5 | — | — | — | ||||||||||||
| Payables: |
||||||||||||||||
| Management fees |
1,277 | 1,217 | 15,815 | 366 | ||||||||||||
| Funds advanced by custodian |
153 | — | 279,516 | — | ||||||||||||
| Deferred tax |
— | — | 111,942 | — | ||||||||||||
|
|
|
|||||||||||||||
| Total liabilities |
1,435 | 1,217 | 407,273 | 366 | ||||||||||||
|
|
|
|||||||||||||||
| Net assets, at value |
$ | 17,683,213 | $ | 17,068,873 | $ | 98,977,442 | $ | 5,038,814 | ||||||||
|
|
|
|||||||||||||||
| Net assets consist of: |
| |||||||||||||||
| Paid-in capital |
$ | 20,187,918 | $ | 20,392,708 | $ | 101,969,733 | $ | 4,977,355 | ||||||||
| Total distributable earnings (loss) |
(2,504,705 | ) | (3,323,835 | ) | (2,992,291 | ) | 61,459 | |||||||||
|
|
|
|||||||||||||||
| Net assets, at value |
$ | 17,683,213 | $ | 17,068,873 | $ | 98,977,442 | $ | 5,038,814 | ||||||||
|
|
|
|||||||||||||||
| Shares outstanding |
800,000 | 800,000 | 3,600,000 | 200,000 | ||||||||||||
|
|
|
|||||||||||||||
| Net asset value per share |
$ | 22.10 | $ | 21.34 | $ | 27.49 | $ | 25.19 | ||||||||
|
|
|
|||||||||||||||
| 306 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
March 31, 2023
| 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 |
$ | 1,089,076,853 | $13,750,298 | $61,702,938 | $ | 21,033,038 | ||||||||||
| Cost – Non-controlled affiliates (Note 3c) |
4,417,293 | 721 | — | — | ||||||||||||
| Value – Unaffiliated issuers+ |
$ | 988,568,241 | $13,036,206 | $67,137,485 | $ | 24,885,047 | ||||||||||
| Value – Non-controlled affiliates (Note 3c) |
4,417,293 | 721 | — | — | ||||||||||||
| Cash |
32 | — | — | — | ||||||||||||
| Foreign currency, at value (cost $928,337, $59,181, $50,224 and $5,990, respectively) |
920,343 | 58,717 | 51,729 | 6,103 | ||||||||||||
| Receivables: |
| |||||||||||||||
| Dividends |
10,450,363 | 141,239 | 181,240 | 15,014 | ||||||||||||
| Investment securities sold |
196,649 | 285,879 | — | — | ||||||||||||
| Variation margin on futures contracts |
201,220 | 2,700 | — | — | ||||||||||||
| Deposits with brokers for: |
||||||||||||||||
| Futures contracts |
480,577 | 7,393 | 37,522 | 35 | ||||||||||||
|
|
|
|||||||||||||||
| Total assets |
1,005,234,718 | 13,532,855 | 67,407,976 | 24,906,199 | ||||||||||||
|
|
|
|||||||||||||||
| Liabilities: |
| |||||||||||||||
| Payables: |
| |||||||||||||||
| Investment securities purchased |
1,519 | 121 | — | — | ||||||||||||
| Management fees |
74,143 | 988 | 10,606 | 3,882 | ||||||||||||
| Variation margin on futures contracts |
— | — | 3,962 | — | ||||||||||||
| Funds advanced by custodian |
— | — | 21,176 | 12,469 | ||||||||||||
| Payable upon return of securities loaned |
4,355,834 | — | — | — | ||||||||||||
| Unrealized depreciation on OTC forward exchange contracts |
— | 247,252 | — | — | ||||||||||||
|
|
|
|||||||||||||||
| Total liabilities |
4,431,496 | 248,361 | 35,744 | 16,351 | ||||||||||||
|
|
|
|||||||||||||||
| Net assets, at value |
$ | 1,000,803,222 | $13,284,494 | $67,372,232 | $ | 24,889,848 | ||||||||||
|
|
|
|||||||||||||||
| Net assets consist of: |
||||||||||||||||
| Paid-in capital |
$ | 1,111,304,190 | $20,188,740 | $63,559,300 | $ | 22,021,779 | ||||||||||
| Total distributable earnings (loss) |
(110,500,968 | ) | (6,904,246 | ) | 3,812,932 | 2,868,069 | ||||||||||
|
|
|
|||||||||||||||
| Net assets, at value |
$ | 1,000,803,222 | $13,284,494 | $67,372,232 | $ | 24,889,848 | ||||||||||
|
|
|
|||||||||||||||
| Shares outstanding |
39,000,000 | 500,000 | 3,300,000 | 850,000 | ||||||||||||
|
|
|
|||||||||||||||
| Net asset value per share |
$ | 25.66 | $ 26.57 | $ 20.42 | $ | 29.28 | ||||||||||
|
|
|
|||||||||||||||
| +Includes securities loaned |
4,146,755 | — | — | — | ||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
307 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
March 31, 2023
| Franklin FTSE Saudi Arabia ETF |
Franklin FTSE South Africa ETF |
Franklin FTSE South Korea ETF |
||||||||||
|
|
||||||||||||
| Assets: |
||||||||||||
| Investments in securities: |
| |||||||||||
| Cost – Unaffiliated issuers |
$20,984,820 | $2,702,285 | $292,428,896 | |||||||||
| Value – Unaffiliated issuers |
$21,730,478 | $2,242,239 | $290,711,940 | |||||||||
| Foreign currency, at value (cost $56,228, $5,118 and $75,909, respectively) |
56,252 | 5,154 | 75,945 | |||||||||
| Receivables: |
||||||||||||
| Dividends |
149,721 | 8,936 | 2,161,241 | |||||||||
| Investment securities sold |
— | — | 449,585 | |||||||||
| Variation margin on futures contracts |
— | — | 55,556 | |||||||||
| Deposits with brokers for: |
| |||||||||||
| Futures contracts |
— | — | 172,070 | |||||||||
|
|
|
|||||||||||
| Total assets |
21,936,451 | 2,256,329 | 293,626,337 | |||||||||
|
|
|
|||||||||||
| Liabilities: |
||||||||||||
| Payables: |
||||||||||||
| Investment securities purchased |
— | — | 507,088 | |||||||||
| Management fees |
7,002 | 428 | 21,733 | |||||||||
| Funds advanced by custodian |
55,817 | 12,274 | 48,723 | |||||||||
|
|
|
|||||||||||
| Total liabilities |
62,819 | 12,702 | 577,544 | |||||||||
|
|
|
|||||||||||
| Net assets, at value |
$21,873,632 | $2,243,627 | $293,048,793 | |||||||||
|
|
|
|||||||||||
| Net assets consist of: |
| |||||||||||
| Paid-in capital |
$21,045,215 | $3,099,543 | $307,935,864 | |||||||||
| Total distributable earnings (loss) |
828,417 | (855,916 | ) | (14,887,071 | ) | |||||||
|
|
|
|||||||||||
| Net assets, at value |
$21,873,632 | $2,243,627 | $293,048,793 | |||||||||
|
|
|
|||||||||||
| Shares outstanding |
650,000 | 100,000 | 13,900,000 | |||||||||
|
|
|
|||||||||||
| Net asset value per share |
$ 33.65 | $ 22.44 | $ 21.08 | |||||||||
|
|
|
|||||||||||
| 308 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
March 31, 2023
| Franklin FTSE Switzerland ETF |
Franklin FTSE Taiwan ETF |
Franklin FTSE United Kingdom ETF |
||||||||||
|
|
||||||||||||
| Assets: |
| |||||||||||
| Investments in securities: |
| |||||||||||
| Cost – Unaffiliated issuers |
$48,952,282 | $125,458,129 | $590,608,325 | |||||||||
| Cost – Non-controlled affiliates (Note 3c) |
— | — | 10 | |||||||||
| Value – Unaffiliated issuers |
$49,051,415 | $136,871,589 | $564,026,704 | |||||||||
| Value – Non-controlled affiliates (Note 3c) |
— | — | 10 | |||||||||
| Cash |
— | 954 | 66,638 | |||||||||
| Foreign currency, at value (cost $17,394, $78,095 and $911,204, respectively) |
17,446 | 78,102 | 910,804 | |||||||||
| Receivables: |
| |||||||||||
| Dividends |
854,880 | 159,771 | 3,737,339 | |||||||||
| Variation margin on futures contracts |
5,205 | — | 9,870 | |||||||||
| Deposits with brokers for: |
| |||||||||||
| Futures contracts |
48,710 | 13 | 283,163 | |||||||||
|
|
|
|||||||||||
| Total assets |
49,977,656 | 137,110,429 | 569,034,528 | |||||||||
|
|
|
|||||||||||
| Liabilities: |
| |||||||||||
| Payables: |
| |||||||||||
| Investment securities purchased |
— | — | 31,950 | |||||||||
| Management fees |
3,656 | 16,602 | 41,663 | |||||||||
| Funds advanced by custodian |
33,251 | — | — | |||||||||
|
|
|
|||||||||||
| Total liabilities |
36,907 | 16,602 | 73,613 | |||||||||
|
|
|
|||||||||||
| Net assets, at value |
$49,940,749 | $137,093,827 | $568,960,915 | |||||||||
|
|
|
|||||||||||
| Net assets consist of: |
| |||||||||||
| Paid-in capital |
$50,648,740 | $128,392,163 | $608,290,313 | |||||||||
| Total distributable earnings (loss) |
(707,991 | ) | 8,701,664 | (39,329,398 | ) | |||||||
|
|
|
|||||||||||
| Net assets, at value |
$49,940,749 | $137,093,827 | $568,960,915 | |||||||||
|
|
|
|||||||||||
| Shares outstanding |
1,600,000 | 3,700,000 | 23,500,000 | |||||||||
|
|
|
|||||||||||
| Net asset value per share |
$ 31.21 | $ 37.05 | $ 24.21 | |||||||||
|
|
|
|||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
309 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations
for the year ended March 31, 2023
| 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 |
$ 853,108 | $ 1,714,905 | $ 36,247,124 | $ 6,964,614 | ||||||||||||
| Non-cash dividends |
76,504 | — | — | — | ||||||||||||
| Interest: |
||||||||||||||||
| Unaffiliated issuers |
230 | — | — | — | ||||||||||||
| Interest from securities loaned (Note 1d): |
||||||||||||||||
| Unaffiliated issuers (net of fees and rebates) |
12 | — | — | — | ||||||||||||
| Non-Controlled affiliates (Note 3c) |
10 | — | — | — | ||||||||||||
|
|
|
|||||||||||||||
| Total investment income |
929,864 | 1,714,905 | 36,247,124 | 6,964,614 | ||||||||||||
|
|
|
|||||||||||||||
| Expenses: |
||||||||||||||||
| Management fees (Note 3a) |
61,706 | 25,597 | 619,096 | 202,904 | ||||||||||||
|
|
|
|||||||||||||||
| Total expenses |
61,706 | 25,597 | 619,096 | 202,904 | ||||||||||||
| Expenses waived/paid by affiliates (Note 3c) |
(143 | ) | — | — | — | |||||||||||
|
|
|
|||||||||||||||
| Net expenses |
61,563 | 25,597 | 619,096 | 202,904 | ||||||||||||
|
|
|
|||||||||||||||
| Net investment income |
868,301 | 1,689,308 | 35,628,028 | 6,761,710 | ||||||||||||
|
|
|
|||||||||||||||
| Realized and unrealized gains (losses): |
||||||||||||||||
| Net realized gain (loss) from: |
||||||||||||||||
| Investments: |
||||||||||||||||
| Unaffiliated issuers |
(2,269,307 | ) | (591,067 | ) | (91,682,458 | ) | (2,938,738 | ) | ||||||||
| In-kind redemptions |
169,438 | 382,610 | — | 6,382,227 | ||||||||||||
| Foreign currency transactions |
(17,679 | ) | (33,976 | ) | (1,122,565 | ) | (71,721 | ) | ||||||||
| Futures contracts |
(41,334 | ) | 4,705 | (2,139,014 | ) | (32,397 | ) | |||||||||
|
|
|
|||||||||||||||
| Net realized gain (loss) |
(2,158,882 | ) | (237,728 | ) | (94,944,037 | ) | 3,339,371 | |||||||||
|
|
|
|||||||||||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||
| Investments: |
||||||||||||||||
| Unaffiliated issuers |
(2,721,461 | ) | (4,246,961 | ) | (44,926,968 | ) | (27,305,464 | ) | ||||||||
| Translation of other assets and liabilities denominated in foreign currencies |
404 | (515 | ) | (9,444 | ) | 5,184 | ||||||||||
| Futures contracts |
— | 865 | (313,611 | ) | 13,181 | |||||||||||
| Change in deferred taxes on unrealized appreciation |
82,986 | — | — | — | ||||||||||||
|
|
|
|||||||||||||||
| Net change in unrealized appreciation (depreciation) |
(2,638,071 | ) | (4,246,611 | ) | (45,250,023 | ) | (27,287,099 | ) | ||||||||
|
|
|
|||||||||||||||
| Net realized and unrealized gain (loss) |
(4,796,953 | ) | (4,484,339 | ) | (140,194,060 | ) | (23,947,728 | ) | ||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
$(3,928,652 | ) | $(2,795,031 | ) | $(104,566,032 | ) | $(17,186,018 | ) | ||||||||
|
|
|
|||||||||||||||
| aForeign taxes withheld on dividends |
$116,622 | $11,838 | $1,369,781 | $1,231,578 | ||||||||||||
|
|
|
|||||||||||||||
| 310 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the year ended March 31, 2023
| 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 |
$ 3,169,280 | $ 3,413,567 | $ 567,428 | $ 227,982 | ||||||||||||
| European Union tax reclaims (Note 1e) |
— | 497,518 | 38,729 | 84,224 | ||||||||||||
| Interest: |
||||||||||||||||
| Unaffiliated issuers |
2,413 | — | — | — | ||||||||||||
| Interest from securities loaned (Note 1d): |
||||||||||||||||
| Non-Controlled affiliates (Note 3c) |
1,001 | — | — | — | ||||||||||||
|
|
|
|||||||||||||||
| Total investment income |
3,172,694 | 3,911,085 | 606,157 | 312,206 | ||||||||||||
|
|
|
|||||||||||||||
| Expenses: |
||||||||||||||||
| Management fees (Note 3a) |
200,306 | 74,288 | 15,218 | 6,610 | ||||||||||||
| Contingent fees for European Union tax reclaims (Note 1e) |
— | 124,379 | 9,682 | 21,056 | ||||||||||||
| Other |
— | 305 | 25 | 1 | ||||||||||||
|
|
|
|||||||||||||||
| Total expenses |
200,306 | 198,972 | 24,925 | 27,667 | ||||||||||||
| Expenses waived/paid by affiliates (Note 3c) |
(114 | ) | — | (85 | ) | — | ||||||||||
|
|
|
|||||||||||||||
| Net expenses |
200,192 | 198,972 | 24,840 | 27,667 | ||||||||||||
|
|
|
|||||||||||||||
| Net investment income |
2,972,502 | 3,712,113 | 581,317 | 284,539 | ||||||||||||
|
|
|
|||||||||||||||
| Realized and unrealized gains (losses): |
||||||||||||||||
| Net realized gain (loss) from: |
||||||||||||||||
| Investments: |
||||||||||||||||
| Unaffiliated issuers |
(8,197,395 | ) | (2,028,827 | ) | (1,927,497 | ) | (200,236 | ) | ||||||||
| In-kind redemptions |
— | 6,498,626 | 308,341 | (75,711 | ) | |||||||||||
| Foreign currency transactions |
(10,174 | ) | (26,976 | ) | (6,270 | ) | (997 | ) | ||||||||
| Forward exchange contracts |
— | — | 1,844,814 | — | ||||||||||||
| Futures contracts |
(282,944 | ) | 35,645 | 800 | (3,299 | ) | ||||||||||
|
|
|
|||||||||||||||
| Net realized gain (loss) |
(8,490,513 | ) | 4,478,468 | 220,188 | (280,243 | ) | ||||||||||
|
|
|
|||||||||||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||
| Investments: |
||||||||||||||||
| Unaffiliated issuers |
(281,035 | ) | (20,809,475 | ) | (492,570 | ) | (133,773 | ) | ||||||||
| Translation of other assets and liabilities denominated in foreign currencies |
117 | 6,754 | 256 | 1,510 | ||||||||||||
| Futures contracts |
— | (40,919 | ) | 2,816 | 2,470 | |||||||||||
| Forward exchange contracts |
— | — | (515,430 | ) | — | |||||||||||
|
|
|
|||||||||||||||
| Net change in unrealized appreciation (depreciation) |
(280,918 | ) | (20,843,640 | ) | (1,004,928 | ) | (129,793 | ) | ||||||||
|
|
|
|||||||||||||||
| Net realized and unrealized gain (loss) |
(8,771,431 | ) | (16,365,172 | ) | (784,740 | ) | (410,036 | ) | ||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
$(5,798,929 | ) | $(12,653,059 | ) | $ (203,423 | ) | $(125,497 | ) | ||||||||
|
|
|
|||||||||||||||
| aForeign taxes withheld on dividends |
$199,805 | $428,263 | $72,213 | $39,278 | ||||||||||||
|
|
|
|||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
311 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the year ended March 31, 2023
| 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 |
$ 456,585 | $ 530,227 | $ 715,520 | $136,695 | ||||||||||||
| Interest: |
||||||||||||||||
| Unaffiliated issuers |
— | — | — | 37 | ||||||||||||
|
|
|
|||||||||||||||
| Total investment income |
456,585 | 530,227 | 715,520 | 136,732 | ||||||||||||
|
|
|
|||||||||||||||
| Expenses: |
||||||||||||||||
| Management fees (Note 3a) |
12,821 | 12,935 | 116,142 | 3,036 | ||||||||||||
| Other |
22 | — | — | — | ||||||||||||
|
|
|
|||||||||||||||
| Total expenses |
12,843 | 12,935 | 116,142 | 3,036 | ||||||||||||
|
|
|
|||||||||||||||
| Net investment income |
443,742 | 517,292 | 599,378 | 133,696 | ||||||||||||
|
|
|
|||||||||||||||
| Realized and unrealized gains (losses): |
||||||||||||||||
| Net realized gain (loss) from: |
||||||||||||||||
| Investments: |
||||||||||||||||
| Unaffiliated issuers |
(539,191 | ) | (797,621 | ) | (1,460,849 | ) | (96,290 | ) | ||||||||
| In-kind redemptions |
821,012 | 210,305 | — | — | ||||||||||||
| Foreign currency transactions |
(43 | ) | (107 | ) | (153,763 | ) | (745 | ) | ||||||||
| Futures contracts |
(10,835 | ) | (2,161 | ) | 4,985 | — | ||||||||||
|
|
|
|||||||||||||||
| Net realized gain (loss) |
270,943 | (589,584 | ) | (1,609,627 | ) | (97,035 | ) | |||||||||
|
|
|
|||||||||||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||
| Investments: |
||||||||||||||||
| Unaffiliated issuers |
248,165 | (625,796 | ) | (7,898,915 | ) | 215,951 | ||||||||||
| Translation of other assets and liabilities denominated in foreign currencies |
(118 | ) | 35 | 1,138 | 34 | |||||||||||
| Futures contracts |
— | 477 | (1,364 | ) | — | |||||||||||
| Change in deferred taxes on unrealized appreciation |
— | — | 850,370 | — | ||||||||||||
|
|
|
|||||||||||||||
| Net change in unrealized appreciation (depreciation) |
248,047 | (625,284 | ) | (7,048,771 | ) | 215,985 | ||||||||||
|
|
|
|||||||||||||||
| Net realized and unrealized gain (loss) |
518,990 | (1,214,868 | ) | (8,658,398 | ) | 118,950 | ||||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
$ 962,732 | $ (697,576 | ) | $(8,059,020 | ) | $252,646 | ||||||||||
|
|
|
|||||||||||||||
| aForeign taxes withheld on dividends |
$71,663 | $443 | $219,492 | $23,212 | ||||||||||||
|
|
|
|||||||||||||||
| 312 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the year ended March 31, 2023
| 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 |
$21,871,300 | $ 476,413 | $ 4,057,749 | $ 421,658 | ||||||||||||
| Non-cash dividends |
— | — | — | 64,977 | ||||||||||||
| Interest from securities loaned (Note 1d): |
||||||||||||||||
| Non-Controlled affiliates (Note 3c) |
10,989 | — | — | — | ||||||||||||
|
|
|
|||||||||||||||
| Total investment income |
21,882,289 | 476,413 | 4,057,749 | 486,635 | ||||||||||||
|
|
|
|||||||||||||||
| Expenses: |
||||||||||||||||
| Management fees (Note 3a) |
731,006 | 20,638 | 93,144 | 24,713 | ||||||||||||
| Other |
323 | 10 | — | — | ||||||||||||
|
|
|
|||||||||||||||
| Total expenses |
731,329 | 20,648 | 93,144 | 24,713 | ||||||||||||
| Expenses waived/paid by affiliates (Note 3c) |
(1,696 | ) | (523 | ) | — | — | ||||||||||
|
|
|
|||||||||||||||
| Net expenses |
729,633 | 20,125 | 93,144 | 24,713 | ||||||||||||
|
|
|
|||||||||||||||
| Net investment income |
21,152,656 | 456,288 | 3,964,605 | 461,922 | ||||||||||||
|
|
|
|||||||||||||||
| Realized and unrealized gains (losses): |
||||||||||||||||
| Net realized gain (loss) from: |
||||||||||||||||
| Investments: |
||||||||||||||||
| Unaffiliated issuers |
(10,941,946 | ) | (3,889,020 | ) | (1,454,275 | ) | (225,846 | ) | ||||||||
| In-kind redemptions |
6,334,028 | 1,515,186 | — | 462,021 | ||||||||||||
| Foreign currency transactions |
(477,798 | ) | (20,515 | ) | (117,101 | ) | (327 | ) | ||||||||
| Forward exchange contracts |
— | 2,715,905 | — | — | ||||||||||||
| Futures contracts |
354,956 | 4,773 | (99,250 | ) | (1,730 | ) | ||||||||||
|
|
|
|||||||||||||||
| Net realized gain (loss) |
(4,730,760 | ) | 326,329 | (1,670,626 | ) | 234,118 | ||||||||||
|
|
|
|||||||||||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||
| Investments: |
||||||||||||||||
| Unaffiliated issuers |
(55,828,260 | ) | 1,551,360 | 4,569,870 | 1,254,910 | |||||||||||
| Translation of other assets and liabilities denominated in foreign currencies |
(54,841 | ) | (1,653 | ) | 6,467 | 107 | ||||||||||
| Futures contracts |
14,541 | 832 | (15,889 | ) | — | |||||||||||
| Forward exchange contracts |
— | (797,600 | ) | — | — | |||||||||||
|
|
|
|||||||||||||||
| Net change in unrealized appreciation (depreciation) |
(55,868,560 | ) | 752,939 | 4,560,448 | 1,255,017 | |||||||||||
|
|
|
|||||||||||||||
| Net realized and unrealized gain (loss) |
(60,599,320 | ) | 1,079,268 | 2,889,822 | 1,489,135 | |||||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
$(39,446,664 | ) | $ 1,535,556 | $ 6,854,427 | $1,951,057 | |||||||||||
|
|
|
|||||||||||||||
| aForeign taxes withheld on dividends |
$2,426,823 | $52,376 | $242,662 | $33,514 | ||||||||||||
|
|
|
|||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
313 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the year ended March 31, 2023
| Franklin FTSE Saudi Arabia ETF |
Franklin FTSE South Africa ETF |
Franklin FTSE South Korea ETF |
Franklin FTSE Switzerland ETF |
|||||||||||||
|
|
||||||||||||||||
| Investment income: |
||||||||||||||||
| Dividends: (net of foreign taxes)a |
||||||||||||||||
| Unaffiliated issuers |
$ 282,081 | $ 144,621 | $ 2,548,524 | $ 1,175,893 | ||||||||||||
| Non-cash dividends |
— | 24,173 | — | — | ||||||||||||
| Interest: |
||||||||||||||||
| Unaffiliated issuers |
— | — | 8,463 | — | ||||||||||||
|
|
|
|||||||||||||||
| Total investment income |
282,081 | 168,794 | 2,556,987 | 1,175,893 | ||||||||||||
|
|
|
|||||||||||||||
| Expenses: |
||||||||||||||||
| Management fees (Note 3a) |
25,252 | 7,608 | 93,962 | 45,437 | ||||||||||||
| Other |
— | — | — | 1,349 | ||||||||||||
|
|
|
|||||||||||||||
| Total expenses |
25,252 | 7,608 | 93,962 | 46,786 | ||||||||||||
| Expenses waived/paid by affiliates (Note 3c) |
— | — | (6 | ) | — | |||||||||||
|
|
|
|||||||||||||||
| Net expenses |
25,252 | 7,608 | 93,956 | 46,786 | ||||||||||||
|
|
|
|||||||||||||||
| Net investment income |
256,829 | 161,186 | 2,463,031 | 1,129,107 | ||||||||||||
|
|
|
|||||||||||||||
| Realized and unrealized gains (losses): |
||||||||||||||||
| Net realized gain (loss) from: |
||||||||||||||||
| Investments: |
||||||||||||||||
| Unaffiliated issuers |
(84,402 | ) | (135,018 | ) | (3,827,692 | ) | (799,546 | ) | ||||||||
| In-kind redemptions |
— | 182,042 | — | 926,985 | ||||||||||||
| Foreign currency transactions |
(5,043 | ) | (2,257 | ) | (156,508 | ) | 4,604 | |||||||||
| Forward exchange contracts |
1 | — | — | — | ||||||||||||
| Futures contracts |
— | — | 116,088 | (97,288 | ) | |||||||||||
|
|
|
|||||||||||||||
| Net realized gain (loss) |
(89,444 | ) | 44,767 | (3,868,112 | ) | 34,755 | ||||||||||
|
|
|
|||||||||||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||
| Investments: |
||||||||||||||||
| Unaffiliated issuers |
(908,728 | ) | (1,673,931 | ) | (2,418,540 | ) | (3,646,051 | ) | ||||||||
| Translation of other assets and liabilities denominated in foreign currencies |
103 | 309 | (29,194 | ) | (180 | ) | ||||||||||
| Futures contracts |
— | — | (12,915 | ) | 3,897 | |||||||||||
|
|
|
|||||||||||||||
| Net change in unrealized appreciation (depreciation) |
(908,625 | ) | (1,673,622 | ) | (2,460,649 | ) | (3,642,334 | ) | ||||||||
|
|
|
|||||||||||||||
| Net realized and unrealized gain (loss) |
(998,069 | ) | (1,628,855 | ) | (6,328,761 | ) | (3,607,579 | ) | ||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
$(741,240 | ) | $(1,467,669 | ) | $(3,865,730 | ) | $(2,478,472 | ) | ||||||||
|
|
|
|||||||||||||||
| aForeign taxes withheld on dividends |
$13,410 | $25,219 | $504,329 | $188,331 | ||||||||||||
|
|
|
|||||||||||||||
| 314 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the year ended March 31, 2023
| Franklin FTSE Taiwan ETF |
Franklin FTSE United Kingdom ETF |
|||||||
|
|
||||||||
| Investment income: |
| |||||||
| Dividends: (net of foreign taxes)a |
| |||||||
| Unaffiliated issuers |
$ 1,659,413 | $ 21,250,677 | ||||||
| Interest: |
| |||||||
| Unaffiliated issuers |
— | 4,351 | ||||||
| Interest from securities loaned (Note 1d): |
| |||||||
| Unaffiliated issuers (net of fees and rebates) |
— | 19,311 | ||||||
| Non-Controlled affiliates (Note 3c) |
— | 7,535 | ||||||
|
|
|
|||||||
| Total investment income |
1,659,413 | 21,281,874 | ||||||
|
|
|
|||||||
| Expenses: |
| |||||||
| Management fees (Note 3a) |
84,970 | 457,578 | ||||||
|
|
|
|||||||
| Total expenses |
84,970 | 457,578 | ||||||
| Expenses waived/paid by affiliates (Note 3c) |
— | (1,339 | ) | |||||
|
|
|
|||||||
| Net expenses |
84,970 | 456,239 | ||||||
|
|
|
|||||||
| Net investment income |
1,574,443 | 20,825,635 | ||||||
|
|
|
|||||||
| Realized and unrealized gains (losses): |
| |||||||
| Net realized gain (loss) from: |
| |||||||
| Investments: |
||||||||
| Unaffiliated issuers |
(1,909,374 | ) | (11,493,177 | ) | ||||
| In-kind redemptions |
— | 3,462,099 | ||||||
| Foreign currency transactions |
(76,972 | ) | (570,016 | ) | ||||
| Futures contracts |
589 | (107,586 | ) | |||||
|
|
|
|||||||
| Net realized gain (loss) |
(1,985,757 | ) | (8,708,680 | ) | ||||
|
|
|
|||||||
| Net change in unrealized appreciation (depreciation) on: |
| |||||||
| Investments: |
| |||||||
| Unaffiliated issuers |
(1,986,237 | ) | (35,514,032 | ) | ||||
| Translation of other assets and liabilities denominated in foreign currencies |
4,476 | 47,175 | ||||||
| Futures contracts |
— | (203,775 | ) | |||||
|
|
|
|||||||
| Net change in unrealized appreciation (depreciation) |
(1,981,761 | ) | (35,670,632 | ) | ||||
|
|
|
|||||||
| Net realized and unrealized gain (loss) |
(3,967,518 | ) | (44,379,312 | ) | ||||
|
|
|
|||||||
| Net increase (decrease) in net assets resulting from operations |
$(2,393,075 | ) | $(23,553,677 | ) | ||||
|
|
|
|||||||
| aForeign taxes withheld on dividends |
$404,157 | $35,421 | ||||||
|
|
|
|||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
315 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
| Franklin FTSE Asia ex Japan ETF | Franklin FTSE Australia ETF | |||||||||||||||
|
|
|
|||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||
|
|
||||||||||||||||
| Increase (decrease) in net assets: |
||||||||||||||||
| Operations: |
||||||||||||||||
| Net investment income |
$ 868,301 | $ 664,421 | $ 1,689,308 | $ 1,235,873 | ||||||||||||
| Net realized gain (loss) |
(2,158,882 | ) | (979,634 | ) | (237,728 | ) | (464,945 | ) | ||||||||
| Net change in unrealized appreciation (depreciation) |
(2,638,071 | ) | (3,275,420 | ) | (4,246,611 | ) | 2,892,489 | |||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
(3,928,652 | ) | (3,590,633 | ) | (2,795,031 | ) | 3,663,417 | |||||||||
|
|
|
|||||||||||||||
| Distributions to shareholders (Note 1f) |
(845,059 | ) | (744,268 | ) | (1,647,793 | ) | (1,262,140 | ) | ||||||||
|
|
|
|||||||||||||||
| Capital share transactions: (Note 2) |
(3,997,011 | ) | 8,769,376 | 3,911,576 | 4,271,838 | |||||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets |
(8,770,722 | ) | 4,434,475 | (531,248 | ) | 6,673,115 | ||||||||||
| Net assets: |
||||||||||||||||
| Beginning of year |
38,751,051 | 34,316,576 | 29,968,184 | 23,295,069 | ||||||||||||
|
|
|
|||||||||||||||
| End of year |
$29,980,329 | $38,751,051 | $29,436,936 | $29,968,184 | ||||||||||||
|
|
|
|||||||||||||||
| 316 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin FTSE Brazil ETF | Franklin FTSE Canada ETF | |||||||||||||||
|
|
|
|||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||
|
|
||||||||||||||||
| Increase (decrease) in net assets: |
||||||||||||||||
| Operations: |
||||||||||||||||
| Net investment income |
$ 35,628,028 | $ 20,729,461 | $ 6,761,710 | $ 725,501 | ||||||||||||
| Net realized gain (loss) |
(94,944,037 | ) | (18,881,968 | ) | 3,339,371 | (201,770 | ) | |||||||||
| Net change in unrealized appreciation (depreciation) |
(45,250,023 | ) | 69,556,549 | (27,287,099 | ) | 5,384,898 | ||||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
(104,566,032 | ) | 71,404,042 | (17,186,018 | ) | 5,908,629 | ||||||||||
|
|
|
|||||||||||||||
| Distributions to shareholders (Note 1f) |
(37,484,866 | ) | (16,614,538 | ) | (5,031,676 | ) | (639,656 | ) | ||||||||
|
|
|
|||||||||||||||
| Capital share transactions: (Note 2) |
(116,854,829 | ) | 365,373,593 | 258,855,931 | 13,859,588 | |||||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets |
(258,905,727 | ) | 420,163,097 | 236,638,237 | 19,128,561 | |||||||||||
| Net assets: |
||||||||||||||||
| Beginning of year |
527,819,503 | 107,656,406 | 43,288,811 | 24,160,250 | ||||||||||||
|
|
|
|||||||||||||||
| End of year |
$268,913,776 | $527,819,503 | $279,927,048 | $43,288,811 | ||||||||||||
|
|
|
|||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
317 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin FTSE China ETF | Franklin FTSE Europe ETF | |||||||||||||||
|
|
|
|||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||
|
|
||||||||||||||||
| Increase (decrease) in net assets: |
||||||||||||||||
| Operations: |
||||||||||||||||
| Net investment income |
$ 2,972,502 | $ 2,209,264 | $ 3,712,113 | $ 6,105,734 | ||||||||||||
| Net realized gain (loss) |
(8,490,513 | ) | (4,775,014 | ) | 4,478,468 | 26,177,110 | ||||||||||
| Net change in unrealized appreciation (depreciation) |
(280,918 | ) | (42,274,445 | ) | (20,843,640 | ) | (24,258,897 | ) | ||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
(5,798,929 | ) | (44,840,195 | ) | (12,653,059 | ) | 8,023,947 | |||||||||
|
|
|
|||||||||||||||
| Distributions to shareholders (Note 1f) |
(2,755,725 | ) | (1,744,579 | ) | (3,354,521 | ) | (7,497,235 | ) | ||||||||
|
|
|
|||||||||||||||
| Capital share transactions: (Note 2) |
11,335,252 | 37,256,442 | (57,291,354 | ) | (44,796,057 | ) | ||||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets |
2,780,598 | (9,328,332 | ) | (73,298,934 | ) | (44,269,345 | ) | |||||||||
| Net assets: |
||||||||||||||||
| Beginning of year |
111,453,758 | 120,782,090 | 184,857,082 | 229,126,427 | ||||||||||||
|
|
|
|||||||||||||||
| End of year |
$114,234,356 | $111,453,758 | $111,558,148 | $184,857,082 | ||||||||||||
|
|
|
|||||||||||||||
| 318 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin FTSE Europe Hedged ETF | Franklin FTSE France ETF | |||||||||||||||
|
|
|
|||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||
|
|
||||||||||||||||
| Increase (decrease) in net assets: |
||||||||||||||||
| Operations: |
||||||||||||||||
| Net investment income |
$ 581,317 | $ 515,076 | $ 284,539 | $ 268,585 | ||||||||||||
| Net realized gain (loss) |
220,188 | 758,844 | (280,243 | ) | (84,036 | ) | ||||||||||
| Net change in unrealized appreciation (depreciation) |
(1,004,928 | ) | (221,066 | ) | (129,793 | ) | (57,195 | ) | ||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
(203,423 | ) | 1,052,854 | (125,497 | ) | 127,354 | ||||||||||
|
|
|
|||||||||||||||
| Distributions to shareholders (Note 1f) |
(3,158,611 | ) | (666,937 | ) | (227,103 | ) | (270,848 | ) | ||||||||
|
|
|
|||||||||||||||
| Capital share transactions: (Note 2) |
(4,169,747 | ) | 5,879,630 | (3,601,500 | ) | 3,120,862 | ||||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets |
(7,531,781 | ) | 6,265,547 | (3,954,100 | ) | 2,977,368 | ||||||||||
| Net assets: |
||||||||||||||||
| Beginning of year |
21,694,673 | 15,429,126 | 10,087,881 | 7,110,513 | ||||||||||||
|
|
|
|||||||||||||||
| End of year |
$14,162,892 | $21,694,673 | $6,133,781 | $10,087,881 | ||||||||||||
|
|
|
|||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
319 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin FTSE Germany ETF | Franklin FTSE Hong Kong ETF | |||||||||||||||
|
|
|
|||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||
|
|
||||||||||||||||
| Increase (decrease) in net assets: |
||||||||||||||||
| Operations: |
||||||||||||||||
| Net investment income |
$ 443,742 | $ 423,991 | $ 517,292 | $ 489,122 | ||||||||||||
| Net realized gain (loss) |
270,943 | (191,927 | ) | (589,584 | ) | (407,601 | ) | |||||||||
| Net change in unrealized appreciation (depreciation) |
248,047 | (2,762,955 | ) | (625,284 | ) | (2,850,341 | ) | |||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
962,732 | (2,530,891 | ) | (697,576 | ) | (2,768,820 | ) | |||||||||
|
|
|
|||||||||||||||
| Distributions to shareholders (Note 1f) |
(449,481 | ) | (404,523 | ) | (536,059 | ) | (478,429 | ) | ||||||||
|
|
|
|||||||||||||||
| Capital share transactions: (Note 2) |
395,253 | 10,617,319 | 729,118 | 3,959,042 | ||||||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets |
908,504 | 7,681,905 | (504,517 | ) | 711,793 | |||||||||||
| Net assets: |
||||||||||||||||
| Beginning of year |
16,774,709 | 9,092,804 | 17,573,390 | 16,861,597 | ||||||||||||
|
|
|
|||||||||||||||
| End of year |
$17,683,213 | $16,774,709 | $17,068,873 | $17,573,390 | ||||||||||||
|
|
|
|||||||||||||||
| 320 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin FTSE India ETF | Franklin FTSE Italy ETF | |||||||||||||||
|
|
|
|||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||
|
|
||||||||||||||||
| Increase (decrease) in net assets: |
||||||||||||||||
| Operations: |
||||||||||||||||
| Net investment income |
$ 599,378 | $ 318,604 | $ 133,696 | $ 127,754 | ||||||||||||
| Net realized gain (loss) |
(1,609,627 | ) | (535,539 | ) | (97,035 | ) | (26,481 | ) | ||||||||
| Net change in unrealized appreciation (depreciation) |
(7,048,771 | ) | 3,883,589 | 215,985 | (211,281 | ) | ||||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
(8,059,020 | ) | 3,666,654 | 252,646 | (110,008 | ) | ||||||||||
|
|
|
|||||||||||||||
| Distributions to shareholders (Note 1f) |
(445,431 | ) | (1,055,912 | ) | (160,658 | ) | (166,253 | ) | ||||||||
|
|
|
|||||||||||||||
| Capital share transactions: (Note 2) |
57,341,977 | 23,985,026 | 1,248,714 | — | ||||||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets |
48,837,526 | 26,595,768 | 1,340,702 | (276,261 | ) | |||||||||||
| Net assets: |
||||||||||||||||
| Beginning of year |
50,139,916 | 23,544,148 | 3,698,112 | 3,974,373 | ||||||||||||
|
|
|
|||||||||||||||
| End of year |
$98,977,442 | $50,139,916 | $5,038,814 | $3,698,112 | ||||||||||||
|
|
|
|||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
321 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin FTSE Japan ETF | Franklin FTSE Japan Hedged ETF | |||||||||||||||
|
|
|
|||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||
|
|
||||||||||||||||
| Increase (decrease) in net assets: |
||||||||||||||||
| Operations: |
||||||||||||||||
| Net investment income |
$ | 21,152,656 | $ | 14,429,061 | $ | 456,288 | $ | 366,040 | ||||||||
| Net realized gain (loss) |
(4,730,760 | ) | 12,140,033 | 326,329 | 1,786,855 | |||||||||||
| Net change in unrealized appreciation (depreciation) |
(55,868,560 | ) | (89,344,816 | ) | 752,939 | (2,137,629 | ) | |||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
(39,446,664 | ) | (62,775,722 | ) | 1,535,556 | 15,266 | ||||||||||
|
|
|
|||||||||||||||
| Distributions to shareholders (Note 1f) |
(15,080,965 | ) | (15,304,771 | ) | (6,293,059 | ) | (162,493 | ) | ||||||||
|
|
|
|||||||||||||||
| Capital share transactions: (Note 2) |
265,693,564 | 268,783,660 | (6,677,798 | ) | 303,836 | |||||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets |
211,165,935 | 190,703,167 | (11,435,301 | ) | 156,609 | |||||||||||
| Net assets: |
||||||||||||||||
| Beginning of year |
789,637,287 | 598,934,120 | 24,719,795 | 24,563,186 | ||||||||||||
|
|
|
|||||||||||||||
| End of year |
$ | 1,000,803,222 | $ | 789,637,287 | $ | 13,284,494 | $ | 24,719,795 | ||||||||
|
|
|
|||||||||||||||
| 322 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin FTSE Latin America ETF | Franklin FTSE Mexico ETF | |||||||||||||||
|
|
|
|||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||
|
|
||||||||||||||||
| Increase (decrease) in net assets: |
||||||||||||||||
| Operations: |
||||||||||||||||
| Net investment income |
$ | 3,964,605 | $ | 322,765 | $ | 461,922 | $ | 254,422 | ||||||||
| Net realized gain (loss) |
(1,670,626 | ) | (234,913 | ) | 234,118 | (158,105 | ) | |||||||||
| Net change in unrealized appreciation (depreciation) |
4,560,448 | 1,079,782 | 1,255,017 | 2,181,332 | ||||||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
6,854,427 | 1,167,634 | 1,951,057 | 2,277,649 | ||||||||||||
|
|
|
|||||||||||||||
| Distributions to shareholders (Note 1f) |
(3,573,506 | ) | (304,300 | ) | (447,955 | ) | (302,647 | ) | ||||||||
|
|
|
|||||||||||||||
| Capital share transactions: (Note 2) |
56,516,479 | 2,231,798 | 11,014,721 | 4,861,121 | ||||||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets |
59,797,400 | 3,095,132 | 12,517,823 | 6,836,123 | ||||||||||||
| Net assets: |
||||||||||||||||
| Beginning of year |
7,574,832 | 4,479,700 | 12,372,025 | 5,535,902 | ||||||||||||
|
|
|
|||||||||||||||
| End of year |
$ | 67,372,232 | $ | 7,574,832 | $ | 24,889,848 | $ | 12,372,025 | ||||||||
|
|
|
|||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
323 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin FTSE Saudi Arabia ETF | Franklin FTSE South Africa ETF | |||||||||||||||
|
|
|
|||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||
|
|
||||||||||||||||
| Increase (decrease) in net assets: |
||||||||||||||||
| Operations: |
||||||||||||||||
| Net investment income |
$ | 256,829 | $ | 62,016 | $ | 161,186 | $ | 141,667 | ||||||||
| Net realized gain (loss) |
(89,444 | ) | 42,036 | 44,767 | (81,742 | ) | ||||||||||
| Net change in unrealized appreciation (depreciation) |
(908,625 | ) | 1,061,595 | (1,673,622 | ) | 824,250 | ||||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
(741,240 | ) | 1,165,647 | (1,467,669 | ) | 884,175 | ||||||||||
|
|
|
|||||||||||||||
| Distributions to shareholders (Note 1f) |
(78,128 | ) | (68,376 | ) | (191,901 | ) | (111,346 | ) | ||||||||
|
|
|
|||||||||||||||
| Capital share transactions: (Note 2) |
18,562,690 | — | (2,054,548 | ) | 2,562,673 | |||||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets |
17,743,322 | 1,097,271 | (3,714,118 | ) | 3,335,502 | |||||||||||
| Net assets: |
||||||||||||||||
| Beginning of year |
4,130,310 | 3,033,039 | 5,957,745 | 2,622,243 | ||||||||||||
|
|
|
|||||||||||||||
| End of year |
$ | 21,873,632 | $ | 4,130,310 | $ | 2,243,627 | $ | 5,957,745 | ||||||||
|
|
|
|||||||||||||||
| 324 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin FTSE South Korea ETF | Franklin FTSE Switzerland ETF | |||||||||||||||
|
|
|
|||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||
|
|
||||||||||||||||
| Increase (decrease) in net assets: |
||||||||||||||||
| Operations: |
||||||||||||||||
| Net investment income |
$ | 2,463,031 | $ | 1,268,057 | $ | 1,129,107 | $ | 999,855 | ||||||||
| Net realized gain (loss) |
(3,868,112 | ) | (5,450,316 | ) | 34,755 | 3,329,359 | ||||||||||
| Net change in unrealized appreciation (depreciation) |
(2,460,649 | ) | (8,014,155 | ) | (3,642,334 | ) | 2,599,949 | |||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
(3,865,730 | ) | (12,196,414 | ) | (2,478,472 | ) | 6,929,163 | |||||||||
|
|
|
|||||||||||||||
| Distributions to shareholders (Note 1f) |
(2,183,845 | ) | (1,354,645 | ) | (1,004,310 | ) | (1,077,037 | ) | ||||||||
|
|
|
|||||||||||||||
| Capital share transactions: (Note 2) |
237,736,926 | 11,946,711 | 5,830,307 | (6,828,650 | ) | |||||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets |
231,687,351 | (1,604,348 | ) | 2,347,525 | (976,524 | ) | ||||||||||
| Net assets: |
||||||||||||||||
| Beginning of year |
61,361,442 | 62,965,790 | 47,593,224 | 48,569,748 | ||||||||||||
|
|
|
|||||||||||||||
| End of year |
$ | 293,048,793 | $ | 61,361,442 | $ | 49,940,749 | $ | 47,593,224 | ||||||||
|
|
|
|||||||||||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
325 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
| Franklin FTSE Taiwan ETF | Franklin FTSE United Kingdom ETF | |||||||||||||||
|
|
|
|||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||
|
|
||||||||||||||||
| Increase (decrease) in net assets: |
||||||||||||||||
| Operations: |
||||||||||||||||
| Net investment income |
$ | 1,574,443 | $ | 990,911 | $ | 20,825,635 | $ | 15,398,911 | ||||||||
| Net realized gain (loss) |
(1,985,757 | ) | (550,668 | ) | (8,708,680 | ) | (202,105 | ) | ||||||||
| Net change in unrealized appreciation (depreciation) |
(1,981,761 | ) | 2,783,522 | (35,670,632 | ) | 8,007,752 | ||||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
(2,393,075 | ) | 3,223,765 | (23,553,677 | ) | 23,204,558 | ||||||||||
|
|
|
|||||||||||||||
| Distributions to shareholders (Note 1f) |
(1,549,538 | ) | (1,073,757 | ) | (20,583,824 | ) | (11,671,197 | ) | ||||||||
|
|
|
|||||||||||||||
| Capital share transactions: (Note 2) |
97,369,890 | 8,619,703 | (474,084 | ) | 396,366,561 | |||||||||||
|
|
|
|||||||||||||||
| Net increase (decrease) in net assets |
93,427,277 | 10,769,711 | (44,611,585 | ) | 407,899,922 | |||||||||||
| Net assets: |
||||||||||||||||
| Beginning of year |
43,666,550 | 32,896,839 | 613,572,500 | 205,672,578 | ||||||||||||
|
|
|
|||||||||||||||
| End of year |
$ | 137,093,827 | $ | 43,666,550 | $ | 568,960,915 | $ | 613,572,500 | ||||||||
|
|
|
|||||||||||||||
| 326 | Annual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
1. Organization and Significant Accounting Policies
Franklin Templeton ETF Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company consisting of forty-eight separate funds, twenty-two of which are included in this report (Funds). The Funds follow the accounting and reporting guidance in Financial Accounting Standards Board ("FASB") Accounting Standard 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. 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 Fund 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 Fund 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 Fund net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.
The Fund has 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 employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.
Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Funds’ business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Funds’ portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, an independent pricing service may be used to adjust the Fund’s portfolio securities to the latest indications of fair value at 4 p.m. Eastern time. At March 31, 2023, 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”).
| franklintempleton.com | Annual Report |
327 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
a. Financial Instrument Valuation (continued)
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. 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 does 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
| 328 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
c. Derivative Financial Instruments (continued)
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 7 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 Funds’ 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 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 invests. 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, Funds records an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.
Each Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of March 31, 2023, 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.
| franklintempleton.com | Annual Report |
329 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
e. Income and Deferred Taxes (continued)
As a result of several court cases, in certain countries across the European Union the Fund filed additional tax reclaims for previously withheld taxes on dividends earned in those countries (EU reclaims). Income recognized, if any, for EU reclaims is reflected as European Union tax reclaims in the Statement of Operations and any related receivable is reflected as European Union tax reclaims receivable in the Statement of Assets and Liabilities. Any fees associated with these filings are reflected as European Union tax reclaim contingent fees in the Statement of Operations. When uncertainty exists as to the ultimate resolution of these proceedings, the likelihood of receipt of these EU reclaims, and the potential timing of payment, no amounts are reflected in the financial statements. For U.S. income tax purposes, EU reclaims received by the Fund, if any, reduce the amount of foreign taxes Fund shareholders can use as tax deductions or credits on their income tax returns.
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 Funds 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 statement 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 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 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.
| 330 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
2. Shares of Beneficial Interest (continued)
In addition, for cash Creation Unit transactions, a variable fee for creation transactions and redemption transactions may be charged to the Authorized Participant to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades. Variable fees, if any, are included in capital share transactions in the Statements of Changes in Net Assets.
At March 31, 2023, there were an unlimited number of shares authorized (without par value). Transactions in the Funds’ shares were as follows:
| Franklin FTSE Asia ex Japan ETF | ||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
— | $ | 13,819 | 400,000 | $ | 8,769,376 | ||||||||||||||
| Shares redeemed |
(200,000 | ) | (4,010,830 | ) | — | — | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
(200,000 | ) | $ | (3,997,011 | ) | 400,000 | $ | 8,769,376 | ||||||||||||
|
|
|
|||||||||||||||||||
| Franklin FTSE Australia ETF | ||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
200,000 | $ | 5,212,830 | 150,000 | $ | 4,271,838 | ||||||||||||||
| Shares redeemed |
(50,000 | ) | (1,301,254 | ) | — | — | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
150,000 | $ | 3,911,576 | 150,000 | $ | 4,271,838 | ||||||||||||||
|
|
|
|||||||||||||||||||
| Franklin FTSE Brazil ETF | ||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
7,000,000 | $ | 130,953,951 | 17,500,000 | $ | 372,085,342 | ||||||||||||||
| Shares redeemed |
(13,400,000 | ) | (247,808,780 | ) | (300,000 | ) | (6,711,749 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
(6,400,000 | ) | $ | (116,854,829 | ) | 17,200,000 | $ | 365,373,593 | ||||||||||||
|
|
|
|||||||||||||||||||
| Franklin FTSE Canada ETF | ||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
11,250,000 | $ | 360,676,656 | 400,000 | $ | 13,859,588 | ||||||||||||||
| Shares redeemed |
(3,350,000 | ) | (101,820,725 | ) | — | — | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
7,900,000 | $ | 258,855,931 | 400,000 | $ | 13,859,588 | ||||||||||||||
|
|
|
|||||||||||||||||||
| franklintempleton.com | Annual Report |
331 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
2. Shares of Beneficial Interest (continued)
| Franklin FTSE China ETF | ||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
600,000 | $ | 11,335,252 | 1,600,000 | $ | 43,703,237 | ||||||||||||||
| Shares redeemed |
— | — | (200,000 | ) | (6,446,795 | ) | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
600,000 | $ | 11,335,252 | 1,400,000 | $ | 37,256,442 | ||||||||||||||
|
|
|
|||||||||||||||||||
| Franklin FTSE Europe ETF | ||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
2,800,000 | $ | 71,589,590 | 1,400,000 | $ | 38,599,643 | ||||||||||||||
| Shares redeemed |
(5,400,000 | ) | (128,880,944 | ) | (3,000,000 | ) | (83,395,700 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
(2,600,000 | ) | $ | (57,291,354 | ) | (1,600,000 | ) | $ | (44,796,057 | ) | ||||||||||
|
|
|
|||||||||||||||||||
| Franklin FTSE Europe Hedged ETF | ||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
400,000 | $ | 10,645,855 | 200,000 | $ | 5,879,630 | ||||||||||||||
| Shares redeemed |
(600,000 | ) | (14,815,602 | ) | — | — | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
(200,000 | ) | $ | (4,169,747 | ) | 200,000 | $ | 5,879,630 | ||||||||||||
|
|
|
|||||||||||||||||||
| Franklin FTSE France ETF | ||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
— | $ | — | 100,000 | $ | 3,120,862 | ||||||||||||||
| Shares redeemed |
(150,000 | ) | (3,601,500 | ) | — | — | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
(150,000 | ) | $ | (3,601,500 | ) | 100,000 | $ | 3,120,862 | ||||||||||||
|
|
|
|||||||||||||||||||
| Franklin FTSE Germany ETF | ||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
300,000 | $ | 5,539,373 | 400,000 | $ | 10,617,319 | ||||||||||||||
| Shares redeemed |
(250,000 | ) | (5,144,120 | ) | — | — | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
50,000 | $ | 395,253 | 400,000 | $ | 10,617,319 | ||||||||||||||
|
|
|
|||||||||||||||||||
| 332 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
2. Shares of Beneficial Interest (continued)
| Franklin FTSE Hong Kong ETF | ||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
200,000 | $ | 4,048,817 | 150,000 | $ | 3,959,042 | ||||||||||||||
| Shares redeemed |
(150,000 | ) | (3,319,699 | ) | — | — | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
50,000 | $ | 729,118 | 150,000 | $ | 3,959,042 | ||||||||||||||
|
|
|
|||||||||||||||||||
| Franklin FTSE India ETF |
||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
2,000,000 | $ | 57,341,977 | 750,000 | $ | 23,985,026 | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
2,000,000 | $ | 57,341,977 | 750,000 | $ | 23,985,026 | ||||||||||||||
|
|
|
|||||||||||||||||||
| Franklin FTSE Italy ETF | ||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
50,000 | $ | 1,248,714 | — | $ | — | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
50,000 | $ | 1,248,714 | — | $ | — | ||||||||||||||
|
|
|
|||||||||||||||||||
| Franklin FTSE Japan ETF | ||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
17,400,000 | $ | 429,036,842 | 11,400,000 | $ | 340,542,812 | ||||||||||||||
| Shares redeemed |
(7,200,000 | ) | (163,343,278 | ) | (2,400,000 | ) | (71,759,152 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
10,200,000 | $ | 265,693,564 | 9,000,000 | $ | 268,783,660 | ||||||||||||||
|
|
|
|||||||||||||||||||
| Franklin FTSE Japan Hedged ETF | ||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
200,000 | $ | 6,015,210 | 400,000 | $ | 12,446,606 | ||||||||||||||
| Shares redeemed |
(500,000 | ) | (12,693,008 | ) | (400,000 | ) | (12,142,770 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
(300,000 | ) | $ | (6,677,798 | ) | — | $ | 303,836 | ||||||||||||
|
|
|
|||||||||||||||||||
| franklintempleton.com | Annual Report |
333 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
2. Shares of Beneficial Interest (continued)
| Franklin FTSE Latin America ETF | ||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
3,000,000 | $ | 56,516,479 | 100,000 | $ | 2,231,798 | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
3,000,000 | $ | 56,516,479 | 100,000 | $ | 2,231,798 | ||||||||||||||
|
|
|
|||||||||||||||||||
| Franklin FTSE Mexico ETF | ||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
450,000 | $ | 12,282,600 | 200,000 | $ | 4,861,121 | ||||||||||||||
| Shares redeemed |
(50,000 | ) | (1,267,879 | ) | — | — | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
400,000 | $ | 11,014,721 | 200,000 | $ | 4,861,121 | ||||||||||||||
|
|
|
|||||||||||||||||||
| Franklin FTSE Saudi Arabia ETF | ||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
550,000 | $ | 18,562,690 | — | $ | — | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
550,000 | $ | 18,562,690 | — | $ | — | ||||||||||||||
|
|
|
|||||||||||||||||||
| Franklin FTSE South Africa ETF | ||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
— | $ | — | 100,000 | $ | 2,562,673 | ||||||||||||||
| Shares redeemed |
(100,000 | ) | (2,054,548 | ) | — | — | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
(100,000 | ) | $ | (2,054,548 | ) | 100,000 | $ | 2,562,673 | ||||||||||||
|
|
|
|||||||||||||||||||
| Franklin FTSE South Korea ETF | ||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
11,500,000 | $ | 237,736,926 | 800,000 | $ | 23,052,455 | ||||||||||||||
| Shares redeemed |
— | — | (400,000 | ) | (11,105,744 | ) | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
11,500,000 | $ | 237,736,926 | 400,000 | $ | 11,946,711 | ||||||||||||||
|
|
|
|||||||||||||||||||
| 334 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
2. Shares of Beneficial Interest (continued)
| Franklin FTSE Switzerland ETF | ||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
500,000 | $ | 14,529,344 | 300,000 | $ | 10,413,668 | ||||||||||||||
| Shares redeemed |
(300,000 | ) | (8,699,037 | ) | (500,000 | ) | (17,242,318 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
200,000 | $ | 5,830,307 | (200,000 | ) | $ | (6,828,650 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| Franklin FTSE Taiwan ETF | ||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
2,800,000 | $ | 100,458,761 | 300,000 | $ | 13,007,178 | ||||||||||||||
| Shares redeemed |
(100,000 | ) | (3,088,871 | ) | (100,000 | ) | (4,387,475 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
2,700,000 | $ | 97,369,890 | 200,000 | $ | 8,619,703 | ||||||||||||||
|
|
|
|||||||||||||||||||
| Franklin FTSE United Kingdom ETF | ||||||||||||||||||||
|
|
|
|||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
|
|
|
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
|
|
||||||||||||||||||||
| Shares sold |
7,150,000 | $ | 165,942,304 | 16,400,000 | $ | 419,981,074 | ||||||||||||||
| Shares redeemed |
(7,750,000 | ) | (166,416,388 | ) | (950,000 | ) | (23,614,513 | ) | ||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
(600,000 | ) | $ | (474,084 | ) | 15,450,000 | $ | 396,366,561 | ||||||||||||
|
|
|
|||||||||||||||||||
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Funds are also officers and/or directors of the following subsidiaries:
| Subsidiary | Affiliation | |
| Franklin Advisers, Inc (Advisers) |
Investment manager | |
| Franklin Advisory Services, LLC (FASL) |
Investment manager | |
| Franklin Templeton Services, LLC (FT Services) |
Administrative manager | |
| Franklin Distributors, LLC (Distributors) |
Principal underwriter | |
| franklintempleton.com | Annual Report |
335 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates (continued)
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. 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. 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 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% | |
b. Administrative Fees
Under an agreement with FASL, FT Services provides administrative services to the Funds. The fee is paid by FASL based on the Funds’ average daily net assets, and is not an additional expense of the Funds.
| 336 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates (continued)
c. Investments in Affiliated Management Investment Companies
Certain or all Funds invest in one or more affiliated management investment companies. As defined in the 1940 Act, an investment is deemed to be a “Controlled Affiliate” of a fund when a fund owns, either directly or indirectly, 25% or more of the affiliated fund’s outstanding shares or has the power to exercise control over management or policies of such fund. The Funds do not invest for purposes of exercising a controlling influence over the management or policies. Management fees paid by the Funds are waived on assets invested in the affiliated management investment companies, as noted in the Statements of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the year ended March 31, 2023, investments in affiliated management investment companies were as follows:
| Value at Beginning of Year |
Purchases | Sales | Realized Gain (Loss) |
Net Change in Unrealized Appreciation (Depreciation) |
Value at End of Year |
Number of Shares Held at End of Year |
Investment Income |
|||||||||||||||||||||||||||
| Franklin FTSE Asia ex Japan ETF Non-Controlled Affiliates |
|
Income from Securities loaned |
| |||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||
| Institutional Fiduciary Trust |
$ | 6,825 | $ | 48,550 | $ | (55,375 | ) | $ — | $ — | $ | — | — | $ 10 | |||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||
| Franklin FTSE China ETF Non-Controlled Affiliates |
Income from Securities loaned |
| ||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||
| Institutional Fiduciary Trust |
$ | 78,125 | $ | 1,058,393 | $ | (1,136,518 | ) | $ — | $ — | $ | — | — | $ 1,001 | |||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||
| Franklin FTSE Europe Hedged ETF Non-Controlled Affiliates |
Income from Securities loaned |
| ||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||
| Institutional Fiduciary Trust |
$ | — | $ | 4,136 | $ | — | $ — | $ — | $ | 4,136 | 4,136 | $ — | ||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||
| Franklin FTSE Japan ETF Non-Controlled Affiliates |
Income from Securities loaned |
| ||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||
| Institutional Fiduciary Trust |
$ | 251,746 | $ | 4,165,547 | $ | — | $ — | $ — | $ | 4,417,293 | 4,417,293 | $10,989 | ||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||
| Franklin FTSE Japan Hedged ETF Non-Controlled Affiliates |
Income from Securities loaned |
| ||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||
| Institutional Fiduciary Trust |
$ | 695,758 | $ | 9,497,074 | $ | (10,192,111 | ) | $ — | $ — | $ | 721 | 721 | $ — | |||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||
| franklintempleton.com | Annual Report |
337 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates (continued)
c. Investments in Affiliated Management Investment Companies (continued)
| Value at Beginning of Year |
Purchases | Sales | Realized Gain (Loss) |
Net Change in Unrealized Appreciation (Depreciation) |
Value at End of Year |
Number of Shares Held at End of Year |
Investment Income |
|||||||||||||||||||||||||
| Franklin FTSE United Kingdom ETF Non-Controlled Affiliates |
|
Income from Securities loaned |
| |||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||
| Institutional Fiduciary Trust Money Market Portfolio 4.47% |
$620,830 | $9,249,442 | $ (9,870,262 | ) | $— | $— | $ | 10 | 10 | $ 7,535 | ||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||
d. Other Affiliated Transactions
At March 31, 2023, the shares of the Funds were owned by the following entities:
| Funds | Shares | Percentage of Outstanding Sharesa |
||||||
|
|
||||||||
| Franklin FTSE Latin America ETF | ||||||||
| Franklin Resources Inc. |
985,000 | 29.8% | ||||||
|
|
|
|||||||
| Franklin FTSE South Africa ETF | ||||||||
| Franklin Resources Inc. |
16,000 | 16.0% | ||||||
|
|
|
|||||||
| Franklin FTSE Taiwan ETF | ||||||||
| Franklin Resources Inc. |
1,260,000 | 34.1% | ||||||
|
|
|
|||||||
| Franklin FTSE United Kingdom ETF | ||||||||
| Franklin Resources Inc. |
2,930,000 | 12.5% | ||||||
|
|
|
|||||||
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, 2023, the capital loss carryforwards were as follows:
| Franklin Asia ex Japan |
Franklin FTSE Australia ETF |
Franklin FTSE Brazil ETF |
Franklin FTSE Canada ETF |
|||||||||||||
|
|
||||||||||||||||
| Capital loss carryforwards not subject to expiration: | ||||||||||||||||
| Long term |
$ | 2,978,321 | $ | 861,861 | $ | 58,599,726 | $ | 917,859 | ||||||||
| Short term |
773,828 | 287,758 | 66,857,630 | 2,247,375 | ||||||||||||
|
|
|
|||||||||||||||
| Total capital loss carryforwards |
$ | 3,752,149 | $ | 1,149,619 | $ | 125,457,356 | $ | 3,165,234 | ||||||||
|
|
|
|||||||||||||||
| 338 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
| 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 |
$ | 13,143,127 | $ | 3,778,280 | $ | 185,736 | $ | 253,790 | ||||||||
| Short term |
3,376,115 | 908,263 | 211,682 | 52,788 | ||||||||||||
|
|
|
|||||||||||||||
| Total capital loss carryforwards |
$ | 16,519,242 | $ | 4,686,543 | $ | 397,418 | $ | 306,578 | ||||||||
|
|
|
|||||||||||||||
| 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 |
$ | 744,560 | $ | 809,586 | $ | 1,024,623 | $ | 358,163 | ||||||||
| Short term |
207,142 | 553,844 | 321,248 | 22,058 | ||||||||||||
|
|
|
|||||||||||||||
| Total capital loss carryforwards |
$ | 951,702 | $ | 1,363,430 | $ | 1,345,871 | $ | 380,221 | ||||||||
|
|
|
|||||||||||||||
| 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 |
$ | 14,225,837 | $ | — | $ | 890,110 | $ | 826,878 | ||||||||
| Short term |
3,657,331 | — | 668,844 | 80,987 | ||||||||||||
|
|
|
|||||||||||||||
| Total capital loss carryforwards |
$ | 17,883,168 | $ | — | $ | 1,558,954 | $ | 907,865 | ||||||||
|
|
|
|||||||||||||||
| Franklin FTSE Saudi Arabia ETF |
Franklin FTSE South Africa ETF |
Franklin FTSE South Korea ETF |
Franklin FTSE Switzerland ETF |
|||||||||||||
|
|
||||||||||||||||
| Capital loss carryforwards not subject to expiration: | ||||||||||||||||
| Long term |
$ | 12,585 | $ | 329,148 | $ | 4,244,652 | $ | 510,380 | ||||||||
| Short term |
51,837 | 75,911 | 2,671,797 | 794,022 | ||||||||||||
|
|
|
|||||||||||||||
| Total capital loss carryforwards |
$ | 64,422 | $ | 405,059 | $ | 6,916,449 | $ | 1,304,402 | ||||||||
|
|
|
|||||||||||||||
| Franklin FTSE Taiwan ETF |
Franklin FTSE United Kingdom ETF |
|||||||||||||||
|
|
||||||||||||||||
| Capital loss carryforwards not subject to expiration: | ||||||||||||||||
| Long term |
$ | 1,217,333 | $ | 11,733,951 | ||||||||||||
| Short term |
636,412 | 5,822,629 | ||||||||||||||
|
|
|
|||||||||||||||
| Total capital loss carryforwards |
$ | 1,853,745 | $ | 17,556,580 | ||||||||||||
|
|
|
|||||||||||||||
| franklintempleton.com | Annual Report |
339 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
For tax purposes, the Funds may elect to defer any portion of a post-October capital loss or late-year ordinary loss to the first day of the following fiscal year. At March 31, 2023, the deferred losses were as follows:
| Franklin FTSE Europe Hedged ETF |
Franklin FTSE India ETF |
Franklin FTSE Japan Hedged ETF |
||||||||||
|
|
||||||||||||
| Post October capital losses | $ | 2,717,313 | $ | — | $ | 7,324,097 | ||||||
| Late year ordinary losses | $ | — | $ | 242,051 | $ | — | ||||||
For tax purposes, capital losses may be carried over to offset future capital gains. During the year ended March 31, 2023, the following Fund utilized capital loss carryforwards as follows:
| Franklin FTSE |
||||
| Capital loss carryforwards utilized |
$ | 38,507 | ||
The tax character of distributions paid during the period ended March 31, 2023 and 2022, were as follows:
| Franklin FTSE Asia ex Japan ETF |
||||||||
|
|
|
|||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from Ordinary income |
$845,059 | $744,268 | ||||||
|
|
|
|||||||
| Franklin FTSE Australia ETF | ||||||||
|
|
|
|||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from Ordinary income |
$1,647,793 | $1,262,140 | ||||||
|
|
|
|||||||
| Franklin FTSE Brazil ETF | ||||||||
|
|
|
|||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from Ordinary income |
$37,484,866 | $16,614,538 | ||||||
|
|
|
|||||||
| Franklin FTSE Canada ETF | ||||||||
|
|
|
|||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from Ordinary income |
$5,031,676 | $639,656 | ||||||
|
|
|
|||||||
| Franklin FTSE China ETF | ||||||||
|
|
|
|||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from Ordinary income |
$2,755,725 | $1,744,579 | ||||||
|
|
|
|||||||
| Franklin FTSE Europe ETF | ||||||||
|
|
|
|||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from Ordinary income |
$3,354,521 | $7,497,235 | ||||||
|
|
|
|||||||
| 340 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
| Franklin FTSE Europe Hedged ETF |
||||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from: | ||||||||
| Ordinary income |
$1,664,444 | $666,937 | ||||||
| Long-term Capital Gain |
1,494,167 | — | ||||||
|
|
|
|||||||
| $3,158,611 | $666,937 | |||||||
|
|
|
|||||||
| Franklin FTSE France ETF | ||||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from Ordinary income |
$227,103 | $270,848 | ||||||
|
|
|
|||||||
| Franklin FTSE Germany ETF | ||||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from Ordinary income |
$449,481 | $404,523 | ||||||
|
|
|
|||||||
| Franklin FTSE Hong Kong ETF |
||||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from Ordinary income |
$536,059 | $478,429 | ||||||
|
|
|
|||||||
| Franklin FTSE India ETF | ||||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from Ordinary income |
$445,431 | $1,055,912 | ||||||
|
|
|
|||||||
| Franklin FTSE Italy ETF | ||||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from Ordinary income |
$160,658 | $166,253 | ||||||
|
|
|
|||||||
| Franklin FTSE Japan ETF | ||||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from Ordinary income |
$15,080,965 | $15,304,771 | ||||||
|
|
|
|||||||
| Franklin FTSE Japan Hedged ETF |
||||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from: | ||||||||
| Ordinary income |
$2,846,872 | $162,493 | ||||||
| Long-term Capital Gain |
3,446,187 | — | ||||||
|
|
|
|||||||
| $6,293,059 | $162,493 | |||||||
|
|
|
|||||||
| Franklin FTSE Latin America ETF |
||||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from Ordinary income |
$3,573,506 | $304,300 | ||||||
|
|
|
|||||||
| franklintempleton.com | Annual Report |
341 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
| Franklin FTSE Mexico ETF | ||||||||
|
|
|
|||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from Ordinary income | $447,955 | $302,647 | ||||||
|
|
|
|||||||
| Franklin FTSE Saudi Arabia ETF |
||||||||
|
|
|
|||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from Ordinary income | $78,128 | $68,376 | ||||||
|
|
|
|||||||
| Franklin FTSE South Africa ETF |
||||||||
|
|
|
|||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from Ordinary income | $191,901 | $111,346 | ||||||
|
|
|
|||||||
| Franklin FTSE South Korea ETF |
||||||||
|
|
|
|||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from Ordinary income | $2,183,845 | $1,354,645 | ||||||
|
|
|
|||||||
| Franklin FTSE Switzerland ETF |
||||||||
|
|
|
|||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from Ordinary income | $1,004,310 | $1,077,037 | ||||||
|
|
|
|||||||
| Franklin FTSE Taiwan ETF | ||||||||
|
|
|
|||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from Ordinary income | $1,549,538 | $1,073,757 | ||||||
|
|
|
|||||||
| Franklin FTSE United Kingdom ETF |
||||||||
|
|
|
|||||||
| 2023 | 2022 | |||||||
|
|
||||||||
| Distributions paid from Ordinary income | $20,583,824 | $11,671,197 | ||||||
|
|
|
|||||||
At March 31, 2023, the cost of investments, net unrealized appreciation (depreciation) and undistributed ordinary income 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 |
$ | 32,682,770 | $ | 28,252,930 | $ | 297,219,785 | $ | 299,117,396 | ||||||||
|
|
|
|||||||||||||||
| Unrealized appreciation |
$ | 3,337,011 | $ | 2,327,728 | $ | 22,307,974 | $ | 7,025,985 | ||||||||
| Unrealized depreciation |
(5,986,603 | ) | (1,637,676 | ) | (52,967,089 | ) | (27,022,214) | |||||||||
|
|
|
|||||||||||||||
| Net unrealized appreciation (depreciation) |
$ | (2,649,592 | ) | $ | 690,052 | $ | (30,659,115 | ) | $ | (19,996,229) | ||||||
|
|
|
|||||||||||||||
| Distributable earnings – undistributed ordinary income |
$ | 159,005 | $ | 368,009 | $ | 2,304,975 | $ | 1,871,648 | ||||||||
|
|
|
|||||||||||||||
| 342 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
| Franklin FTSE China ETF |
Franklin FTSE Europe ETF |
Franklin FTSE Europe Hedged ETF |
Franklin FTSE France ETF |
|||||||||||||
|
|
||||||||||||||||
| Cost of investments |
$ | 145,822,604 | $ | 113,965,929 | $ | 14,491,062 | $ | 5,905,750 | ||||||||
|
|
|
|||||||||||||||
| Unrealized appreciation |
$ | 6,781,773 | $ | 4,404,303 | $ | 1,054,124 | $ | 707,632 | ||||||||
| Unrealized depreciation |
(38,346,839 | ) | (8,194,337 | ) | (1,522,051 | ) | (565,805) | |||||||||
|
|
|
|||||||||||||||
| Net unrealized appreciation (depreciation) |
$ | (31,565,066 | ) | $ | (3,790,034 | ) | $ | (467,927 | ) | $ | 141,827 | |||||
|
|
|
|||||||||||||||
| Distributable earnings – undistributed ordinary income |
$ | 853,016 | $ | 805,273 | $ | — | $ | 15,078 | ||||||||
|
|
|
|||||||||||||||
| Franklin FTSE Germany ETF |
Franklin FTSE Hong Kong ETF |
Franklin FTSE India ETF |
Franklin FTSE Italy ETF |
|||||||||||||
|
|
||||||||||||||||
| Cost of investments |
$ | 19,347,639 | $ | 19,099,547 | $ | 100,367,195 | $ | 4,635,561 | ||||||||
|
|
|
|||||||||||||||
| Unrealized appreciation |
$ | 910,338 | $ | 799,851 | $ | 4,780,687 | $ | 707,896 | ||||||||
| Unrealized depreciation |
(2,574,563 | ) | (2,864,894 | ) | (6,075,476 | ) | (306,030) | |||||||||
|
|
|
|||||||||||||||
| Net unrealized appreciation (depreciation) |
$ | (1,664,225 | ) | $ | (2,065,043 | ) | $ | (1,294,789 | ) | $ | 401,866 | |||||
|
|
|
|||||||||||||||
| Distributable earnings – undistributed ordinary income |
$ | 111,219 | $ | 104,641 | $ | — | $ | 39,803 | ||||||||
|
|
|
|||||||||||||||
| Franklin FTSE Japan ETF |
Franklin FTSE Japan Hedged ETF |
Franklin FTSE Latin America ETF |
Franklin FTSE Mexico ETF |
|||||||||||||
|
|
||||||||||||||||
| Cost of investments |
$ | 1,102,887,621 | $ | 14,143,991 | $ | 62,315,928 | $ | 21,219,139 | ||||||||
|
|
|
|||||||||||||||
| Unrealized appreciation |
$ | 34,397,639 | $ | 553,403 | $ | 8,758,934 | $ | 4,213,826 | ||||||||
| Unrealized depreciation |
(144,299,726 | ) | (1,660,467 | ) | (3,937,377 | ) | (547,918) | |||||||||
|
|
|
|||||||||||||||
| Net unrealized appreciation (depreciation) |
$ | (109,902,087 | ) | $ | (1,107,064 | ) | $ | 4,821,557 | $ | 3,665,908 | ||||||
|
|
|
|||||||||||||||
| Distributable earnings – undistributed ordinary income |
$ | 17,312,929 | $ | 1,527,675 | $ | 542,988 | $ | 109,912 | ||||||||
|
|
|
|||||||||||||||
| Franklin FTSE Saudi Arabia ETF |
Franklin FTSE South Africa ETF |
Franklin FTSE South Korea ETF |
Franklin FTSE Switzerland ETF |
|||||||||||||
|
|
||||||||||||||||
| Cost of investments |
$ | 21,016,214 | $ | 2,717,890 | $ | 301,280,999 | $ | 48,973,220 | ||||||||
|
|
|
|||||||||||||||
| Unrealized appreciation |
$ | 1,160,042 | $ | 103,181 | $ | 14,712,621 | $ | 3,820,850 | ||||||||
| Unrealized depreciation |
(445,778 | ) | (578,832 | ) | (25,281,680 | ) | (3,742,655) | |||||||||
|
|
|
|||||||||||||||
| Net unrealized appreciation (depreciation) |
$ | 714,264 | $ | (475,651 | ) | $ | (10,569,059 | ) | $ | 78,195 | ||||||
|
|
|
|||||||||||||||
| Distributable earnings – undistributed ordinary income |
$ | 178,472 | $ | 24,552 | $ | 2,643,619 | $ | 504,795 | ||||||||
|
|
|
|||||||||||||||
| franklintempleton.com | Annual Report |
343 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
| Franklin FTSE Taiwan ETF |
Franklin FTSE United Kingdom ETF |
|||||||
|
|
||||||||
| Cost of investments |
$ | 127,023,589 | $ | 592,580,014 | ||||
|
|
|
|||||||
| Unrealized appreciation |
$ | 12,266,200 | $ | 27,830,054 | ||||
| Unrealized depreciation |
(2,418,200 | ) | (56,383,344) | |||||
|
|
|
|||||||
| Net unrealized appreciation (depreciation) |
$ | 9,848,000 | $ | (28,553,290) | ||||
|
|
|
|||||||
| Distributable earnings – undistributed ordinary income |
$ | 706,564 | $ | 6,735,922 | ||||
|
|
|
|||||||
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of foreign currency transactions, financial futures transactions, passive foreign investment company shares, EU reclaims and gains/losses realized on in-kind shareholder redemptions and wash sales.
5. Investment Transactions
Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the year ended March 31, 2023, were as follows:
| Franklin FTSE Asia ex Japan ETF |
Franklin FTSE Australia ETF |
Franklin FTSE Brazil ETF |
Franklin FTSE Canada ETF |
|||||||||||||||
|
|
||||||||||||||||||
| Purchases |
$ | 1,908,691 | $ | 1,671,688 | $ | 173,242,572 | $ | 12,912,510 | ||||||||||
| Sales |
$ | 4,294,561 | $ | 2,108,563 | $ | 293,865,300 | $ | 11,416,876 | ||||||||||
| Franklin FTSE China ETF |
Franklin FTSE Europe ETF |
Franklin FTSE Europe Hedged ETF |
Franklin FTSE France ETF |
|||||||||||||||
|
|
||||||||||||||||||
| Purchases |
$ | 20,746,623 | $ | 4,542,129 | $ | 3,685,035 | $ | 354,887 | ||||||||||
| Sales |
$ | 10,197,058 | $ | 4,476,786 | $ | 5,327,831 | $ | 388,721 | ||||||||||
| Franklin FTSE Germany ETF |
Franklin FTSE Hong Kong ETF |
Franklin FTSE India ETF |
Franklin FTSE Italy ETF |
|||||||||||||||
|
|
||||||||||||||||||
| Purchases |
$ | 606,127 | $ | 5,151,427 | $ | 61,517,360 | $ | 615,475 | ||||||||||
| Sales |
$ | 607,720 | $ | 1,300,220 | $ | 4,264,684 | $ | 643,828 | ||||||||||
| Franklin FTSE Japan ETF |
Franklin FTSE Japan Hedged ETF |
Franklin FTSE Latin America ETF |
Franklin FTSE Mexico ETF |
|||||||||||||||
|
|
||||||||||||||||||
| Purchases |
$ | 30,902,470 | $ | 7,112,900 | $ | 46,099,803 | $ | 1,511,502 | ||||||||||
| Sales |
$ | 24,462,987 | $ | 10,887,531 | $ | 5,129,698 | $ | 1,497,626 | ||||||||||
| Franklin FTSE Saudi Arabia ETF |
Franklin FTSE South Africa ETF |
Franklin FTSE South Korea ETF |
Franklin FTSE Switzerland ETF |
|||||||||||||||
|
|
||||||||||||||||||
| Purchases |
$ | 18,976,370 | $ | 315,163 | $ | 243,049,567 | $ | 3,974,138 | ||||||||||
| 344 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
5. Investment Transactions (continued)
| Franklin FTSE Saudi Arabia ETF |
Franklin FTSE South Africa ETF |
Franklin FTSE South Korea ETF |
Franklin FTSE Switzerland ETF |
|||||||||||||
|
|
||||||||||||||||
| Sales |
$ | 387,290 | $ | 342,295 | $ | 6,620,131 | $ | 3,928,753 | ||||||||
| Franklin FTSE Taiwan ETF |
Franklin FTSE United Kingdom ETF |
|||||||||||||||
|
|
||||||||||||||||
| Purchases |
$ | 102,686,342 | $ | 32,754,756 | ||||||||||||
| Sales |
$ | 5,594,586 | $ | 28,776,359 | ||||||||||||
| In-kind transactions associated with creation and redemptions for the year ended March 31, 2023, 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 |
$ | 1,657,109 | $ | — | $ | — | $ | — | ||||||||
| Franklin FTSE China ETF |
Franklin FTSE Europe ETF |
Franklin FTSE Europe Hedged ETF |
Franklin FTSE France ETF |
|||||||||||||
|
|
||||||||||||||||
| Cost of Securities Received |
$ | 747,193 | $ | 70,731,122 | $ | 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 |
$ | 5,533,324 | $ | 144,988 | $ | — | $ | 1,248,141 | ||||||||
| Value of Securities Delivereda |
$ | 5,139,872 | $ | 3,255,694 | $ | — | $ | — | ||||||||
| Franklin FTSE Japan ETF |
Franklin FTSE Japan Hedged ETF |
Franklin FTSE Latin America ETF |
Franklin FTSE Mexico ETF |
|||||||||||||
|
|
||||||||||||||||
| Cost of Securities Received |
$ | 422,602,145 | $ | 5,821,497 | $ | 15,533,410 | $ | 12,277,160 | ||||||||
| Value of Securities Delivereda |
$ | 160,515,326 | $ | 12,708,732 | $ | — | $ | 1,266,860 | ||||||||
| Franklin FTSE Saudi Arabia ETF |
Franklin FTSE South Africa ETF |
Franklin FTSE South Korea ETF |
Franklin FTSE Switzerland ETF |
|||||||||||||
|
|
||||||||||||||||
| Cost of Securities Received |
$ | — | $ | — | $ | — | $ | 14,253,301 | ||||||||
| Value of Securities Delivereda |
$ | — | $ | 2,054,263 | $ | — | $ | 4,543,769 | ||||||||
| Franklin FTSE Taiwan ETF |
Franklin FTSE United Kingdom |
|||||||||||||||
|
|
||||||||||||||||
| Cost of Securities Received |
$ | — | $ | 164,931,197 | ||||||||||||
| franklintempleton.com | Annual Report |
345 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
5. Investment Transactions (continued)
| Franklin FTSE Taiwan ETF |
Franklin FTSE United Kingdom ETF |
|||||||
|
|
||||||||
| Value of Securities Delivereda |
$ | — | $ | 164,898,997 | ||||
aRealized gains and losses from in-kind redemptions, as shown on the Statement of Operations, are not recognized by the Funds for tax purposes.
At March 31, 2023, in connection with securities lending transactions, certain or all Funds loaned investments and received cash collateral as follows:
| Franklin FTSE Japan ETF |
||||
|
|
||||
| Securities lending transactionsa: | ||||
| Equity Investmentsb |
$ | 4,355,834 | ||
|
|
|
|||
aThe agreements can be terminated at any time.
bThe gross amount of recognized liability for such transactions is included in payable upon return of securities loaned in the Statements of Assets and Liabilities.
6. Concentration of Risk
Investing in foreign securities may include certain risks and considerations not typically associated with investing in U.S. securities, such as fluctuating currency values and changing local, regional and global economic, political and social conditions, which may result in greater market volatility. Political and financial uncertainty in many foreign regions may increase market volatility and the economic risk of investing in foreign securities. In addition, certain foreign securities may not be as liquid as U.S. securities.
Russia’s military invasion of Ukraine in February 2022, the resulting responses by the United States and other countries, and the potential for wider conflict could increase volatility and uncertainty in the financial markets and adversely affect regional and global economies. The United States and other countries have imposed broad-ranging economic sanctions on Russia and certain Russian individuals, banking entities and corporations as a response to its invasion of Ukraine. The United States and other countries have also imposed economic sanctions on Belarus and may impose sanctions on other countries that support Russia’s military invasion. These sanctions, as well as any other economic consequences related to the invasion, such as additional sanctions, boycotts or changes in consumer or purchaser preferences or cyberattacks on governments, companies or individuals, may further decrease the value and liquidity of certain Russian securities and securities of issuers in other countries that are subject to economic sanctions related to the invasion. To the extent that the Funds have exposure to Russian investments or investments in countries affected by the invasion, the Fund’s ability to price, buy, sell, receive or deliver such investments was impaired. The Funds could determine at any time that certain of the most affected securities have little or no value. In addition, any exposure that the Funds may have to counterparties in Russia or in countries affected by the invasion could negatively impact the Fund’s portfolio. The extent and duration of Russia’s military actions and the repercussions of such actions (including any retaliatory actions or countermeasures that may be taken by those subject to sanctions) are impossible to predict, but could result in significant market disruptions, including in the oil and natural gas markets, and may negatively affect global supply chains, inflation and global growth. These and any related events could significantly impact the Fund’s performance and the value of an investment in the Funds’, even beyond any direct exposure the Funds may have to Russian issuers or issuers in other countries affected by the invasion.
7. Other Derivative Information
At March 31, 2023, the Funds’ investments in derivative contracts are reflected in the Statements of Asset and Liabilities as follows:
| 346 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
7. Other Derivative Information (continued)
| Asset Derivatives |
Liability Derivatives |
|||||||||||
| Statements of Assets and Liabilities Location |
Fair Value | Statements of Assets and Liabilities Location |
Fair Value | |||||||||
| Franklin FTSE Australia ETF | ||||||||||||
| Equity contracts |
Variation margin on futures contracts |
$ | 865 | Variation margin on futures contracts |
$ | — | ||||||
|
|
|
|
|
|||||||||
| Franklin FTSE Brazil ETF | ||||||||||||
| Equity contracts |
Variation margin on futures contracts |
$ | — | Variation margin on futures contracts |
$ | 100,113 | ||||||
|
|
|
|
|
|||||||||
| Franklin FTSE Canada ETF | ||||||||||||
| Equity contracts |
Variation margin on futures contracts |
$ | 13,181 | Variation margin on futures contracts |
$ | — | ||||||
|
|
|
|
|
|||||||||
| Franklin FTSE Europe ETF | ||||||||||||
| Equity contracts |
Variation margin on futures contracts |
$ | 30,814 | Variation margin on futures contracts |
$ | — | ||||||
|
|
|
|
|
|||||||||
| Franklin FTSE Europe Hedged ETF | ||||||||||||
| Foreign exchange contracts |
Unrealized appreciation on OTC forward exchange contracts |
$ | 2,354 | Unrealized depreciation on OTC forward exchange contracts |
$ | 295,253 | ||||||
| Equity contracts |
Variation margin on futures contracts |
2,816 | Variation margin on futures contracts |
— | ||||||||
|
|
|
|
|
|||||||||
| Totals |
$ | 5,170 | $ | 295,253 | ||||||||
|
|
|
|
|
|||||||||
| Franklin FTSE France ETF | ||||||||||||
| Equity contracts |
Variation margin on futures contracts |
$ | 2,470 | Variation margin on futures contracts |
$ | — | ||||||
|
|
|
|
|
|||||||||
| Franklin FTSE Hong Kong ETF | ||||||||||||
| Equity contracts |
Variation margin on futures contracts |
$ | 1,064 | Variation margin on futures contracts |
$ | — | ||||||
|
|
|
|
|
|||||||||
| Franklin FTSE Japan ETF | ||||||||||||
| Equity contracts |
Variation margin on futures contracts |
$ | 162,284 | Variation margin on futures contracts |
$ | — | ||||||
|
|
|
|
|
|||||||||
| Franklin FTSE Japan Hedged ETF | ||||||||||||
| Foreign exchange contracts |
Unrealized appreciation on OTC forward exchange contracts |
$ | — | Unrealized depreciation on OTC forward exchange contracts |
$ | 247,252 | ||||||
| Equity contracts |
Variation margin on futures contracts |
2,278 | Variation margin on futures contracts |
— | ||||||||
|
|
|
|
|
|||||||||
| Totals |
$ | 2,278 | $ | 247,252 | ||||||||
|
|
|
|
|
|||||||||
| Franklin FTSE Latin America ETF | ||||||||||||
| Equity contracts |
Variation margin on futures contracts |
$ | — | Variation margin on futures contracts |
$ | 14,879 | ||||||
|
|
|
|
|
|||||||||
| Franklin FTSE South Korea ETF | ||||||||||||
| Equity contracts |
Variation margin on futures contracts |
$ | 25,029 | Variation margin on futures contracts |
$ | — | ||||||
|
|
|
|
|
|||||||||
| Franklin FTSE Switzerland ETF | ||||||||||||
| Equity contracts |
Variation margin on futures contracts |
$ | 38,313 | Variation margin on futures contracts |
$ | — | ||||||
|
|
|
|
|
|||||||||
| Franklin FTSE United Kingdom ETF | ||||||||||||
| Equity contracts |
Variation margin on futures contracts |
$ | 27,481 | Variation margin on futures contracts |
$ | — | ||||||
|
|
|
|
|
|||||||||
| franklintempleton.com | Annual Report |
347 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
7. Other Derivative Information (continued)
For the year ended March 31, 2023, the effect of derivative contracts in the Funds’ Statements of Operations was as follows:
| Derivative Contracts Not Accounted for as Hedging Instruments |
Statements of Operations Locations |
Net Realized Gain (Loss) for the Period |
Statements of Operations Locations |
Net Change in Unrealized Appreciation (Depreciation) for the Period |
||||||||
|
|
||||||||||||
| Franklin FTSE Asia ex Japan ETF | ||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized |
|||||||||||
| Equity contracts |
Futures contracts |
$ | (41,334 | ) | Futures contracts |
$ | — | |||||
|
|
|
|
|
|||||||||
| Franklin FTSE Australia ETF | ||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized |
|||||||||||
| Equity contracts |
Futures contracts |
$ | 4,705 | Futures contracts |
$ | 865 | ||||||
|
|
|
|
|
|||||||||
| Franklin FTSE Brazil ETF | ||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized |
|||||||||||
| Equity contracts |
Futures contracts |
$ | (2,139,014 | ) | Futures contracts |
$ | (313,611 | ) | ||||
|
|
|
|
|
|||||||||
| Franklin FTSE Canada ETF | ||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized |
|||||||||||
| Equity contracts |
Futures contracts |
$ | (32,397 | ) | Futures contracts |
$ | 13,181 | |||||
|
|
|
|
|
|||||||||
| Franklin FTSE China ETF | ||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized |
|||||||||||
| Equity contracts |
Futures contracts |
$ | (282,944 | ) | Futures contracts |
$ | — | |||||
|
|
|
|
|
|||||||||
| Franklin FTSE Europe ETF | ||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized |
|||||||||||
| Equity contracts |
Futures contracts |
$ | 35,645 | Futures contracts |
$ | (40,919 | ) | |||||
|
|
|
|
|
|||||||||
| Franklin FTSE Europe Hedged ETF | ||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized |
|||||||||||
| Foreign exchange contracts |
Forward exchange contracts |
$ | 1,844,814 | Forward exchange contracts |
$ | (515,430 | ) | |||||
| Equity contracts |
Futures contracts |
800 | Futures contracts |
2,816 | ||||||||
|
|
|
|
|
|||||||||
| Totals |
$ | 1,845,614 | $ | (512,614 | ) | |||||||
|
|
|
|
|
|||||||||
| Franklin FTSE France ETF | ||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized |
|||||||||||
| Equity contracts |
Futures contracts |
$ | (3,299 | ) | Futures contracts |
$ | 2,470 | |||||
|
|
|
|
|
|||||||||
| Franklin FTSE Germany ETF | ||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized |
|||||||||||
| Equity contracts |
Futures contracts |
$ | (10,835 | ) | Futures contracts |
$ | — | |||||
|
|
|
|
|
|||||||||
| Franklin FTSE Hong Kong ETF | ||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized |
|||||||||||
| Equity contracts |
Futures contracts |
$ | (2,161 | ) | Futures contracts |
$ | 477 | |||||
|
|
|
|
|
|||||||||
| 348 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
7. 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 India ETF | ||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
| Equity contracts |
Futures contracts |
$ | 4,985 | Futures contracts |
$ | (1,364 | ) | |||||
|
|
|
|
|
|||||||||
| Franklin FTSE Japan ETF | ||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
| Equity contracts |
Futures contracts |
$ | 354,956 | Futures contracts |
$ | 14,541 | ||||||
|
|
|
|
|
|||||||||
| Franklin FTSE Japan Hedged ETF | ||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
| Foreign exchange contracts |
Forward exchange contracts |
$ | 2,715,905 | Forward exchange contracts |
$ | (797,600 | ) | |||||
| Equity contracts |
Futures contracts |
4,773 | Futures contracts |
832 | ||||||||
|
|
|
|
|
|||||||||
| Totals |
$ | 2,720,678 | $ | (796,768 | ) | |||||||
|
|
|
|
|
|||||||||
| Franklin FTSE Latin America ETF | ||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
| Equity contracts |
Futures contracts |
$ | (99,250 | ) | Futures contracts |
$ | (15,889 | ) | ||||
|
|
|
|
|
|||||||||
| Franklin FTSE Mexico ETF | ||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
| Equity contracts |
Futures contracts |
$ | (1,730 | ) | Futures contracts |
$ | — | |||||
|
|
|
|
|
|||||||||
| Franklin FTSE Saudi Arabia ETF | ||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
| Foreign exchange contracts |
Forward exchange contracts |
$ | 1 | Forward exchange contracts |
$ | — | ||||||
|
|
|
|
|
|||||||||
| Franklin FTSE South Korea ETF | ||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
| Equity contracts |
Futures contracts |
$ | 116,088 | Futures contracts |
$ | (12,915 | ) | |||||
|
|
|
|
|
|||||||||
| Franklin FTSE Switzerland ETF | ||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
| Equity contracts |
Futures contracts |
$ | (97,288 | ) | Futures contracts |
$ | 3,897 | |||||
|
|
|
|
|
|||||||||
| Franklin FTSE Taiwan ETF | ||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
| Equity contracts |
Futures contracts |
$ | 589 | Futures contracts |
$ | — | ||||||
|
|
|
|
|
|||||||||
| Franklin FTSE United Kingdom ETF | ||||||||||||
| Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
| Equity contracts |
Futures contracts |
$ | (107,586 | ) | Futures contracts |
$ | (203,775 | ) | ||||
|
|
|
|
|
|||||||||
| franklintempleton.com | Annual Report |
349 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
7. Other Derivative Information (continued)
For the year ended March 31, 2023, 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 Australia ETF |
Franklin FTSE Brazil ETF |
Franklin FTSE Canada ETF | |||||||||||
| Futures contracts |
$35,047 | $152,132 | $5,819,540 | $519,804 | ||||||||||
| Forward exchange contracts |
$ — | $ — | $ — | $ — | ||||||||||
| Franklin FTSE China ETF |
Franklin FTSE Europe ETF |
Franklin FTSE Europe Hedged ETF |
Franklin FTSE France ETF | |||||||||||
| Futures contracts |
$304,969 | $788,608 | $ 89,942 | $7,706 | ||||||||||
| Forward exchange contracts |
$ — | $ — | $52,732,966 | $ — | ||||||||||
| Franklin FTSE Germany ETF |
Franklin FTSE Hong Kong ETF |
Franklin FTSE India ETF |
Franklin FTSE Japan ETF | |||||||||||
| Futures contracts |
$37,240 | $55,744 | $66,394 | $5,604,615 | ||||||||||
| Forward exchange contracts |
$ — | $ — | $ — | $ — | ||||||||||
| Franklin | Franklin | Franklin | Franklin | |||||||||||
| FTSE | FTSE | FTSE | FTSE | |||||||||||
| Japan Hedged | Latin America | Saudi Arabia | South Korea | |||||||||||
| ETF | ETF | ETF | ETF | |||||||||||
| Futures contracts |
$ 194,640 | $415,110 | $ — | $750,795 | ||||||||||
| Forward exchange contracts |
$68,391,103 | $ — | $430 | $ — | ||||||||||
| Franklin | Franklin | Franklin | ||||||||||||
| FTSE | FTSE | FTSE | ||||||||||||
| Switzerland | Taiwan | United Kingdom | ||||||||||||
| ETF | ETF | ETF | ||||||||||||
| Futures contracts |
$697,945 | $122,352 | $3,050,206 | |||||||||||
| Forward exchange contracts |
$ — | $ — | $ — | |||||||||||
At March 31, 2023, 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 | ||||||||||||
| Assets | Liabilities | |||||||||||
| Franklin FTSE Europe Hedged ETF | ||||||||||||
| Foreign exchange contracts |
$2,354 | $295,253 | ||||||||||
| Franklin FTSE Japan Hedged ETF | ||||||||||||
| Foreign exchange contracts |
$— | $247,252 | ||||||||||
| 350 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
7. Other Derivative Information (continued)
At March 31, 2023, 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 | Financial | |||||||||||||||||||
| of Assets Presented in | Financial | Instruments | Cash | |||||||||||||||||
| the Statements of | Instruments | Collateral | Collateral | Net Amount (Not | ||||||||||||||||
| Assets and Liabilities | Available for Offset | Receiveda | Receiveda | less than zero) | ||||||||||||||||
| Franklin FTSE Europe | ||||||||||||||||||||
| Hedged ETF | ||||||||||||||||||||
| Counterparty | ||||||||||||||||||||
| BOFA |
$2,330 | $(2,330) | $— | $— | $— | |||||||||||||||
| UBSW |
24 | (24) | — | — | — | |||||||||||||||
|
Total |
$2,354 | $(2,354) | $— | $— | $— | |||||||||||||||
aIn some instances, the collateral amounts disclosed in the table above were adjusted due to the requirement to limit collateral amounts to avoid the effect of overcollateralization. Actual collateral received and/or pledged may be more than the amounts disclosed herein.
At March 31, 2023, 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 | Financial | |||||||||||||||||||
| of Liabilities Presented in | Financial | Instruments | Cash | |||||||||||||||||
| the Statements of | Instruments | Collateral | Collateral | Net Amount (Not | ||||||||||||||||
| Assets and Liabilities | Available for Offset | Pledged | a | Pledged | a | less than zero) | ||||||||||||||
| Franklin FTSE Europe | ||||||||||||||||||||
| Hedged ETF | ||||||||||||||||||||
| Counterparty | ||||||||||||||||||||
| BOFA |
$ 70,666 | $(2,330) | $— | $— | $ 68,336 | |||||||||||||||
| HSBK |
53,130 | — | — | — | 53,130 | |||||||||||||||
| UBSW |
171,457 | (24) | — | — | 171,433 | |||||||||||||||
| Total |
$295,253 | $(2,354) | $— | $— | $292,899 | |||||||||||||||
| Franklin FTSE Japan | ||||||||||||||||||||
| Hedged ETF | ||||||||||||||||||||
| Counterparty | ||||||||||||||||||||
| BOFA |
$ 61,844 | $ — | $— | $— | $ 61,844 | |||||||||||||||
| HSBK |
61,819 | — | — | — | 61,819 | |||||||||||||||
| UBSW |
123,589 | — | — | — | 123,589 | |||||||||||||||
| Total |
$247,252 | $ — | $— | $— | $247,252 | |||||||||||||||
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.
| franklintempleton.com | Annual Report |
351 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
8. Fair Value Measurements
The Funds follow a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Funds’ own market assumptions (unobservable inputs). These inputs are used in determining the value of the Funds’ financial instruments and are summarized in the following fair value hierarchy:
| • | Level 1 – quoted prices in active markets for identical financial instruments |
| • | Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.) |
| • | Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of financial instruments) |
The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.
A summary of inputs used as of March 31, 2023, 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 |
$ | 30,019,732 | $ | 2,022 | $ | 11,424c | $ | 30,033,178 | ||||||||||||||||||||
| Franklin FTSE Australia ETF | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||||||||||
| Equity Investmentsb |
$ | 28,942,982 | $ | — | $ | — | $ | 28,942,982 | ||||||||||||||||||||
| Other Financial Instruments: |
||||||||||||||||||||||||||||
| Futures Contracts |
$ | 865 | $ | — | $ | — | $ | 865 | ||||||||||||||||||||
| Franklin FTSE Brazil ETF | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||||||||||
| Equity Investmentsb |
$ | 266,560,670 | $ | — | $ | — | $ | 266,560,670 | ||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||
| Other Financial Instruments: |
||||||||||||||||||||||||||||
| Futures Contracts |
$ | 100,113 | $ | — | $ | — | $ | 100,113 | ||||||||||||||||||||
| Franklin FTSE Canada ETF | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||||||||||
| Equity Investmentsb |
$ | 279,121,167 | $ | — | $ | — | $ | 279,121,167 | ||||||||||||||||||||
| Other Financial Instruments: |
||||||||||||||||||||||||||||
| Futures Contracts |
$ | 13,181 | $ | — | $ | — | $ | 13,181 | ||||||||||||||||||||
| Franklin FTSE China ETF | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||||||||||
| Equity Investmentsb |
$ | 114,131,584 | $ | 25,784 | $ | 100,170c | $ | 114,257,538 | ||||||||||||||||||||
| Franklin FTSE Europe ETF | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||||||||||
| Equity Investmentsb |
$ | 110,175,895 | $ | — | $ | —c | $ | 110,175,895 | ||||||||||||||||||||
| Other Financial Instruments: |
||||||||||||||||||||||||||||
| Futures Contracts |
$ | 30,814 | $ | — | $ | — | $ | 30,814 | ||||||||||||||||||||
| 352 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
8. Fair Value Measurements (continued)
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
| Franklin FTSE Europe Hedged ETF | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||||||||||
| Equity Investmentsb |
$ | 14,018,999 | $ | — | $ | —c | $ | 14,018,999 | ||||||||||||||||||||
| Short-Term Investments |
4,136 | — | — | 4,136 | ||||||||||||||||||||||||
| Total Investments in Securities |
$ | 14,023,135 | $ | — | $ | — | $ | 14,023,135 | ||||||||||||||||||||
| Other Financial Instruments: |
||||||||||||||||||||||||||||
| Forward Exchange Contracts |
$ | — | $ | 2,354 | $ | — | $ | 2,354 | ||||||||||||||||||||
| Futures Contracts |
2,816 | — | — | 2,816 | ||||||||||||||||||||||||
| Total Other Financial Instruments |
$ | 2,816 | $ | 2,354 | $ | — | $ | 5,170 | ||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||
| Other Financial Instruments: |
||||||||||||||||||||||||||||
| Forward Exchange Contracts |
$ | — | $ | 295,253 | $ | — | $ | 295,253 | ||||||||||||||||||||
| Franklin FTSE France ETF | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||||||||||
| Equity Investmentsb |
$ | 6,047,577 | $ | — | $ | — | $ | 6,047,577 | ||||||||||||||||||||
| Other Financial Instruments: |
||||||||||||||||||||||||||||
| Futures Contracts |
$ | 2,470 | $ | — | $ | — | $ | 2,470 | ||||||||||||||||||||
| Franklin FTSE Germany ETF | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||||||||||
| Equity Investmentsb |
$ | 17,683,414 | $ | — | $ | — | $ | 17,683,414 | ||||||||||||||||||||
| Franklin FTSE Hong Kong ETF | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||||||||||
| Equity Investmentsb |
$ | 17,034,504 | $ | — | $ | — | $ | 17,034,504 | ||||||||||||||||||||
| Other Financial Instruments: |
||||||||||||||||||||||||||||
| Futures Contracts |
$ | 1,064 | $ | — | $ | — | $ | 1,064 | ||||||||||||||||||||
| Franklin FTSE India ETF | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||||||||||
| Equity Investmentsb |
$ | 99,072,406 | $ | — | $ | — | $ | 99,072,406 | ||||||||||||||||||||
| Franklin FTSE Italy ETF | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||||||||||
| Equity Investmentsb |
$ | 5,037,427 | $ | — | $ | — | $ | 5,037,427 | ||||||||||||||||||||
| Franklin FTSE Japan ETF | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||||||||||
| Equity Investmentsb |
$ | 988,568,241 | $ | — | $ | — | $ | 988,568,241 | ||||||||||||||||||||
| Short-Term Investments |
4,417,293 | — | — | 4,417,293 | ||||||||||||||||||||||||
| Total Investments in Securities |
$ | 992,985,534 | $ | — | $ | — | $ | 992,985,534 | ||||||||||||||||||||
| Other Financial Instruments: |
||||||||||||||||||||||||||||
| Futures Contracts |
$ | 162,284 | $ | — | $ | — | $ | 162,284 | ||||||||||||||||||||
| franklintempleton.com | Annual Report |
353 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
8. Fair Value Measurements (continued)
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
| Franklin FTSE Japan Hedged ETF | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||||||||||
| Equity Investmentsb |
$ | 13,036,206 | $ | — | $ | — | $ | 13,036,206 | ||||||||||||||||||||
| Short-Term Investments |
721 | — | — | 721 | ||||||||||||||||||||||||
| Total Investments in Securities |
$ | 13,036,927 | $ | — | $ | — | $ | 13,036,927 | ||||||||||||||||||||
| Other Financial Instruments: |
||||||||||||||||||||||||||||
| Futures Contracts |
$ | 2,278 | $ | — | $ | — | $ | 2,278 | ||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||
| Other Financial Instruments: |
||||||||||||||||||||||||||||
| Forward Exchange Contracts |
$ | — | $ | 247,252 | $ | — | $ | 247,252 | ||||||||||||||||||||
| Franklin FTSE Latin America ETF | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||||||||||
| Equity Investmentsb |
$ | 67,137,485 | $ | — | $ | — | $ | 67,137,485 | ||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||
| Other Financial Instruments: |
||||||||||||||||||||||||||||
| Futures Contracts |
$ | 14,879 | $ | — | $ | — | $ | 14,879 | ||||||||||||||||||||
| Franklin FTSE Mexico ETF | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||||||||||
| Equity Investmentsb |
$ | 24,885,047 | $ | — | $ | — | $ | 24,885,047 | ||||||||||||||||||||
| Franklin FTSE Saudi Arabia ETF | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||||||||||
| Equity Investmentsb |
$ | 21,730,478 | $ | — | $ | — | $ | 21,730,478 | ||||||||||||||||||||
| Franklin FTSE South Africa ETF | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||||||||||
| Equity Investmentsb |
$ | 2,242,239 | $ | — | $ | — | $ | 2,242,239 | ||||||||||||||||||||
| Franklin FTSE South Korea ETF | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||||||||||
| Equity Investmentsb |
$ | 290,711,940 | $ | — | $ | — | $ | 290,711,940 | ||||||||||||||||||||
| Other Financial Instruments: |
||||||||||||||||||||||||||||
| Futures Contracts |
$ | 25,029 | $ | — | $ | — | $ | 25,029 | ||||||||||||||||||||
| Franklin FTSE Switzerland ETF | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||||||||||
| Equity Investmentsb |
$ | 49,051,415 | $ | — | $ | — | $ | 49,051,415 | ||||||||||||||||||||
| Other Financial Instruments: |
||||||||||||||||||||||||||||
| Futures Contracts |
$ | 38,313 | $ | — | $ | — | $ | 38,313 | ||||||||||||||||||||
| Franklin FTSE Taiwan ETF | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||
| Investments in Securities:a |
||||||||||||||||||||||||||||
| Equity Investmentsb |
$ | 136,871,589 | $ | — | $ | — | $ | 136,871,589 | ||||||||||||||||||||
| 354 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
8. Fair Value Measurements (continued)
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Franklin FTSE United Kingdom ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Equity Investmentsb |
$ | 564,026,714 | $ | — | $ | —c | $ | 564,026,714 | ||||||||
| Short-Term Investments |
10 | — | — | 10 | ||||||||||||
|
|
|
|||||||||||||||
| Total Investments in Securities |
$ | 564,026,724 | $ | — | $ | — | $ | 564,026,724 | ||||||||
|
|
|
|||||||||||||||
| Other Financial Instruments: |
||||||||||||||||
| Futures Contracts |
$ | 27,481 | $ | — | $ | — | $ | 27,481 | ||||||||
|
|
|
|||||||||||||||
aFor detailed categories, see the accompanying Schedules of Investments.
bIncludes common and preferred stocks, warrants, as well as other equity investments.
cIncludes securities determined to have no value at March 31, 2023.
9. New Accounting Pronouncements
In June 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-03, Fair Value Measurement (Topic 820) – Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in the ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, should not be considered in measuring fair value. The ASU is effective for interim and annual reporting periods beginning after December 15, 2023, with the option of early adoption. Management has reviewed the requirements and believes that the adoption of the ASU will not have a material impact on the financial statements.
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 | Counterparty | |||||||
| ADR | American Depositary Receipt | BOFA | Bank of America Corp. | |||||
| CDI | Clearing House Electronic Subregister System Depositary Interest | HSBK | HSBC Bank PLC | |||||
| UBSW | UBS AG | |||||||
| NVDR | Non-Voting Depositary Receipt | |||||||
| REIT | Real Estate Investment Trust | |||||||
| SF | Single Family | |||||||
| SPA | Standby Purchase Agreement | |||||||
| SRF | State Revolving Fund | |||||||
| franklintempleton.com | Annual Report |
355 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Franklin Templeton ETF Trust and Shareholders of Franklin FTSE Asia ex Japan ETF, Franklin FTSE Australia ETF, Franklin FTSE Brazil ETF, Franklin FTSE Canada ETF, Franklin FTSE China ETF, Franklin FTSE Europe ETF, Franklin FTSE Europe Hedged ETF, Franklin FTSE France ETF, Franklin FTSE Germany ETF, Franklin FTSE Hong Kong ETF, Franklin FTSE India ETF, Franklin FTSE Italy ETF, Franklin FTSE Japan ETF, Franklin FTSE Japan Hedged ETF, Franklin FTSE Latin America ETF, Franklin FTSE Mexico ETF, Franklin FTSE Saudi Arabia ETF, Franklin FTSE South Africa ETF, Franklin FTSE South Korea ETF, Franklin FTSE Switzerland ETF, Franklin FTSE Taiwan ETF and Franklin FTSE United Kingdom ETF
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Franklin FTSE Asia ex Japan ETF, Franklin FTSE Australia ETF, Franklin FTSE Brazil ETF, Franklin FTSE Canada ETF, Franklin FTSE China ETF, Franklin FTSE Europe ETF, Franklin FTSE Europe Hedged ETF, Franklin FTSE France ETF, Franklin FTSE Germany ETF, Franklin FTSE Hong Kong ETF, Franklin FTSE India ETF, Franklin FTSE Italy ETF, Franklin FTSE Japan ETF, Franklin FTSE Japan Hedged ETF, Franklin FTSE Latin America ETF, Franklin FTSE Mexico ETF, Franklin FTSE Saudi Arabia ETF, Franklin FTSE South Africa ETF, Franklin FTSE South Korea ETF, Franklin FTSE Switzerland ETF, Franklin FTSE Taiwan ETF and Franklin FTSE United Kingdom ETF (twenty-two of the funds constituting Franklin Templeton ETF Trust, hereafter collectively referred to as the "Funds") as of March 31, 2023, the related statements of operations for the year ended March 31, 2023, the statements of changes in net assets for each of the two years in the period ended March 31, 2023, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of March 31, 2023, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period ended March 31, 2023 and each of the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinions
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of March 31, 2023 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.
PricewaterhouseCoopers LLP
San Francisco, California
May 23, 2023
We have served as the auditor of one or more investment companies in the Franklin Templeton funds since 1948.
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By mid-February, tax information related to a shareholder’s proportionate share of distributions paid during the preceding calendar year will be received, if applicable. Please also refer to www.franklintempleton.com for per share tax information related to any distributions paid during the preceding calendar year. Shareholders are advised to consult with their tax advisors for further information on the treatment of these amounts on their tax returns.
The following tax information for the Funds is required to be furnished to shareholders with respect to the income earned and distributions paid during their fiscal year.
The Funds below hereby report the following amounts, or if subsequently determined to be different, the maximum allowable amounts, for the fiscal year ended March 31, 2023:
| Pursuant to: | Franklin FTSE Asia ex Janpan ETF |
Franklin FTSE Australia ETF |
Franklin FTSE Brazil ETF |
Franklin FTSE Canada ETF |
||||||||||||||||
| Long-Term Capital Gain Dividends | §852(b)(3)(C) | $ — | $ — | $— | $ — | |||||||||||||||
| Qualified Dividend Income (QDI) | §854(b)(1)(B) | $432,488 | $1,659,460 | $— | $6,243,337 | |||||||||||||||
| Short-Term Capital Gain Dividends | §871(k)(2)(C) | $ — | $ — | $— | $ — | |||||||||||||||
| Pursuant to: | Franklin FTSE China ETF |
Franklin FTSE Europe ETF |
Franklin FTSE ETF |
Franklin FTSE France ETF |
||||||||||||||||
| Long-Term Capital Gain Dividends | §852(b)(3)(C) | $ — | $ — | $1,854,370 | $ — | |||||||||||||||
| Qualified Dividend Income (QDI) | §854(b)(1)(B) | $1,864,327 | $3,315,327 | $ 590,158 | $228,229 | |||||||||||||||
| Short-Term Capital Gain Dividends | §871(k)(2)(C) | $ — | $ — | $1,223,776 | $ — | |||||||||||||||
| Pursuant to: | Franklin FTSE Germany ETF |
Franklin FTSE Hong Kong ETF |
Franklin FTSE India ETF |
Franklin FTSE Italy ETF |
||||||||||||||||
| Long-Term Capital Gain Dividends | §852(b)(3)(C) | $ — | $— | $ — | $ — | |||||||||||||||
| Qualified Dividend Income (QDI) | §854(b)(1)(B) | $396,209 | $— | $797,312 | $155,960 | |||||||||||||||
| Short-Term Capital Gain Dividends | §871(k)(2)(C) | $ — | $— | $ — | $ — | |||||||||||||||
| Pursuant to: | Franklin FTSE ETF |
Franklin FTSE Japan Hedged ETF |
Franklin FTSE Latin America ETF |
Franklin FTSE Mexico ETF |
||||||||||||||||
| Long-Term Capital Gain Dividends | §852(b)(3)(C) | $ — | $3,446,187 | $ — | $ — | |||||||||||||||
| Qualified Dividend Income (QDI) | §854(b)(1)(B) | $17,494,206 | $ 446,213 | $519,676 | $454,652 | |||||||||||||||
| Short-Term Capital Gain Dividends | §871(k)(2)(C) | $ — | $2,106,927 | $ — | $ — | |||||||||||||||
| Pursuant to: | Franklin FTSE Saudi Arabia ETF |
Franklin FTSE South Africa ETF |
Franklin FTSE South Korea ETF |
Franklin FTSE Switzerland ETF |
||||||||||||||||
| Long-Term Capital Gain Dividends | §852(b)(3)(C) | $— | $ — | $ — | $ — | |||||||||||||||
| Qualified Dividend Income (QDI) | §854(b)(1)(B) | $— | $158,331 | $2,388,233 | $1,191,933 | |||||||||||||||
| Short-Term Capital Gain Dividends | §871(k)(2)(C) | $— | $ — | $ — | $ — | |||||||||||||||
| Pursuant to: | Franklin FTSE Taiwan ETF |
Franklin FTSE United Kingdom ETF |
||||||||||||||||||
| Long-Term Capital Gain Dividends | §852(b)(3)(C) | $— | $ — | |||||||||||||||||
| Qualified Dividend Income (QDI) | §854(b)(1)(B) | $— | $20,402,341 | |||||||||||||||||
| Short-Term Capital Gain Dividends | §871(k)(2)(C) | $— | $ — | |||||||||||||||||
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Tax information (unaudited) (continued)
Under Section 853 of the Internal Revenue Code, the Funds below intend to elect to pass through to their shareholders the following amounts, or amounts as finally determined, of foreign taxes paid and foreign source income earned by the Funds during the fiscal year ended March 31, 2023:
| Franklin FTSE Asia ex Janpan ETF |
Franklin FTSE ETF |
Franklin FTSE Brazil ETF |
Franklin FTSE Canada ETF |
|||||||||||||
| Foreign Taxes Paid | $154,749 | $ 11,667 | $ 1,353,900 | $1,211,661 | ||||||||||||
| Foreign Source Income | $984,149 | $1,700,733 | $36,993,572 | $7,991,293 | ||||||||||||
| Franklin FTSE China ETF |
Franklin FTSE Europe ETF |
Franklin FTSE Europe Hedged ETF |
Franklin FTSE France ETF |
|||||||||||||
| Foreign Taxes Paid | $ 199,000 | $ 292,678 | $ 49,382 | $ 1,126 | ||||||||||||
| Foreign Source Income | $3,163,497 | $3,772,704 | $631,757 | $261,445 | ||||||||||||
| Franklin FTSE Germany ETF |
Franklin FTSE Hong Kong ETF |
Franklin FTSE ETF |
Franklin FTSE Italy ETF |
|||||||||||||
| Foreign Taxes Paid | $ 71,213 | $ 443 | $351,881 | $ 23,213 | ||||||||||||
| Foreign Source Income | $515,557 | $518,118 | $820,696 | $157,311 | ||||||||||||
| Franklin FTSE Japan ETF |
Franklin FTSE Japan Hedged ETF |
Franklin FTSE Latin America ETF |
Franklin FTSE Mexico ETF |
|||||||||||||
| Foreign Taxes Paid | $ 2,413,241 | $ 52,222 | $ 241,585 | $ 33,514 | ||||||||||||
| Foreign Source Income | $23,596,110 | $521,762 | $4,206,885 | $496,442 | ||||||||||||
| Franklin FTSE Saudi Arabia ETF |
Franklin FTSE South Africa ETF |
Franklin FTSE South Korea ETF |
Franklin FTSE Switzerland ETF |
|||||||||||||
| Foreign Taxes Paid | $ 13,295 | $ 25,133 | $ 501,177 | $ 187,623 | ||||||||||||
| Foreign Source Income | $270,256 | $186,396 | $2,990,894 | $1,314,229 | ||||||||||||
| Franklin FTSE Taiwan ETF |
Franklin FTSE United Kingdom ETF |
|||||||||||||||
| Foreign Taxes Paid | $ 388,893 | $ 14,061 | ||||||||||||||
| Foreign Source Income | $1,985,202 | $20,830,214 | ||||||||||||||
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The name, year of birth and address of the officers and board members, as well as their affiliations, positions held with the Trust, principal occupations during at least the past five years and number of U.S. registered portfolios overseen in the Franklin Templeton/Legg Mason fund complex, are shown below. Generally, each board member serves until that person’s successor is elected and qualified.
Independent Board Members
| Name,Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||||||
| Rohit Bhagat (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Lead Independent Trustee |
Since 2016 | 59 | AssetMark Financial Holdings, Inc. (investment solutions) (2018-present) and PhonePe (2020-present) (payment and financial services); formerly, Axis Bank (financial) (2013- 2021), FlipKart Limited (2019-2020) (eCommerce company); CapFloat Financial Services Pvt., Ltd. (non-banking finance company) (2018) and Zentific Investment Management (hedge fund) (2015-2018). | ||||||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||||||
| Managing Member, Mukt Capital, LLC (private investment firm) (2014-present); Advisor, Optimal Asset Management (investment technology and advisory services company) (2015-present); Chief Executive Officer and Director, FinTech Evolution Acquisition (eCommerce company) (February 2021-present); and formerly, Chairman, Asia Pacific, BlackRock (2009-2012); Global Chief Operating Officer, Barclays Global Investors (investment management) (2005-2009); and Senior Partner, The Boston Consulting Group (management consulting) (1992-2005). | ||||||||||||
| Deborah D. McWhinney (1955) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee | Since 2020 | 59 | IHS Markit (information services) (2015-present), Borg Warner (automotive) (2018-present), LegalShield (consumer services) (2020-present); and formerly, Fluor Corporation (construction and engineering) (2014-2020) and Focus Financial Partner, LLC (financial services) (2018-2020). | ||||||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||||||
| Director of various companies; and formerly, Board Member, Lloyds Banking Group (2015-2018) (financial institution)) and Fresenius Medical Group (2016-2018) (healthcare); Chief Executive Officer (2013-2014) and Chief Operating Officer (2011-2013), Citi Group Global Enterprise Payments (financial services); and President, Citi’s Personal Banking and Wealth Management (2009-2011). | ||||||||||||
| Anantha K. Pradeep (1963) | Trustee | Since 2016 | 59 | None | ||||||||
| One Franklin Parkway San Mateo, CA 94403-1906 |
||||||||||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||||||
| Chief Executive Officer, Smilable, Inc. (technology company) (2014-present); Chief Executive Officer, Machine Vantage (technology company) (2018-present); Founder and Managing Partner, Consult Meridian, LLC (consulting company) (2009-present); and formerly, Founder, Board Vantage (board portal solutions provider delivering paperless process for boards and leadership) (2000-2002). | ||||||||||||
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Interested Board Members and Officers
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| **Jennifer M. Johnson (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee and Chairperson of the Board | Since 2016 | 70 | None | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Chief Executive Officer, President and Director, Franklin Resources, Inc.; officer and/or director or trustee, of some of the other subsidiaries of Franklin Resources, Inc. and of certain funds in the Franklin Templeton/Legg Mason fund complex; and formerly, Chief Operating Officer and Executive Vice President, Franklin Resources, Inc. (1994-2015); Executive Vice President of Operations and Technology, Franklin Resources, Inc. (2005-2010); and Senior Vice President, Franklin Resources, Inc. (2003-2005). | ||||||||
| Alison E. Baur (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President | Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Deputy General Counsel, Franklin Templeton; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Steven J. Gray (1955) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President | Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Distributors, LLC; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Matthew T. Hinkle (1971) One Franklin Parkway San Mateo, CA 94403-1906 |
Chief Executive Officer –Finance and Administration | Since 2017 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Vice President, Franklin Templeton Services, LLC; officer of certain funds in the Franklin Templeton/Legg Mason fund complex; and formerly, Vice President, Global Tax (2012-April 2017) and Treasurer/Assistant Treasurer, Franklin Templeton (2009-2017). | ||||||||
| Fred Jensen (1963) 620 Eighth Avenue, 47th Floor New York, NY 10018 |
Chief Compliance Officer | Since 2021 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Director - Global Compliance of Franklin Templeton; Managing Director of Legg Mason & Co.; Director of Compliance, Legg Mason Office of the Chief Compliance Officer; Chief Compliance Officer, Franklin Advisory Services, LLC; Compliance Officer, Franklin Advisers, Inc.; officer of certain funds in the Franklin Templeton/Legg Mason fund complex; formerly, Chief Compliance Officer of Legg Mason Global Asset Allocation; Chief Compliance Officer, Legg Mason Private Portfolio; Chief Compliance Officer to The Reserves Funds (investment adviser, funds and broker-dealer) and Ambac Financial Group (investment adviser, funds and broker-dealer). | ||||||||
| Susan Kerr (1949) 620 Eighth Avenue New York, NY 10018 |
Vice President - AML Compliance | Since 2021 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Compliance Analyst, Franklin Templeton; Chief Anti-Money Laundering Compliance Officer, Legg Mason & Co., or its affiliates; Anti Money Laundering Compliance Officer; Senior Compliance Officer, LMIS; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Todd Mathias (1983) One Franklin Parkway, San Mateo, Ca 94403-1906 |
Vice President | Since March 2022 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Head of US ETF Product Strategy, Franklin Templeton; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
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Interested Board Members and Officers (continued)
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| Patrick O’Connor (1967) One Franklin Parkway San Mateo, CA 94403-1906 |
President and Chief Executive Officer – Investment Management | Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| President and Chief Investment Officer, Franklin Advisory Services, LLC; Senior Vice President, Franklin Advisers, Inc.; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Vivek Pai (1970) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 |
Treasurer, Chief Financial Officer and Chief Accounting Officer | Since 2019 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Treasurer, U.S. Fund Administration & Reporting and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Navid J. Tofigh (1972) One Franklin Parkway, San Mateo, Ca 94403-1906 |
Vice President and Secretary | Since 2015 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Lori A. Weber (1964) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 |
Vice President and Secretary | Vice President since 2011 and Secretary since 2013 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Resources, Inc.; Vice President and Secretary, Templeton Investment Counsel, LLC; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
*We base the number of portfolios on each separate series of the U.S. registered investment companies within the Franklin Templeton fund complex. These portfolios have a common investment manager or affiliated investment managers.
**Jennifer M. Johnson is considered to be an interested person of the Fund under the federal securities laws due to her position as an officer and director of Franklin Resources, Inc. (Resources), which is the parent company of the Fund’s investment manager and distributor.
Note 1: Officer information is current as of the date of this report. It is possible that after this date, information about officers may change.
The Sarbanes-Oxley Act of 2002 and Rules adopted by the Securities and Exchange Commission require the Fund to disclose whether the Fund’s Audit Committee includes at least one member who is an audit committee financial expert within the meaning of such Act and Rules. The Fund’s Board has determined that there is at least one such financial expert on the Audit Committee and has designated Rohit Bhagat and Deboarah D. McWhinney as its audit committee financial experts. The Board believes that Mr. Bhagat and Ms. McWhinney qualify as such an expert in view of their extensive business background and experience, including extensive experience in the asset management and financial services industries. Mr. Bhagat has been a Member and Chairman of the Fund’s Audit Committee since 2017. Ms. McWhinney has been a member of the Fund Audit Committee since 2020. As a result of such background and experience, the Board believes that Mr. Bhagat and Ms. McWhinney have acquired an understanding of generally accepted accounting principles and financial statements, the general application of such principles in connection with the accounting estimates, accruals and reserves, and analyzing and evaluating financial statements that presents a breadth and level of complexity of accounting issues generally comparable to those of the Fund, as well as an understanding of internal controls and procedures for financial reporting and an understanding of audit committee functions. Mr. Bhagat and Ms. McWhinney are independent Board members as that term is defined under the relevant Securities and Exchange Commission Rules and Releases.
The Statement of Additional Information (SAI) includes additional information about the board members and is available, without charge, upon request. Shareholders may call (800) DIAL BEN/342-5236 to request the SAI.
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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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Annual Report Franklin Templeton ETF Trust |
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| Investment Manager | Distributor | Investor Services | ||||
| Franklin Advisory | Franklin Distributors, LLC | Transfer Agent | ||||
| Services, LLC | (800) DIAL BEN®/342-5236 | State Street Bank and | ||||
| franklintempleton.com | Trust Company | |||||
| 1 HeritageDrive | ||||||
| Mail Stop OHD0100 | ||||||
| North Quincy, MA 02171 | ||||||
| © 2023 Franklin Templeton Investments. All rights reserved. | ETF5 A 05/23 | |||||
ANNUAL REPORT CLEARBRIDGE SUSTAINABLE INFRASTRUCTURE ETF A Series of Franklin Templeton ETF Trust March 31, 2023
| Visit franklintempleton.com for fund updates and documents, or to find helpful financial planning tools. |
| Not FDIC Insured | May Lose Value | No Bank Guarantee |
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ClearBridge Sustainable Infrastructure ETF
This inaugural annual report for ClearBridge Sustainable Infrastructure ETF (the “Fund”) covers the period since the Fund’s inception on December 14, 2022, through March 31, 2023.
Q. What is the Fund’s investment strategy?
A. The Fund seeks total return, consisting of capital appreciation and income. Under normal circumstances, the Fund invests at least 80% of its net assets, plus the amount of borrowings for investment purposes, if any, in securities issued by companies that are engaged in the infrastructure business and that meet the sub-advisor’s sustainability and financial criteria at the time of investment, and other investments with similar economic characteristics.
The Fund seeks to achieve its investment objective by investing in a portfolio of equity securities of infrastructure companies with attractive valuation, distributions and cash flow characteristics that meet the sub-advisor’s sustainability criteria for investment. The Fund invests in equity and equity-related securities of exchange-traded infrastructure companies and may invest in companies of any size and market capitalization, including small and mid-capitalization companies. These issuers may be newer or less seasoned companies, including companies making initial public offerings (IPOs). The Fund’s portfolio is expected to be highly concentrated, with approximately 25 to 50 holdings. The Fund may seek investment opportunities in any foreign country and may invest a significant portion of its assets in foreign securities. The Fund may invest up to 20% of its assets in securities of companies located in countries with developing or emerging markets.
The sub-advisor applies a proprietary screening methodology to develop an investment universe of securities of companies that are engaged in the infrastructure business and meet the Fund’s sustainability and financial criteria. In constructing the Fund’s portfolio, the sub-advisor applies inclusionary liquidity, infrastructure exposure, quality and income screens to the global listed infrastructure investable universe. All eligible companies are then assigned a proprietary rating on a scale of 1-5 with companies assessed at the current point in time as well as expectations of any improvement (e.g., decarbonization opportunities) or deterioration (e.g., climate-related risk exposures) across a five-year investment horizon based on a company’s planned
actions, strategies and engagement as evaluated by the sub-advisor. The sub-advisor’s proprietary environmental, social and/or governance (ESG) ratings system assesses whether a company focuses on ESG factors, integrates ESG factors into its business model, and measures such efforts. Specifically, the sub-advisor assesses various climate related risks and opportunities as part of its bottom-up stock selection process. ESG efforts are measured using the sub-advisor’s proprietary scorecard, which assesses a range of data including adverse impacts and includes ongoing issuer engagement. The sub-advisor uses various quantitative and qualitative measures to analyze global listed equity securities of infrastructure companies. In identifying companies that meet the Fund’s sustainability criteria, the sub-advisor assesses ESG factors through a proprietary analytical framework that is applied to each potential investment. In constructing the Fund’s portfolio, each infrastructure sub-industry is assessed against a weighting of factors relevant to its business operations. This analysis includes such factors as: the company’s environmental practices including green-house gas emissions, carbon emissions, energy efficiency initiatives, supply chain, pollution/hazardous waste policies, water usage, and climate change policies; social factors such as a company’s approach to community relations, occupational safety and health and the management of its human capital; the governance structure of the company including alignment with management, the board and other major shareholders of the company, board effectiveness and quality, operating excellence, risk control, diversity, remuneration practices, shareholder rights, accounting standards, and cybersecurity/data protection. The materiality and relevance of these factors will vary by company and sub-industry. The sub-advisor uses ESG factors as a tool to assess sustainability in the context of an individual company’s circumstances. In addition, the Fund seeks to avoid investing in companies that are assigned to the following Global Industry Classification Standard (GICS) sub-industries: Oil & Gas Storage & Transportation; Gas Utilities; and Airport Services (excluding Air Navigation Service Providers). The sub-advisor may modify this list of prohibited investments, or any particular exclusion, at any time, without shareholder approval or notice. The sustainability criteria described above apply to 100% of the Fund’s portfolio, excluding cash and cash equivalents held for cash management. The sub-advisor also focuses on companies that it believes are
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 11.
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CLEARBRIDGE SUSTAINABLE INFRASTRUCTURE ETF
attractively valued relative to other companies in the same industry or market. The sub-advisor’s value analysis includes consideration of a company’s dividends, cash flows, capital growth projections, capital expenditures, balance sheet and capital requirements. The sub-advisor primarily selects stocks based on their bottom-up risk and return characteristics. A top-down approach is then applied to ensure that the portfolio is not overly exposed to a particular geography, sector or other macro factors.
Top 10 Sectors/Industries
3/31/23
| % of Total Net Assets |
||||
| Electric Utilities | 36.1% | |||
| Transportation Infrastructure | 12.1% | |||
| Water Utilities | 11.3% | |||
| Ground Transportation | 11.1% | |||
| Independent Power Producers & Energy Traders | 9.6% | |||
| Multi-Utilities | 8.3% | |||
| Diversified REITs | 4.1% | |||
| Construction & Engineering | 3.3% | |||
| Diversified Telecommunication Services | 2.9% | |||
Q. What were the overall market conditions during the Fund’s reporting period?
A. Amid a growth push during the period, the performance of infrastructure equities generally trailed global equities as a whole. Infrastructure trends that closed out 2022 continued in 2023’s first quarter, with energy prices stabilizing and even declining across Europe and the rest of the globe amid a warmer-than-expected winter. This kept pressure off both utilities as well as households, while a continuing re-emergence of mobility and travel lifted the airports and toll roads sectors. Bond yields too came off recent highs, supporting longer-duration assets such as renewables, which performed well. Lower yields are also positive for communication towers, though yields are still elevated, and some broad market pressure on real estate—tower companies are generally structured as real estate investment trusts (REITs)—was still being felt during the period.
The rail and energy infrastructure industries underperformed. A weak outlook for the rail industry amid growing recession expectations, continued service challenges and fuel and
labor cost increases were headwinds. Energy infrastructure trailed the broader market as 2022’s tight price environment loosened somewhat with abnormally warm weather.
Q. How did we respond to these changing market conditions?
A. We maintained our defensive positioning as we believe that the impacts of tightened financial conditions will eventually impact the economy and ultimately corporate earnings. In fact, we started to see some weakness in corporate earnings from higher interest costs. We think that the U.S. Federal Reserve (Fed) and many other central banks around the world will have to maintain their hawkish positions and have started to accept the recessionary risks as increasingly likely but necessary to combat stubbornly high levels of inflation. The banking collapses from Silicon Valley Bank and Credit Suisse seem to have added a very credible datapoint toward a recessionary environment, paired with the Fed’s need to continue its monetary tightening policy direction.
We are still trying to find areas where a COVID-19 recovery is still happening, and we found such exposure through a new position in West Japan Railway. It is our belief that much of this recovery is due to domestic reopening in Japan, but now there is an added benefit from the Chinese reopening as well. Renewable energy’s recent struggles may be coming to an end as we approach the end of the monetary tightening cycle. We continue to be constructive on the long-term outlook, and purchased Danish renewable energy company Orsted during the period, while adding to existing positions in Auren Energia and NextEra Energy.
Performance Overview
During the period since the Fund’s inception on December 14, 2022, through March 31, 2023, the Fund posted cumulative total returns of +1.20% based on market price and +0.88% based on net asset value (NAV).1 In comparison, the Fund’s primary benchmark, the FTSE Global Core Infrastructure 50/50 – Net Tax, which is comprised of equity securities of infrastructure companies as defined by FTSE Russell, posted a -2.28% cumulative total return for the same period.2 The Fund’s secondary benchmark, the OECD G7 CPI + 5.5%, which measures the change in the prices of consumer goods and services in G7 countries, posted a +2.24% 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 6.
1. Prior to the Fund’s listing on December 16, 2022, the Fund’s NAV performance is used as a proxy for the Fund’s market price returns.
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 Tax returns include income net of tax withholding when dividends are paid.
| franklintempleton.com | Annual Report | 3 | ||
CLEARBRIDGE SUSTAINABLE INFRASTRUCTURE 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.
Q. What were the leading contributors to performance?
A. On a regional basis, the main contributors to performance were Western Europe and Latin America. On a sub-sector basis, the main contributors to performance were electric and toll roads. On an individual stock basis, the main contributors to performance were Portuguese renewables utility Energias de Portugal, Brazilian toll road operator CCR, and Spanish electric utility Iberdrola.
Q. What were the leading detractors from performance?
A. On a regional basis, the main detractors from performance were the U.S. & Canada and Asia Pacific Developed. On a sub-sector basis, the main detractors from performance were rail and other infrastructure. On an individual stock basis, the main detractors from performance were U.S. renewables company NextEra Energy Partners, U.S. rail operator CSX, and U.S. water utility American Water Works Company.
Q. Were there any significant changes to the Fund during the reporting period?
A. During the period, we initiated new positions in Danish renewables company Orsted and Japanese rail operator West Japan Railway. We exited French toll road operator Vinci.
| Top 10 Holdings | ||||
| 3/31/23 | ||||
| Company Sector/Industry, Country |
% of Total Net Assets |
|||
| EDP - Energias de Portugal SA Electric Utilities, Portugal |
5.0% | |||
| Terna - Rete Elettrica Nazionale Electric Utilities, Italy |
4.8% | |||
| SSE PLC Electric Utilities, United Kingdom |
4.7% | |||
| NextEra Energy, Inc. Electric Utilities, United States |
4.5% | |||
| Iberdrola SA Electric Utilities, Spain |
4.5% | |||
| Public Service Enterprise Group, Inc. Multi-Utilities, United States |
4.4% | |||
| Hydro One Ltd. Electric Utilities, Canada |
4.1% | |||
| Transurban Group Transportation Infrastructure, Australia |
4.0% | |||
| National Grid PLC Multi-Utilities, United Kingdom |
3.9% | |||
| Getlink SE Transportation Infrastructure, France |
3.5% | |||
| Top 10 Countries | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| United States | 25.7% | |||
| United Kingdom | 17.0% | |||
| Spain | 12.4% | |||
| Japan | 8.4% | |||
| Italy | 7.6% | |||
| Canada | 6.8% | |||
| Brazil | 5.5% | |||
| Portugal | 5.0% | |||
| Australia | 4.0% | |||
| France | 3.5% | |||
See www.franklintempletondatasources.com for additional data provider information.
| 4 | Annual Report | franklintempleton.com | ||
CLEARBRIDGE SUSTAINABLE INFRASTRUCTURE ETF
Thank you for your participation in ClearBridge Sustainable Infrastructure ETF. We look forward to serving your future investment needs.
Charles Hamieh
Shane Hurst
Nick Langley
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2023, 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.
| franklintempleton.com | Annual Report | 5 | ||
CLEARBRIDGE SUSTAINABLE INFRASTRUCTURE ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (12/16/22), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return | Average Annual Total Return | |||||||||||||||
| Based on NAV2 |
Based on market price3 |
Based on NAV2 |
Based on market price3 |
|||||||||||||
| Since Inception (12/14/22) |
+0.88% | +1.20% | +3.03% | +4.15% | ||||||||||||
| Distribution Rate | |
30-Day Standardized Yield |
4 | |
| 0.00% |
2.20% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 8 for Performance Summary footnotes.
| 6 | Annual Report | franklintempleton.com | ||
CLEARBRIDGE SUSTAINABLE INFRASTRUCTURE ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
12/14/22–3/31/23
See page 8 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 7 | ||
CLEARBRIDGE SUSTAINABLE INFRASTRUCTURE ETF
PERFORMANCE SUMMARY
Total Annual Operating Expenses6
| 0.59% |
All investments involve risks, including possible loss of principal. The Fund is newly organized, with a limited history of operations. Equity securities are subject to price fluctuation and possible loss of principal. Companies in the infrastructure industry may be subject to a variety of factors that could adversely affect their business or operations, including high interest costs in connection with capital intensive construction programs, high degrees of leverage, costs associated with governmental, environmental and other regulations, the effects of economic slowdowns, increased competition from other providers of services, uncertainties concerning costs, the level of government spending on infrastructure projects, and other factors. International investments are subject to special risks including currency fluctuations, social, economic and political uncertainties, which could increase volatility. Because this Fund expects to hold a concentrated portfolio of securities, and invests primarily in a certain industry, it has increased vulnerability to market volatility. The sub-advisor’s environmental social and governance (ESG) strategies may limit the types and number of investments available and, as a result, may forego favorable market opportunities or underperform strategies that are not subject to such criteria. The managers’ environmental social and governance (ESG) strategies may limit the types and number of investments available and, as a result, may forego favorable market opportunities or underperform strategies that are not subject to such criteria. There is no guarantee that the strategy’s ESG directives will be successful or will result in better performance. The Fund may invest in real estate investment trusts (REITs), which are closely linked to the performance of the real estate markets. REITs are subject to illiquidity, credit and interest rate risks, as well as risks associated with small-and mid-cap investments. Investments in master limited partnerships (MLPs) include the risks of declines in energy and commodity prices, decreases in energy demand, adverse weather conditions, natural or other disasters, changes in government regulation, and changes in tax laws, and other risks of the MLP and energy sector. 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.
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 as of the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
2. Assumes reinvestment of distributions based on net asset value.
3. Assumes reinvestment of distributions based on market price.
4. 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.
5. Source: FactSet. The FTSE Global Core Infrastructure 50/50 Index – Net Tax is comprised of equity securities of infrastructure companies as defined by FTSE Russell to include companies that derive a minimum of 65% of their revenue from core infrastructure activities. The index is readjusted semiannually to adjust the exposure to certain infrastructure sub-sectors and limit company weights to 5%. Net Tax returns include income net of tax withholding when dividends are paid. The OECD G7 CPI +5.5% Index is estimated as a series of summary measures of the period-to-period proportional change in the prices of a fixed set of consumer goods and services of constant quantity and characteristics, acquired, used or paid for by the reference population. The OECD publishes the data on a 3-4 month lag basis. Therefore, the index being used is comparing the current month returns for the fund against a reference Benchmark that uses a previous index return (using past performance calculations).
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.
See www.franklintempletondatasources.com for additional data provider information.
| 8 | Annual Report | franklintempleton.com | ||
CLEARBRIDGE SUSTAINABLE INFRASTRUCTURE ETF
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 12/14/2022 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 12/14/2022–3/31/231,2 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 12/14/2022–3/31/231,2 |
Net Annualized Expense Ratio2 |
|||||||||||||||||
| $1,000.00 | $1,008.80 | $1.74 | $1,012.93 | $1.74 | 0.59% | |||||||||||||||||
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 107/365 to reflect the one-half year period. For Actual expenses, the multiplier is 107/365 to reflect the number of days since
2. Reflects expenses after fee waivers and expense reimbursements.
| franklintempleton.com | Annual Report | 9 | ||
FRANKLIN TEMPLETON ETF TRUST
ClearBridge Sustainable Infrastructure ETF
| Period Ended March 31, 2023a |
||||
| Per share operating performance (for a share outstanding throughout the period) |
||||
| Net asset value, beginning of period |
$25.00 | |||
|
|
|
|||
| Income from investment operationsb: | ||||
| Net investment incomec |
0.13 | |||
| Net realized and unrealized gains (losses) |
0.09 | |||
|
|
|
|||
| Total from investment operations |
0.22 | |||
|
|
|
|||
| Net asset value, end of period |
$25.22 | |||
|
|
|
|||
| Total returnd |
0.88% | |||
| Ratios to average net assetse | ||||
| Total expenses |
0.59% | |||
| Net investment income |
1.82% | |||
| Supplemental data | ||||
| Net assets, end of period (000’s) |
$2,522 | |||
| Portfolio turnover ratef |
6.33%g | |||
aFor the period December 14, 2022 (commencement of operations) to March 31, 2023.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: 6.33%
| 10 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
ClearBridge Sustainable Infrastructure ETF
| Industry | Shares | Value | ||||||||||||
| Common Stocks 98.9% | ||||||||||||||
| Australia 4.0% | ||||||||||||||
| Transurban Group |
Transportation Infrastructure | 10,632 | $ | 101,186 | ||||||||||
|
|
|
|||||||||||||
| Brazil 5.5% |
||||||||||||||
| Auren Energia SA |
Independent Power Producers & Energy Traders | 20,741 | 60,011 | |||||||||||
| CCR SA |
Transportation Infrastructure | 17,546 | 44,295 | |||||||||||
| Neoenergia SA |
Electric Utilities | 11,474 | 33,945 | |||||||||||
|
|
|
|||||||||||||
| 138,251 | ||||||||||||||
|
|
|
|||||||||||||
| Canada 6.8% |
||||||||||||||
| Brookfield Renewable Corp., Class A |
Independent Power Producers & Energy Traders | 1,906 | 66,615 | |||||||||||
| a | Hydro One Ltd. |
Electric Utilities | 3,660 | 104,065 | ||||||||||
|
|
|
|||||||||||||
| 170,680 | ||||||||||||||
|
|
|
|||||||||||||
| Denmark 3.0% |
||||||||||||||
| a | Orsted AS |
Electric Utilities | 880 | 74,876 | ||||||||||
|
|
|
|||||||||||||
| France 3.5% |
||||||||||||||
| Getlink SE |
Transportation Infrastructure | 5,436 | 89,711 | |||||||||||
|
|
|
|||||||||||||
| Italy 7.6% |
||||||||||||||
| a | Enav SpA |
Transportation Infrastructure | 16,623 | 69,640 | ||||||||||
| Terna - Rete Elettrica Nazionale |
Electric Utilities | 14,718 | 120,983 | |||||||||||
|
|
|
|||||||||||||
| 190,623 | ||||||||||||||
|
|
|
|||||||||||||
| Japan 8.4% |
||||||||||||||
| Central Japan Railway Co. |
Ground Transportation | 594 | 70,562 | |||||||||||
| East Japan Railway Co. |
Ground Transportation | 1,507 | 83,056 | |||||||||||
| West Japan Railway Co. |
Ground Transportation | 1,442 | 59,125 | |||||||||||
|
|
|
|||||||||||||
| 212,743 | ||||||||||||||
|
|
|
|||||||||||||
| Portugal 5.0% |
||||||||||||||
| EDP - Energias de Portugal SA |
Electric Utilities | 23,236 | 126,628 | |||||||||||
|
|
|
|||||||||||||
| Spain 12.4% |
||||||||||||||
| a,b | Cellnex Telecom SA |
Diversified Telecommunication Services | 1,893 | 73,546 | ||||||||||
| Ferrovial SA |
Construction & Engineering | 2,799 | 82,380 | |||||||||||
| Iberdrola SA |
Electric Utilities | 9,053 | 112,962 | |||||||||||
| Red Electrica Corp. SA |
Electric Utilities | 2,486 | 43,755 | |||||||||||
|
|
|
|||||||||||||
| 312,643 | ||||||||||||||
|
|
|
|||||||||||||
| United Kingdom 17.0% |
||||||||||||||
| National Grid PLC |
Multi-Utilities | 7,248 | 98,266 | |||||||||||
| Pennon Group PLC |
Water Utilities | 6,476 | 69,984 | |||||||||||
| Severn Trent PLC |
Water Utilities | 2,268 | 80,735 | |||||||||||
| SSE PLC |
Electric Utilities | 5,366 | 119,625 | |||||||||||
| United Utilities Group PLC |
Water Utilities | 4,544 | 59,555 | |||||||||||
|
|
|
|||||||||||||
| 428,165 | ||||||||||||||
|
|
|
|||||||||||||
| United States 25.7% |
||||||||||||||
| American Tower Corp. |
Diversified REITs | 296 | 60,485 | |||||||||||
| American Water Works Co., Inc. |
Water Utilities | 514 | 75,296 | |||||||||||
| Clearway Energy, Inc., Class C |
Independent Power Producers & Energy Traders | 2,066 | 64,728 | |||||||||||
| Crown Castle, Inc. |
Diversified REITs | 330 | 44,167 | |||||||||||
| CSX Corp. |
Ground Transportation | 2,276 | 68,143 | |||||||||||
| Exelon Corp. |
Electric Utilities | 1,398 | 58,562 | |||||||||||
| NextEra Energy Partners LP |
Independent Power Producers & Energy Traders | 830 | 50,423 | |||||||||||
| NextEra Energy, Inc. |
Electric Utilities | 1,485 | 114,464 | |||||||||||
| franklintempleton.com | Annual Report | 11 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENT
ClearBridge Sustainable Infrastructure ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| United States (continued) | ||||||||||||||
| Public Service Enterprise Group, Inc. |
Multi-Utilities | 1,780 | $ | 111,161 | ||||||||||
|
|
|
|||||||||||||
| 647,429 | ||||||||||||||
|
|
|
|||||||||||||
| Total Investments (Cost $2,481,429) 98.9% |
2,492,935 | |||||||||||||
| Other Assets, less Liabilities 1.1% |
28,986 | |||||||||||||
|
|
|
|||||||||||||
| Net Assets 100.0% |
$ | 2,521,921 | ||||||||||||
|
|
|
|||||||||||||
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $322,127, representing 12.8% of net assets.
bNon-income producing.
| 12 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
March 31, 2023
ClearBridge Sustainable Infrastructure ETF
| Assets: |
||||
| Investments in securities: |
||||
| Cost – Unaffiliated issuers |
$2,481,429 | |||
| Value – Unaffiliated issuers |
$2,492,935 | |||
| Cash |
27,031 | |||
| Foreign currency, at value (cost $253) |
252 | |||
| Receivables: |
||||
| Dividends |
2,914 | |||
|
|
|
|||
| Total assets |
2,523,132 | |||
|
|
|
|||
| Liabilities: |
||||
| Payables: |
||||
| Management fees |
1,211 | |||
|
|
|
|||
| Total liabilities |
1,211 | |||
|
|
|
|||
| Net assets, at value |
$2,521,921 | |||
|
|
|
|||
| Net assets consist of: |
||||
| Paid-in capital |
$2,500,000 | |||
| Total distributable earnings (loss) |
21,921 | |||
|
|
|
|||
| Net assets, at value |
$2,521,921 | |||
|
|
|
|||
| Shares outstanding |
100,000 | |||
|
|
|
|||
| Net asset value per share |
$ 25.22 | |||
|
|
|
|||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 13 | ||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statement of Operations
for the period ended March 31, 2023a
ClearBridge Sustainable Infrastructure ETF
| Investment income: |
||||
| Dividends: (net of foreign taxes)b |
||||
| Unaffiliated issuers |
$15,106 | |||
| Non-cash dividends |
1,979 | |||
| Interest: |
||||
| Unaffiliated issuers |
348 | |||
|
|
|
|||
| Total investment income |
17,433 | |||
|
|
|
|||
| Expenses: |
||||
| Management fees (Note 3a) |
4,240 | |||
|
|
|
|||
| Total expenses |
4,240 | |||
|
|
|
|||
| Net investment income |
13,193 | |||
|
|
|
|||
| Realized and unrealized gains (losses): |
||||
| Net realized gain (loss) from: |
||||
| Investments: |
||||
| Unaffiliated issuers |
(2,670 | ) | ||
| Foreign currency transactions |
(138 | ) | ||
|
|
|
|||
| Net realized gain (loss) |
(2,808 | ) | ||
|
|
|
|||
| Net change in unrealized appreciation (depreciation) on: |
||||
| Investments: |
||||
| Unaffiliated issuers |
11,506 | |||
| Translation of other assets and liabilities denominated in foreign currencies |
30 | |||
|
|
|
|||
| Net change in unrealized appreciation (depreciation) |
11,536 | |||
|
|
|
|||
| Net realized and unrealized gain (loss) |
8,728 | |||
|
|
|
|||
| Net increase (decrease) in net assets resulting from operations |
$21,921 | |||
|
|
|
|||
| aFor the period December 14, 2022 (commencement of operations) to March 31, 2023. |
||||
| bForeign taxes withheld on dividends |
$845 | |||
|
|
|
|||
| 14 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statement of Changes in Net Assets
ClearBridge Sustainable Infrastructure ETF
| Period Ended March 31, 2023a |
||||
| Increase (decrease) in net assets: |
||||
| Operations: |
||||
| Net investment income |
$ 13,193 | |||
| Net realized loss |
(2,808 | ) | ||
| Net change in unrealized appreciation (depreciation) |
11,536 | |||
|
|
|
|||
| Net increase (decrease) in net assets resulting from operations |
21,921 | |||
|
|
|
|||
| Capital share transactions: (Note 2) |
2,500,000 | |||
|
|
|
|||
| Net increase (decrease) in net assets |
2,521,921 | |||
| Net assets: |
||||
| Beginning of period |
— | |||
|
|
|
|||
| End of period |
$2,521,921 | |||
|
|
|
|||
aFor the period December 14, 2022 (commencement of operations) to March 31, 2023.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 15 | ||
FRANKLIN TEMPLETON ETF TRUST
1. Organization and Significant Accounting Policies
Franklin Templeton ETF Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of forty-eight separate funds, one of which is included in this report (Fund). The Fund follow the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standard 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 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.
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 fund are valued at the closing NAV.
Certain derivative financial instruments are centrally cleared or trade in the OTC market. The Fund 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 Fund net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.
The Fund has 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 employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are 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 March 31,
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting
Policies (continued)
a. Financial Instrument Valuation (continued)
2023. At March 31, 2023, 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. 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 Fund 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 Fund 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
During the period ended March 31, 2023, the Fund did not invest in derivative instruments.
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 invests. 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 records 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 March 31, 2023, 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
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting
Policies (continued)
e. Security Transactions, Investment Income, Expenses and Distributions (continued)
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 to 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.
f. Accounting Estimates
The preparation of financial statement 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 Fund regardless of the number of Creation Units that are being created or redeemed on the same day by the Authorized Participant. The standard transaction fee is imposed to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units and is not charged to or paid by the Fund.
In addition, for cash Creation Unit transactions, a variable fee for creation transactions and redemption transactions may be charged to the Authorized Participant to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades. Variable fees, if any, are included in capital share transactions in the Statements of Changes in Net Assets.
At March 31, 2023, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:
| Period Ended March 31, 2023a |
||||||||||||||||
| Shares | Amount | |||||||||||||||
| Shares sold |
100,000 | $2,500,000 | ||||||||||||||
| Net increase (decrease) |
100,000 | $2,500,000 | ||||||||||||||
aFor the period December 14, 2022 (commencement of operations) to March 31, 2023.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the 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 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 December 14, 2022 through March 31, 2023, the annualized fee rate was 0.59% of the average daily net assets of the fund. The fee is calculated daily and paid monthly according to the terms of the management agreement.
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. Other Affiliated Transactions
At March 31, 2023, the shares of ClearBridge Sustainable Infrastructure ETF were owned by the following entity:
| Funds | Shares | Percentage of Outstanding Sharesa |
||||||
| ClearBridge Sustainable Infrastructure ETF |
||||||||
| Franklin Resources Inc. |
50,000 | 50.0% | ||||||
aInvestment activities of significant shareholders could have a material impact on the Funds.
4. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains, if any. At March 31, 2023, the capital loss carryforwards were as follows:
| Period Ended March 31, 2023 |
||||
| Capital loss carryforwards not subject to expiration: | ||||
| Short term |
$2,666 | |||
|
|
|
|||
| Total capital loss carryforwards |
$2,666 | |||
|
|
|
|||
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
At March 31, 2023, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:
| Period Ended March 31, 2023 |
||||
| Cost of investments |
$2,480,578 | |||
|
|
|
|||
| Unrealized appreciation |
$ 75,464 | |||
| Unrealized depreciation |
(63,107 | ) | ||
|
|
|
|||
| Net unrealized appreciation (depreciation) |
$ 12,357 | |||
|
|
|
|||
| Distributable earnings – undistributed ordinary income |
$ 12,200 | |||
|
|
|
|||
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of real estate investment trust shares.
5. Investment Transactions
Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the period ended March 31, 2023, $317,485 and $150,271, respectively.
In-kind transactions associated with creation and redemptions for the period ended March 31, 2023, $2,314,516 and $-, respectively.
6. 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 March 31, 2023, in valuing the Fund’s assets and liabilities carried at fair value, is as follows:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| ClearBridge Sustainable Infrastructure ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Equity Investmentsb |
$ | 2,492,935 | $ — | $ — | $2,492,935 | |||||||||||
aFor detailed categories, see the accompanying Schedules of Investments.
bIncludes common stocks.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
7. New Accounting Pronouncements
In June 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-03, Fair Value Measurement (Topic 820) – Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in the ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, should not be considered in measuring fair value. The ASU is effective for interim and annual reporting periods beginning after December 15, 2023, with the option of early adoption. Management has reviewed the requirements and believes that the adoption of the ASU will not have a material impact on the financial statements.
8. Subsequent Events
The Fund has evaluated subsequent events through the issuance of these Financial Statements and determined that no events have occurred that require disclosure.
| franklintempleton.com | Annual Report | 21 | ||
FRANKLIN TEMPLETON ETF TRUST
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Franklin Templeton ETF Trust and Shareholders of ClearBridge Sustainable Infrastructure ETF
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedule of investments, of ClearBridge Sustainable Infrastructure ETF (one of the funds constituting Franklin Templeton ETF Trust, hereafter collectively referred to as the “Fund”) as of March 31, 2023, the related statements of operations, changes in net assets including the related notes, and the financial highlights for the period December 14, 2022 (commencement of operations) through March 31, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of March 31, 2023, and the results of its operations, the changes in its net assets and the financial highlights for the period December 14, 2022 (commencement of operations) through March 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of March 31, 2023 by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
May 23, 2023
We have served as the auditor of one or more investment companies in the Franklin Templeton funds since 1948.
| 22 | Annual Report | franklintempleton.com | ||
By mid-February, tax information related to a shareholder’s proportionate share of distributions paid during the preceding calendar year will be received, if applicable. Please also refer to www.franklintempleton.com for per share tax information related to any distributions paid during the preceding calendar year. Shareholders are advised to consult with their tax advisors for further information on the treatment of these amounts on their tax returns.
The following tax information for the Fund is required to be furnished to shareholders with respect to the income earned and distributions paid during their fiscal year.
The Fund hereby report the following amounts, or if subsequently determined to be different, the maximum allowable amounts, for the period ended March 31, 2023:
| Pursuant to: | ||||||||
| Dividends Received Deduction (DRD) |
§854(b)(1)(A) | $ 3,573 | ||||||
| Qualified Dividend Income (QDI) |
§854(b)(1)(B) | $15,745 | ||||||
| Qualified Business Income Dividends (QBI) |
§199A | $ 793 | ||||||
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FRANKLIN TEMPLETON ETF TRUST
The name, year of birth and address of the officers and board members, as well as their affiliations, positions held with the Trust, principal occupations during at least the past five years and number of U.S. registered portfolios overseen in the Franklin Templeton/Legg Mason fund complex, are shown below. Generally, each board member serves until that person’s successor is elected and qualified.
Independent Board Members
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| Rohit Bhagat (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Lead Independent Trustee |
Since 2016 | 59 | AssetMark Financial Holdings, Inc. (investment solutions) (2018-present) and PhonePe (2020-present) (payment and financial services); formerly, Axis Bank (financial) (2013- 2021), FlipKart Limited (2019-2020) (eCommerce company); CapFloat Financial Services Pvt., Ltd. (non-banking finance company) (2018) and Zentific Investment Management (hedge fund) (2015-2018). | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Managing Member, Mukt Capital, LLC (private investment firm) (2014-present); Advisor, Optimal Asset Management (investment technology and advisory services company) (2015-present); Chief Executive Officer and Director, FinTech Evolution Acquisition (eCommerce company) (February 2021-present); and formerly, Chairman, Asia Pacific, BlackRock (2009-2012); Global Chief Operating Officer, Barclays Global Investors (investment management) (2005-2009); and Senior Partner, The Boston Consulting Group (management consulting) (1992-2005). | ||||||||
| Deborah D. McWhinney (1955) | Trustee | Since 2020 | 59 | S&P Global, Inc. (financial | ||||
| One Franklin Parkway San Mateo, CA 94403-1906 |
information services) (February 2022), Borg Warner (automotive) (2018-present), LegalShield (consumer services) (2020-present); and formerly, IHS Markit (information services) (2015-2022), Fluor Corporation (construction and engineering) (2014-2020) and Focus Financial Partner, LLC (financial services) (2018-2020). | |||||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Director of various companies; and formerly, Board Member, Lloyds Banking Group (2015-2018) (financial institution) and Fresenius Medical Group (2016-2018) (healthcare); Chief Executive Officer (2013-2014) and Chief Operating Officer (2011-2013), CitiGroup Global Enterprise Payments (financial services); and President, Citi’s Personal Banking and Wealth Management (2009-2011). | ||||||||
| Anantha K. Pradeep (1963) | Trustee | Since 2016 | 59 | None | ||||
| One Franklin Parkway | ||||||||
| San Mateo, CA 94403-1906 | ||||||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Chief Executive Officer, Smilable, Inc. (technology company) (2014-present); Chief Executive Officer, MachineVantage (technology company) (2018-present); Founder and Managing Partner, Consult Meridian, LLC (consulting company) (2009-present); and formerly, Founder, BoardVantage (board portal solutions provider delivering paperless process for boards and leadership) (2000-2002).
| ||||||||
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FRANKLIN TEMPLETON ETF TRUST
Interested Board Members and Officers
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| **Jennifer M. Johnson (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee and Chairperson of the Board | Since 2016 | 70 | None | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Chief Executive Officer, President and Director, Franklin Resources, Inc.; officer and/or director or trustee, of some of the other subsidiaries of Franklin Resources, Inc. and of certain funds in the Franklin Templeton/Legg Mason fund complex; and formerly, Chief Operating Officer and Executive Vice President, Franklin Resources, Inc. (1994-2015); Executive Vice President of Operations and Technology, Franklin Resources, Inc. (2005-2010); and Senior Vice President, Franklin Resources, Inc. (2003-2005).
| ||||||||
| Alison E. Baur (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President | Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Deputy General Counsel, Franklin Templeton; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of certain funds in the Franklin Templeton/Legg Mason fund complex.
| ||||||||
| Steven J. Gray (1955) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President | Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Distributors, LLC; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex.
| ||||||||
| Matthew T. Hinkle (1971) One Franklin Parkway San Mateo, CA 94403-1906 |
Chief Executive Officer – Finance and Administration | Since 2017 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Vice President, Franklin Templeton Services, LLC; officer of certain funds in the Franklin Templeton/Legg Mason fund complex; and formerly, Vice President, Global Tax (2012-April 2017) and Treasurer/Assistant Treasurer, Franklin Templeton (2009-2017).
| ||||||||
| Fred Jensen (1963) 620 Eighth Avenue, 47th Floor New York, NY 10018 |
Chief Compliance Officer | Since 2021 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Director - Global Compliance of Franklin Templeton; Managing Director of Legg Mason & Co.; Director of Compliance, Legg Mason Office of the Chief Compliance Officer; Chief Compliance Officer, Franklin Advisory Services, LLC; Compliance Officer, Franklin Advisers, Inc.; officer of certain funds in the Franklin Templeton/Legg Mason fund complex; formerly, Chief Compliance Officer of Legg Mason Global Asset Allocation; Chief Compliance Officer, Legg Mason Private Portfolio; Chief Compliance Officer to The Reserves Funds (investment adviser, funds and broker-dealer) and Ambac Financial Group (investment adviser, funds and broker-dealer).
| ||||||||
| Susan Kerr (1949) 620 Eighth Avenue New York, NY 10018 |
Vice President - AML Compliance | Since 2021 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Compliance Analyst, Franklin Templeton; Chief Anti-Money Laundering Compliance Officer, Legg Mason & Co., or its affiliates; Anti Money Laundering Compliance Officer; Senior Compliance Officer, LMIS; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex.
| ||||||||
| Todd Mathias (1983) One Franklin Parkway, San Mateo, Ca 94403-1906 |
Vice President | Since March 2022 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Head of US ETF Product Strategy, Franklin Templeton; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex.
| ||||||||
| franklintempleton.com | Annual Report | 25 | ||
FRANKLIN TEMPLETON ETF TRUST
Interested Board Members and Officers (continued)
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| Patrick O’Connor (1967) One Franklin Parkway San Mateo, CA 94403-1906 |
President and Chief Executive Officer – Investment Management | Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| President and Chief Investment Officer, Franklin Advisory Services, LLC; Senior Vice President, Franklin Advisers, Inc.; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex.
| ||||||||
| Vivek Pai (1970) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 |
Treasurer, Chief Financial Officer and Chief Accounting Officer | Since 2019 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Treasurer, U.S. Fund Administration & Reporting and officer of certain funds in the Franklin Templeton/Legg Mason fund complex.
| ||||||||
| Navid J. Tofigh (1972) One Franklin Parkway, San Mateo, Ca 94403-1906 |
Vice President and Secretary | Since 2015 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex.
| ||||||||
| Lori A. Weber (1964) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 |
Vice President and Secretary | Vice President since 2011 and Secretary since 2013 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Resources, Inc.; Vice President and Secretary, Templeton Investment Counsel, LLC; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex.
| ||||||||
*We base the number of portfolios on each separate series of the U.S. registered investment companies within the Franklin Templeton fund complex. These portfolios have a common investment manager or affiliated investment managers.
**Jennifer M. Johnson is considered to be an interested person of the Fund under the federal securities laws due to her position as an officer and director of Franklin Resources, Inc. (Resources), which is the parent company of the Fund’s investment manager and distributor.
Note 1: Officer information is current as of the date of this report. It is possible that after this date, information about officers may change.
The Sarbanes-Oxley Act of 2002 and Rules adopted by the Securities and Exchange Commission require the Fund to disclose whether the Fund’s Audit Committee includes at least one member who is an audit committee financial expert within the meaning of such Act and Rules. The Fund’s Board has determined that there is at least one such financial expert on the Audit Committee and has designated Rohit Bhagat and Deboarah D. McWhinney as its audit committee financial experts. The Board believes that Mr. Bhagat and Ms. McWhinney qualify as such an expert in view of their extensive business background and experience, including extensive experience in the asset management and financial services industries. Mr. Bhagat has been a Member and Chairman of the Fund’s Audit Committee since 2017. Ms. McWhinney has been a member of the Fund Audit Committee since 2020. As a result of such background and experience, the Board believes that Mr. Bhagat and Ms. McWhinney have acquired an understanding of generally accepted accounting principles and financial statements, the general application of such principles in connection with the accounting estimates, accruals and reserves, and analyzing and evaluating financial statements that presents a breadth and level of complexity of accounting issues generally comparable to those of the Fund, as well as an understanding of internal controls and procedures for financial reporting and an understanding of audit committee functions. Mr. Bhagat and Ms. McWhinney are independent Board members as that term is defined under the relevant Securities and Exchange Commission Rules and Releases.
The Statement of Additional Information (SAI) includes additional information about the board members and is available, without charge, upon request. Shareholders may call (800) DIAL BEN/342-5236 to request the SAI.
| 26 | Annual Report | franklintempleton.com | ||
Board Approval of Investment Management Agreements
FRANKLIN TEMPLETON ETF TRUST
Clearbridge Sustainable Infrastructure ETF (Fund)
At a meeting held on November 18, 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 (i) an investment management agreement between Franklin Advisers, Inc. (FAV) and the Trust; and (ii) an investment sub-advisory agreement between FAV and ClearBridge Investments (North America) Pty Limited (ClearBridge), on behalf of the Fund, for an initial two-year period (each a Management Agreement). The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve each Management Agreement. FAV and ClearBridge are each referred to herein as a Manager.
In considering the approval of each Management Agreement, the Board reviewed and considered information provided by each Manager at the Meeting and throughout the year at meetings of the Board and its committees. The Board reviewed and considered all of the factors it deemed relevant in approving each Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services to be provided by each Manager; (ii) the costs of the services to be provided by each Manager; and (iii) the extent to which economies of scale may be realized as the Fund grows. The Board also reviewed and considered the form of each Management Agreement and the terms of each Management Agreement which were explained at the Meeting, noting that FAV would provide general investment management and administrative services and that the Fund would operate under a unified management fee structure consistent with the current management fee structure for most of the existing Franklin Templeton (FT) exchange-traded funds.
In approving each Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of the proposed Management Agreement are fair and reasonable and that such Management Agreement is in the best interests of the Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.
Nature, Extent and Quality of Services
The Board reviewed and considered information regarding the nature, extent and quality of investment management services to be provided by the Managers and their affiliates to the Fund and its shareholders. This information included, among other things, the Fund’s proposed investment strategies and the ability of the applicable Managers to implement such investment strategies; the qualifications, background and experience of the investment personnel that will be responsible for the day-to-day portfolio management of the Fund; each Manager’s experience as the Manager of other funds and accounts, including other series of the Trust and other funds in the FT family of funds; each Manager’s strength and reputation within the industry; the personnel, operations, financial condition, and investment management capabilities, methodologies and resources of each Manager; and each Manager’s compliance capabilities, as demonstrated by, among other things, its policies and procedures reasonably designed to prevent violations of the Federal Securities Laws (as defined in Rule 38a-1 of the Investment Company Act of 1940). Following consideration of such information, the Board was satisfied with the nature, extent and quality of services to be provided by each Manager and its affiliates to the Fund and its shareholders.
Fund Performance
The Board noted that, as the Fund had not yet commenced investment operations, there was no investment performance for the Fund. The Board also considered the proposed performance benchmark for the Fund and how such benchmark would be utilized to measure performance of each Manager.
Comparative Fees and Expenses
The Board reviewed and considered information regarding the Fund’s proposed total expense ratio, noting that the Fund will pay a Unified Fee (as defined below). The Board considered the proposed total expense ratio and, separately, the proposed contractual unified 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 as the Fund (Expense Group) as selected by Broadridge Financial Solutions, Inc. (Broadridge), an independent provider of investment company data. Broadridge fee and expense data is based upon information taken from each fund’s most recent annual report (excluding the Fund), 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
| franklintempleton.com | Annual Report | 27 | ||
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 the Fund was comprised of actively managed exchange-traded funds, which included the Fund, one other global infrastructure fund, one multi-cap core fund, one industrials fund, four global multi-cap core funds, one global science/technology fund, one global multi-cap growth fund and one alternative energy fund. The Board noted that the proposed Management Rate and total expense ratio for the Fund was below the median of its Expense Group. The Board also noted that the Fund proposed to implement a unified management fee (Unified Fee). The Board further noted that pursuant to the Unified Fee arrangement FAV would reimburse the Fund for all of its acquired fund fees and expenses (if any) and pay 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 (vii) other non-routine or extraordinary expenses. The Board also noted that ClearBridge is paid by FAV out of the Unified Fee FAV receives from the Fund and that the allocation of the fee between FAV and ClearBridge reflected the services to be provided by ClearBridge to the Fund. After consideration of the above, the Board concluded that the Management Rate to be charged to the Fund and the sub-advisory fee to be paid to ClearBridge are reasonable.
Profitability
The Board noted that the Managers (and their affiliates) could not report any financial results from their relationships with the Fund because the Fund has not yet commenced investment operations, and thus, the Board could not evaluate each Manager’s (or its affiliates’) profitability with respect to the Fund.
Economies of Scale
The Board reviewed and considered the extent to which each 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. With respect to possible economies of scale in the future, the Board noted that it is not anticipated that the Fund will generate significant, if any, profit for the Managers and/or their affiliates for some time.
Conclusion
Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved each Management Agreement for the Fund for an initial two-year period.
Proxy Voting Policies and Procedures
The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.
Quarterly 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.
| 28 | Annual Report | franklintempleton.com | ||
Authorized for distribution only when accompanied or preceded by a summary prospectus and/or prospectus. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. A prospectus contains this and other information; please read it carefully before investing.
To help ensure we provide you with quality service, all calls to and from our service areas are monitored and/or recorded.
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| © 2023 Franklin Templeton Investments. All rights reserved. | INFR A 05/23 |
ANNUAL REPORT BRANDYWINEGLOBAL -DYNAMIC US LARGE CAP VALUE ETF A Series of Franklin Templeton ETF Trust March 31, 2023
Contents
| Visit franklintempleton.com for fund updates and documents, or to find helpful financial planning tools. |
| Not FDIC Insured | | May Lose Value | | No Bank Guarantee |
| franklintempleton.com | Annual Report | 1 | ||
| 2 | Annual Report | franklintempleton.com | ||
BrandywineGLOBAL - Dynamic US Large Cap Value ETF
As approved by the Board of Trustees at a meeting held on November 18, 2022, the fiscal year-end for Brandywine-GLOBAL – Dynamic US Large Cap Value ETF (the “Fund”) was changed to March 31. Effective after the market close on October 28, 2022, the Fund’s predecessor mutual fund, BrandywineGLOBAL – Dynamic US Large Cap Value Fund, reorganized into this Fund (the “Reorganization”). The Fund has an identical investment goal and substantially similar investment strategies as the predecessor mutual fund. This annual report for the Fund covers the shortened fiscal year for the transitional six-month period between the predecessor mutual fund’s prior fiscal year-end, September 30, 2022, and March 31, 2023.
Q. What is the Fund’s investment strategy?
A. The Fund seeks to provide long-term capital appreciation by quantitatively investing in U.S. equities. The portfolio managers use a proprietary quantitative model to identify investments for the Fund. To identify investments, the model evaluates multiple quantitative characteristics for each potential stock investment and applies specific rules to select stocks for investment based on these characteristics. The sub-advisor’s quantitative model seeks to identify stocks that appear to have upside potential and relatively low downside risk relative to the Russell 1000® Value Index. The quantitative model analyzes factors regarding a stock’s valuation and quality, as well as market sentiment toward a stock, to select stocks that may have the potential to outperform the Russell 1000® Value Index. The Fund seeks to do this by purchasing stocks that the sub-advisor’s proprietary quantitative model identifies as having low valuations and appropriate quantitative characteristics for the market environment. The quantitative factors are selected based on prevailing market conditions and include, among other things, earnings quality and profitability, investor sentiment, and management’s utilization of capital.
The Fund will typically invest in a stock when it meets the large capitalization threshold and its historical price-to-earnings or price-to-book ratios relative to the large-cap segment of the U.S. equity market indicate a potentially attractive valuation and the quantitative model ranks it with a high multi-factor score. The Fund will typically sell a stock when its multi-factor score reaches a sell target set by the quantitative model, its historical price-to-earnings and price-to-book ratios relative to the large-cap segment of the
U.S. equity market, exceed the upper thresholds, or its market capitalization falls below the Fund’s large capitalization definition.
The Fund will only invest in U.S. traded companies, which may include companies incorporated outside the U.S. which conduct a significant portion of their activities in the U.S. and are considered U.S. companies in the Russell U.S. indices. Under normal market conditions, the Fund invests at least 80% of its net assets in issuers domiciled, or having their principal activities, in the U.S., at the time of investment or other instruments with similar economic characteristics. In addition, under normal market conditions, the Fund invests at least 80% of its net assets in equity securities of large capitalization companies or other instruments with similar economic characteristics.
Q. What were the overall market conditions during the Fund’s reporting period?
A. In the beginning of the reporting period, broad equity markets were in the midst of a bear market, with declines for many indices exceeding 20% for the calendar year as of September 30, 2022. During the six-month period ending March 31, 2023, market sentiment vacillated between hard landing and recession fears and optimism for a pivot by the U.S. Federal Reserve (Fed) from monetary tightening and a softer landing. A tight labor market continued to keep pressure on the Fed to combat persistently high inflation, resulting in the Fed raising the upper bound of the target rate to 5.00% from 3.25% at the beginning of the period. Interest rates rose in the beginning of the period and bond markets flashed recession warnings as yield curves inverted. The more policy-sensitive two-year Treasury yield climbed again in February 2023 amid higher-than-expected inflation, resulting in yield curves becoming more deeply inverted. Suddenly, the shock of the second largest bank failure in U.S. history altered the landscape dramatically in March. Stocks sold off and bond yields fell sharply in the wake of the unfolding banking crisis. This resulted in substantial underperformance of financial-heavy value benchmarks, which up until that point were outperforming for the period. Growth-oriented stocks, such as those in the technology sector, were beneficiaries of the sudden decline in interest rates and consequently growth stocks posted higher returns than value stocks for the six-month period. As the period drew to a close, markets rallied as the banking crisis showed
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 12.
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signs of stabilizing and expectations grew that the Fed may be near the end of its tightening campaign. The economy showed signs of weakening toward the end of the period, but consumers continued to be quite resilient, and the labor market has remained robust. The unemployment rate ended the period as it began at 3.5%, and we believe the labor market is not yet indicating a recession in the near term.
Q. How did we respond to these changing market conditions?
A. Market conditions over momentary periods of time do not alter our approach. Our investment strategy is based on the consistent application of our investment philosophy, which relies on long term equity factors and market relationships while avoiding emotional reactions to near term events. We respond to volatile environments by the consistent, disciplined execution of our investment strategy. This process has been back tested over 40 years of varied conditions, and while we recognize it will not excel in every situation, we believe it has the potential to outperform over many 3-to-5-year periods. We are aware of the macroeconomic implications of events for specific securities, but do not alter our primary focus on value, quality, and favorable sentiment factors.
Geographic Composition*
3/31/23
| % of Total Net Assets |
||||
| North America | 98.1% | |||
| Short-Term Investments & Other Net Assets | 1.9% | |||
*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.
Top 10 Sectors/Industries
3/31/23
| % of Total Net Assets |
||||
| Insurance | 16.2% | |||
| Banks | 7.9% | |||
| Specialty Retail | 6.7% | |||
| Oil, Gas & Consumable Fuels | 6.6% | |||
| Ground Transportation | 6.2% | |||
| Health Care Providers & Services | 4.5% | |||
| Consumer Staples Distribution & Retail | 3.9% | |||
| Consumer Finance | 3.9% | |||
| Chemicals | 3.2% | |||
| Pharmaceuticals | 3.2% | |||
During the six-month period under review the Fund posted cumulative total returns of +13.84% based on market price and +14.03% based on net asset value (NAV).1 In comparison, the Russell 1000® Value Index, which measures the performance of Russell 1000® Index companies with relatively lower forecasted growth rates, posted a +13.55% cumulative total return for the same period.2 Also in comparison, the Standard & Poor’s® 500 (S&P 500®), which is designed to measure total U.S. equity market performance, posted a +15.62% cumulative total return.2
You can find more of the Fund’s performance data in the Performance Summary beginning on page 7.
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 Fund adopted the performance of the predecessor mutual fund as the result of the Reorganization. Prior to the Reorganization, the Fund had not yet commenced operations. The returns shown for periods ended on or prior to October 28, 2022, are those of the predecessor mutual fund. The predecessor mutual fund’s performance is represented by the performance of the predecessor mutual fund’s Class IS Shares. Prior to the Fund’s listing on October 31, 2022, the NAV performance of the Class IS Shares of the predecessor mutual fund is used as a proxy for the Fund’s market price returns. Had the predecessor mutual fund been structured as an ETF, its performance may have differed.
2. 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.
See www.franklintempletondatasources.com for additional data provider information.
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Q. What were the leading contributors to performance?
A. Our overweighted position and positive stock selection in metals and mining in the materials sector were our largest contributors to performance. Consumer discretionary was our second largest sector-based contributor, driven by an overweight position of homebuilders and positive stock selection in specialty retail. From a factor perspective, the 12-month change in shares outstanding was effective as our higher exposure to companies buying back shares and lower weighting to share issuers added to performance.
Q. What were the leading detractors from performance?
A. Financials were the largest source of underperformance, primarily from an overweight of insurance and negative stock selection from diversified banks. These industries underperformed late in the period in the wake of the banking crisis. The strategy also did not keep pace with above benchmark returns in the food, beverage and tobacco industry within the consumer staples sector. On a factor basis, a higher exposure to companies that have decreased their book value detracted from performance. In addition, being underweight companies that underperformed during the 12 months prior to the period was not effective, as these companies rebounded strongly during the six-month period under review.
Q. Were there any significant changes to the Fund during the reporting period?
A. Although there was not a regime shift over the last six months, there were notable sector changes. The largest increase was in the industrial sector, which went from a large underweight to a substantial overweight position, primarily from adding to transportation and capital goods. The strategy also added to exploration and production as well as refining and marketing, but remains slightly underweight the energy sector. The largest sector decline resulted from sales in semiconductors and semiconductor equipment and technology hardware and equipment within the information technology sector, leading to an underweight position at the end of the period. The strategy also sold out of home-building stocks during the period, which drove the decline in the consumer discretionary sector, but the strategy remains overweighted to the overall sector.
Top 10 Holdings
3/31/23
| Company Sector/Industry, Country |
% of Total Net Assets |
|||
| Chubb Ltd. Insurance, United States |
3.9% | |||
| Union Pacific Corp. Ground Transportation, United States |
3.7% | |||
| Wells Fargo & Co. Banks, United States |
3.2% | |||
| Amgen, Inc. Biotechnology, United States |
3.0% | |||
| Lockheed Martin Corp. Aerospace & Defense, United States |
3.0% | |||
| Kroger Co. Consumer Staples Distribution & Retail, United States |
2.7% | |||
| 3M Co. Industrial Conglomerates, United States |
2.6% | |||
| Caterpillar, Inc. Machinery, United States |
2.5% | |||
| KLA Corp. Semiconductors & Semiconductor Equipment, United States |
2.3% | |||
| Cigna Group Health Care Providers & Services, United States |
2.2% | |||
Thank you for your participation in BrandywineGLOBAL - Dynamic US Large Cap Value ETF. We look forward to
serving your future investment needs.
Michael Fleisher
Henry Otto
Steven Tonkovich
Portfolio Management Team
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The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2023, 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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BRANDYWINEGLOBAL - DYNAMIC US LARGE CAP VALUE ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (October 31, 2022), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
| 6-Month |
+14.03% | +13.84% | +14.03% | +13.84% | ||||||||||||
| 1-Year |
-4.57% | -4.73% | -4.57% | -4.73% | ||||||||||||
| 3-Year |
+75.76% | +75.47% | +20.68% | +20.62% | ||||||||||||
| Since Inception (10/31/14) |
+2.08% | +13.84% | +5.09% | +4.67% | ||||||||||||
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 9 for Performance Summary footnotes.
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BRANDYWINEGLOBAL - DYNAMIC US LARGE CAP VALUE ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes includes reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
3/31/13–3/31/23
See page 9 for Performance Summary footnotes.
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BRANDYWINEGLOBAL - DYNAMIC US LARGE CAP VALUE ETF
PERFORMANCE SUMMARY
Distributions (6/1/22–3/31/23)
| Net Investment Income |
Long-Term Capital Gain |
Total | ||||||
| $0.183100 | $1.319900 | $1.503000 | ||||||
Total Annual Operating Expenses6
| 0.49% |
All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. The value approach to investing involves the risk that stocks may remain undervalued. Value stocks may underperform the overall equity market while the market concentrates on growth stocks. The sub-advisor’s investment style may become out of favor and/or the sub-advisor’s selection process may prove incorrect, which may have a negative impact on the Fund’s performance. To the extent the Fund holds a concentrated portfolio of securities, or invests in certain regions or industries, it is subject to increased volatility. 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.
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 as of the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
2. The Fund adopted the performance of the predecessor mutual fund as the result of the Reorganization. Prior to the Reorganization, the Fund had not yet commenced operations. 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. The returns shown for periods ended on or prior to October 28, 2022, are those of the predecessor mutual fund (except as noted below). The predecessor mutual fund’s performance is represented by the performance of the predecessor mutual fund’s Class IS Shares. Prior to the Fund’s listing on October 31, 2022, the NAV performance of the Class IS Shares of the predecessor mutual fund is used as a proxy for the Fund’s market price returns.
The predecessor mutual fund was the successor to an unregistered private fund (the “predecessor private fund” and, together with the predecessor mutual fund, the “predecessor funds”), as described in greater detail below. Performance prior to October 31, 2014, is that of the predecessor private fund. Had the predecessor funds been structured as an ETF, their performance may have differed.
The performance prior to the predecessor mutual fund’s inception is that of the predecessor private fund. On October 31, 2014, the predecessor private fund transferred its assets to the predecessor mutual fund in exchange for the predecessor mutual fund’s Class IS shares. The investment policies, objectives, guidelines and restrictions of the predecessor mutual fund were in all material respects equivalent to those of the predecessor private fund. In addition, the predecessor private fund’s portfolio managers were the portfolio managers of the predecessor mutual fund. As a mutual fund registered under the Investment Company Act of 1940 (1940 Act), the predecessor mutual fund was subject to certain restrictions under the 1940 Act and the Internal Revenue Code of 1986, as amended (Code) to which the predecessor private fund was not subject. Had the predecessor private fund been registered under the 1940 Act and been subject to the provisions of the 1940 Act and the Code, its investment performance could have been adversely affected, but these restrictions were not expected to have a material effect on the predecessor mutual fund’s investment program. The performance information for the predecessor private fund reflects the gross expenses of the predecessor private fund adjusted to reflect the higher fees and expenses of Class IS shares of the predecessor mutual fund. The performance is shown net of an annual management fee of 0.55% and other expenses of 0.10% which reflects the application of the predecessor mutual fund’s Class IS shares’ expense limitation agreement. If the expense limitation agreement were not applicable, expenses would have been higher and performance lower.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Source: FactSet. The Russell 1000® Value Index is market capitalization weighted and measures the performance of those Russell 1000® Index companies with relatively lower price-to-book ratios and lower forecasted growth rates. The S&P 500® is a market capitalization-weighted index of 500 stocks designed to measure total U.S. equity market performance.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.
See www.franklintempletondatasources.com for additional data provider information.
| franklintempleton.com | Annual Report | 9 | ||
BRANDYWINEGLOBAL - DYNAMIC US LARGE CAP VALUE ETF
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
| Beginning Account Value 10/1/22 |
Ending Account Value 3/31/23 |
Expenses 10/1/22–3/31/231 |
Ending Account Value 3/31/23 |
Expenses 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $ | 1,140.30 | $ | 3.26 | $ | 1,021.89 | $ | 3.07 | 0.61 | % | ||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
| 10 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
BrandywineGLOBAL - Dynamic US Large Cap Value ETFa
| Period Ended March 31, |
Year Ended September 30, | |||||||||||||||||||||||
| 2023b | 2022 | 2021 | 2020 | 2019 | 2018 | |||||||||||||||||||
| Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||||||
| Net asset value, beginning of period |
$11.36 | $15.45 | $11.49 | $11.77 | $13.04 | $11.72 | ||||||||||||||||||
| Income from investment operationsc: |
||||||||||||||||||||||||
| Net investment incomed |
0.14 | 0.17 | 0.19 | 0.20 | 0.22 | 0.17 | ||||||||||||||||||
| Net realized and unrealized gains (losses) |
1.49 | (1.87 | ) | 4.44 | 0.02 | (0.31 | ) | 1.51 | ||||||||||||||||
| Total from investment operations |
1.63 | (1.70 | ) | 4.63 | 0.22 | (0.09 | ) | 1.68 | ||||||||||||||||
| Less distributions from: |
||||||||||||||||||||||||
| Net investment income |
(0.18 | ) | (0.20 | ) | (0.17 | ) | (0.18 | ) | (0.20 | ) | (0.11 | ) | ||||||||||||
| Net realized gains |
(1.32 | ) | (2.19 | ) | (0.50 | ) | (0.32 | ) | (0.98 | ) | (0.25 | ) | ||||||||||||
| Total distributions |
(1.50 | ) | (2.39 | ) | (0.67 | ) | (0.50 | ) | (1.18 | ) | (0.36 | ) | ||||||||||||
| Net asset value, end of period |
$11.49 | $11.36 | $15.45 | $11.49 | $11.77 | $13.04 | ||||||||||||||||||
| Total returne,f |
14.03% | (13.03)% | 41.75% | 1.66% | 0.01% | 14.51% | ||||||||||||||||||
| Ratios to average net assetsg | ||||||||||||||||||||||||
| Expenses before waiver and payments by affiliates |
0.65% | 0.67% | 0.67% | 0.71%h | 0.72%h | 0.72%h | ||||||||||||||||||
| Expenses net of waiver and payments by affiliates |
0.61% | 0.65% | 0.65% | 0.65%h | 0.65%h | 0.65%h | ||||||||||||||||||
| Net investment income |
2.40% | 1.24% | 1.37% | 1.75% | 1.88% | 1.37% | ||||||||||||||||||
| Supplemental data | ||||||||||||||||||||||||
| Net assets, end of period (000’s) |
$158,053 | $155,901 | $207,109 | $169,544 | $167,688 | $156,361 | ||||||||||||||||||
| Portfolio turnover ratei |
52.48%j | 124.00% | 83.00% | 141.00% | 126.00% | 91.00% | ||||||||||||||||||
aEffective after the market close on October 28, 2022, the Fund’s predecessor mutual fund, BrandywineGLOBAL - Dynamic US Large Cap Value ETF, reorganized into this Fund (the “Reorganization”). See Note 1 in the Notes to Financial Statements for additional information about the Reorganization.
bFor the period October 1, 2022 through March 31, 2023.
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.
eThe Fund adopted the performance of the predecessor mutual fund as the result of the Reorganization. Prior to the Reorganization, the Fund had not yet commenced operations. The returns shown for periods ending on or prior to October 28, 2022, are those of the predecessor mutual fund. The predecessor mutual fund’s performance is represented by the performance of the predecessor mutual fund’s Class IS Shares. Had the predecessor mutual fund been structured as an ETF, its performance may have differed.
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.
gRatios are annualized for periods less than one year.
hReflects recapture of expenses waived/reimbursed from prior fiscal years.
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: 52.48%
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 11 | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
BrandywineGLOBAL - Dynamic US Large Cap Value ETF
| Country | Shares | Value | ||||||||||||
| Common Stocks 98.1% | ||||||||||||||
| Aerospace & Defense 3.0% | ||||||||||||||
| Lockheed Martin Corp. |
United States | 9,911 | $ | 4,685,227 | ||||||||||
|
|
|
|||||||||||||
| Air Freight & Logistics 2.2% | ||||||||||||||
| CH Robinson Worldwide, Inc. |
United States | 7,220 | 717,451 | |||||||||||
| Expeditors International of Washington, Inc. |
United States | 2,521 | 277,613 | |||||||||||
| FedEx Corp. |
United States | 10,581 | 2,417,653 | |||||||||||
|
|
|
|||||||||||||
| 3,412,717 | ||||||||||||||
|
|
|
|||||||||||||
| Banks 7.9% | ||||||||||||||
| BOK Financial Corp. |
United States | 3,098 | 261,502 | |||||||||||
| Comerica, Inc. |
United States | 9,964 | 432,637 | |||||||||||
| Commerce Bancshares, Inc. |
United States | 8,388 | 489,440 | |||||||||||
| Cullen/Frost Bankers, Inc. |
United States | 2,980 | 313,913 | |||||||||||
| Fifth Third Bancorp |
United States | 52,483 | 1,398,147 | |||||||||||
| Hancock Whitney Corp. |
United States | 2,310 | 84,084 | |||||||||||
| KeyCorp |
United States | 62,709 | 785,117 | |||||||||||
| Popular, Inc. |
Puerto Rico | 5,605 | 321,783 | |||||||||||
| Regions Financial Corp. |
United States | 75,791 | 1,406,681 | |||||||||||
| Synovus Financial Corp. |
United States | 12,220 | 376,743 | |||||||||||
| Truist Financial Corp. |
United States | 30,075 | 1,025,557 | |||||||||||
| UMB Financial Corp. |
United States | 2,743 | 158,326 | |||||||||||
| Wells Fargo & Co. |
United States | 136,314 | 5,095,417 | |||||||||||
| Zions Bancorp NA |
United States | 11,434 | 342,220 | |||||||||||
|
|
|
|||||||||||||
| 12,491,567 | ||||||||||||||
|
|
|
|||||||||||||
| Biotechnology 3.0% | ||||||||||||||
| Amgen, Inc. |
United States | 19,585 | 4,734,674 | |||||||||||
|
|
|
|||||||||||||
| Broadline Retail 1.5% | ||||||||||||||
| Dillard’s, Inc., Class A |
United States | 236 | 72,613 | |||||||||||
| Target Corp. |
United States | 14,348 | 2,376,459 | |||||||||||
|
|
|
|||||||||||||
| 2,449,072 | ||||||||||||||
|
|
|
|||||||||||||
| Building Products 1.3% | ||||||||||||||
| a | Builders FirstSource, Inc. |
United States | 21,004 | 1,864,735 | ||||||||||
| Fortune Brands Innovations, Inc. |
United States | 3,676 | 215,892 | |||||||||||
|
|
|
|||||||||||||
| 2,080,627 | ||||||||||||||
|
|
|
|||||||||||||
| Capital Markets 2.4% | ||||||||||||||
| Affiliated Managers Group, Inc. |
United States | 827 | 117,781 | |||||||||||
| Ameriprise Financial, Inc. |
United States | 9,018 | 2,764,017 | |||||||||||
| Blackstone, Inc. |
United States | 8,257 | 725,295 | |||||||||||
| Lazard Ltd., Class A |
United States | 6,406 | 212,103 | |||||||||||
|
|
|
|||||||||||||
| 3,819,196 | ||||||||||||||
|
|
|
|||||||||||||
| Chemicals 3.2% | ||||||||||||||
| Chemours Co. |
United States | 3,453 | 103,383 | |||||||||||
| Eastman Chemical Co. |
United States | 8,782 | 740,674 | |||||||||||
| Huntsman Corp. |
United States | 26,911 | 736,285 | |||||||||||
| LyondellBasell Industries NV, Class A |
United States | 24,297 | 2,281,245 | |||||||||||
| Mosaic Co. |
United States | 15,831 | 726,326 | |||||||||||
| Olin Corp. |
United States | 8,269 | 458,930 | |||||||||||
|
|
|
|||||||||||||
| 5,046,843 | ||||||||||||||
|
|
|
|||||||||||||
| Communications Equipment 1.1% | ||||||||||||||
| Cisco Systems, Inc. |
United States | 34,065 | 1,780,748 | |||||||||||
|
|
|
|||||||||||||
| Construction Materials 0.4% | ||||||||||||||
| Eagle Materials, Inc. |
United States | 4,844 | 710,857 | |||||||||||
|
|
|
|||||||||||||
| 12 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
BrandywineGLOBAL - Dynamic US Large Cap Value ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Consumer Finance 3.9% | ||||||||||||||
| Capital One Financial Corp. |
United States | 25,625 | $ | 2,464,100 | ||||||||||
| a | Credit Acceptance Corp. |
United States | 1,076 | 469,179 | ||||||||||
| Discover Financial Services |
United States | 18,326 | 1,811,342 | |||||||||||
| OneMain Holdings, Inc. |
United States | 6,707 | 248,696 | |||||||||||
| Synchrony Financial |
United States | 38,179 | 1,110,245 | |||||||||||
|
|
|
|||||||||||||
| 6,103,562 | ||||||||||||||
|
|
|
|||||||||||||
| Consumer Staples Distribution & Retail 3.9% | ||||||||||||||
| Albertsons Cos., Inc., Class A |
United States | 15,595 | 324,064 | |||||||||||
| Kroger Co. |
United States | 85,131 | 4,202,917 | |||||||||||
| Walmart, Inc. |
United States | 10,922 | 1,610,449 | |||||||||||
|
|
|
|||||||||||||
| 6,137,430 | ||||||||||||||
|
|
|
|||||||||||||
| Containers & Packaging 1.2% | ||||||||||||||
| Amcor PLC |
United States | 69,767 | 793,948 | |||||||||||
| Berry Global Group, Inc. |
United States | 2,823 | 166,275 | |||||||||||
| International Paper Co. |
United States | 24,468 | 882,316 | |||||||||||
|
|
|
|||||||||||||
| 1,842,539 | ||||||||||||||
|
|
|
|||||||||||||
| Distributors 1.3% | ||||||||||||||
| LKQ Corp. |
United States | 36,323 | 2,061,694 | |||||||||||
|
|
|
|||||||||||||
| Diversified Consumer Services 0.8% | ||||||||||||||
| Service Corp. International |
United States | 19,061 | 1,311,016 | |||||||||||
|
|
|
|||||||||||||
| Electric Utilities 2.1% | ||||||||||||||
| Duke Energy Corp. |
United States | 6,314 | 609,112 | |||||||||||
| Exelon Corp. |
United States | 52,033 | 2,179,662 | |||||||||||
| NextEra Energy, Inc. |
United States | 7,286 | 561,605 | |||||||||||
|
|
|
|||||||||||||
| 3,350,379 | ||||||||||||||
|
|
|
|||||||||||||
| Electrical Equipment 0.1% | ||||||||||||||
| Acuity Brands, Inc. |
United States | 919 | 167,929 | |||||||||||
|
|
|
|||||||||||||
| Electronic Equipment, Instruments & Components 1.1% | ||||||||||||||
| a | Arrow Electronics, Inc. |
United States | 4,765 | 595,006 | ||||||||||
| Corning, Inc. |
United States | 34,144 | 1,204,600 | |||||||||||
|
|
|
|||||||||||||
| 1,799,606 | ||||||||||||||
|
|
|
|||||||||||||
| Financial Services 0.2% | ||||||||||||||
| Essent Group Ltd. |
United States | 6,839 | 273,902 | |||||||||||
|
|
|
|||||||||||||
| Food Products 0.4% | ||||||||||||||
| Mondelez International, Inc., Class A |
United States | 5,815 | 405,422 | |||||||||||
| a | Pilgrim’s Pride Corp. |
United States | 11,826 | 274,127 | ||||||||||
|
|
|
|||||||||||||
| 679,549 | ||||||||||||||
|
|
|
|||||||||||||
| Ground Transportation 6.2% | ||||||||||||||
| CSX Corp. |
United States | 96,755 | 2,896,845 | |||||||||||
| Norfolk Southern Corp. |
United States | 5,303 | 1,124,236 | |||||||||||
| Union Pacific Corp. |
United States | 28,720 | 5,780,187 | |||||||||||
|
|
|
|||||||||||||
| 9,801,268 | ||||||||||||||
|
|
|
|||||||||||||
| Health Care Providers & Services 4.5% | ||||||||||||||
| Cigna Group |
United States | 13,546 | 3,461,409 | |||||||||||
| CVS Health Corp. |
United States | 7,837 | 582,368 | |||||||||||
| a | DaVita, Inc. |
United States | 11,710 | 949,798 | ||||||||||
| Quest Diagnostics, Inc. |
United States | 14,650 | 2,072,682 | |||||||||||
|
|
|
|||||||||||||
| 7,066,257 | ||||||||||||||
|
|
|
|||||||||||||
| franklintempleton.com | Annual Report | 13 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
BrandywineGLOBAL - Dynamic US Large Cap Value ETF (continued)
| ` | Country | Shares | Value | |||||||||||
| Common Stocks (continued) | ||||||||||||||
| Household Durables 0.1% | ||||||||||||||
| Leggett & Platt, Inc. |
United States | 5,540 | $ | 176,615 | ||||||||||
|
|
|
|||||||||||||
| Household Products 1.1% | ||||||||||||||
| Procter & Gamble Co. |
United States | 11,289 | 1,678,561 | |||||||||||
|
|
|
|||||||||||||
| Industrial Conglomerates 2.6% | ||||||||||||||
| 3M Co. |
United States | 39,773 | 4,180,540 | |||||||||||
|
|
|
|||||||||||||
| Insurance 16.2% | ||||||||||||||
| Aflac, Inc. |
United States | 52,834 | 3,408,850 | |||||||||||
| American Financial Group, Inc. |
United States | 7,141 | 867,631 | |||||||||||
| American International Group, Inc. |
United States | 63,387 | 3,192,169 | |||||||||||
| Assurant, Inc. |
United States | 1,510 | 181,306 | |||||||||||
| Chubb Ltd. |
United States | 31,611 | 6,138,224 | |||||||||||
| CNA Financial Corp. |
United States | 21,226 | 828,451 | |||||||||||
| Fidelity National Financial, Inc. |
United States | 23,129 | 807,896 | |||||||||||
| Hartford Financial Services Group, Inc. |
United States | 26,975 | 1,879,888 | |||||||||||
| Loews Corp. |
United States | 14,729 | 854,577 | |||||||||||
| Old Republic International Corp. |
United States | 25,596 | 639,132 | |||||||||||
| Principal Financial Group, Inc. |
United States | 20,739 | 1,541,322 | |||||||||||
| Reinsurance Group of America, Inc. |
United States | 1,548 | 205,512 | |||||||||||
| RLI Corp. |
United States | 2,100 | 279,111 | |||||||||||
| Travelers Cos., Inc. |
United States | 19,781 | 3,390,661 | |||||||||||
| Unum Group |
United States | 14,228 | 562,860 | |||||||||||
| W R Berkley Corp. |
United States | 12,627 | 786,157 | |||||||||||
|
|
|
|||||||||||||
| 25,563,747 | ||||||||||||||
|
|
|
|||||||||||||
| IT Services 0.6% | ||||||||||||||
| a | FleetCor Technologies, Inc. |
United States | 4,214 | 888,522 | ||||||||||
|
|
|
|||||||||||||
| Leisure Products 0.3% | ||||||||||||||
| Polaris, Inc. |
United States | 4,226 | 467,522 | |||||||||||
|
|
|
|||||||||||||
| Machinery 2.7% | ||||||||||||||
| Caterpillar, Inc. |
United States | 17,420 | 3,986,393 | |||||||||||
| Crane Holdings Co. |
United States | 2,783 | 315,870 | |||||||||||
|
|
|
|||||||||||||
| 4,302,263 | ||||||||||||||
|
|
|
|||||||||||||
| Media 2.8% | ||||||||||||||
| a | Charter Communications, Inc., Class A |
United States | 564 | 201,692 | ||||||||||
| Nexstar Media Group, Inc. |
United States | 4,739 | 818,236 | |||||||||||
| Omnicom Group, Inc. |
United States | 26,438 | 2,494,161 | |||||||||||
| a | Walt Disney Co. |
United States | 9,189 | 920,094 | ||||||||||
|
|
|
|||||||||||||
| 4,434,183 | ||||||||||||||
|
|
|
|||||||||||||
| Oil, Gas & Consumable Fuels 6.6% | ||||||||||||||
| Chevron Corp. |
United States | 4,214 | 687,556 | |||||||||||
| ConocoPhillips |
United States | 4,949 | 490,990 | |||||||||||
| Coterra Energy, Inc., Class A |
United States | 12,549 | 307,953 | |||||||||||
| Exxon Mobil Corp. |
United States | 7,588 | 832,100 | |||||||||||
| Marathon Oil Corp. |
United States | 32,593 | 780,928 | |||||||||||
| Marathon Petroleum Corp. |
United States | 24,100 | 3,249,403 | |||||||||||
| Pioneer Natural Resources Co. |
United States | 15,882 | 3,243,740 | |||||||||||
| Williams Cos., Inc. |
United States | 28,549 | 852,473 | |||||||||||
|
|
|
|||||||||||||
| 10,445,143 | ||||||||||||||
|
|
|
|||||||||||||
| Paper & Forest Products 0.2% | ||||||||||||||
| Louisiana-Pacific Corp. |
United States | 5,356 | 290,349 | |||||||||||
|
|
|
|||||||||||||
| 14 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
BrandywineGLOBAL - Dynamic US Large Cap Value ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Pharmaceuticals 3.2% | ||||||||||||||
| Bristol-Myers Squibb Co. |
United States | 11,500 | $ | 797,065 | ||||||||||
| Johnson & Johnson |
United States | 13,941 | 2,160,855 | |||||||||||
| Merck & Co., Inc. |
United States | 7,325 | 779,307 | |||||||||||
| Pfizer, Inc. |
United States | 30,967 | 1,263,453 | |||||||||||
|
|
|
|||||||||||||
| 5,000,680 | ||||||||||||||
|
|
|
|||||||||||||
| Professional Services 0.2% | ||||||||||||||
| ManpowerGroup, Inc. |
United States | 2,875 | 237,274 | |||||||||||
| a | TriNet Group, Inc. |
United States | 1,391 | 112,128 | ||||||||||
|
|
|
|||||||||||||
| 349,402 | ||||||||||||||
|
|
|
|||||||||||||
| Semiconductors & Semiconductor Equipment 2.6% | ||||||||||||||
| KLA Corp. |
United States | 8,979 | 3,584,147 | |||||||||||
| Teradyne, Inc. |
United States | 4,476 | 481,215 | |||||||||||
|
|
|
|||||||||||||
| 4,065,362 | ||||||||||||||
|
|
|
|||||||||||||
| Specialty Retail 6.7% | ||||||||||||||
| Advance Auto Parts, Inc. |
United States | 7,325 | 890,793 | |||||||||||
| a | AutoNation, Inc. |
United States | 7,601 | 1,021,270 | ||||||||||
| Best Buy Co., Inc. |
United States | 15,188 | 1,188,765 | |||||||||||
| Dick’s Sporting Goods, Inc. |
United States | 7,233 | 1,026,290 | |||||||||||
| Murphy USA, Inc. |
United States | 2,822 | 728,217 | |||||||||||
| Penske Automotive Group, Inc. |
United States | 8,861 | 1,256,579 | |||||||||||
| a | Ulta Beauty, Inc. |
United States | 6,209 | 3,388,065 | ||||||||||
| Williams-Sonoma, Inc. |
United States | 8,782 | 1,068,418 | |||||||||||
|
|
|
|||||||||||||
| 10,568,397 | ||||||||||||||
|
|
|
|||||||||||||
| Textiles, Apparel & Luxury Goods 0.5% | ||||||||||||||
| a | Capri Holdings Ltd. |
United States | 6,078 | 285,666 | ||||||||||
| Tapestry, Inc. |
United States | 13,467 | 580,562 | |||||||||||
|
|
|
|||||||||||||
| 866,228 | ||||||||||||||
|
|
|
|||||||||||||
| Total Common Stocks (Cost $151,940,360) |
155,084,173 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments before Short-Term Investments |
155,084,173 | |||||||||||||
|
|
|
|||||||||||||
| Short-Term Investments 1.8% |
||||||||||||||
| Money Market Funds 1.8% |
||||||||||||||
| b | State Street Institutional U.S. Government Money Market Fund, 4.70% |
United States | 2,837,064 | 2,837,064 | ||||||||||
|
|
|
|||||||||||||
| Total Short-Term Investments (Cost $2,837,064) |
2,837,064 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments (Cost $154,777,424) 99.9% |
157,921,237 | |||||||||||||
| Other Assets, less Liabilities 0.1% |
131,504 | |||||||||||||
|
|
|
|||||||||||||
| Net Assets 100.0% |
$ | 158,052,741 | ||||||||||||
|
|
|
|||||||||||||
aNon-income producing.
bThe rate shown is the annualized seven-day effective yield at period end.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 15 | ||
FRANKLIN TEMPLETON ETF TRUST
Statement of Assets and Liabilities
March 31, 2023
BrandywineGLOBAL - Dynamic US Large Cap Value ETF
| Assets: |
||||
| Investments in securities: |
||||
| Cost – Unaffiliated issuers |
$ | 154,777,424 | ||
| Value – Unaffiliated issuers+ |
$ | 157,921,237 | ||
| Receivables: |
||||
| Dividends and interest |
221,136 | |||
|
|
|
|||
| Total assets |
158,142,373 | |||
|
|
|
|||
| Liabilities: |
||||
| Payables: |
||||
| Management fees |
66,206 | |||
| Accrued expenses and other liabilities |
23,426 | |||
|
|
|
|||
| Total liabilities |
89,632 | |||
|
|
|
|||
| Net assets, at value |
$ | 158,052,741 | ||
|
|
|
|||
| Net assets consist of: |
||||
| Paid-in capital |
$ | 158,290,644 | ||
| Total distributable earnings (loss) |
(237,903 | ) | ||
|
|
|
|||
| Net assets, at value |
$ | 158,052,741 | ||
|
|
|
|||
| Shares outstanding |
13,752,953 | |||
|
|
|
|||
| Net asset value per share |
$ | 11.49 | ||
|
|
|
|||
| 16 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statement of Operations
For the period ended March 31, 2023 and the year ended September 30, 2022
BrandywineGLOBAL - Dynamic US Large Cap Value ETFa
| 2023† | 2022 | |||||||
| Investment income: |
||||||||
| Dividends: (net of foreign taxes)b |
||||||||
| Unaffiliated issuers |
$ | 2,432,774 | $ | 4,349,518 | ||||
| Non-Controlled affiliates |
— | 44,599 | ||||||
| Interest: |
||||||||
| Unaffiliated issuers |
101,330 | — | ||||||
| Total investment income |
2,534,104 | 4,394,117 | ||||||
| Expenses: |
||||||||
| Management fees (Note 3a) |
498,408 | 1,275,842 | ||||||
| Registration and filing fees |
27,037 | 81,508 | ||||||
| Fund accounting fees |
5,782 | 69,605 | ||||||
| Professional fees |
2,886 | 70,736 | ||||||
| Transfer agent fees |
2,847 | 35,788 | ||||||
| Distribution and service fees |
2,561 | 52,912 | ||||||
| Reports to shareholders |
1,492 | 17,055 | ||||||
| Trustee fees |
723 | 18,096 | ||||||
| Custodian fees |
83 | 1,261 | ||||||
| Other |
1,855 | 12,142 | ||||||
| Total expenses |
543,674 | 1,634,945 | ||||||
| Expenses waived/paid by affiliates (Note 3c) |
(27,988 | ) | (46,697 | ) | ||||
| Net expenses |
515,686 | 1,588,248 | ||||||
| Net investment income |
2,018,418 | 2,805,869 | ||||||
| Realized and unrealized gains (losses): |
||||||||
| Net realized gain (loss) from: |
||||||||
| Investments: |
||||||||
| Unaffiliated issuers |
(327,510 | ) | 16,810,000 | |||||
| In-kind redemptions |
11,162,020 | — | ||||||
| Net realized gain (loss) |
10,834,510 | 16,810,000 | ||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||
| Investments: |
||||||||
| Unaffiliated issuers |
11,214,241 | (49,039,398 | ) | |||||
| Net change in unrealized appreciation (depreciation) |
11,214,241 | (49,039,398 | ) | |||||
| Net realized and unrealized gain (loss) |
22,048,751 | (32,229,398 | ) | |||||
| Net increase (decrease) in net assets resulting from operations |
$ | 24,067,169 | $ | (29,423,529 | ) | |||
aEffective after the market close on October 28, 2022, the Fund’s predecessor mutual fund, BrandywineGLOBAL - Dynamic US Large Cap Value ETF, reorganized into this Fund (the “Reorganization”). See Note 1 in the Notes to Financial Statements for additional information about the Reorganization.
| bForeign taxes withheld on dividends | $ | 584 | $ | 1,191 |
†For the period October 1, 2022 through March 31, 2023.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 17 | ||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
BrandywineGLOBAL - Dynamic US Large Cap Value ETFa
| Period Ended March 31, 2023† |
Year Ended September 30, 2022 |
Year Ended September 30, 2021 |
||||||||||
| Increase (decrease) in net assets: |
||||||||||||
| Operations: |
||||||||||||
| Net investment income |
$ 2,018,418 | $ 2,805,869 | $ 2,961,771 | |||||||||
| Net realized gain |
10,834,510 | 16,810,000 | 32,207,663 | |||||||||
| Net change in unrealized appreciation (depreciation) |
11,214,241 | (49,039,398 | ) | 37,367,443 | ||||||||
| Total Operations: |
24,067,169 | (29,423,529 | ) | 72,536,877 | ||||||||
| Distributions to shareholders (Note 1e) |
(20,520,894 | ) | (35,713,355 | ) | (10,154,684 | ) | ||||||
| Capital share transactions: (Note 2) |
(26,987,678 | ) | 20,691,101 | (13,382,931 | ) | |||||||
| Net increase (decrease) in net assets |
(23,441,403 | ) | (44,445,783 | ) | 48,999,262 | |||||||
| Net assets: |
||||||||||||
| Beginning of period |
181,494,144 | 225,939,927 | 176,940,665 | |||||||||
| End of period |
$158,052,741 | $181,494,144 | $225,939,927 | |||||||||
aEffective after the market close on October 28, 2022, the Fund’s predecessor mutual fund, BrandywineGLOBAL - Dynamic US Large Cap Value ETF, reorganized into this Fund (the “Reorganization”). See Note 1 in the Notes to Financial Statements for additional information about the Reorganization.
†For the period October 1, 2022 through March 31, 2023.
| 18 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
1. Organization and Significant Accounting Policies
BrandywineGLOBAL - Dynamic US Large Cap Value ETF (the “Fund”) is a separate non-diversified investment series of the “Trust”. The Trust, a Delaware statutory trust, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Fund follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946, Financial Services - Investment Companies (“ASC 946”). At a meeting held on November 18, 2022, the Fund’s Board of Trustees approved changing the Fund’s fiscal year end from September 30th to March 31st. This change resulted in a short-period annual report for the six-month period from October 1, 2022 through March 31, 2023.
The Fund adopted the performance of the BrandywineGLOBAL—Dynamic US Large Cap Value Fund (the “predecessor mutual fund”) as the result of a reorganization of the predecessor mutual fund into the fund (the “Reorganization”) that was effective after the market close on October 28, 2022. Prior to the Reorganization, the Fund had not yet commenced operations. The returns shown for periods ended on or prior to October 28, 2022 are those of the predecessor mutual fund. The predecessor mutual fund’s performance is represented by the performance of the predecessor mutual fund’s Class IS Shares.
Prior to the Fund’s listing on October 31, 2022, the NAV performance of the Class IS Shares of the predecessor mutual fund is used as a proxy for the Fund’s market price returns. Had the predecessor mutual fund have been structured as an ETF, its performance may have differed.
State Street Bank and Trust Company, serves as the Fund’s Custodian and Transfer Agent pursuant to a Global Custodial and Agency Services Agreement with the Trust. American Stock Transfer & Trust Company, LLC serves as stock transfer agent for the Acquiring Fund listed above. Prior to the Reorganizations, The Bank of New York Mellon was the Custodian and Franklin Templeton Investor Services, LLC was the Transfer Agent for the Target Fund.
The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”). Estimates and assumptions are required to be made regarding assets, liabilities and changes in net assets resulting from operations when financial statements are prepared. Changes in the economic environment, financial markets and any other parameters used in determining
these estimates could cause actual results to differ. Subsequent events have been evaluated through the date the financial statements were issued.
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 Fund’s 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 Fund’s
| franklintempleton.com | Annual Report | 19 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
a. Financial Instrument Valuation (continued)
net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.
The Fund has 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, 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 March 31 2023. At March 31 2023, 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. Foreign Currency Translation
Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the respective dates of such transactions.
The Fund does not isolate that portion of the results of operations resulting from fluctuations in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
Net realized foreign exchange gains or losses arise from sales of foreign currencies, including gains and losses on forward foreign currency contracts, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the values of assets and liabilities, other than investments in securities, on the date of valuation, resulting from changes in exchange rates.
Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.
The Fund’s investments in foreign securities may involve risks not present in domestic investments. Since securities may be denominated in foreign currencies, may require settlement in foreign currencies or may pay interest or dividends in foreign currencies, changes in the relationship of these foreign currencies to the U.S. dollar can significantly affect the value of the investments and earnings of the Fund. Foreign investments may also subject the Fund to foreign government exchange restrictions, expropriation, taxation or other political, social or economic developments,
| 20 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
b. Foreign Currency Translation (continued)
all of which affect the market and/or credit risk of the investments.
c. Derivative Financial Instruments
During the period ended March 31, 2023, the Fund did not invest in derivative instruments.
d. Income and Deferred Taxes
It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
The Fund may 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 invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a capital gain tax is determined to apply, Funds 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 March 31, 2023, 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. Amortization of premium and accretion of discount on debt securities are included in interest income. Dividend income and capital
gain distributions are recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Funds. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.
Common expenses incurred by the Trust are allocated among the 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.
f. Compensating Balance Arrangements
Prior to the reorganization, the predecessor mutual fund had an arrangement with its custodian bank whereby a portion of the custodian’s fees is paid indirectly by credits earned on the Fund’s cash on deposit with the bank.
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 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.
| franklintempleton.com | Annual Report | 21 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
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 Fund regardless of the number of Creation Units that are being created or redeemed on the same day by the Authorized Participant. The standard transaction fee is imposed to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units and is not charged to or paid by the Fund. Such transactions fees are treated as increases in capital and are disclosed in the Fund’s Statements of Changes in Net Assets
In addition, for cash Creation Unit transactions, a variable fee for creation transactions and redemption transactions may be charged to the Authorized Participant to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades. Variable fees, if any, are included in capital share transactions in the Statements of Changes in Net Assets.
At March 31, 2023, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:
| 22 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
2. Shares of Beneficial Interest (continued)
| Six Months Ended | Year Ended | Year Ended | ||||||||||||||||||||||
| March 31, 2023 | September 30, 2022 | September 30, 2021 | ||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||
| Capital Transactions(a) |
||||||||||||||||||||||||
| Shares sold |
7,044,346 | $ | 85,629,495 | 2,776,923 | $ | 37,193,756 | 1,036,338 | $ | 14,801,061 | |||||||||||||||
| Shares reinvested |
— | — | 2,460,970 | 32,443,766 | 787,422 | 9,764,032 | ||||||||||||||||||
| Shares redeemed |
(7,016,304 | ) | (85,983,005 | ) | (4,915,352 | ) | (63,639,979 | ) | (3,181,922 | ) | (46,793,633 | ) | ||||||||||||
| Net increase (decrease) |
28,042 | $ | (353,510 | ) | 322,541 | $ | 5,997,543 | (1,358,162 | ) | $ | (22,228,540 | ) | ||||||||||||
| Class A(b) |
||||||||||||||||||||||||
| Shares sold |
47 | 578 | 572,314 | 7,684,930 | 156,732 | 2,395,081 | ||||||||||||||||||
| Shares reinvested |
— | — | 119,096 | 1,561,866 | 25,473 | 315,097 | ||||||||||||||||||
| Shares redeemed |
(953,559 | ) | (11,206,733 | ) | (355,767 | ) | (4,762,733 | ) | (83,108 | ) | (1,249,432 | ) | ||||||||||||
| Net increase (decrease) |
(953,512 | ) | $ | (11,206,155 | ) | 335,643 | $ | 4,484,063 | 99,097 | $ | 1,460,746 | |||||||||||||
| Class C(b) |
||||||||||||||||||||||||
| Shares sold |
— | — | 309,819 | 4,097,721 | 16,591 | 250,423 | ||||||||||||||||||
| Shares reinvested |
— | — | 9,369 | 116,930 | 894 | 10,993 | ||||||||||||||||||
| Shares redeemed |
(298,070 | ) | (3,444,751 | ) | (67,396 | ) | (826,386 | ) | (1,169 | ) | (18,108 | ) | ||||||||||||
| Net increase (decrease) |
(298,070 | ) | $ | (3,444,751 | ) | 251,792 | $ | 3,388,265 | 16,316 | $ | 243,308 | |||||||||||||
| Class Rb |
||||||||||||||||||||||||
| Shares sold |
— | — | 15,030 | 231,122 | 9,357 | 135,141 | ||||||||||||||||||
| Shares reinvested |
— | — | 3,026 | 39,820 | 277 | 3,444 | ||||||||||||||||||
| Shares redeemed |
(19,625 | ) | (226,287 | ) | (9,309 | ) | (126,785 | ) | (5,175 | ) | (79,897 | ) | ||||||||||||
| Net increase (decrease) |
(19,625 | ) | $ | (226,287 | ) | 8,747 | $ | 144,157 | 4,459 | $ | 58,688 | |||||||||||||
| Class Ib |
||||||||||||||||||||||||
| Shares sold |
— | — | 810,734 | 11,306,052 | 594,754 | 9,207,028 | ||||||||||||||||||
| Shares reinvested |
— | — | 114,799 | 1,506,308 | 4,456 | 55,252 | ||||||||||||||||||
| Shares redeemed |
(996,323 | ) | (11,756,975 | ) | (477,495 | ) | (6,135,287 | ) | (143,554 | ) | (2,179,413 | ) | ||||||||||||
| Net increase (decrease) |
(996,323 | ) | $ | (11,756,975 | ) | 448,038 | $ | 6,677,073 | 455,656 | $ | 7,082,867 | |||||||||||||
aEffective after the market close on October 28, 2022, the Fund’s predecessor mutual fund, BrandywineGLOBAL - Dynamic US Large Cap Value ETF, reorganized into this Fund (the “Reorganization”). The predecessor mutual fund’s Class IS Shares’ performance and financial history have been adopted by BrandywineGLOBAL - Dynamic US Large Cap Value ET and will be used going forward. As a result, the information prior to the Reorganization reflects that of the predecessor mutual fund’s Class IS Shares. Shares of the other classes of the predecessor mutual fund were converted into Class IS Shares as a part of the Reorganization. Such conversion of the other classes of shares into Class IS Shares is included under “Shares sold”.
bShares of the class of the Target Fund was converted into Class IS shares as a part of the Reorganization. Such conversion of shares into Class IS shares is included under “Shares redeemed”.
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:
| Subsidiary | Affiliation | |||
| Franklin Advisers, Inc. (Advisers) | Investment manager | |||
| Franklin Templeton Services, LLC (FT Services) | Administrative Manager | |||
| Franklin Distributors, LLC (Distributors) | Principal Underwriter |
| franklintempleton.com | Annual Report | 23 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates (continued)
a. Management fees
Effective after the market close on October 28, 2022 pursuant to the investment management agreement with the Trust on behalf of the Fund, the Fund pays Advisers a unified management fee equal to the annual rate of 0.65% based on the average daily net assets of the Fund. Effective February 1, 2023, the management fee was reduced to 0.49% of the average daily net assets of the Fund. Pursuant to the investment management agreement, Advisers reimburses the Fund for all acquired fund fees and expenses (such as those associated with the Fund’s investment in a Franklin Templeton money fund) and pays all of the ordinary operating expenses of the Fund, except for (i) the Fund’s management fee, (ii) payments under the Fund’s Rule 12b-1 plan (if any), (iii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments), (iv) taxes, (v) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), (vi) litigation expenses (including litigation to which the Trust or the Fund may be a party and indemnification of the Trustees and officers with respect thereto), and (vii) other non-routine or extraordinary expenses. Advisers pays Brandywine Global for its services.
For the period October 1, 2022 through October 28, 2022 the predecessor mutual fund paid an investment management fee to Legg Mason Partners Fund Advisor, LLC (“LMPFA”), the investment advisor to the predecessor fund at an annual rate of 0.55% of the Fund’s average daily net assets.
For its services, LMPFA paid Brandywine Global monthly, an aggregate fee equal to 90% of the net management fee it receives from the predecessor mutual fund.
For the period ended Mach 31, 2023, the Fund’s annualized effective investment management fee rate based on average daily net assets was 0.56%.
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. For the period October 1, 2022 through October 28, 2022, LMPFA provided administrative and certain oversight services to the Fund.
4. Income Taxes
For tax purposes, capital losses of the predecessor mutual fund may be carried over to offset future capital gains, if any. At March 31, 2023, there were no capital loss carryforwards.
The tax character of distributions paid during the period ended March 31, 2023 and the year ended September 31, 2022, were as follows:
| 2023 | 2022 | |||||||
| Distributions paid from: |
||||||||
| Ordinary income |
$ | 2,164,816 | $ | 29,043,421 | ||||
| Long-term Capital Gain |
18,356,078 | 6,669,934 | ||||||
| $ | 20,520,894 | $ | 35,713,355 | |||||
At March 31, 2023, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
| Period Ended | ||||
| March 31, 2023 | ||||
| Cost of investments |
$ | 157,277,981 | ||
| Unrealized appreciation |
$ | 10,622,823 | ||
| Unrealized depreciation |
(9,979,567 | ) | ||
| Net unrealized appreciation (depreciation) . |
$ | 643,256 | ||
| Distributable earnings – undistributed ordinary income |
$ | 1,760,857 | ||
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 March 31, 2023, $88,074,548 and $123,405,000 respectively.
6. Global Credit Facility
On February 4, 2022, the predecessor mutual fund, together with other U.S. registered and foreign investment funds (collectively, the “Borrowers”) managed by Franklin Resources or its affiliates, became a borrower in a joint syndicated senior unsecured credit facility totaling $2.675 billion (the “Global Credit Facility”). The 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. The Global Credit Facility has been matured on February 3, 2023.
Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all 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 the Statement of Operations. The Fund did not utilize the Global Credit Facility during the period ended March 31, 2023.
7. 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.
| franklintempleton.com | Annual Report | 25 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
7. Fair Value Measurements (continued)
A summary of inputs used as of March 31, 2023, in valuing the Fund’s assets and liabilities carried at fair value, is as follows:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| BrandywineGLOBAL - Dynamic US Large Cap Value ETF |
||||||||||||||||
| Assets: |
||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Equity Investmentsb |
$ | 155,084,173 | $ | — | $ | — | $ | 155,084,173 | ||||||||
| Short-Term Investments |
2,837,064 | — | — | 2,837,064 | ||||||||||||
| Total Investments in Securities |
$ | 157,921,237 | $ | — | $ | — | $ | 157,921,237 | ||||||||
aFor detailed categories, see the accompanying Schedules of Investments.
bIncludes common stocks.
8. New Accounting Pronouncements
In June 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-03, Fair Value Measurement (Topic 820) - Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in the ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, should not be considered in measuring fair value. The ASU is effective for interim and annual reporting periods beginning after December 15, 2023, with the option of early adoption. Management has reviewed the requirements and believes that the adoption of the ASU will not have a material impact on the financial statements.
9. Subsequent Events
The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.
| 26 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Franklin Templeton ETF Trust and Shareholders of BrandywineGLOBAL – Dynamic US Large Cap Value ETF
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedule of investments, of Brandywine-GLOBAL – Dynamic US Large Cap Value ETF (one of the funds constituting Franklin Templeton ETF Trust, hereafter referred to as the “Fund”) as of March 31, 2023, the related statements of operations for the period October 1, 2022 through March 31, 2023 and the year ended September 30, 2022, and the statements of changes in net assets for the period October 1, 2022 through March 31, 2023, and each of the two years in the period ended September 30, 2022, including the related notes, and the financial highlights for the period October 1, 2022 through March 31, 2023, and each of the five years in the period ended September 30, 2022 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of March 31, 2023, and the results of its operations for the period October 1, 2022 through March 31, 2023 and the year ended September 30, 2022, the changes in each of their net assets for the period October 1, 2022 through March 31, 2023, and each of the two years in the period ended September 30, 2022, and the financial highlights for the period October 1, 2022 through March 31, 2023, and each of the five years in the period ended September 30, 2022, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of March 31, 2023 by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
May 23, 2023
We have served as the auditor of one or more investment companies in the Franklin Templeton funds since 1948.
| franklintempleton.com | Annual Report | 27 | ||
By mid-February, tax information related to a shareholder’s proportionate share of distributions paid during the preceding calendar year will be received, if applicable. Please also refer to www.franklintempleton.com for per share tax information related to any distributions paid during the preceding calendar year. Shareholders are advised to consult with their tax advisors for further information on the treatment of these amounts on their tax returns.
The following tax information for the Fund is required to be furnished to shareholders with respect to the income earned and distributions paid during their fiscal year.
The Fund below hereby report the following amounts, or if subsequently determined to be different, the maximum allowable amounts, for the period ended March 31, 2023:
| Pursuant to: | ||||||||
| Long-Term Capital Gain Dividends |
§ | 852(b)(3)(C) | $ | 18,356,078 | ||||
| Dividends Received Deduction (DRD) |
§ | 854(b)(1)(A) | $ | 2,285,289 | ||||
| Qualified Dividend Income (QDI) |
§ | 854(b)(1)(B) | $ | 2,356,757 | ||||
| 28 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| Rohit Bhagat (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Lead Independent Trustee | Since 2016 | 59 | AssetMark Financial Holdings, Inc. (investment solutions) (2018-present) and PhonePe (2020-present) (payment and financial services); formerly, Axis Bank (financial) (2013- 2021), FlipKart Limited (2019-2020) (eCommerce company); CapFloat Financial Services Pvt., Ltd. (non-banking finance company) (2018) and Zentific Investment Management (hedge fund) (2015-2018). | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Managing Member, Mukt Capital, LLC (private investment firm) (2014-present); Advisor, Optimal Asset Management (investment technology and advisory services company) (2015-present); Chief Executive Officer and Director, FinTech Evolution Acquisition (eCommerce company) (February 2021-present); and formerly, Chairman, Asia Pacific, BlackRock (2009-2012); Global Chief Operating Officer, Barclays Global Investors (investment management) (2005-2009); and Senior Partner, The Boston Consulting Group (management consulting) (1992-2005). | ||||||||
| Deborah D. McWhinney (1955) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee | Since 2020 | 59 | S&P Global, Inc. (financial information services) (February 2022), Borg Warner (automotive) (2018-present), LegalShield (consumer services) (2020-present); and formerly, IHS Markit (information services) (2015-2022), Fluor Corporation (construction and engineering) (2014-2020) and Focus Financial Partner, LLC (financial services) (2018-2020). | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Director of various companies; and formerly, Board Member, Lloyds Banking Group (2015-2018) (financial institution) and Fresenius Medical Group (2016-2018) (healthcare); Chief Executive Officer (2013-2014) and Chief Operating Officer (2011-2013), CitiGroup Global Enterprise Payments (financial services); and President, Citi’s Personal Banking and Wealth Management (2009-2011). | ||||||||
| Anantha K. Pradeep (1963) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee | Since 2016 | 59 | None | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Chief Executive Officer, Smilable, Inc. (technology company) (2014-present); Chief Executive Officer, MachineVantage (technology company) (2018-present); Founder and Managing Partner, Consult Meridian, LLC (consulting company) (2009-present); and formerly, Founder, BoardVantage (board portal solutions provider delivering paperless process for boards and leadership) (2000-2002). | ||||||||
Interested Board Members and Officers
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| **Jennifer M. Johnson (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee and Chairperson of the Board | Since 2016 | 70 | None | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Chief Executive Officer, President and Director, Franklin Resources, Inc.; officer and/or director or trustee, of some of the other subsidiaries of Franklin Resources, Inc. and of certain funds in the Franklin Templeton/Legg Mason fund complex; and formerly, Chief Operating Officer and Executive Vice President, Franklin Resources, Inc. (1994-2015); Executive Vice President of Operations and Technology, Franklin Resources, Inc. (2005-2010); and Senior Vice President, Franklin Resources, Inc. (2003-2005). | ||||||||
| franklintempleton.com | Annual Report | 29 | ||
FRANKLIN TEMPLETON ETF TRUST
Interested Board Members and Officers (continued)
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| Alison E. Baur (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President |
Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Deputy General Counsel, Franklin Templeton; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Steven J. Gray (1955) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President |
Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Distributors, LLC; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Matthew T. Hinkle (1971) One Franklin Parkway San Mateo, CA 94403-1906 |
Chief Executive Officer – Finance and Administration | Since 2017 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Vice President, Franklin Templeton Services, LLC; officer of certain funds in the Franklin Templeton/Legg Mason fund complex; and formerly, Vice President, Global Tax (2012-April 2017) and Treasurer/Assistant Treasurer, Franklin Templeton (2009-2017). | ||||||||
| Fred Jensen (1963) 620 Eighth Avenue, 47th Floor New York, NY 10018 |
Chief Compliance Officer | Since 2021 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Director - Global Compliance of Franklin Templeton; Managing Director of Legg Mason & Co.; Director of Compliance, Legg Mason Office of the Chief Compliance Officer; Chief Compliance Officer, Franklin Advisory Services, LLC; Compliance Officer, Franklin Advisers, Inc.; officer of certain funds in the Franklin Templeton/Legg Mason fund complex; formerly, Chief Compliance Officer of Legg Mason Global Asset Allocation; Chief Compliance Officer, Legg Mason Private Portfolio; Chief Compliance Officer to The Reserves Funds (investment adviser, funds and broker-dealer) and Ambac Financial Group (investment adviser, funds and broker-dealer). | ||||||||
| Susan Kerr (1949) 620 Eighth Avenue New York, NY 10018 |
Vice President - AML Compliance |
Since 2021 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Compliance Analyst, Franklin Templeton; Chief Anti-Money Laundering Compliance Officer, Legg Mason & Co., or its affiliates; Anti Money Laundering Compliance Officer; Senior Compliance Officer, LMIS; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Todd Mathias (1983) One Franklin Parkway, San Mateo, Ca 94403-1906 |
Vice President |
Since March 2022 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Head of US ETF Product Strategy, Franklin Templeton; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| 30 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
Interested Board Members and Officers (continued)
| Name, Year of Birth and Address | Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| Patrick O’Connor (1967) One Franklin Parkway San Mateo, CA 94403-1906 |
President and Chief Executive Officer – Investment Management | Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| President and Chief Investment Officer, Franklin Advisory Services, LLC; Senior Vice President, Franklin Advisers, Inc.; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Vivek Pai (1970) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 |
Treasurer, Chief Financial Officer and Chief Accounting Officer | Since 2019 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Treasurer, U.S. Fund Administration & Reporting and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Navid J. Tofigh (1972) One Franklin Parkway, San Mateo, Ca 94403-1906 |
Vice President and Secretary | Since 2015 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Lori A. Weber (1964) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 |
Vice President and Secretary | Vice President since 2011 and Secretary since 2013 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Resources, Inc.; Vice President and Secretary, Templeton Investment Counsel, LLC; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
*We base the number of portfolios on each separate series of the U.S. registered investment companies within the Franklin Templeton fund complex. These portfolios have a common investment manager or affiliated investment managers.
**Jennifer M. Johnson is considered to be an interested person of the Fund under the federal securities laws due to her position as an officer and director of Franklin Resources, Inc. (Resources), which is the parent company of the Fund’s investment manager and distributor.
Note 1: Officer information is current as of the date of this report. It is possible that after this date, information about officers may change.
The Sarbanes-Oxley Act of 2002 and Rules adopted by the Securities and Exchange Commission require the Fund to disclose whether the Fund’s Audit Committee includes at least one member who is an audit committee financial expert within the meaning of such Act and Rules. The Fund’s Board has determined that there is at least one such financial expert on the Audit Committee and has designated Rohit Bhagat and Deboarah D. McWhinney as its audit committee financial experts. The Board believes that Mr. Bhagat and Ms. McWhinney qualify as such an expert in view of their extensive business background and experience, including extensive experience in the asset management and financial services industries. Mr. Bhagat has been a Member and Chairman of the Fund’s Audit Committee since 2017. Ms. McWhinney has been a member of the Fund Audit Committee since 2020. As a result of such background and experience, the Board believes that Mr. Bhagat and Ms. McWhinney have acquired an understanding of generally accepted accounting principles and financial statements, the general application of such principles in connection with the accounting estimates, accruals and reserves, and analyzing and evaluating financial statements that presents a breadth and level of complexity of accounting issues generally comparable to those of the Fund, as well as an understanding of internal controls and procedures for financial reporting and an understanding of audit committee functions. Mr. Bhagat and Ms. McWhinney are independent Board members as that term is defined under the relevant Securities and Exchange Commission Rules and Releases.
The Statement of Additional Information (SAI) includes additional information about the board members and is available, without charge, upon request. Shareholders may call (800) DIAL BEN/342-5236 to request the SAI.
| franklintempleton.com | Annual Report | 31 | ||
Board Approval of Investment Management Agreements
FRANKLIN TEMPLETON ETF TRUST
BrandywineGLOBAL Dynamic US Large Cap Value ETF
(Fund)
At a meeting held on November 19, 2021 (Meeting), the Board of Trustees (Board) of Franklin Templeton ETF Trust (Trust), including a majority of the trustees who are not “interested persons” as defined in the Investment Company Act of 1940 (Independent Trustees), reviewed and approved (i) an investment management agreement between Franklin Advisers, Inc. (FAV) and the Trust, on behalf of the Fund, and (ii) an investment sub-advisory agreement between FAV and Brandywine Global Investment Management, LLC (Brandywine Global), on behalf of the Fund (each a Management Agreement), for an initial two-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve each Management Agreement. FAV and Brandywine Global are each referred to herein as a Manager.
In considering the approval of each Management Agreement, the Board reviewed and considered information provided by each Manager at the Meeting and by FAV throughout the year at meetings of the Board and its committees. The Board reviewed and considered all of the factors it deemed relevant in approving each Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services to be provided by each Manager; (ii) the costs of the services to be provided by each Manager; and (iii) the extent to which economies of scale may be realized as the Fund grows. The Board also considered management’s representation that the Fund was being established to acquire the assets of a series of Legg Mason Global Asset Management Trust, the Dynamic US Large Cap Value Fund (Legg Mason Fund), in connection with the reorganization of the Legg Mason Fund into the Fund. The Board noted that the current investment sub-adviser and portfolio managers for the Legg Mason Fund would sub-advise and manage the Fund. The Board then reviewed and considered the form of each Management Agreement and the terms of each Management Agreement which were explained at the Meeting.
In approving each Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of the proposed Management Agreement are fair and reasonable and that such Management Agreement
is in the best interests of the Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.
Nature, Extent and Quality of Services
The Board reviewed and considered information regarding the nature, extent and quality of investment management services to be provided by each Manager and its affiliates to the Fund and its shareholders. This information included, among other things, the Fund’s proposed investment strategies and the ability of each Manager to implement such investment strategies; the qualifications, background and experience of the investment personnel that will be responsible for the day-to-day portfolio management of the Fund; each Manager’s experience as the Manager of other funds and accounts, including other series of the Trust and other funds in the Franklin Templeton family of funds; each Manager’s strength and reputation within the industry; the personnel, operations, financial condition, and investment management capabilities, methodologies and resources of each Manager; and each Manager’s compliance capabilities, as demonstrated by, among other things, its policies and procedures reasonably designed to prevent violations of the Federal Securities Laws (as defined in Rule 38a-1 of the Investment Company Act of 1940). Following consideration of such information, the Board was satisfied with the nature, extent and quality of services to be provided by each Manager and its affiliates to the Fund and its shareholders.
Fund Performance
The Board noted that the Fund was being established to acquire the assets of the Legg Mason Fund and that the current investment sub-adviser and portfolio managers for the Legg Mason Fund would sub-advise and manage the Fund. Accordingly, the Board further noted the historical performance information of the Legg Mason Fund. The Board considered the proposed performance benchmark for the Fund and how such benchmark would be utilized to measure performance of each Manager.
Comparative Fees and Expenses
The Board reviewed and considered information regarding the Fund’s proposed total expense ratio, noting that the Fund will pay a Unified Fee (as defined below). The Board considered the proposed total expense ratio and, separately, the proposed 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
| 32 | Annual Report | franklintempleton.com | ||
structure as the Fund (Expense Group) as selected by Broadridge Financial Solutions, Inc. (Broadridge), an independent provider of investment company data. Broadridge fee and expense data is based upon information taken from each fund’s most recent annual report (excluding the Fund), 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 the Fund was comprised of actively managed exchange-traded funds, which included the Fund, two other multi-cap value funds, four multi-cap growth funds, and five multi-cap core funds. The Board noted that the proposed Management Rate and total expense ratio for the Fund was above the median of its Expense Group. The Board also noted that the Fund proposed to implement a unified management fee (Unified Fee). The Board further noted that pursuant to the Unified Fee arrangement FAV would reimburse the Fund for all of its acquired fund fees and expenses (if any) and pay 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 (vii) other non-routine or extraordinary expenses. The Board concluded that the Management Rate to be charged to the Fund is reasonable. In doing so, the Board noted that the fee paid to Brandywine Global would be paid out of the Unified Fee FAV receives from the Fund, as applicable.
Profitability
The Board noted that each Manager (and its affiliates) could not report any financial results from their relationships with the Fund because the Fund has not commenced investment operations, and thus, the Board could not evaluate each Manager’s (or its affiliates’) profitability with respect to the Fund.
Economies of Scale
The Board reviewed and considered the extent to which each 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. With respect to possible economies of scale in the future, the Board noted that it is not anticipated that the Fund will generate significant, if any, profit for its respective Managers and/or its affiliates for some time.
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 applicable Management Agreements for the Fund for an initial two-year period.
Proxy Voting Policies and Procedures
The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.
Quarterly 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.
| franklintempleton.com | Annual Report | 33 | ||
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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Annual Report BrandywineGLOBAL - Dynamic US Large Cap Value ETF |
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| Investment Manager | Distributor | Investor Services | ||||
| Franklin Advisers, Inc.
Subadvisor Brandywine Global Investment Management, 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 | ||||
| © 2023 Franklin Templeton Investments. All rights reserved. | DVAL A 05/23 | |||||
ANNUAL REPORT MARTIN CURRIE SUSTAINABLE INTERNATIONAL EQUITY ETF A Series of Franklin Templeton ETF Trust March 31, 2023
| Visit franklintempleton.com for fund updates and documents, or to find helpful financial planning tools. |
| Not FDIC Insured | | May Lose Value | | No Bank Guarantee |
| franklintempleton.com | Annual Report | 1 | ||
Martin Currie Sustainable International Equity ETF
As approved by the Board of Trustees at a meeting held on November 18, 2022, the fiscal year-end for Martin Currie Sustainable International Equity ETF (the “Fund”) was changed to March 31. Effective after the market close on October 28, 2022, the Fund’s predecessor mutual fund, Martin Currie International Sustainable Equity Fund, reorganized into this Fund (the “Reorganization”). The Fund has an identical investment goal and substantially similar investment strategies as the predecessor mutual fund. This annual report for the Fund covers the shortened fiscal year for the transitional 10-month period between the predecessor mutual fund’s prior fiscal year-end, May 31, 2022, and March 31, 2023.
Fund Overview
Q. What is the Fund’s investment strategy?
A. The Fund’s investment goal is to seek long-term capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in equity and equity-related securities of foreign companies and other investments with similar economic characteristics that meet the sub-advisor’s environmental, social and governance (ESG) criteria for the Fund. Subject to the ESG criteria, the Fund is generally unconstrained by any particular sector, geography or market capitalization. The Fund may invest without limit in securities of companies located in any foreign country, including countries with developed or emerging markets. The Fund will typically invest in those companies with market capitalizations in excess of $3 billion. The Fund’s portfolio is expected to be highly concentrated, with approximately 20-40 holdings.
The sub-advisor focuses on companies that it believes have a strong history of, or future potential for, offering high and durable returns on invested capital over time and seeks to acquire securities of companies with reasonable valuations based on the sub-advisor’s assessment of the company’s long-term potential. When the sub-advisor identifies an opportunity it finds attractive, it aims to make a long-term capital commitment.
Q. What were the overall market conditions during the Fund’s reporting period?
A. International equity markets remained volatile during the reporting period, with monetary policy and inflation often
dictating market direction and leadership between growth and value equity styles. Markets corrected sharply in June 2022 following worse-than-expected inflationary data from the U.S. This saw the U.S. Federal Reserve (Fed) raise interest rates by 0.75%, the largest hike since 1994, followed by a 0.25% increase by the Bank of England (BoE). The European Central Bank (ECB) raised its respective benchmark rate in July 2022 and again in September, ending the negative rates era. July 2022 was noteworthy for growth areas of the market as focus turned to the prospect of interest-rate cuts in 2023. However, this reversed in August 2022 after central banks indicated substantial interest-rate rises were still needed to control inflation, and markets declined as the prospect of more modest rate cuts diminished. Ongoing concerns over rising energy costs in Europe weighed on markets, as August 2022 saw the closure again of the Nord Stream 1 pipeline, which supplies natural gas to Germany from Russia. International markets finished the final quarter of 2022 in positive territory overall, despite further interest-rate hikes from the ECB, the Fed and the BoE.
The last six months of the period have seen continued volatility, but markets were generally positive in October and November 2022 on the hope that inflation could be nearing a peak and future interest-rate hikes would be less severe, a view supported by better-than-expected inflation data. Additionally, some easing of COVID-19-restrictions in China raised hopes of a recovery for the world’s second largest economy. However, markets fell again in December, as the Fed and ECB not only raised their respective rates 0.50% each, as expected, but also reiterated their commitment to aggressive rate hikes. January 2023 saw markets rally strongly. An end to China’s zero-COVID policy in late December 2022 got markets off to a strong start, combined with optimism that the rate cycle might be close to peaking. This was tempered in February 2023 after central banks continued with rate increases. Falling bond yields during the quarter also aided the performance of growth stocks. Economic data was resilient, and there was a recovery in composite purchasing manager index (PMI) survey data, with falling energy prices contributing to the pick-up in activity. Geopolitical tensions continued, and increased U.S.-China tensions led emerging markets to underperform developed markets, particularly in February 2023.
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 11.
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MARTIN CURRIE SUSTAINABLE INTERNATIONAL EQUITY ETF
Q. How did we respond to these changing market conditions?
A. As the interest cycle progressed with further rate hikes, we frequently assessed our stock holdings in terms of balance sheet risks, with a particular focus on cash flow profile. We made a number of changes to the portfolio over the period, including exiting Chinese internet platform Tencent Holdings, German sportswear firm adidas, U.K. online luxury platform Farfetch and U.K. bootmaker Dr. Martens. Over the same period, we added U.K. consumer care firm Croda International and French global drinks group Pernod Ricard. We expand further on these below.
While much of the positive investor sentiment during 2023’s first quarter came from expectations that the U.S. Federal Funds rate might be close to peaking, we do not believe this to be the case. We therefore see a major risk of disappointment and volatility for investors expecting an early end to the hiking cycle this year. We still believe central banks are unlikely to pivot until 2024. However, the wide range of possible monetary policy outcomes is what will drive an important bull-bear debate across asset classes. An early end to the hiking cycle would be supportive for markets, and for the quality and growth equity style.
In this uncertain macroeconomic environment, we continue to focus on companies with the below characteristics:
| • | Resilient earnings growth profiles, given the ongoing risks of earnings downgrades. |
| • | Strong pricing power, given the ongoing elevated inflationary pressures weighing on margins. |
| • | Solid balance sheets, to withstand the potential risk of an economic hard landing. |
| • | Exposed to long-term structural growth themes, given the lower growth environment. |
| Geographic Composition* | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Europe | 73.9% | |||
| North America | 12.0% | |||
| Asia | 9.3% | |||
| Australia & New Zealand | 4.1% | |||
| 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.
| Top 10 Sectors/Industries | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Semiconductors & Semiconductor Equipment | 11.0% | |||
| Life Sciences Tools & Services | 10.2% | |||
| Health Care Equipment & Supplies | 10.0% | |||
| Textiles, Apparel & Luxury Goods | 9.8% | |||
| Building Products | 8.6% | |||
| Chemicals | 7.9% | |||
| Software | 6.4% | |||
| Electronic Equipment, Instruments & Components | 5.4% | |||
| Personal Products | 5.3% | |||
| Machinery | 4.9% | |||
Performance Overview
During the 10-month period under review, the Fund posted cumulative total returns of +4.28% based on market price and +4.30% based on net asset value (NAV).1 In comparison, the MSCI All Country World Index (ACWI) ex USA Index-NR posted a +0.57% cumulative total return for the same period.2 You can find more of the Fund’s performance data in the the Performance Summary beginning on page 6.3
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
1. The Fund adopted the performance of the predecessor mutual fund as the result of the Reorganization. Prior to the Reorganization, the Fund had not yet commenced operations. The returns shown for periods ended on or prior to October 28, 2022, are those of the predecessor mutual fund. The predecessor mutual fund’s performance is represented by the performance of the predecessor mutual fund’s Class IS Shares. Prior to the Fund’s listing on October 31, 2022, the NAV performance of the Class IS Shares of the predecessor mutual fund is used as a proxy for the Fund’s market price returns. Had the predecessor mutual fund been structured as an ETF, its performance may have differed.
2. Source: Morningstar.
The index is unmanaged and include reinvestment of any income or distributions. It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
3. Effective September 30, 2021, the predecessor mutual fund changed its name from Martin Currie International Unconstrained Equity Fund to Martin Currie International Sustainable Equity Fund and adopted the Fund’s current ESG-related investment strategies.
See www.franklintempletondatasources.com for additional data provider information.
| franklintempleton.com | Annual Report | 3 | ||
MARTIN CURRIE SUSTAINABLE INTERNATIONAL EQUITY ETF
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.
Q. What were the leading contributors to performance?
A. Over the period, stocks from the consumer discretionary and consumer staples sectors were the strongest contributors to overall performance. From a regional perspective, European stocks contributed, particularly those from Italy, France and the Netherlands.
Notable stock contributions over the period included Moncler, the Italian luxury outerwear manufacturer, which benefited from China’s post-lockdown reopening in January 2023. Although its winter season was impacted by COVID-19, the market is focused on the prospect of customers being able to travel freely around Europe. The company also announced robust financial year results, strongly beating consensus estimates on sales. Improving consumer sentiment also benefited our holding in L’Oreal, the France-based global beauty firm, as reflected in the firm’s 2022 third-quarter results.
Luxury carmaker Ferrari released 2022 second-quarter results in early August which were notable for exceptionally strong growth (+29%) in shipments. Despite this record production, record new orders in the quarter meant backlogs, and therefore customer waiting times stayed high. September 2022 also saw the launch of Ferrari’s long-awaited Purosangue, its first four-door, four-seater model. Management’s guidance for 2023 was also stronger than expected, as a much richer mix of models, including the four-door Purosangue and the Daytona SP3, should lead to higher average selling prices and, in turn, higher profitability.
Although technology exposure was overall a negative, ASML Holding, a Dutch semiconductor equipment manufacturer, published strong results for 2022’s third and fourth quarters. The third quarter showed a record order intake of €8.9bn, versus sales of €5.8bn, and guidance issued with the fourth quarter results suggested +25% growth in 2023. Uncertainty regarding possible further restrictions on its sales in China remain, and the company experienced some weakness in February 2023, after further export controls on semiconductor technology were agreed by the U.S., Japanese and Dutch governments.
Q. What were the leading detractors from performance?
A. The portfolio’s communication services and industrials sector exposures were the largest detractors, and at a country level, our China, Germany and Ireland stocks were the weakest over the period.
Notable detractors at the stock level included Ireland’s Kingspan Group, a building materials firm, due to volatile ordering conditions in the construction industry, which was affected by the prevailing economic conditions. While short-term construction demand remains uncertain, the energy crisis in Europe has highlighted the relevance of insulation products in helping to reduce society’s energy needs.
Our communication services exposure detracted through our position in Tencent Holdings, and we exited the stock. The Chinese internet giant has seen low single digit and mid-to-high single digit revenue and earnings downgrades for both 2022 and 2023. This is likely due to a persistent weakness in the Chinese macroeconomic environment and consumer spending, prolonged lockdowns from China’s zero-COVID policy, and a lack of visibility around blockbuster games gaining approval.
German sportswear firm adidas was also a significant detractor, as an ad-hoc profit warning was driven by worse-than-expected COVID-19 impacts in China along with elevated inventories in the U.S. and Western Europe. We also exited the stock over the period.
Q. Were there any significant changes to the Fund during the reporting period?
A. Over the reporting period we added two new stocks and exited four positions.
The new positions were U.K. consumer care and life sciences firm Croda and France’s Pernod Ricard, the world’s second-largest spirits and wine group. Croda has continued to reposition its portfolio with the disposal of its Performance Technologies and Industrial Chemicals (PTIC) business, while several important acquisitions have led to the business becoming more focused, with stronger growth potential. Pernod Ricard benefits from strong pricing power and a balanced portfolio across different geographical regions and drink categories. The company is actively repositioning its U.S. business after a period of underperformance, and we believe is well positioned in the key emerging markets of China and India.
On disposals, we exited Tencent due to the lack of visibility on the regulatory front, and potential growing geopolitical risk in China. As mentioned above, we also exited adidas. We believe there is further risk to earnings, and the Yeezy (Kayne West) termination highlighted weaker performance of the brand than was previously understood. We also believe there is further risk from succession planning, following the
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MARTIN CURRIE SUSTAINABLE INTERNATIONAL EQUITY ETF
announcement that current CEO Kaspar Rorsted is leaving his contract early.
We also exited Farfetch, the online luxury retailer, whose shares declined following disappointing guidance delivered at its recent Capital Market Day in December 2022. We held a follow-up call with the CEO and founder, but our reduced conviction was unchanged. Finally, we sold Dr. Martens. We held a small position and were unable to rebuild our conviction following January 2023’s weak results and guidance. We subsequently exited and reinvested the proceeds into Moncler.
| Top 10 Holdings | ||||
| 3/31/23 | ||||
| Company Sector/Industry, Country |
% of Total Net Assets |
|||
| ASML Holding NV Semiconductors & Semiconductor Equipment, Netherlands |
8.6% | |||
| Mettler-Toledo International, Inc. Life Sciences Tools & Services, United States |
6.3% | |||
| ResMed, Inc., CDI Health Care Equipment & Supplies, United States |
5.7% | |||
| Linde PLC Chemicals, United States |
5.7% | |||
| Moncler SpA Textiles, Apparel & Luxury Goods, Italy |
5.6% | |||
| Hexagon AB, Class B Electronic Equipment, Instruments & Components, Sweden |
5.4% | |||
| L’Oreal SA Personal Products, France |
5.3% | |||
| Atlas Copco AB, Class A Machinery, Sweden |
4.9% | |||
| Ferrari NV Automobiles, Italy |
4.8% | |||
| Dassault Systemes SE Software, France |
4.7% | |||
CFA® is a trademark owned by CFA Institute.
| Top 10 Countries | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| United States | 17.7% | |||
| France | 17.4% | |||
| Sweden | 14.7% | |||
| Italy | 10.4% | |||
| Netherlands | 8.6% | |||
| Ireland | 7.7% | |||
| Denmark | 4.3% | |||
| Hong Kong | 4.2% | |||
| Australia | 4.1% | |||
| United Kingdom | 3.4% | |||
Thank you for your participation in Martin Currie Sustainable International Equity ETF. We look forward to serving your future investment needs.
Zehrid Osmani
Lead Portfolio Manager
Ken Hughes, CFA
Portfolio Manager
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2023, 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.
| franklintempleton.com | Annual Report | 5 | ||
MARTIN CURRIE SUSTAINABLE INTERNATIONAL EQUITY ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. 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 the Fund’s inception (October 28, 2022) to the first day of secondary trading (October 31, 2022), the NAV performance of the class IS Shares of the predecessor mutual fund is used as a proxy for the Market Price to calculate Market Price returns. Market price and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
| 10-Month |
+4.30% | +4.28% | +4.30% | +4.28% | ||||||||||||
| 5-Year |
+37.01% | +36.98% | +6.50% | +6.50% | ||||||||||||
| Since Inception (11/30/15) |
+66.42% | +66.39% | +7.19% | +7.19% | ||||||||||||
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 8 for Performance Summary footnotes.
| 6 | Annual Report | franklintempleton.com | ||
MARTIN CURRIE SUSTAINABLE INTERNATIONAL EQUITY ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
11/30/15-3/31/23
See page 8 for Performance Summary footnotes.
| franklintempleton.com | Annual Report | 7 | ||
MARTIN CURRIE SUSTAINABLE INTERNATIONAL EQUITY ETF
PERFORMANCE SUMMARY
Distributions (6/1/22–3/31/23)
| Net Investment Income |
Long-Term Capital Gain |
Total | ||||||
| $0.049529 |
$0.011504 | $0.061033 | ||||||
Total Annual Operating Expenses6
| 0.59% |
All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. Small- and mid-cap stocks involve greater risks and volatility than large-cap stocks. International investments are subject to special risks including currency fluctuations, as well as social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. To the extent the Fund focuses its investments in a single country or only a few countries in a particular geographic region, economic, political, regulatory or other conditions affecting such country or region may have a greater impact on Fund performance relative to a more geographically diversified fund. The managers’ environmental social and governance (ESG) strategies may limit the types and number of investments available and, as a result, may forego favorable market opportunities or under perform strategies that are not subject to such criteria. There is no guarantee that the strategy’s ESG directives will be successful or will result in better performance. The Fund is classified as “non-diversified,” which means it may invest a larger percentage of its assets in a smaller number of issuers than a diversified fund. To the extent the Fund invests its assets in a smaller number of issuers, the Fund will be more susceptible to negative events affecting those issuers than a diversified fund. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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 as of the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
2. The Fund adopted the performance of the predecessor mutual fund as the result of the Reorganization. Prior to the Reorganization, the Fund had not yet commenced operations. 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. The returns shown for periods ended on or prior to October 28, 2022, are those of the predecessor mutual fund. The predecessor mutual fund’s performance is represented by the performance of the predecessor mutual fund’s Class IS Shares. Prior to the Fund’s listing on October 31, 2022, the NAV performance of the Class IS Shares of the predecessor mutual fund is used as a proxy for market price returns. Had the predecessor mutual fund been structured as an ETF, its performance may have differed.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Source: FactSet. The MSCI ACWI ex USA Index-NR is a free float-adjusted, market capitalization-weighted index designed to measure the combined equity market performance of developed and emerging markets, excluding the U.S. Net Returns (NR) include income net of tax withholding when dividends are paid.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.
See www.franklintempletondatasources.com for additional data provider information.
| 8 | Annual Report | franklintempleton.com | ||
MARTIN CURRIE SUSTAINABLE INTERNATIONAL EQUITY ETF
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
| Beginning Account Value 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During 10/1/22–3/31/231,2 |
Ending Account Value 3/31/23 |
Expenses Paid During 10/1/22–3/31/231,2 |
Net Annualized Expense Ratio2 |
|||||||||||||||||
| $1,000.00 | $1,287.90 | $4.05 | $1,021.39 | $3.58 | 0.71 | % | ||||||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
2. Included in the expense ratio are “Other fees” described in Note 1 under Income and Deferred Taxes which are not annualized. Without these expenses, the expense ratio would have been 0.70% and the actual and hypothetical expenses paid during the period would have been $0.06 and $0.05, respectively.
| franklintempleton.com | Annual Report | 9 | ||
FRANKLIN TEMPLETON ETF TRUST
Martin Currie Sustainable International Equity ETF
| Period Ended March 31, 2023† |
Year Ended May 31, | |||||||||||||||||||||||
| 2022 | 2021 | 2020 | 2019 | 2018 | ||||||||||||||||||||
| Per share operating performancea (for a share outstanding throughout the period) |
||||||||||||||||||||||||
| Net asset value, beginning of period |
$13.88 | $18.93 | $12.72 | $11.58 | $11.55 | $11.43 | ||||||||||||||||||
| Income from investment operationsb: |
||||||||||||||||||||||||
| Net investment incomec |
—d | 0.10 | 0.04 | 0.02 | 0.10 | 0.17 | ||||||||||||||||||
| Net realized and unrealized gains (losses) |
0.59 | (4.10 | ) | 6.19 | 1.17 | 0.21 | 0.27 | |||||||||||||||||
| Total from investment operations |
0.59 | (4.00 | ) | 6.23 | 1.19 | 0.31 | 0.44 | |||||||||||||||||
| Less distributions from: |
||||||||||||||||||||||||
| Net investment income |
(0.05 | ) | — | (— | )d | (0.05 | ) | (0.16 | ) | (0.17 | ) | |||||||||||||
| Net realized gains |
(0.01 | ) | (1.05 | ) | (0.02 | ) | — | (0.12 | ) | (0.15 | ) | |||||||||||||
| Total distributions |
(0.06 | ) | (1.05 | ) | (0.02 | ) | (0.05 | ) | (0.28 | ) | (0.32 | ) | ||||||||||||
| Net asset value, end of period |
$14.41 | $13.88 | $18.93 | $12.72 | $11.58 | $11.55 | ||||||||||||||||||
| Total returne,f |
4.30% | (22.38)% | 49.06% | 10.26% | 3.06% | 3.86% | ||||||||||||||||||
| Ratios to average net assetsg | ||||||||||||||||||||||||
| Expenses before waiver and payments by affiliates |
1.07%h | 1.50% | 1.89% | 4.61%i | 5.22%i | 4.38% | ||||||||||||||||||
| Expenses net of waiver and payments by affiliates |
0.73%h | 0.75% | 0.75% | 0.75%i | 0.75%i | 0.78% | ||||||||||||||||||
| Net investment income |
0.03% | 0.57% | 0.22% | 0.14% | 0.88% | 1.42% | ||||||||||||||||||
| Supplemental data | ||||||||||||||||||||||||
| Net assets, end of period (000’s) |
$19,700 | $40,848 | $20,966 | $4,783 | $4,800 | $4,655 | ||||||||||||||||||
| Portfolio turnover rate |
26.05%j | 25.00% | 49.00% | 37.00% | 63.00% | 15.00% | ||||||||||||||||||
†For the period June 1, 2022 through March 31, 2023.
aEffective after the market close on October 28, 2022, the Fund’s predecessor mutual fund, Martin Currie International Sustainable Equity Fund, reorganized into this Fund (the “Reorganization”). See Note 1 in the Notes to Financial Statements for additional information about the Reorganization.
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 $0.005 per share.
eThe Fund adopted the performance of the predecessor mutual fund as the result of the Reorganization. Prior to the Reorganization, the Fund had not yet commenced operations. The returns shown for periods ending on or prior to October 28, 2022, are those of the predecessor mutual fund. The predecessor mutual fund’s performance is represented by the performance of the predecessor mutual fund’s Class IS Shares. Had the predecessor mutual fund been structured as an ETF, its performance may have differed.
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.
gRatios are annualized for periods less than one year, except for non-recurring expenses, if any.
hExpense ratios are including non-recurring European Union tax reclaim contingent fees that were incurred by the Fund during the period. Without these fees, the gross and net expense ratios would have been 1.06% and 0.73%, respectively, for the period ended March 31, 2023.
iReflects recapture of expenses waived/reimbursed from prior fiscal years for period prior to the Reorganization.
jPortfolio turnover rate excluding cash creations was as follows: 26.05%
| 10 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Martin Currie Sustainable International Equity ETF
| Country | Shares | Value | ||||||||||||
| Common Stocks 99.3% | ||||||||||||||
| Automobiles 4.8% | ||||||||||||||
| Ferrari NV |
Italy | 3,484 | $ | 943,648 | ||||||||||
|
|
|
|||||||||||||
| Beverages 3.2% | ||||||||||||||
| Pernod Ricard SA |
France | 2,770 | 628,076 | |||||||||||
|
|
|
|||||||||||||
| Biotechnology 4.1% | ||||||||||||||
| CSL Ltd. |
Australia | 4,208 | 812,518 | |||||||||||
|
|
|
|||||||||||||
| Building Products 8.6% | ||||||||||||||
| Assa Abloy AB, Class B |
Sweden | 36,276 | 868,633 | |||||||||||
| Kingspan Group PLC |
Ireland | 11,943 | 817,974 | |||||||||||
|
|
|
|||||||||||||
| 1,686,607 | ||||||||||||||
|
|
|
|||||||||||||
| Chemicals 7.9% | ||||||||||||||
| Croda International PLC |
United Kingdom | 5,401 | 433,941 | |||||||||||
| Linde PLC |
United States | 3,140 | 1,116,081 | |||||||||||
|
|
|
|||||||||||||
| 1,550,022 | ||||||||||||||
|
|
|
|||||||||||||
| Electronic Equipment, Instruments & Components 5.4% | ||||||||||||||
| Hexagon AB, Class B |
Sweden | 92,416 | 1,059,221 | |||||||||||
|
|
|
|||||||||||||
| Food Products 3.5% | ||||||||||||||
| Kerry Group PLC, Class A |
Ireland | 6,919 | 690,375 | |||||||||||
|
|
|
|||||||||||||
| Health Care Equipment & Supplies 10.0% | ||||||||||||||
| Coloplast AS, Class B |
Denmark | 6,434 | 846,224 | |||||||||||
| ResMed, Inc., CDI |
United States | 51,554 | 1,118,372 | |||||||||||
|
|
|
|||||||||||||
| 1,964,596 | ||||||||||||||
|
|
|
|||||||||||||
| Insurance 4.2% | ||||||||||||||
| AIA Group Ltd. |
Hong Kong | 78,072 | 821,999 | |||||||||||
|
|
|
|||||||||||||
| Life Sciences Tools & Services 10.2% | ||||||||||||||
| a | Mettler-Toledo International, Inc. |
United States | 816 | 1,248,651 | ||||||||||
| a | Oxford Nanopore Technologies PLC |
United Kingdom | 87,233 | 239,987 | ||||||||||
| a,b | Wuxi Biologics Cayman, Inc. |
China | 85,040 | 526,493 | ||||||||||
|
|
|
|||||||||||||
| 2,015,131 | ||||||||||||||
|
|
|
|||||||||||||
| Machinery 4.9% | ||||||||||||||
| Atlas Copco AB, Class A |
Sweden | 76,063 | 964,876 | |||||||||||
|
|
|
|||||||||||||
| Personal Products 5.3% | ||||||||||||||
| L’Oreal SA |
France | 2,355 | 1,052,220 | |||||||||||
|
|
|
|||||||||||||
| Semiconductors & Semiconductor Equipment 11.0% | ||||||||||||||
| ASML Holding NV |
Netherlands | 2,492 | 1,692,687 | |||||||||||
| Taiwan Semiconductor Manufacturing Co. Ltd., ADR |
Taiwan | 5,140 | 478,123 | |||||||||||
|
|
|
|||||||||||||
| 2,170,810 | ||||||||||||||
|
|
|
|||||||||||||
| Software 6.4% | ||||||||||||||
| Dassault Systemes SE |
France | 22,750 | 936,146 | |||||||||||
| Nemetschek SE |
Germany | 4,863 | 334,334 | |||||||||||
|
|
|
|||||||||||||
| 1,270,480 | ||||||||||||||
|
|
|
|||||||||||||
| franklintempleton.com | Annual Report | 11 | ||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Martin Currie Sustainable International Equity ETF (continued)
| Country | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| Textiles, Apparel & Luxury Goods 9.8% | ||||||||||||||
| Kering SA |
France | 1,261 | $ | 822,008 | ||||||||||
| Moncler SpA |
Italy | 16,050 | 1,107,980 | |||||||||||
|
|
|
|||||||||||||
| 1,929,988 | ||||||||||||||
|
|
|
|||||||||||||
| Total Common Stocks (Cost $20,852,425) | 19,560,567 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments (Cost $20,852,425) 99.3% | 19,560,567 | |||||||||||||
| Other Assets, less Liabilities 0.7% | 139,246 | |||||||||||||
|
|
|
|||||||||||||
| Net Assets 100.0% | $ | 19,699,813 | ||||||||||||
|
|
|
|||||||||||||
aNon-income producing.
bSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At March 31, 2023, the value of was $526,493, representing 2.7% of net assets.
See Abbreviations on page 23.
| 12 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
March 31, 2023
Martin Currie International Sustainable Equity ETFa
| Assets: |
||||
| Investments in securities: |
||||
| Cost – Unaffiliated issuers |
$ | 20,852,425 | ||
| Value – Unaffiliated issuers |
$ | 19,560,567 | ||
| Cash |
129,375 | |||
| Receivables: |
||||
| Dividends and interest |
45,763 | |||
| European Union tax reclaims receivable (Note 1d) |
12,467 | |||
| Investment securities sold |
111,311 | |||
|
|
|
|||
| Total assets |
19,859,483 | |||
|
|
|
|||
| Liabilities: |
||||
| Payables: |
||||
| Investment securities purchased |
141,305 | |||
| European Union tax reclaim contingent fees payable (Note 1d) |
3,114 | |||
| Management fees |
14,751 | |||
| Accrued expenses and other liabilities |
500 | |||
|
|
|
|||
| Total liabilities |
159,670 | |||
|
|
|
|||
| Net assets, at value |
$ | 19,699,813 | ||
|
|
|
|||
| Net assets consist of: |
||||
| Paid-in capital |
$26,348,933 | |||
| Total distributable earnings (loss) |
(6,649,120 | ) | ||
|
|
|
|||
| Net assets, at value |
$ | 19,699,813 | ||
|
|
|
|||
| Shares outstanding |
1,366,807 | |||
|
|
|
|||
| Net asset value per share |
$ 14.41 | |||
|
|
|
aEffective after the market close on October 28, 2022, the Fund’s predecessor mutual fund, Martin Currie International Sustainable Equity Fund, reorganized into this Fund (the “Reorganization”). See Note 1 in the Notes to Financial Statements for additional information about the Reorganization.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 13 | ||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations
For the Period Ended March 31, 2023 and the Year Ended May 31, 2022
Martin Currie International Sustainable Equity ETFa
| 2023† | 2022 | |||||||
| Investment income: |
||||||||
| Dividends: (net of foreign taxes)b |
||||||||
| Unaffiliated issuers |
$ | 196,285 | $ | 452,613 | ||||
| European Union tax reclaims (Note 1d) |
12,457 | — | ||||||
|
|
|
|||||||
| Total investment income |
208,742 | 452,613 | ||||||
|
|
|
|||||||
| Expenses: |
||||||||
| Management fees (Note 3a) |
195,170 | 241,415 | ||||||
| Fund accounting fees |
32,233 | 76,082 | ||||||
| Registration and filing fees |
30,527 | 62,034 | ||||||
| Professional fees |
10,336 | 78,268 | ||||||
| Reports to shareholders |
9,710 | 8,028 | ||||||
| European Union tax reclaims contingent fees (Note 1d) |
3,114 | — | ||||||
| Trustee fees |
1,138 | 3,538 | ||||||
| Distribution and service fees |
480 | 1,113 | ||||||
| Transfer agent fees |
— | 9,075 | ||||||
| Custodian fees |
— | 4,118 | ||||||
| Other |
5,293 | 12,566 | ||||||
|
|
|
|||||||
| Total expenses |
288,001 | 496,237 | ||||||
| Expenses waived/paid by affiliates (Note 3c) |
(88,984 | ) | (250,006 | ) | ||||
|
|
|
|||||||
| Net expenses |
199,017 | 246,231 | ||||||
|
|
|
|||||||
| Net investment income |
9,725 | 159,345 | ||||||
|
|
|
|||||||
| Realized and unrealized gains (losses): |
||||||||
| Net realized gain (loss) from: |
||||||||
| Investments: |
||||||||
| Unaffiliated issuers |
(4,700,354 | ) | (684,701 | ) | ||||
| In-kind redemptions |
3,852,422 | — | ||||||
| Foreign currency transactions |
5,679 | (29,169 | ) | |||||
| Forward exchange contracts |
(598 | ) | — | |||||
|
|
|
|||||||
| Net realized gain (loss) |
(842,851 | ) | (713,870 | ) | ||||
|
|
|
|||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||
| Investments: |
||||||||
| Unaffiliated issuers |
674,738 | (9,371,356 | ) | |||||
| Translation of other assets and liabilities denominated in foreign currencies |
257 | (2,065 | ) | |||||
|
|
|
|||||||
| Net change in unrealized appreciation (depreciation) |
674,995 | (9,373,421 | ) | |||||
|
|
|
|||||||
| Net realized and unrealized gain (loss) |
(167,856 | ) | (10,087,291 | ) | ||||
|
|
|
|||||||
| Net increase (decrease) in net assets resulting from operations |
$ | (158,131 | ) | $ | (9,927,946 | ) | ||
|
|
|
|||||||
aEffective after the market close on October 28, 2022, the Fund’s predecessor mutual fund, Martin Currie International Sustainable Equity Fund, reorganized into this Fund (the “Reorganization”). See Note 1 in the Notes to Financial Statements for additional information about the Reorganization.
| bForeign taxes withheld on dividends |
$28,487 | $47,037 | ||||||
|
|
|
|||||||
†For the period June 1, 2022 through March 31, 2023.
| 14 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
Martin Currie Sustainable International Equity ETFa
| Period Ended March 31, 2023† |
Year Ended May 31, 2022 |
Year Ended May 31, 2021 |
||||||||||
| Increase (decrease) in net assets: |
||||||||||||
| Operations: |
||||||||||||
| Net investment income |
$ | 9,725 | $ | 159,345 | $ | 46,286 | ||||||
| Net realized gain (loss) |
(842,851 | ) | (713,870 | ) | 1,020,256 | |||||||
| Net change in unrealized appreciation (depreciation) |
674,995 | (9,373,421 | ) | 6,202,329 | ||||||||
|
|
|
|||||||||||
| Total Operations: |
(158,131 | ) | (9,927,946 | ) | 7,268,871 | |||||||
|
|
|
|||||||||||
| Distributions to shareholders (Note 1e) |
(156,660 | ) | (1,443,082 | ) | (37,118 | ) | ||||||
|
|
|
|||||||||||
| Capital share transactions: (Note 2) |
(21,930,980 | ) | 29,246,241 | 10,972,343 | ||||||||
|
|
|
|||||||||||
| Net increase (decrease) in net assets |
(22,245,771 | ) | 17,875,213 | 18,204,096 | ||||||||
| Net assets: |
||||||||||||
| Beginning of period |
41,945,584 | 24,070,371 | 5,866,275 | |||||||||
|
|
|
|||||||||||
| End of period |
$ | 19,699,813 | $ | 41,945,584 | $ | 24,070,371 | ||||||
|
|
|
|||||||||||
aEffective after the market close on October 28, 2022, the Fund’s predecessor mutual fund, Martin Currie International Sustainable Equity Fund, reorganized into this Fund (the “Reorganization”). See Note 1 in the Notes to Financial Statements for additional information about the Reorganization.
†For the period June 1, 2022 through March 31, 2023.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 15 | ||
FRANKLIN TEMPLETON ETF TRUST
1. Organization and Significant Accounting Policies
Martin Currie Sustainable International Equity ETF (the” Fund”) is a separate non-diversified investment series of the “Trust”. The Trust, a Delaware statutory trust, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Fund follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946, Financial Services - Investment Companies (“ASC 946”). At a meeting held on November 18, 2022, the Fund’s Board of Trustees approved changing the Fund’s fiscal year end from May 31st to March 31st. This change resulted in a short-period annual report for the ten-month period from June 1, 2022 through March 31, 2023.
The Fund adopted the performance of the Martin Currie International Sustainable Equity Fund (the “predecessor mutual fund”) as the result of a reorganization of the predecessor mutual fund into the fund (the “Reorganization”) that was effective after the market close on October 28, 2022. Prior to the Reorganization, the Fund had not yet commenced operations. The returns shown for periods ended on or prior to October 28, 2022 are those of the predecessor mutual fund. The predecessor mutual fund’s performance is represented by the performance of the predecessor mutual fund’s Class IS Shares.
Prior to the Fund’s listing on October 31, 2022, the NAV performance of the Class IS Shares of the predecessor mutual fund is used as a proxy for the Fund’s market price returns. Had the predecessor mutual fund have been structured as an ETF, its performance may have differed.
State Street Bank and Trust Company, serves as the Fund’s Custodian and Transfer Agent pursuant to a Global Custodial and Agency Services Agreement with the Trust. American Stock Transfer & Trust Company, LLC serves as stock transfer agent for the Acquiring Fund listed above. Prior to the Reorganizations, The Bank of New York Mellon was the Custodian and Franklin Templeton Investor Services, LLC was the Transfer Agent for the Target Fund.
The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”), including, but not limited to, ASC 946. Estimates and assumptions are required to be made regarding assets, liabilities and changes in net assets resulting from operations when financial statements are prepared. Changes in the economic environment, financial markets and any other
parameters used in determining these estimates could cause actual results to differ. Subsequent events have been evaluated through the date the financial statements were issued.
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 Fund’s 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 Fund’s
| 16 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
a. Financial Instrument Valuation (continued)
net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.
The Fund has 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, 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 March 31, 2023. At March 31, 2023, 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. Foreign Currency Translation
Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the respective dates of such transactions.
The Fund does not isolate that portion of the results of operations resulting from fluctuations in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
Net realized foreign exchange gains or losses arise from sales of foreign currencies, including gains and losses on forward foreign currency contracts, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the values of assets and liabilities, other than investments in securities, on the date of valuation, resulting from changes in exchange rates.
Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.
The Fund’s investments in foreign securities may involve risks not present in domestic investments. Since securities may be denominated in foreign currencies, may require settlement in foreign currencies or may pay interest or dividends in foreign currencies, changes in the relationship of these foreign currencies to the U.S. dollar can significantly affect the value of the investments and earnings of the Fund. Foreign investments may also subject the Fund to foreign government exchange restrictions, expropriation, taxation or other political, social or economic developments,
| franklintempleton.com | Annual Report | 17 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
b. Foreign Currency Translation (continued)
all of which affect the market and/or credit risk of the investments.
c. Derivative Financial Instruments
During the period ended March 31, 2023, the Fund did not invest in derivative instruments.
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 invests. 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 records 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 March 31, 2023, 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.
As a result of several court cases, in certain countries across the European Union the Fund filed additional tax reclaims for previously withheld taxes on dividends earned in those countries (EU reclaims). Income recognized, if any, for EU reclaims is reflected as European Union tax reclaims in the Statement of Operations and any related receivable is reflected as European Union tax reclaims receivable in the Statement of Assets and Liabilities. Any fees associated with these filings are reflected as European Union tax reclaim
contingent fees in the Statement of Operations. When uncertainty exists as to the ultimate resolution of these proceedings, the likelihood of receipt of these EU reclaims, and the potential timing of payment, no amounts are reflected in the financial statements. For U.S. income tax purposes, EU reclaims received by the Fund, if any, reduce the amount of foreign taxes Fund shareholders can use as tax deductions or credits on their income tax returns.
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. 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 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 among 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.
f. Compensating Balance Arrangements
Prior to the reorganization, the predecessor mutual fund had an arrangement with its custodian bank whereby a portion of the custodian’s fees is paid indirectly by credits earned on the Fund’s cash on deposit with the bank.
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
| 18 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
g. Accounting Estimates (continued)
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 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 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 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 Fund regardless of the number of Creation Units that are being created or redeemed on the same day by the Authorized Participant. The standard transaction fee is imposed to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units and is not charged to or paid by the Funds. Such transactions fees are treated as increases in capital and are disclosed in the Fund’s Statements of Changes in Net Assets.
In addition, for cash Creation Unit transactions, a variable fee for creation transactions and redemption transactions may be charged to the Authorized Participant to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades. Variable fees, if any, are included in capital share transactions in the Statements of Changes in Net Assets.
| franklintempleton.com | Annual Report | 19 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
2. Shares of Beneficial Interest (continued)
At March 31, 2023, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:
| Year Ended March 31, 2023† |
Year Ended May 31, 2022 |
Year Ended May 31, 2021 |
||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||
| Capital Transactions(a) |
||||||||||||||||||||||||
| Shares sold |
787,311 | $ | 10,884,675 | 2,095,132 | $ | 34,967,223 | 1,233,089 | $ | 18,783,877 | |||||||||||||||
| Shares reinvested |
— | — | 70,688 | 1,260,375 | 542 | 8,901 | ||||||||||||||||||
| Shares redeemed |
(2,362,502 | ) | (31,900,630 | ) | (331,581 | ) | (5,789,430 | ) | (501,962 | ) | (9,093,329 | ) | ||||||||||||
| Net increase (decrease) |
(1,575,191 | ) | $ | (21,015,955 | ) | 1,834,239 | $ | 30,438,168 | 731,669 | $ | 9,699,449 | |||||||||||||
| Class A(b) | ||||||||||||||||||||||||
| Shares sold |
4,822 | 60,967 | 32,274 | 540,466 | 8,789 | 158,214 | ||||||||||||||||||
| Shares reinvested |
— | — | 1,355 | 23,847 | 28 | 451 | ||||||||||||||||||
| Shares redeemed |
(43,699 | ) | (501,526 | ) | (11,404 | ) | (190,145 | ) | (11,271 | ) | (204,887 | ) | ||||||||||||
| Net increase (decrease) |
(38,877 | ) | $ | (440,559 | ) | 22,225 | $ | 374,168 | (2,454 | ) | $ | (46,222 | ) | |||||||||||
| Class C(b) | ||||||||||||||||||||||||
| Shares sold |
745 | 10,400 | 117,838 | 2,291,106 | 153,634 | 2,607,437 | ||||||||||||||||||
| Shares reinvested |
— | — | 8,522 | 151,694 | 155 | 2,534 | ||||||||||||||||||
| Shares redeemed |
(41,637 | ) | (484,866 | ) | (233,235 | ) | (4,008,895 | ) | (72,199 | ) | (1,290,855 | ) | ||||||||||||
| Net increase (decrease) |
(40,892 | ) | $ | (474,466 | ) | (106,875 | ) | $ | (1,566,095 | ) | 81,590 | $ | 1,319,116 | |||||||||||
†For the period June 1, 2022 through March 31, 2023.
aEffective after the market close on October 28, 2022, the Fund’s predecessor mutual fund, Martin Currie International Sustainable Equity Fund, reorganized into Martin Currie Sustainable International Equity ETF (the “Reorganization”). The predecessor mutual funds Class IS Shares’ performance and financial history have been adopted by Martin Currie Sustainable International Equity ETF and will be used going forward. As a result, the information prior to the Reorganization reflects that of the Predecessor Fund’s Class IS Shares. Shares of the class of the Target Fund was converted into Class IS shares as a part of the Reorganization. Such conversion of shares into Class IS shares is included under “Shares sold”.
bShares of the class of the Target Fund was converted into Class IS shares as a part of the Reorganization. Such conversion of shares into Class IS shares is included under “Shares redeemed”.
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 Services, LLC (FT Services) |
Administrative manager | |
| Franklin Distributors, LLC (Distributors) |
Principal underwriter | |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates (continued)
a. Management fees
Effective after the market close on October 28, 2022 pursuant to the investment management agreement with the Trust on behalf of the Fund, the Fund pays Advisers a unified management fee equal to the annual rate of 0.75% based on the average daily net assets of the Fund. The Fund’s management fee was reduced from 0.75% to 0.59% effective February 1, 2023. Pursuant to the investment management agreement, Advisers reimburses the Fund for all acquired fund fees and expenses (such as those associated with the Fund’s investment in a Franklin Templeton money fund) and pays all of the ordinary operating expenses of the Fund, except for (i) the Fund’s management fee, (ii) payments under the Fund’s Rule 12b-1 plan (if any), (iii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments), (iv) taxes, (v) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), (vi) litigation expenses (including litigation to which the Trust or the Fund may be a party and indemnification of the Trustees and officers with respect thereto), and (vii) other non-routine or extraordinary expenses. Advisers pays Martin Currie for its services.
For the period June 1, 2022 through October 28, 2022 the predecessor mutual fund paid an investment management fee to Legg Mason Partners Fund Advisor, LLC (“LMPFA”), the investment advisor to the predecessor fund based on the average daily net assets of the fund as follows:
| Average Daily Net Assets | Annual Rate | |||
| First $1 billion |
0.750% | |||
| Next $1 billion |
0.700 | |||
| Next $3 billion |
0.650 | |||
| Next $5 billion |
0.600 | |||
| Over $10 billion |
0.550 | |||
For its services, LMPFA paid Martin Currie monthly, an aggregate fee equal to 70% of the net management fee it receives from the predecessor mutual fund.
For the period ended March 31, 2023, the Fund’s annualized effective investment management fee rate based on average daily net assets was 0.73%.
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. For the period June 1, 2022 through October 28, 2022, LMPFA provided administrative and certain oversight services to the Fund.
4. Income Taxes
For tax purposes, capital losses of the predecessor mutual fund may be carried over to offset future capital gains, if any. At March 31, 2023, the capital loss carryforwards were as follows:
| Period Ended March 31, 2023 |
||||
| Capital loss carryforwards not subject to expiration: |
||||
| Long term |
$1,696,352 | |||
| Short term |
3,468,090 | |||
| Total capital loss carryforwards |
$5,164,442 | |||
| franklintempleton.com | Annual Report | 21 | ||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
The tax character of distributions paid during the period ended March 31, 2023 and the predecessor mutual fund of May 31 2022, were as follows:
| Period Ended 2023 |
Year Ended May 31, 2022 | |||||||
| Distributions paid from: |
||||||||
| Ordinary income |
$ 156,660 | $ 1,007,863 | ||||||
| Long-term Capital Gain |
— | 435,219 | ||||||
| $ 156,660 | $ 1,443,082 | |||||||
At March 31, 2023, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:
| Period Ended March 31, 2023 |
||||
| Cost of investments |
$ | 21,056,228 | ||
| Unrealized appreciation |
$ | 643,841 | ||
| Unrealized depreciation |
(2,139,502 | ) | ||
| Net unrealized appreciation (depreciation) |
$ | (1,495,661 | ) | |
| Distributable earnings – undistributed ordinary income |
$ | 1,862 | ||
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to wash sales.
5. Investment Transactions
Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the period ended March 31, 2023, $8,031,742 and $13,935,494, respectively.
6. Global Credit Facility
On February 4, 2022, the predecessor mutual fund, together with other U.S. registered and foreign investment funds (collectively, the “Borrowers”) managed by Franklin Resources or its affiliates, became a borrower in a joint syndicated senior unsecured credit facility totaling $2.675 billion (the “Global Credit Facility”). The 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. The Global Credit Facility has been matured on February 3, 2023.
Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all 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 the Statement of Operations. The Fund did not utilize the Global Credit Facility during the period ended March 31, 2023.
7. 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 |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
7. Fair Value Measurements (continued)
| • | 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 March 31, 2023, in valuing the Fund’s assets and liabilities carried at fair value, is as follows:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Martin Currie Sustainable International Equity ETF |
||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Equity Investmentsb |
$19,560,567 | $ — | $ — | $19,560,567 | ||||||||||||
aFor detailed categories, see the accompanying Schedule of Investments.
bIncludes common stocks.
8. New Accounting Pronouncements
In June 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-03, Fair Value Measurement (Topic 820) – Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in the ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, should not be considered in measuring fair value. The ASU is effective for interim and annual reporting periods beginning after December 15, 2023, with the option of early adoption. Management has reviewed the requirements and believes that the adoption of the ASU will not have a material impact on the financial statements.
9. Subsequent Events
The Fund has evaluated subsequent events through the issuance of these Financial Statements and determined that no events have occurred that require disclosure.
Abbreviations
| ADR | American Depositary Receipt | |
| CDI | Clearing House Electronic Subregister | |
| System Depositary Interest | ||
| SPA | Standby Purchase Agreement | |
| franklintempleton.com | Annual Report | 23 | ||
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Franklin Templeton ETF Trust and Shareholders of Martin Currie Sustainable International Equity ETF
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Martin Currie Sustainable International Equity ETF (one of the funds constituting Franklin Templeton ETF Trust, hereafter collectively referred to as the “Fund”) as of March 31, 2023, the related statements of operations for the period June 1, 2022 through March 31, 2023 and the year ended May 31, 2022, and the statements of changes in net assets for the period June 1, 2022 through March 31, 2023, and each of the two years in the period ended May 31, 2022, including the related notes, and the financial highlights for the period June 1, 2022 through March 31, 2023, and each of the five years in the period ended May 31, 2022 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of March 31, 2023, and the results of its operations for the period June 1, 2022 through March 31, 2023 and the year ended May 31, 2022, the changes in its net assets for the period June 1, 2022 through March 31, 2023, and each of the two years in the period ended May 31, 2022, and the financial highlights for the period June 1, 2022 through March 31, 2023, and each of the five years in the period ended May 31, 2022, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of March 31, 2023 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
May 23, 2023
We have served as the auditor of one or more investment companies in the Franklin Templeton funds since 1948.
| 24 | Annual Report | franklintempleton.com | ||
By mid-February, tax information related to a shareholder’s proportionate share of distributions paid during the preceding calendar year will be received, if applicable. Please also refer to www.franklintempleton.com for per share tax information related to any distributions paid during the preceding calendar year. Shareholders are advised to consult with their tax advisors for further information on the treatment of these amounts on their tax returns.
The following tax information for the Fund is required to be furnished to shareholders with respect to the income earned and distributions paid during their fiscal year.
The Fund below hereby report the following amounts, or if subsequently determined to be different, the maximum allowable amounts, for the period ended March 31, 2023:
| Pursuant to: | ||||||
| Qualified Dividend Income (QDI) |
§854(b)(1)(B) | $ | 162,197 | |||
Under Section 853 of the Internal Revenue Code, the Funds below intend to elect to pass through to their shareholders the following amounts, or amounts as finally determined, of foreign taxes paid and foreign source income earned by the Fund during the fiscal year ended March 31, 2023:
| Foreign Taxes Paid |
$ | 13,325 | ||
| Foreign Source Income |
$ | 169,705 |
| franklintempleton.com | Annual Report | 25 | ||
FRANKLIN TEMPLETON ETF TRUST
The name, year of birth and address of the officers and board members, as well as their affiliations, positions held with the Trust, principal occupations during at least the past five years and number of U.S. registered portfolios overseen in the Franklin Templeton/Legg Mason fund complex, are shown below. Generally, each board member serves until that person’s successor is elected and qualified.
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| Rohit Bhagat (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Lead Independent Trustee | Since 2016 | 59 | AssetMark Financial Holdings, Inc. (investment solutions) (2018-present) and PhonePe (2020-present) (payment and financial services); formerly, Axis Bank (financial) (2013- 2021), FlipKart Limited (2019-2020) (eCommerce company); CapFloat Financial Services Pvt., Ltd. (non-banking finance company) (2018) and Zentific Investment Management (hedge fund) (2015-2018). | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Managing Member, Mukt Capital, LLC (private investment firm) (2014-present); Advisor, Optimal Asset Management (investment technology and advisory services company) (2015-present); Chief Executive Officer and Director, FinTech Evolution Acquisition (eCommerce company) (February 2021-present); and formerly, Chairman, Asia Pacific, BlackRock (2009-2012); Global Chief Operating Officer, Barclays Global Investors (investment management) (2005-2009); and Senior Partner, The Boston Consulting Group (management consulting) (1992-2005). | ||||||||
| Deborah D. McWhinney (1955) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee | Since 2020 | 59 | S&P Global, Inc. (financial information services) (February 2022), Borg Warner (automotive) (2018-present), LegalShield (consumer services) (2020-present); and formerly, IHS Markit (information services) (2015-2022), Fluor Corporation (construction and engineering) (2014-2020) and Focus Financial Partner, LLC (financial services) (2018-2020). | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Director of various companies; and formerly, Board Member, Lloyds Banking Group (2015-2018) (financial institution) and Fresenius Medical Group (2016-2018) (healthcare); Chief Executive Officer (2013-2014) and Chief Operating Officer (2011-2013), CitiGroup Global Enterprise Payments (financial services); and President, Citi’s Personal Banking and Wealth Management (2009-2011). | ||||||||
| Anantha K. Pradeep (1963) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee | Since 2016 | 59 | None | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Chief Executive Officer, Smilable, Inc. (technology company) (2014-present); Chief Executive Officer, MachineVantage (technology company) (2018-present); Founder and Managing Partner, Consult Meridian, LLC (consulting company) (2009-present); and formerly, Founder, BoardVantage (board portal solutions provider delivering paperless process for boards and leadership) (2000-2002). | ||||||||
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FRANKLIN TEMPLETON ETF TRUST
Interested Board Members and Officers
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| **Jennifer M. Johnson (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee and Chairperson of the Board | Since 2016 | 70 | None | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Chief Executive Officer, President and Director, Franklin Resources, Inc.; officer and/or director or trustee, of some of the other subsidiaries of Franklin Resources, Inc. and of certain funds in the Franklin Templeton/Legg Mason fund complex; and formerly, Chief Operating Officer and Executive Vice President, Franklin Resources, Inc. (1994-2015); Executive Vice President of Operations and Technology, Franklin Resources, Inc. (2005-2010); and Senior Vice President, Franklin Resources, Inc. (2003-2005). | ||||||||
| Alison E. Baur (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President |
Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Deputy General Counsel, Franklin Templeton; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Steven J. Gray (1955) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President |
Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Distributors, LLC; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Matthew T. Hinkle (1971) One Franklin Parkway San Mateo, CA 94403-1906 |
Chief Executive Officer – Finance and Administration | Since 2017 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Vice President, Franklin Templeton Services, LLC; officer of certain funds in the Franklin Templeton/Legg Mason fund complex; and formerly, Vice President, Global Tax (2012-April 2017) and Treasurer/Assistant Treasurer, Franklin Templeton (2009-2017). | ||||||||
| Fred Jensen (1963) 620 Eighth Avenue, 47th Floor New York, NY 10018 |
Chief Compliance Officer | Since 2021 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Director - Global Compliance of Franklin Templeton; Managing Director of Legg Mason & Co.; Director of Compliance, Legg Mason Office of the Chief Compliance Officer; Chief Compliance Officer, Franklin Advisory Services, LLC; Compliance Officer, Franklin Advisers, Inc.; officer of certain funds in the Franklin Templeton/Legg Mason fund complex; formerly, Chief Compliance Officer of Legg Mason Global Asset Allocation; Chief Compliance Officer, Legg Mason Private Portfolio; Chief Compliance Officer to The Reserves Funds (investment adviser, funds and broker-dealer) and Ambac Financial Group (investment adviser, funds and broker-dealer). | ||||||||
| Susan Kerr (1949) 620 Eighth Avenue New York, NY 10018 |
Vice President - AML Compliance | Since 2021 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Compliance Analyst, Franklin Templeton; Chief Anti-Money Laundering Compliance Officer, Legg Mason & Co., or its affiliates; Anti Money Laundering Compliance Officer; Senior Compliance Officer, LMIS; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| franklintempleton.com | Annual Report | 27 | ||
FRANKLIN TEMPLETON ETF TRUST
Interested Board Members and Officers (continued)
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| Todd Mathias (1983) One Franklin Parkway, San Mateo, Ca 94403-1906 |
Vice President | Since March 2022 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Head of US ETF Product Strategy, Franklin Templeton; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Patrick O’Connor (1967) One Franklin Parkway San Mateo, CA 94403-1906 |
President and Chief Executive Officer – Investment Management | Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| President and Chief Investment Officer, Franklin Advisory Services, LLC; Senior Vice President, Franklin Advisers, Inc.; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Vivek Pai (1970) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 |
Treasurer, Chief Financial Officer and Chief Accounting Officer | Since 2019 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Treasurer, U.S. Fund Administration & Reporting and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Navid J. Tofigh (1972) One Franklin Parkway, San Mateo, Ca 94403-1906 |
Vice President and Secretary | Since 2015 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Lori A. Weber (1964) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 |
Vice President and Secretary | Vice President since 2011 and Secretary since 2013 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Resources, Inc.; Vice President and Secretary, Templeton Investment Counsel, LLC; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
*We base the number of portfolios on each separate series of the U.S. registered investment companies within the Franklin Templeton fund complex. These portfolios have a common investment manager or affiliated investment managers.
**Jennifer M. Johnson is considered to be an interested person of the Fund under the federal securities laws due to her position as an officer and director of Franklin Resources, Inc. (Resources), which is the parent company of the Fund’s investment manager and distributor.
Note 1: Officer information is current as of the date of this report. It is possible that after this date, information about officers may change.
The Sarbanes-Oxley Act of 2002 and Rules adopted by the Securities and Exchange Commission require the Fund to disclose whether the Fund’s Audit Committee includes at least one member who is an audit committee financial expert within the meaning of such Act and Rules. The Fund’s Board has determined that there is at least one such financial expert on the Audit Committee and has designated Rohit Bhagat and Deboarah D. McWhinney as its audit committee financial experts. The Board believes that Mr. Bhagat and Ms. McWhinney qualify as such an expert in view of their extensive business background and experience, including extensive experience in the asset management and financial services industries. Mr. Bhagat has been a Member and Chairman of the Fund’s Audit Committee since 2017. Ms. McWhinney has been a member of the Fund Audit Committee since 2020. As a result of such background and
| 28 | Annual Report | franklintempleton.com | ||
FRANKLIN TEMPLETON ETF TRUST
experience, the Board believes that Mr. Bhagat and Ms. McWhinney have acquired an understanding of generally accepted accounting principles and financial statements, the general application of such principles in connection with the accounting estimates, accruals and reserves, and analyzing and evaluating financial statements that presents a breadth and level of complexity of accounting issues generally comparable to those of the Fund, as well as an understanding of internal controls and procedures for financial reporting and an understanding of audit committee functions. Mr. Bhagat and Ms. McWhinney are independent Board members as that term is defined under the relevant Securities and Exchange Commission Rules and Releases.
The Statement of Additional Information (SAI) includes additional information about the board members and is available, without charge, upon request. Shareholders may call (800) DIAL BEN/342-5236 to request the SAI.
| franklintempleton.com | Annual Report | 29 | ||
Statement regarding liquidity risk management program (unaudited)
Each Fund has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for Funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the Securities and Exchange Commission (“SEC”) (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
The Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) is the appointed Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for 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/Directors 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.
| 30 | Annual Report | franklintempleton.com | ||
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.
| franklintempleton.com | Annual Report | 31 | ||
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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Annual Report Martin Currie Sustainable International Equity ETF | |||||
| Investment Manager | Distributor | Investor Services | ||||
| Franklin Advisers, Inc.
Subadvisor
Martin Currie Inc. |
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 | ||||
| www.franklintempleton.com © 2023 Franklin Templeton Investments. All rights reserved. |
MCSE A 05/23 | |||||
ANNUAL REPORT
FRANKLIN U.S. EQUITY
INDEX ETF
Formerly, Franklin LibertyQ Global Equity ETF
A Series of Franklin Templeton ETF Trust
March 31, 2023
| Visit franklintempleton.com for fund updates and documents, or to find helpful financial planning tools. |
| Not FDIC Insured | May Lose Value | No Bank Guarantee |
| franklintempleton.com | Annual Report |
1 | ||||||||
Franklin U.S. Equity Index ETF
Formerly, Franklin LibertyQ Global Equity ETF
This annual report for Franklin U.S. Equity Index ETF covers the fiscal year ended March 31, 2023. 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).
| Geographic Composition | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| North America |
98.0 | % | ||
| Europe |
1.5 | % | ||
| Latin America & Caribbean |
0.2 | % | ||
| Asia |
0.0 | % | ||
| Short-Term Investments & Other Net Assets |
0.3 | % | ||
Performance Overview
During the 12-month period, the Fund posted cumulative total returns of -8.48% based on market price and -8.63% 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 12-month period, the Underlying Index posted a cumulative total return of -8.53%.2 The Linked 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 -8.56% cumulative total return for the same period.2
The Fund’s former primary benchmark, the MSCI All Country World Index (ACWI)-NR posted a -6.96% cumulative total return for the 12-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 -7.73% total return for the 12 months ended March 31, 2023.3 High inflation, rising interest rates and geopolitical instability contributed to a sharp decline in equity prices. Consumer spending continued to rise, but deteriorating financial conditions and investors’ expectations for slower growth pressured equity markets.
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 early in the period. Inflation peaked at 9.1% in June 2022, the highest annual rate since 1981, before gradually sliding to a low of 6% in February 2023. The labor market remained strong amid a high level of nominal growth, which sent the U.S.
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 10.
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FRANKLIN U.S. EQUITY INDEX ETF
unemployment rate down to a historic 54-year low of 3.4% in January 2023 before ending the period at 3.5%.
U.S. gross domestic product grew in the second half of 2022 after modestly contracting in the first half of the year. Rising consumer spending and increased exports amid declining inflation led to solid economic growth in the final two quarters of 2022. However, rising interest rates translated to higher borrowing costs for individuals and businesses, which dampened economic activity, especially in the housing and financial markets over the period.
In an effort to control inflation, the U.S. Federal Reserve (Fed) rapidly restricted monetary policy during the period. The Fed raised the federal funds target rate eight times to end the period at a range of 4.75%–5.00%, pushing borrowing costs to their highest levels since 2007. The interest-rate hikes included four successive 75 basis point increases at its June, July, September and November 2022 meetings and smaller increases at its remaining meetings during the period. At its March 2023 meeting, the Fed said it would continue to reduce bond holdings, but departed from previous statements by softening its firm outlook on future rate hikes. Additionally, Fed Chair Jerome Powell said the central bank most likely would not cut rates in 2023.
| Top 10 Sectors/Industries | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| Software |
9.9% | |||
| Technology Hardware, Storage & Peripherals |
7.1% | |||
| Semiconductors & Semiconductor Equipment |
6.3% | |||
| Interactive Media & Services |
4.7% | |||
| IT Services |
4.5% | |||
| Oil, Gas & Consumable Fuels |
4.2% | |||
| Pharmaceuticals |
4.0% | |||
| Capital Markets |
3.0% | |||
| Banks |
3.0% | |||
| Internet & Direct Marketing Retail |
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 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.
| Top 10 Holdings | ||||
| 3/31/23 | ||||
| Company Sector/Industry, Country |
% of Total Net Assets |
|||
| Apple, Inc. Technology Hardware, Storage & Peripherals, United States |
6.8% | |||
| Microsoft Corp. Software, United States |
6.0% | |||
| Amazon.com, Inc. Internet & Direct Marketing Retail, United States |
2.6% | |||
| NVIDIA Corp. Semiconductors & Semiconductor Equipment, United States |
1.9% | |||
| Alphabet, Inc., Class A Interactive Media & Services, United States |
1.7% | |||
| Tesla, Inc. Automobiles, United States |
1.6% | |||
| Berkshire Hathaway, Inc., Class B Financial Services, United States |
1.5% | |||
| Alphabet, Inc., Class C Interactive Media & Services, United States |
1.5% | |||
| Meta Platforms, Inc., Class A Interactive Media & Services, United States |
1.3% | |||
| Exxon Mobil Corp. Oil, Gas & Consumable Fuels, United States |
1.3% | |||
Manager’s Discussion
For the fiscal year ended March 31, 2023, individual holdings that hindered the Fund’s absolute return included Tesla, Amazon.com and Alphabet. Individual holdings that lifted the Fund’s absolute return included NVIDIA, Merck and Eli Lilly.
Prior to August 1, 2022, the Fund’s research-based selection process focused on four investment factors: value, quality, momentum and low volatility. Since then, the Fund has focused on offering broad exposure to the U.S. market. Of the four target-style factors, value and quality contributed to the Fund’s relative performance for the reporting period, while momentum detracted modestly. The low volatility factor had no significant impact on the Fund’s relative return.
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
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FRANKLIN U.S. EQUITY INDEX ETF
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.
| Top 10 Countries | ||||
| 3/31/23 | ||||
| % of Total Net Assets |
||||
| United States |
99.3% | |||
| Brazil |
0.2% | |||
| China |
0.1% | |||
| Switzerland |
0.1% | |||
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
The foregoing information reflects our analysis, opinions and portfolio holdings as of March 31, 2023, 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 U.S. EQUITY INDEX ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (6/3/16), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231,2
| Cumulative Total Return3 | Average Annual Total Return3 | |||||||||||||||
| Based on NAV4 |
Based on market price5 |
Based on NAV4 |
Based on market price5 |
|||||||||||||
| 1-Year |
-8.63% | -8.48% | -8.63% | -8.48% | ||||||||||||
| 5-Year |
+35.89% | +36.18% | +6.33% | +6.37% | ||||||||||||
| Since Inception (6/1/16) |
+70.09% | +69.97% | +8.09% | +8.08% | ||||||||||||
| Distribution Rate6 | 30-Day Standardized Yield7 | |||
| 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 7 for Performance Summary footnotes.
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FRANKLIN U.S. EQUITY INDEX ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.
6/1/16–3/31/23
See page 7 for Performance Summary footnotes.
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FRANKLIN U.S. EQUITY INDEX ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $0.828387 |
Total Annual Operating Expenses9
| 0.03% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in emerging markets involve heightened risks related to the same factors. To the extent the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transaction costs, expenses and other factors. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
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.
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 as of the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
2. 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.
3. 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.
4. Assumes reinvestment of distributions based on net asset value.
5. Assumes reinvestment of distributions based on market price.
6. Distribution rate is based on an annualization of the March dividend and the NAV per share on 3/31/23.
7. 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.
8. Source: FactSet. The Morningstar® US Target Market Exposure Index includes large- and mid-capitalization stocks representing the top 85% of the U.S. equity market by float-adjusted market capitalization. The Linked Morningstar® US Target Market Exposure Index measures the performance of the LibertyQ Global Equity Index-NR through July 31, 2022, followed by the performance of the Morningstar® US Target Market Exposure Index thereafter. The LibertyQ Global Equity Index-NR is a systematic, rules-based proprietary index that is owned and calculated by MSCI Inc. It is based on the MSCI ACWI Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. The MSCI ACWI-NR is a free float-adjusted, market capitalization-weighted index designed to measure the equity market performance of global developed and emerging markets. Net Returns (NR) include income net of tax withholding when dividends are paid.
9. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
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7 | ||||||||
FRANKLIN U.S. EQUITY INDEX ETF
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
| Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
| Beginning Account Value 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231,2 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231,2 |
Net Annualized Expense Ratio2 |
|||||||||||||||||
| $1,000.00 | $ | 1,154.10 | $ | 0.16 | $ | 1,024.78 | $ | 0.15 | 0.03 | % | ||||||||||||
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 182/365 to reflect the one-half year period.
2. 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
Franklin U.S. Equity Index ETFa
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$ | 40.04 | $ | 37.65 | $ | 26.77 | $ | 30.90 | $ | 30.14 | ||||||||||
|
|
|
|||||||||||||||||||
| Income from investment operationsb: | ||||||||||||||||||||
| Net investment incomec |
0.59 | 1.05 | 0.81 | 0.90 | 0.89 | |||||||||||||||
| Net realized and unrealized gains (losses) |
(4.10 | ) | 2.34 | 10.97 | (4.00 | ) | 0.67 | |||||||||||||
|
|
|
|||||||||||||||||||
| Total from investment operations |
(3.51 | ) | 3.39 | 11.78 | (3.10 | ) | 1.56 | |||||||||||||
|
|
|
|||||||||||||||||||
| Less distributions from net investment income |
(0.83 | ) | (1.00 | ) | (0.90 | ) | (1.03 | ) | (0.80 | ) | ||||||||||
|
|
|
|||||||||||||||||||
| Net asset value, end of year |
$ | 35.70 | $ | 40.04 | $ | 37.65 | $ | 26.77 | $ | 30.90 | ||||||||||
|
|
|
|||||||||||||||||||
| Total returnd |
(8.63)% | 9.00% | 44.55% | (10.53)% | 5.44% | |||||||||||||||
| Ratios to average net assetse | ||||||||||||||||||||
| Expenses before waiver and payments by affiliates |
0.03% | 0.35% | 0.35% | 0.35% | 0.35% | |||||||||||||||
| Expenses net of waiver and payments by affiliates |
0.03% | 0.35% | 0.34% | 0.34% | 0.34% | |||||||||||||||
| Net investment income |
1.73% | 2.63% | 2.45% | 2.86% | 2.99% | |||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$681,913 | $16,014 | $15,059 | $16,059 | $24,721 | |||||||||||||||
| Portfolio turnover ratef |
6.33% | g | 24.13% | g | 31.70% | g | 27.85% | g | 34.99% | |||||||||||
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.
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
| gPortfolio turnover rate excluding cash creations was as follows: | 6.33% | 24.13% | 31.70% | 27.85% | — |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
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FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin U.S. Equity Index ETF
| Industry | Shares | Value | ||||||||||||
| Common Stocks 99.7% | ||||||||||||||
| Brazil 0.2% | ||||||||||||||
| a | MercadoLibre, Inc. |
Internet & Direct Marketing Retail | 867 | $ | 1,142,758 | |||||||||
|
|
|
|||||||||||||
| China 0.1% | ||||||||||||||
| NXP Semiconductors NV |
Semiconductors & Semiconductor Equipment | 4,966 | 926,035 | |||||||||||
| a,b | Sunac China Holdings Ltd. |
Real Estate Management & Development | 1,000 | 198 | ||||||||||
|
|
|
|||||||||||||
| 926,233 | ||||||||||||||
|
|
|
|||||||||||||
| Ireland 0.0%† | ||||||||||||||
| Seagate Technology Holdings PLC |
Technology Hardware, Storage & Peripherals | 3,617 | 239,156 | |||||||||||
|
|
|
|||||||||||||
| Russia 0.0%† | ||||||||||||||
| a,b | Alrosa PJSC |
Metals & Mining | 3,584 | — | ||||||||||
| 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 | — | ||||||||||
| a,b | Novolipetsk Steel PJSC |
Metals & Mining | 2,272 | — | ||||||||||
| b | PhosAgro PJSC |
Chemicals | 73 | — | ||||||||||
| b | PhosAgro PJSC |
Chemicals | 2 | — | ||||||||||
| a,b | Polymetal International PLC |
Metals & Mining | 470 | — | ||||||||||
| a,b | Polyus PJSC |
Metals & Mining | 50 | — | ||||||||||
| b | Rosneft Oil Co. PJSC |
Oil, Gas & Consumable Fuels | 1,154 | — | ||||||||||
| a,b | Severstal PAO |
Metals & Mining | 392 | — | ||||||||||
| b | Surgutneftegas PJSC |
Oil, Gas & Consumable Fuels | 8,286 | — | ||||||||||
| b | Tatneft PJSC |
Oil, Gas & Consumable Fuels | 1,974 | — | ||||||||||
| a,b | TCS Group Holding PLC, GDR |
Banks | 118 | — | ||||||||||
| b | United Co. RUSAL International PJSC |
Metals & Mining | 1,714 | — | ||||||||||
|
|
|
|||||||||||||
| — | ||||||||||||||
|
|
|
|||||||||||||
| Switzerland 0.1% | ||||||||||||||
| TE Connectivity Ltd. |
Electronic Equipment, Instruments & Components | 6,112 | 801,589 | |||||||||||
|
|
|
|||||||||||||
| United States 99.3% | ||||||||||||||
| 3M Co. |
Industrial Conglomerates | 10,696 | 1,124,257 | |||||||||||
| Abbott Laboratories |
Health Care Equipment & Supplies | 33,031 | 3,344,719 | |||||||||||
| AbbVie, Inc. |
Biotechnology | 33,616 | 5,357,382 | |||||||||||
| Accenture PLC, Class A |
IT Services | 11,842 | 3,384,562 | |||||||||||
| Activision Blizzard, Inc. |
Entertainment | 13,752 | 1,177,034 | |||||||||||
| a | Adobe, Inc. |
Software | 8,786 | 3,385,861 | ||||||||||
| Advance Auto Parts, Inc. |
Specialty Retail | 1,146 | 139,365 | |||||||||||
| a | Advanced Micro Devices, Inc. |
Semiconductors & Semiconductor Equipment | 30,560 | 2,995,186 | ||||||||||
| AES Corp. |
Independent Power Producers & Energy Traders | 12,403 | 298,664 | |||||||||||
| Aflac, Inc. |
Insurance | 10,696 | 690,106 | |||||||||||
| Agilent Technologies, Inc. |
Life Sciences Tools & Services | 5,730 | 792,688 | |||||||||||
| a | agilon health, Inc. |
Health Care Providers & Services | 3,617 | 85,904 | ||||||||||
| Air Products & Chemicals, Inc. |
Chemicals | 4,202 | 1,206,856 | |||||||||||
| a | Airbnb, Inc., Class A |
Hotels, Restaurants & Leisure | 7,437 | 925,163 | ||||||||||
| a | Akamai Technologies, Inc. |
IT Services | 3,056 | 239,285 | ||||||||||
| Albemarle Corp. |
Chemicals | 2,292 | 506,624 | |||||||||||
| Albertsons Cos., Inc., Class A |
Consumer Staples Distribution & Retail | 3,056 | 63,504 | |||||||||||
| Alexandria Real Estate Equities, Inc. |
Diversified REITs | 3,056 | 383,803 | |||||||||||
| a | Align Technology, Inc. |
Health Care Equipment & Supplies | 1,528 | 510,566 | ||||||||||
| Allegion PLC |
Building Products | 1,707 | 182,188 | |||||||||||
| Alliant Energy Corp. |
Electric Utilities | 4,966 | 265,184 | |||||||||||
| Allstate Corp. |
Insurance | 4,966 | 550,282 | |||||||||||
| Ally Financial, Inc. |
Consumer Finance | 5,909 | 150,620 | |||||||||||
| a | Alnylam Pharmaceuticals, Inc. |
Biotechnology | 2,292 | 459,133 | ||||||||||
| a | Alphabet, Inc., Class A |
Interactive Media & Services | 113,072 | 11,728,959 | ||||||||||
| a | Alphabet, Inc., Class C |
Interactive Media & Services | 98,556 | 10,249,824 | ||||||||||
| 10 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Equity Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| United States (continued) | ||||||||||||||
| Altria Group, Inc. |
Tobacco | 33,998 | $ | 1,516,991 | ||||||||||
| a | Amazon.com, Inc. |
Internet & Direct Marketing Retail | 169,226 | 17,479,354 | ||||||||||
| Amcor PLC |
Containers & Packaging | 28,650 | 326,037 | |||||||||||
| Ameren Corp. |
Multi-Utilities | 4,966 | 429,013 | |||||||||||
| American Electric Power Co., Inc. |
Electric Utilities | 9,932 | 903,713 | |||||||||||
| American Express Co. |
Consumer Finance | 11,460 | 1,890,327 | |||||||||||
| American Financial Group, Inc. |
Insurance | 1,325 | 160,988 | |||||||||||
| American International Group, Inc. |
Insurance | 14,134 | 711,788 | |||||||||||
| American Tower Corp. |
Diversified REITs | 8,786 | 1,795,331 | |||||||||||
| American Water Works Co., Inc. |
Water Utilities | 3,820 | 559,592 | |||||||||||
| Ameriprise Financial, Inc. |
Capital Markets | 1,910 | 585,415 | |||||||||||
| AmerisourceBergen Corp. |
Health Care Providers & Services | 3,056 | 489,296 | |||||||||||
| AMETEK, Inc. |
Electrical Equipment | 4,584 | 666,193 | |||||||||||
| Amgen, Inc. |
Biotechnology | 10,111 | 2,444,334 | |||||||||||
| Amphenol Corp., Class A |
Electronic Equipment, Instruments & Components | 11,078 | 905,294 | |||||||||||
| Analog Devices, Inc. |
Semiconductors & Semiconductor Equipment | 9,550 | 1,883,451 | |||||||||||
| Annaly Capital Management, Inc. |
Mortgage Real Estate Investment Trusts (REITs | ) | 8,786 | 167,900 | ||||||||||
| a | ANSYS, Inc. |
Software | 1,528 | 508,518 | ||||||||||
| Aon PLC, Class A |
Insurance | 3,820 | 1,204,408 | |||||||||||
| APA Corp. |
Oil, Gas & Consumable Fuels | 6,112 | 220,399 | |||||||||||
| Apollo Global Management, Inc. |
Financial Services | 8,201 | 517,975 | |||||||||||
| Apple, Inc. |
Technology Hardware, Storage & Peripherals | 282,298 | 46,550,940 | |||||||||||
| Applied Materials, Inc. |
Semiconductors & Semiconductor Equipment | 16,044 | 1,970,685 | |||||||||||
| a | Aptiv PLC |
Automobile Components | 4,966 | 557,136 | ||||||||||
| Aramark |
Hotels, Restaurants & Leisure | 4,763 | 170,515 | |||||||||||
| a | Arch Capital Group Ltd. |
Insurance | 6,876 | 466,674 | ||||||||||
| Archer-Daniels-Midland Co. |
Food Products | 10,314 | 821,613 | |||||||||||
| a | Arista Networks, Inc. |
Communications Equipment | 4,584 | 769,470 | ||||||||||
| Arthur J Gallagher & Co. |
Insurance | 3,999 | 765,049 | |||||||||||
| a | Aspen Technology, Inc. |
Software | 382 | 87,428 | ||||||||||
| AT&T, Inc. |
Diversified Telecommunication Services | 135,992 | 2,617,846 | |||||||||||
| a | Atlassian Corp., Class A |
Software | 2,674 | 457,709 | ||||||||||
| Atmos Energy Corp. |
Gas Utilities | 2,674 | 300,451 | |||||||||||
| a | Autodesk, Inc. |
Software | 4,202 | 874,688 | ||||||||||
| Automatic Data Processing, Inc. |
IT Services | 7,819 | 1,740,744 | |||||||||||
| a | AutoZone, Inc. |
Specialty Retail | 338 | 830,855 | ||||||||||
| AvalonBay Communities, Inc. |
Diversified REITs | 2,674 | 449,392 | |||||||||||
| Avangrid, Inc. |
Electric Utilities | 1,146 | 45,702 | |||||||||||
| a | Avantor, Inc. |
Life Sciences Tools & Services | 12,606 | 266,491 | ||||||||||
| Avery Dennison Corp. |
Containers & Packaging | 1,528 | 273,405 | |||||||||||
| Baker Hughes Co. |
Energy Equipment & Services | 19,482 | 562,251 | |||||||||||
| Ball Corp. |
Containers & Packaging | 5,909 | 325,645 | |||||||||||
| Bank of America Corp. |
Banks | 132,172 | 3,780,119 | |||||||||||
| Bank of New York Mellon Corp. |
Capital Markets | 13,752 | 624,891 | |||||||||||
| Bath & Body Works, Inc. |
Specialty Retail | 4,202 | 153,709 | |||||||||||
| Baxter International, Inc. |
Health Care Equipment & Supplies | 9,550 | 387,348 | |||||||||||
| Becton Dickinson & Co. |
Health Care Equipment & Supplies | 5,348 | 1,323,844 | |||||||||||
| Bentley Systems, Inc., Class B |
Software | 3,617 | 155,495 | |||||||||||
| a | Berkshire Hathaway, Inc., Class B |
Financial Services | 33,998 | 10,497,562 | ||||||||||
| Best Buy Co., Inc. |
Specialty Retail | 3,820 | 298,991 | |||||||||||
| a | Bills Holdings, Inc. |
Software | 1,528 | 123,982 | ||||||||||
| a | Biogen, Inc. |
Biotechnology | 2,674 | 743,452 | ||||||||||
| a | BioMarin Pharmaceutical, Inc. |
Biotechnology | 3,438 | 334,311 | ||||||||||
| a | Bio-Rad Laboratories, Inc., Class A |
Life Sciences Tools & Services | 382 | 182,986 | ||||||||||
| Bio-Techne Corp. |
Life Sciences Tools & Services | 3,056 | 226,725 | |||||||||||
| BlackRock, Inc. |
Capital Markets | 2,831 | 1,894,279 | |||||||||||
| Blackstone, Inc. |
Capital Markets | 13,370 | 1,174,421 | |||||||||||
| franklintempleton.com | Annual Report |
11 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Equity Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| United States (continued) | ||||||||||||||
| a | Block, Inc. |
IT Services | 10,314 | $ | 708,056 | |||||||||
| a | Boeing Co. |
Aerospace & Defense | 10,696 | 2,272,151 | ||||||||||
| a | Booking Holdings, Inc. |
Hotels, Restaurants & Leisure | 713 | 1,891,168 | ||||||||||
| Booz Allen Hamilton Holding Corp. |
Professional Services | 2,674 | 247,853 | |||||||||||
| BorgWarner, Inc. |
Automobile Components | 4,584 | 225,120 | |||||||||||
| Boston Properties, Inc. |
Diversified REITs | 2,674 | 144,717 | |||||||||||
| a | Boston Scientific Corp. |
Health Care Equipment & Supplies | 27,122 | 1,356,914 | ||||||||||
| Bristol-Myers Squibb Co. |
Pharmaceuticals | 40,110 | 2,780,024 | |||||||||||
| Broadcom, Inc. |
Semiconductors & Semiconductor Equipment | 8,022 | 5,146,434 | |||||||||||
| Broadridge Financial Solutions, Inc. |
IT Services | 2,292 | 335,938 | |||||||||||
| Brown & Brown, Inc. |
Insurance | 4,584 | 263,213 | |||||||||||
| Brown-Forman Corp., Class A |
Beverages | 1,146 | 74,708 | |||||||||||
| Brown-Forman Corp., Class B |
Beverages | 3,438 | 220,960 | |||||||||||
| Bunge Ltd. |
Food Products | 2,853 | 272,519 | |||||||||||
| a | Burlington Stores, Inc. |
Specialty Retail | 1,146 | 231,607 | ||||||||||
| a | Cadence Design Systems, Inc. |
Software | 5,145 | 1,080,913 | ||||||||||
| a | Caesars Entertainment, Inc. |
Hotels, Restaurants & Leisure | 3,999 | 195,191 | ||||||||||
| Camden Property Trust |
Diversified REITs | 1,910 | 200,244 | |||||||||||
| Campbell Soup Co. |
Food Products | 3,820 | 210,024 | |||||||||||
| Capital One Financial Corp. |
Consumer Finance | 7,258 | 697,929 | |||||||||||
| Cardinal Health, Inc. |
Health Care Providers & Services | 4,966 | 374,933 | |||||||||||
| Carlyle Group, Inc. |
Capital Markets | 4,202 | 130,514 | |||||||||||
| a | CarMax, Inc. |
Specialty Retail | 3,056 | 196,440 | ||||||||||
| a | Carnival Corp. |
Hotels, Restaurants & Leisure | 19,100 | 193,865 | ||||||||||
| Carrier Global Corp. |
Building Products | 15,841 | 724,726 | |||||||||||
| a | Catalent, Inc. |
Pharmaceuticals | 3,438 | 225,911 | ||||||||||
| Caterpillar, Inc. |
Machinery | 9,932 | 2,272,839 | |||||||||||
| a | CBRE Group, Inc., Class A |
Real Estate Management & Development | 6,112 | 445,015 | ||||||||||
| CDW Corp. |
Electronic Equipment, Instruments & Components | 2,674 | 521,136 | |||||||||||
| Celanese Corp. |
Chemicals | 1,910 | 207,980 | |||||||||||
| a | Centene Corp. |
Health Care Providers & Services | 10,314 | 651,948 | ||||||||||
| CenterPoint Energy, Inc. |
Multi-Utilities | 11,639 | 342,885 | |||||||||||
| a | Ceridian HCM Holding, Inc. |
Software | 3,056 | 223,760 | ||||||||||
| CF Industries Holdings, Inc. |
Chemicals | 3,820 | 276,912 | |||||||||||
| CH Robinson Worldwide, Inc. |
Air Freight & Logistics | 2,292 | 227,756 | |||||||||||
| a | Charles River Laboratories International, Inc. |
Life Sciences Tools & Services | 943 | 190,316 | ||||||||||
| Charles Schwab Corp. |
Capital Markets | 29,032 | 1,520,696 | |||||||||||
| a | Charter Communications, Inc., Class A |
Media | 1,910 | 683,035 | ||||||||||
| Cheniere Energy, Inc. |
Oil, Gas & Consumable Fuels | 4,584 | 722,438 | |||||||||||
| Chevron Corp. |
Oil, Gas & Consumable Fuels | 33,616 | 5,484,787 | |||||||||||
| a | Chipotle Mexican Grill, Inc. |
Hotels, Restaurants & Leisure | 516 | 881,478 | ||||||||||
| Chubb Ltd. |
Insurance | 7,819 | 1,518,293 | |||||||||||
| Church & Dwight Co., Inc. |
Household Products | 4,584 | 405,271 | |||||||||||
| Cigna Group |
Health Care Providers & Services | 5,730 | 1,464,187 | |||||||||||
| Cincinnati Financial Corp. |
Insurance | 3,056 | 342,516 | |||||||||||
| Cintas Corp. |
Commercial Services & Supplies | 1,528 | 706,975 | |||||||||||
| CisCo Systems, Inc. |
Communications Equipment | 77,928 | 4,073,686 | |||||||||||
| Citigroup, Inc. |
Banks | 36,672 | 1,719,550 | |||||||||||
| Citizens Financial Group, Inc. |
Banks | 9,347 | 283,868 | |||||||||||
| a | Clarivate PLC |
Professional Services | 7,819 | 73,420 | ||||||||||
| Clorox Co. |
Household Products | 2,292 | 362,686 | |||||||||||
| a | Cloudflare, Inc., Class A |
Software | 5,348 | 329,758 | ||||||||||
| CME Group, Inc. |
Capital Markets | 6,876 | 1,316,892 | |||||||||||
| CMS Energy Corp. |
Multi-Utilities | 5,730 | 351,707 | |||||||||||
| Coca-Cola Co. |
Beverages | 74,108 | 4,596,919 | |||||||||||
| Cognex Corp. |
Electronic Equipment, Instruments & Components | 3,438 | 170,353 | |||||||||||
| Cognizant Technology Solutions Corp., Class A |
IT Services | 9,932 | 605,157 | |||||||||||
| 12 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Equity Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| United States (continued) | ||||||||||||||
| a,c | Coinbase Global, Inc., Class A |
Capital Markets | 3,056 | $ | 206,494 | |||||||||
| Colgate-Palmolive Co. |
Household Products | 16,044 | 1,205,707 | |||||||||||
| Comcast Corp., Class A |
Media | 79,838 | 3,026,659 | |||||||||||
| Comerica, Inc. |
Banks | 2,292 | 99,519 | |||||||||||
| Conagra Brands, Inc. |
Food Products | 9,168 | 344,350 | |||||||||||
| ConocoPhillips |
Oil, Gas & Consumable Fuels | 23,302 | 2,311,791 | |||||||||||
| Consolidated Edison, Inc. |
Multi-Utilities | 6,673 | 638,406 | |||||||||||
| Constellation Brands, Inc., Class A |
Beverages | 3,056 | 690,320 | |||||||||||
| Constellation Energy Corp. |
Electric Utilities | 6,112 | 479,792 | |||||||||||
| Cooper Cos., Inc. |
Health Care Equipment & Supplies | 943 | 352,078 | |||||||||||
| a | Copart, Inc. |
Commercial Services & Supplies | 8,022 | 603,335 | ||||||||||
| Corebridge Financial, Inc. |
Financial Services | 1,528 | 24,479 | |||||||||||
| Corning, Inc. |
Electronic Equipment, Instruments & Components | 14,313 | 504,963 | |||||||||||
| Corteva, Inc. |
Chemicals | 13,549 | 817,140 | |||||||||||
| a | CoStar Group, Inc. |
Professional Services | 7,640 | 526,014 | ||||||||||
| Costco Wholesale Corp. |
Consumer Staples Distribution & Retail | 8,404 | 4,175,695 | |||||||||||
| Coterra Energy, Inc., Class A |
Oil, Gas & Consumable Fuels | 14,898 | 365,597 | |||||||||||
| a | Coupang, Inc. |
Broadline Retail | 19,482 | 311,712 | ||||||||||
| a | Crowdstrike Holdings, Inc., Class A |
Software | 4,202 | 576,767 | ||||||||||
| Crown Castle, Inc. |
Diversified REITs | 8,201 | 1,097,622 | |||||||||||
| Crown Holdings, Inc. |
Containers & Packaging | 2,292 | 189,571 | |||||||||||
| CSX Corp. |
Ground Transportation | 40,492 | 1,212,330 | |||||||||||
| Cummins, Inc. |
Machinery | 2,674 | 638,765 | |||||||||||
| CVS Health Corp. |
Health Care Providers & Services | 24,830 | 1,845,117 | |||||||||||
| Danaher Corp. |
Life Sciences Tools & Services | 12,403 | 3,126,052 | |||||||||||
| Darden Restaurants, Inc. |
Hotels, Restaurants & Leisure | 2,292 | 355,627 | |||||||||||
| a | Datadog, Inc., Class A |
Software | 4,763 | 346,080 | ||||||||||
| a | DaVita, Inc. |
Health Care Providers & Services | 1,146 | 92,952 | ||||||||||
| Deere & Co. |
Machinery | 4,966 | 2,050,362 | |||||||||||
| Dell Technologies, Inc., Class C |
Technology Hardware, Storage & Peripherals | 4,966 | 199,683 | |||||||||||
| a | Delta Air Lines, Inc. |
Airlines | 12,224 | 426,862 | ||||||||||
| DENTSPLY SIRONA, Inc. |
Health Care Equipment & Supplies | 3,820 | 150,050 | |||||||||||
| Devon Energy Corp. |
Oil, Gas & Consumable Fuels | 12,606 | 637,990 | |||||||||||
| a | Dexcom, Inc. |
Health Care Equipment & Supplies | 7,437 | 864,031 | ||||||||||
| Diamondback Energy, Inc. |
Oil, Gas & Consumable Fuels | 3,438 | 464,714 | |||||||||||
| Digital Realty Trust, Inc. |
Diversified REITs | 5,348 | 525,762 | |||||||||||
| Discover Financial Services |
Consumer Finance | 5,145 | 508,532 | |||||||||||
| a | DocuSign, Inc. |
Software | 3,820 | 222,706 | ||||||||||
| Dollar General Corp. |
Broadline Retail | 4,202 | 884,353 | |||||||||||
| a | Dollar Tree, Inc. |
Broadline Retail | 3,999 | 574,056 | ||||||||||
| Dominion Energy, Inc. |
Multi-Utilities | 15,662 | 875,662 | |||||||||||
| Domino’s Pizza, Inc. |
Hotels, Restaurants & Leisure | 764 | 252,021 | |||||||||||
| a | DoorDash, Inc., Class A |
Internet & Direct Marketing Retail | 4,966 | 315,639 | ||||||||||
| Dover Corp. |
Machinery | 2,674 | 406,288 | |||||||||||
| Dow, Inc. |
Chemicals | 13,549 | 742,756 | |||||||||||
| DR Horton, Inc. |
Household Durables | 6,112 | 597,081 | |||||||||||
| DTE Energy Co. |
Multi-Utilities | 3,617 | 396,206 | |||||||||||
| Duke Energy Corp. |
Electric Utilities | 14,516 | 1,400,359 | |||||||||||
| DuPont de Nemours, Inc. |
Chemicals | 8,786 | 630,571 | |||||||||||
| a | DXC Technology Co. |
IT Services | 4,763 | 121,742 | ||||||||||
| a | Dynatrace, Inc. |
Software | 4,202 | 177,745 | ||||||||||
| East West Bancorp, Inc. |
Banks | 2,674 | 148,407 | |||||||||||
| Eastman Chemical Co. |
Chemicals | 2,292 | 193,307 | |||||||||||
| Eaton Corp. PLC |
Electrical Equipment | 7,640 | 1,309,038 | |||||||||||
| eBay, Inc. |
Internet & Direct Marketing Retail | 10,314 | 457,632 | |||||||||||
| Ecolab, Inc. |
Chemicals | 4,584 | 758,790 | |||||||||||
| Edison International |
Electric Utilities | 7,258 | 512,342 | |||||||||||
| franklintempleton.com | Annual Report |
13 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Equity Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| United States (continued) | ||||||||||||||
| a | Edwards Lifesciences Corp. |
Health Care Equipment & Supplies | 11,842 | $ | 979,689 | |||||||||
| a | Elanco Animal Health, Inc. |
Pharmaceuticals | 8,786 | 82,588 | ||||||||||
| Electronic Arts, Inc. |
Entertainment | 4,966 | 598,155 | |||||||||||
| Elevance Health, Inc. |
Health Care Providers & Services | 4,584 | 2,107,769 | |||||||||||
| Eli Lilly & Co. |
Pharmaceuticals | 14,898 | 5,116,271 | |||||||||||
| Emerson Electric Co. |
Electrical Equipment | 11,078 | 965,337 | |||||||||||
| a | Enphase Energy, Inc. |
Semiconductors & Semiconductor Equipment | 2,674 | 562,289 | ||||||||||
| Entegris, Inc. |
Semiconductors & Semiconductor Equipment | 2,853 | 233,975 | |||||||||||
| Entergy Corp. |
Electric Utilities | 3,820 | 411,567 | |||||||||||
| EOG Resources, Inc. |
Oil, Gas & Consumable Fuels | 11,078 | 1,269,871 | |||||||||||
| a | EPAM Systems, Inc. |
IT Services | 1,146 | 342,654 | ||||||||||
| EQT Corp. |
Oil, Gas & Consumable Fuels | 6,876 | 219,413 | |||||||||||
| Equifax, Inc. |
Professional Services | 2,292 | 464,909 | |||||||||||
| Equinix, Inc. |
Diversified REITs | 1,764 | 1,271,915 | |||||||||||
| Equitable Holdings, Inc. |
Financial Services | 6,673 | 169,427 | |||||||||||
| Equity LifeStyle Properties, Inc. |
Diversified REITs | 3,235 | 217,166 | |||||||||||
| Equity Residential |
Diversified REITs | 6,494 | 389,640 | |||||||||||
| Essex Property Trust, Inc. |
Diversified REITs | 1,146 | 239,674 | |||||||||||
| Estee Lauder Cos., Inc., Class A |
Personal Products | 4,381 | 1,079,741 | |||||||||||
| a | Etsy, Inc. |
Internet & Direct Marketing Retail | 2,292 | 255,168 | ||||||||||
| Everest Re Group Ltd. |
Insurance | 764 | 273,527 | |||||||||||
| Evergy, Inc. |
Electric Utilities | 4,202 | 256,826 | |||||||||||
| Eversource Energy |
Electric Utilities | 6,876 | 538,116 | |||||||||||
| a | Exact Sciences Corp. |
Biotechnology | 3,438 | 233,131 | ||||||||||
| Exelon Corp. |
Electric Utilities | 18,897 | 791,595 | |||||||||||
| a | Expedia Group, Inc. |
Internet & Direct Marketing Retail | 2,853 | 276,827 | ||||||||||
| Expeditors International of Washington, Inc. |
Air Freight & Logistics | 3,056 | 336,527 | |||||||||||
| Extra Space Storage, Inc. |
Diversified REITs | 2,674 | 435,675 | |||||||||||
| Exxon Mobil Corp. |
Oil, Gas & Consumable Fuels | 78,310 | 8,587,475 | |||||||||||
| a | F5, Inc. |
Communications Equipment | 1,146 | 166,961 | ||||||||||
| FactSet Research Systems, Inc. |
Capital Markets | 764 | 317,129 | |||||||||||
| Fastenal Co. |
Trading Companies & Distributors | 10,875 | 586,598 | |||||||||||
| Federal Realty Investment Trust |
Diversified REITs | 1,325 | 130,950 | |||||||||||
| FedEx Corp. |
Air Freight & Logistics | 4,584 | 1,047,398 | |||||||||||
| Fidelity National Financial, Inc. |
Insurance | 5,145 | 179,715 | |||||||||||
| Fidelity National Information Services, Inc. |
IT Services | 11,078 | 601,868 | |||||||||||
| Fifth Third Bancorp |
Banks | 12,988 | 346,000 | |||||||||||
| c | First Republic Bank |
Banks | 3,438 | 48,098 | ||||||||||
| a | First Solar, Inc. |
Semiconductors & Semiconductor Equipment | 1,910 | 415,425 | ||||||||||
| FirstEnergy Corp. |
Electric Utilities | 10,314 | 413,179 | |||||||||||
| a | Fiserv, Inc. |
IT Services | 12,021 | 1,358,734 | ||||||||||
| a | FleetCor Technologies, Inc. |
IT Services | 1,528 | 322,179 | ||||||||||
| a | Flex Ltd. |
Electronic Equipment, Instruments & Components | 8,404 | 193,376 | ||||||||||
| FMC Corp. |
Chemicals | 2,292 | 279,922 | |||||||||||
| Ford Motor Co. |
Automobiles | 74,872 | 943,387 | |||||||||||
| a | Fortinet, Inc. |
Software | 12,403 | 824,303 | ||||||||||
| Fortive Corp. |
Machinery | 6,673 | 454,898 | |||||||||||
| Fortune Brands Innovations, Inc. |
Building Products | 2,471 | 145,122 | |||||||||||
| Fox Corp., Class A |
Media | 5,730 | 195,107 | |||||||||||
| Fox Corp., Class B |
Media | 2,853 | 89,327 | |||||||||||
| Franklin Resources, Inc. |
Capital Markets | 5,348 | 144,075 | |||||||||||
| Freeport-McMoRan, Inc. |
Metals & Mining | 27,122 | 1,109,561 | |||||||||||
| Garmin Ltd. |
Household Durables | 2,853 | 287,925 | |||||||||||
| a | Gartner, Inc. |
IT Services | 1,528 | 497,777 | ||||||||||
| Gen Digital, Inc. |
Software | 10,696 | 183,543 | |||||||||||
| a | Generac Holdings, Inc. |
Electrical Equipment | 1,146 | 123,779 | ||||||||||
| General Dynamics Corp. |
Aerospace & Defense | 4,202 | 958,938 | |||||||||||
| 14 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Equity Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| United States (continued) | ||||||||||||||
| General Electric Co. |
Industrial Conglomerates | 20,628 | $ | 1,972,037 | ||||||||||
| General Mills, Inc. |
Food Products | 11,257 | 962,023 | |||||||||||
| General Motors Co. |
Automobiles | 26,740 | 980,823 | |||||||||||
| Genuine Parts Co. |
Distributors | 2,674 | 447,387 | |||||||||||
| Gilead Sciences, Inc. |
Biotechnology | 23,684 | 1,965,061 | |||||||||||
| Global Payments, Inc. |
IT Services | 4,966 | 522,622 | |||||||||||
| Globe Life, Inc. |
Insurance | 1,707 | 187,804 | |||||||||||
| a | GoDaddy, Inc., Class A |
IT Services | 2,650 | 205,958 | ||||||||||
| Goldman Sachs Group, Inc. |
Capital Markets | 6,494 | 2,124,252 | |||||||||||
| Halliburton Co. |
Energy Equipment & Services | 17,190 | 543,892 | |||||||||||
| Hartford Financial Services Group, Inc. |
Insurance | 6,112 | 425,945 | |||||||||||
| Hasbro, Inc. |
Leisure Products | 2,471 | 132,668 | |||||||||||
| HCA Healthcare, Inc. |
Health Care Providers & Services | 3,999 | 1,054,456 | |||||||||||
| Healthpeak Properties, Inc. |
Diversified REITs | 9,932 | 218,206 | |||||||||||
| HEICO Corp. |
Aerospace & Defense | 764 | 130,675 | |||||||||||
| HEICO Corp., Class A |
Aerospace & Defense | 1,325 | 180,068 | |||||||||||
| a | Henry Schein, Inc. |
Health Care Providers & Services | 2,471 | 201,485 | ||||||||||
| Hershey Co. |
Food Products | 2,674 | 680,292 | |||||||||||
| Hess Corp. |
Oil, Gas & Consumable Fuels | 5,348 | 707,754 | |||||||||||
| Hewlett Packard Enterprise Co. |
Technology Hardware, Storage & Peripherals | 24,245 | 386,223 | |||||||||||
| Hilton Worldwide Holdings, Inc. |
Hotels, Restaurants & Leisure | 5,145 | 724,776 | |||||||||||
| a | Hologic, Inc. |
Health Care Equipment & Supplies | 4,584 | 369,929 | ||||||||||
| Home Depot, Inc. |
Specialty Retail | 19,482 | 5,749,528 | |||||||||||
| Honeywell International, Inc. |
Industrial Conglomerates | 12,606 | 2,409,259 | |||||||||||
| a | Horizon Therapeutics PLC |
Biotechnology | 4,202 | 458,606 | ||||||||||
| Hormel Foods Corp. |
Food Products | 5,730 | 228,512 | |||||||||||
| Host Hotels & Resorts, Inc. |
Diversified REITs | 13,370 | 220,471 | |||||||||||
| Howmet Aerospace, Inc. |
Aerospace & Defense | 6,876 | 291,336 | |||||||||||
| HP, Inc. |
Technology Hardware, Storage & Peripherals | 16,426 | 482,103 | |||||||||||
| Hubbell, Inc., Class B |
Electrical Equipment | 1,146 | 278,833 | |||||||||||
| a | HubSpot, Inc. |
Software | 943 | 404,311 | ||||||||||
| Humana, Inc. |
Health Care Providers & Services | 2,292 | 1,112,674 | |||||||||||
| Huntington Bancshares, Inc. |
Banks | 27,122 | 303,766 | |||||||||||
| Huntington Ingalls Industries, Inc. |
Aerospace & Defense | 764 | 158,163 | |||||||||||
| IDEX Corp. |
Machinery | 1,528 | 353,014 | |||||||||||
| a | IDEXX Laboratories, Inc. |
Health Care Equipment & Supplies | 1,528 | 764,122 | ||||||||||
| Illinois Tool Works, Inc. |
Machinery | 5,348 | 1,301,971 | |||||||||||
| a | Illumina, Inc. |
Life Sciences Tools & Services | 3,056 | 710,673 | ||||||||||
| a | Incyte Corp. |
Biotechnology | 3,438 | 248,464 | ||||||||||
| Ingersoll Rand, Inc. |
Machinery | 7,640 | 444,495 | |||||||||||
| a | Insulet Corp. |
Health Care Equipment & Supplies | 1,325 | 422,622 | ||||||||||
| Intel Corp. |
Semiconductors & Semiconductor Equipment | 78,692 | 2,570,868 | |||||||||||
| Intercontinental Exchange, Inc. |
Capital Markets | 10,696 | 1,115,486 | |||||||||||
| International Business Machines Corp. |
IT Services | 17,190 | 2,253,437 | |||||||||||
| International Flavors & Fragrances, Inc. |
Chemicals | 4,763 | 438,005 | |||||||||||
| International Paper Co. |
Containers & Packaging | 6,876 | 247,949 | |||||||||||
| Interpublic Group of Cos., Inc. |
Media | 7,258 | 270,288 | |||||||||||
| Intuit, Inc. |
Software | 5,348 | 2,384,299 | |||||||||||
| a | Intuitive Surgical, Inc. |
Health Care Equipment & Supplies | 6,494 | 1,659,022 | ||||||||||
| Invesco Ltd |
Capital Markets | 8,583 | 140,761 | |||||||||||
| Invitation Homes, Inc. |
Diversified REITs | 11,078 | 345,966 | |||||||||||
| a | IQVIA Holdings, Inc. |
Life Sciences Tools & Services | 3,438 | 683,784 | ||||||||||
| Iron Mountain, Inc. |
Diversified REITs | 5,348 | 282,963 | |||||||||||
| J M Smucker Co. |
Food Products | 1,910 | 300,577 | |||||||||||
| Jack Henry & Associates, Inc. |
IT Services | 1,325 | 199,704 | |||||||||||
| Jacobs Solutions, Inc. |
Professional Services | 2,292 | 269,333 | |||||||||||
| a | Jazz Pharmaceuticals PLC |
Pharmaceuticals | 1,146 | 167,694 | ||||||||||
| franklintempleton.com | Annual Report |
15 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Equity Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| United States (continued) | ||||||||||||||
| JB Hunt Transport Services, Inc. |
Ground Transportation | 1,528 | $ | 268,103 | ||||||||||
| Jefferies Financial Group, Inc. |
Capital Markets | 3,438 | 109,122 | |||||||||||
| Johnson & Johnson |
Pharmaceuticals | 49,660 | 7,697,300 | |||||||||||
| Johnson Controls International PLC |
Building Products | 12,988 | 782,137 | |||||||||||
| JPMorgan Chase & Co. |
Banks | 55,772 | 7,267,649 | |||||||||||
| Juniper Networks, Inc. |
Communications Equipment | 6,494 | 223,523 | |||||||||||
| Kellogg Co. |
Food Products | 4,763 | 318,930 | |||||||||||
| Keurig Dr Pepper, Inc. |
Beverages | 16,044 | 566,032 | |||||||||||
| KeyCorp |
Banks | 17,572 | 220,001 | |||||||||||
| a | Keysight Technologies, Inc. |
Electronic Equipment, Instruments & Components | 3,438 | 555,168 | ||||||||||
| Kimberly-Clark Corp. |
Household Products | 6,494 | 871,625 | |||||||||||
| Kimco Realty Corp. |
Diversified REITs | 11,639 | 227,310 | |||||||||||
| Kinder Morgan, Inc. |
Oil, Gas & Consumable Fuels | 37,615 | 658,639 | |||||||||||
| KKR & Co., Inc. |
Capital Markets | 11,078 | 581,817 | |||||||||||
| KLA Corp. |
Semiconductors & Semiconductor Equipment | 2,674 | 1,067,381 | |||||||||||
| Kraft Heinz Co. |
Food Products | 15,662 | 605,650 | |||||||||||
| Kroger Co. |
Consumer Staples Distribution & Retail | 12,403 | 612,336 | |||||||||||
| L3Harris Technologies, Inc. |
Aerospace & Defense | 3,617 | 709,800 | |||||||||||
| Laboratory Corp. of America Holdings |
Health Care Providers & Services | 1,707 | 391,620 | |||||||||||
| Lam Research Corp. |
Semiconductors & Semiconductor Equipment | 2,674 | 1,417,541 | |||||||||||
| Lamb Weston Holdings, Inc. |
Food Products | 2,674 | 279,486 | |||||||||||
| a | Las Vegas Sands Corp. |
Hotels, Restaurants & Leisure | 6,291 | 361,418 | ||||||||||
| Lear Corp. |
Automobile Components | 1,146 | 159,856 | |||||||||||
| Leidos Holdings, Inc. |
Professional Services | 2,674 | 246,168 | |||||||||||
| Lennar Corp., Class A |
Household Durables | 4,763 | 500,639 | |||||||||||
| Lennar Corp., Class B |
Household Durables | 179 | 15,987 | |||||||||||
| Lennox International, Inc. |
Building Products | 561 | 140,968 | |||||||||||
| a | Liberty Broadband Corp., Class A |
Media | 382 | 31,370 | ||||||||||
| a | Liberty Broadband Corp., Class C |
Media | 2,292 | 187,256 | ||||||||||
| a | Liberty Media Corp.-Liberty SiriusXM, Class A |
Media | 1,325 | 37,219 | ||||||||||
| a | Liberty Media Corp.-Liberty SiriusXM, Class C |
Media | 2,853 | 79,855 | ||||||||||
| Lincoln National Corp. |
Insurance | 2,853 | 64,107 | |||||||||||
| Linde PLC |
Chemicals | 9,347 | 3,322,298 | |||||||||||
| a | Live Nation Entertainment, Inc. |
Entertainment | 2,674 | 187,180 | ||||||||||
| LKQ Corp. |
Distributors | 4,763 | 270,348 | |||||||||||
| Lockheed Martin Corp. |
Aerospace & Defense | 4,202 | 1,986,411 | |||||||||||
| Loews Corp. |
Insurance | 3,999 | 232,022 | |||||||||||
| Lowe’s Cos., Inc. |
Specialty Retail | 11,460 | 2,291,656 | |||||||||||
| LPL Financial Holdings, Inc. |
Capital Markets | 1,528 | 309,267 | |||||||||||
| a,c | Lucid Group, Inc. |
Automobiles | 10,493 | 84,364 | ||||||||||
| a | Lululemon Athletica, Inc. |
Textiles, Apparel & Luxury Goods | 2,292 | 834,723 | ||||||||||
| Lumen Technologies, Inc. |
Diversified Telecommunication Services | 17,369 | 46,028 | |||||||||||
| LyondellBasell Industries NV, Class A |
Chemicals | 4,763 | 447,198 | |||||||||||
| M&T Bank Corp. |
Banks | 3,235 | 386,809 | |||||||||||
| Marathon Oil Corp. |
Oil, Gas & Consumable Fuels | 11,842 | 283,734 | |||||||||||
| Marathon Petroleum Corp. |
Oil, Gas & Consumable Fuels | 8,404 | 1,133,111 | |||||||||||
| a | Markel Corp. |
Insurance | 243 | 310,411 | ||||||||||
| MarketAxess Holdings, Inc. |
Capital Markets | 764 | 298,946 | |||||||||||
| Marriott International, Inc., Class A |
Hotels, Restaurants & Leisure | 4,966 | 824,555 | |||||||||||
| Marsh & McLennan Cos., Inc. |
Insurance | 9,347 | 1,556,743 | |||||||||||
| Martin Marietta Materials, Inc. |
Construction Materials | 1,146 | 406,899 | |||||||||||
| Marvell Technology, Inc. |
Semiconductors & Semiconductor Equipment | 16,044 | 694,705 | |||||||||||
| Masco Corp. |
Building Products | 4,202 | 208,923 | |||||||||||
| Mastercard, Inc., Class A |
IT Services | 16,044 | 5,830,550 | |||||||||||
| a | Match Group, Inc. |
Interactive Media & Services | 5,348 | 205,310 | ||||||||||
| McCormick & Co., Inc. |
Food Products | 4,763 | 396,329 | |||||||||||
| McDonald’s Corp. |
Hotels, Restaurants & Leisure | 13,752 | 3,845,197 | |||||||||||
| 16 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Equity Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| United States (continued) | ||||||||||||||
| McKesson Corp. |
Health Care Providers & Services | 2,674 | $ | 952,078 | ||||||||||
| Medtronic PLC |
Health Care Equipment & Supplies | 25,212 | 2,032,591 | |||||||||||
| Merck & Co., Inc. |
Pharmaceuticals | 48,132 | 5,120,764 | |||||||||||
| a | Meta Platforms, Inc., Class A |
Interactive Media & Services | 42,020 | 8,905,719 | ||||||||||
| MetLife, Inc. |
Insurance | 12,606 | 730,392 | |||||||||||
| a | Mettler-Toledo International, Inc. |
Life Sciences Tools & Services | 431 | 659,521 | ||||||||||
| MGM Resorts International |
Hotels, Restaurants & Leisure | 6,112 | 271,495 | |||||||||||
| Microchip Technology, Inc. |
Semiconductors & Semiconductor Equipment | 10,314 | 864,107 | |||||||||||
| Micron Technology, Inc. |
Semiconductors & Semiconductor Equipment | 20,807 | 1,255,494 | |||||||||||
| Microsoft Corp. |
Software | 141,340 | 40,748,322 | |||||||||||
| Mid-America Apartment Communities, Inc. |
Diversified REITs | 2,292 | 346,184 | |||||||||||
| a | Moderna, Inc. |
Biotechnology | 6,112 | 938,681 | ||||||||||
| a | Molina Healthcare, Inc. |
Health Care Providers & Services | 1,146 | 306,544 | ||||||||||
| Molson Coors Beverage Co., Class B |
Beverages | 3,438 | 177,676 | |||||||||||
| Mondelez International, Inc., Class A |
Food Products | 25,976 | 1,811,047 | |||||||||||
| a | MongoDB, Inc. |
IT Services | 1,325 | 308,884 | ||||||||||
| Monolithic Power Systems, Inc. |
Semiconductors & Semiconductor Equipment | 764 | 382,413 | |||||||||||
| a | Monster Beverage Corp. |
Beverages | 14,516 | 784,009 | ||||||||||
| Moody’s Corp. |
Capital Markets | 3,056 | 935,197 | |||||||||||
| Morgan Stanley |
Capital Markets | 24,830 | 2,180,074 | |||||||||||
| Mosaic Co. |
Chemicals | 6,673 | 306,157 | |||||||||||
| Motorola Solutions, Inc. |
Communications Equipment | 3,056 | 874,413 | |||||||||||
| MSCI, Inc. |
Capital Markets | 1,528 | 855,206 | |||||||||||
| Nasdaq, Inc. |
Capital Markets | 6,494 | 355,027 | |||||||||||
| NetApp, Inc. |
Technology Hardware, Storage & Peripherals | 3,999 | 255,336 | |||||||||||
| a | Netflix, Inc. |
Entertainment | 8,404 | 2,903,414 | ||||||||||
| a | Neurocrine Biosciences, Inc. |
Biotechnology | 1,910 | 193,330 | ||||||||||
| Newmont Corp. |
Metals & Mining | 14,898 | 730,300 | |||||||||||
| News Corp., Class A |
Media | 7,258 | 125,346 | |||||||||||
| News Corp., Class B |
Media | 2,089 | 36,411 | |||||||||||
| NextEra Energy, Inc. |
Electric Utilities | 37,818 | 2,915,011 | |||||||||||
| NIKE, Inc., Class B |
Textiles, Apparel & Luxury Goods | 23,684 | 2,904,606 | |||||||||||
| NiSource, Inc. |
Multi-Utilities | 7,640 | 213,614 | |||||||||||
| Norfolk Southern Corp. |
Ground Transportation | 4,381 | 928,772 | |||||||||||
| Northern Trust Corp. |
Capital Markets | 3,820 | 336,657 | |||||||||||
| Northrop Grumman Corp. |
Aerospace & Defense | 2,674 | 1,234,639 | |||||||||||
| a | Novocure Ltd. |
Health Care Equipment & Supplies | 1,910 | 114,867 | ||||||||||
| NRG Energy, Inc. |
Electric Utilities | 4,584 | 157,185 | |||||||||||
| Nucor Corp. |
Metals & Mining | 4,584 | 708,090 | |||||||||||
| NVIDIA Corp. |
Semiconductors & Semiconductor Equipment | 46,604 | 12,945,193 | |||||||||||
| a | NVR, Inc. |
Household Durables | 55 | 306,470 | ||||||||||
| Occidental Petroleum Corp. |
Oil, Gas & Consumable Fuels | 13,752 | 858,537 | |||||||||||
| a | Okta, Inc. |
IT Services | 2,853 | 246,043 | ||||||||||
| Old Dominion Freight Line, Inc. |
Ground Transportation | 1,707 | 581,814 | |||||||||||
| Omnicom Group, Inc. |
Media | 3,820 | 360,379 | |||||||||||
| a | ON Semiconductor Corp. |
Semiconductors & Semiconductor Equipment | 8,022 | 660,371 | ||||||||||
| ONEOK, Inc. |
Oil, Gas & Consumable Fuels | 8,404 | 533,990 | |||||||||||
| Oracle Corp. |
Software | 29,032 | 2,697,653 | |||||||||||
| a | O’Reilly Automotive, Inc. |
Specialty Retail | 1,181 | 1,002,645 | ||||||||||
| Otis Worldwide Corp. |
Machinery | 7,819 | 659,924 | |||||||||||
| Owens Corning |
Building Products | 1,910 | 182,978 | |||||||||||
| PACCAR, Inc. |
Machinery | 9,730 | 712,236 | |||||||||||
| Packaging Corp. of America |
Containers & Packaging | 1,707 | 236,983 | |||||||||||
| a | Palantir Technologies, Inc., Class A |
Software | 33,795 | 285,568 | ||||||||||
| a | Palo Alto Networks, Inc. |
Software | 5,730 | 1,144,510 | ||||||||||
| Paramount Global, Class B |
Media | 9,550 | 213,061 | |||||||||||
| Parker-Hannifin Corp. |
Machinery | 2,471 | 830,528 | |||||||||||
| franklintempleton.com | Annual Report |
17 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Equity Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| United States (continued) | ||||||||||||||
| Paychex, Inc. |
IT Services | 6,112 | $ | 700,374 | ||||||||||
| a | Paycom Software, Inc. |
Software | 943 | 286,681 | ||||||||||
| a | Paylocity Holding Corp. |
Software | 764 | 151,868 | ||||||||||
| a | PayPal Holdings, Inc. |
IT Services | 21,392 | 1,624,508 | ||||||||||
| Pentair PLC |
Machinery | 3,235 | 178,798 | |||||||||||
| PepsiCo, Inc. |
Beverages | 25,976 | 4,735,425 | |||||||||||
| PerkinElmer, Inc. |
Life Sciences Tools & Services | 2,292 | 305,432 | |||||||||||
| Pfizer, Inc. |
Pharmaceuticals | 106,196 | 4,332,797 | |||||||||||
| a | PG&E Corp. |
Electric Utilities | 30,357 | 490,873 | ||||||||||
| Philip Morris International, Inc. |
Tobacco | 29,414 | 2,860,512 | |||||||||||
| Phillips 66 |
Oil, Gas & Consumable Fuels | 8,786 | 890,725 | |||||||||||
| Pinnacle West Capital Corp. |
Electric Utilities | 2,089 | 165,532 | |||||||||||
| a | Pinterest, Inc., Class A |
Interactive Media & Services | 11,078 | 302,097 | ||||||||||
| Pioneer Natural Resources Co. |
Oil, Gas & Consumable Fuels | 4,584 | 936,236 | |||||||||||
| a | Plug Power, Inc. |
Electrical Equipment | 9,729 | 114,024 | ||||||||||
| PNC Financial Services Group, Inc. |
Banks | 7,640 | 971,044 | |||||||||||
| Pool Corp. |
Distributors | 764 | 261,624 | |||||||||||
| PPG Industries, Inc. |
Chemicals | 4,584 | 612,331 | |||||||||||
| PPL Corp. |
Electric Utilities | 13,752 | 382,168 | |||||||||||
| Principal Financial Group, Inc. |
Insurance | 4,381 | 325,596 | |||||||||||
| Procter & Gamble Co. |
Household Products | 44,694 | 6,645,551 | |||||||||||
| Progressive Corp. |
Insurance | 11,078 | 1,584,819 | |||||||||||
| Prologis, Inc. |
Diversified REITs | 17,572 | 2,192,458 | |||||||||||
| Prudential Financial, Inc. |
Insurance | 6,876 | 568,920 | |||||||||||
| a | PTC, Inc. |
Software | 1,910 | 244,919 | ||||||||||
| Public Service Enterprise Group, Inc. |
Multi-Utilities | 9,550 | 596,398 | |||||||||||
| Public Storage |
Diversified REITs | 3,056 | 923,340 | |||||||||||
| PulteGroup, Inc. |
Household Durables | 4,202 | 244,893 | |||||||||||
| a | Qorvo, Inc. |
Semiconductors & Semiconductor Equipment | 1,910 | 193,999 | ||||||||||
| QUALCOMM, Inc. |
Semiconductors & Semiconductor Equipment | 21,392 | 2,729,191 | |||||||||||
| Quanta Services, Inc. |
Construction & Engineering | 2,674 | 445,595 | |||||||||||
| Quest Diagnostics, Inc. |
Health Care Providers & Services | 1,910 | 270,227 | |||||||||||
| Raymond James Financial, Inc. |
Capital Markets | 3,617 | 337,358 | |||||||||||
| Raytheon Technologies Corp. |
Aerospace & Defense | 27,886 | 2,730,876 | |||||||||||
| Realty Income Corp. |
Diversified REITs | 11,842 | 749,835 | |||||||||||
| Regency Centers Corp. |
Diversified REITs | 2,853 | 174,547 | |||||||||||
| a | Regeneron Pharmaceuticals, Inc. |
Biotechnology | 2,028 | 1,666,347 | ||||||||||
| Regions Financial Corp. |
Banks | 17,572 | 326,136 | |||||||||||
| Reinsurance Group of America, Inc. |
Insurance | 1,146 | 152,143 | |||||||||||
| Republic Services, Inc. |
Commercial Services & Supplies | 3,820 | 516,540 | |||||||||||
| ResMed, Inc. |
Health Care Equipment & Supplies | 2,674 | 585,579 | |||||||||||
| a | Rivian Automotive, Inc., Class A |
Automobiles | 10,314 | 159,661 | ||||||||||
| a | ROBLOX Corp., Class A |
Entertainment | 6,876 | 309,282 | ||||||||||
| Rockwell Automation, Inc. |
Electrical Equipment | 2,292 | 672,587 | |||||||||||
| a | Roku, Inc. |
Entertainment | 2,292 | 150,859 | ||||||||||
| Rollins, Inc. |
Commercial Services & Supplies | 4,202 | 157,701 | |||||||||||
| Roper Technologies, Inc. |
Industrial Conglomerates | 1,910 | 841,718 | |||||||||||
| Ross Stores, Inc. |
Specialty Retail | 6,494 | 689,208 | |||||||||||
| a | Royal Caribbean Cruises Ltd. |
Hotels, Restaurants & Leisure | 3,999 | 261,135 | ||||||||||
| Royalty Pharma PLC, Class A |
Pharmaceuticals | 7,258 | 261,506 | |||||||||||
| S&P Global, Inc. |
Capital Markets | 6,112 | 2,107,234 | |||||||||||
| a | Salesforce, Inc. |
Software | 19,100 | 3,815,798 | ||||||||||
| SBA Communications Corp. |
Diversified REITs | 2,089 | 545,375 | |||||||||||
| Schlumberger NV |
Energy Equipment & Services | 27,122 | 1,331,690 | |||||||||||
| a | Seagen, Inc. |
Biotechnology | 2,674 | 541,405 | ||||||||||
| Sealed Air Corp. |
Containers & Packaging | 2,853 | 130,981 | |||||||||||
| SEI Investments Co. |
Capital Markets | 1,910 | 109,921 | |||||||||||
| 18 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Equity Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| United States (continued) | ||||||||||||||
| Sempra Energy |
Multi-Utilities | 5,909 | $ | 893,204 | ||||||||||
| Sensata Technologies Holding PLC |
Electrical Equipment | 3,056 | 152,861 | |||||||||||
| a | ServiceNow, Inc. |
Software | 3,820 | 1,775,230 | ||||||||||
| Sherwin-Williams Co. |
Chemicals | 4,584 | 1,030,346 | |||||||||||
| Simon Property Group, Inc. |
Real Estate Investment Trusts (REITs | ) | 6,112 | 684,361 | ||||||||||
| c | Sirius XM Holdings, Inc. |
Media | 14,898 | 59,145 | ||||||||||
| Skyworks Solutions, Inc. |
Semiconductors & Semiconductor Equipment | 3,056 | 360,547 | |||||||||||
| a | Snap, Inc., Class A |
Interactive Media & Services | 19,100 | 214,111 | ||||||||||
| Snap-on, Inc. |
Machinery | 943 | 232,817 | |||||||||||
| a | Snowflake, Inc., Class A |
IT Services | 5,348 | 825,143 | ||||||||||
| a | SolarEdge Technologies, Inc. |
Semiconductors & Semiconductor Equipment | 1,146 | 348,327 | ||||||||||
| Southern Co. |
Electric Utilities | 20,628 | 1,435,296 | |||||||||||
| Southern Copper Corp. |
Metals & Mining | 1,528 | 116,510 | |||||||||||
| Southwest Airlines Co. |
Airlines | 11,078 | 360,478 | |||||||||||
| a | Splunk, Inc. |
Software | 2,674 | 256,383 | ||||||||||
| SS&C Technologies Holdings, Inc. |
IT Services | 3,999 | 225,824 | |||||||||||
| Stanley Black & Decker, Inc. |
Machinery | 2,853 | 229,895 | |||||||||||
| Starbucks Corp. |
Hotels, Restaurants & Leisure | 21,774 | 2,267,327 | |||||||||||
| State Street Corp. |
Capital Markets | 6,494 | 491,531 | |||||||||||
| Steel Dynamics, Inc. |
Metals & Mining | 3,056 | 345,511 | |||||||||||
| STERIS PLC |
Health Care Equipment & Supplies | 1,910 | 365,345 | |||||||||||
| Stryker Corp. |
Health Care Equipment & Supplies | 6,494 | 1,853,842 | |||||||||||
| Sun Communities, Inc. |
Diversified REITs | 2,292 | 322,897 | |||||||||||
| Synchrony Financial |
Consumer Finance | 8,404 | 244,388 | |||||||||||
| a | Synopsys, Inc. |
Software | 2,853 | 1,101,971 | ||||||||||
| Sysco Corp. |
Consumer Staples Distribution & Retail | 9,550 | 737,547 | |||||||||||
| T Rowe Price Group, Inc. |
Capital Markets | 4,202 | 474,406 | |||||||||||
| a | Take-Two Interactive Software, Inc. |
Entertainment | 3,056 | 364,581 | ||||||||||
| Tapestry, Inc. |
Textiles, Apparel & Luxury Goods | 4,202 | 181,148 | |||||||||||
| Targa Resources Corp. |
Oil, Gas & Consumable Fuels | 4,202 | 306,536 | |||||||||||
| Target Corp. |
Broadline Retail | 8,786 | 1,455,225 | |||||||||||
| a | Teledyne Technologies, Inc. |
Electronic Equipment, Instruments & Components | 943 | 421,860 | ||||||||||
| Teleflex, Inc. |
Health Care Equipment & Supplies | 943 | 238,871 | |||||||||||
| Teradyne, Inc. |
Semiconductors & Semiconductor Equipment | 2,650 | 284,902 | |||||||||||
| a | Tesla, Inc. |
Automobiles | 51,188 | 10,619,463 | ||||||||||
| Texas Instruments, Inc. |
Semiconductors & Semiconductor Equipment | 17,190 | 3,197,512 | |||||||||||
| Texas Pacific Land Corp. |
Oil, Gas & Consumable Fuels | 109 | 185,411 | |||||||||||
| Textron, Inc. |
Aerospace & Defense | 3,999 | 282,449 | |||||||||||
| Thermo Fisher Scientific, Inc. |
Life Sciences Tools & Services | 7,429 | 4,281,853 | |||||||||||
| TJX Cos., Inc. |
Specialty Retail | 21,953 | 1,720,237 | |||||||||||
| a | T-Mobile U.S., Inc. |
Wireless Telecommunication Services | 11,078 | 1,604,538 | ||||||||||
| Tractor Supply Co. |
Specialty Retail | 2,089 | 490,999 | |||||||||||
| a | Trade Desk, Inc., Class A |
Software | 8,404 | 511,888 | ||||||||||
| Trane Technologies PLC |
Building Products | 4,381 | 806,016 | |||||||||||
| TransDigm Group, Inc. |
Aerospace & Defense | 967 | 712,727 | |||||||||||
| TransUnion |
Professional Services | 3,617 | 224,760 | |||||||||||
| Travelers Cos., Inc. |
Insurance | 4,202 | 720,265 | |||||||||||
| a | Trimble, Inc. |
Electronic Equipment, Instruments & Components | 4,584 | 240,293 | ||||||||||
| Truist Financial Corp. |
Banks | 25,212 | 859,729 | |||||||||||
| a | Twilio, Inc., Class A |
IT Services | 3,438 | 229,074 | ||||||||||
| a | Tyler Technologies, Inc. |
Software | 764 | 270,945 | ||||||||||
| Tyson Foods, Inc., Class A |
Food Products | 5,348 | 317,243 | |||||||||||
| U.S. Bancorp |
Banks | 26,358 | 950,206 | |||||||||||
| a | Uber Technologies, Inc. |
Ground Transportation | 37,818 | 1,198,831 | ||||||||||
| UDR, Inc. |
Diversified REITs | 5,730 | 235,274 | |||||||||||
| UGI Corp. |
Gas Utilities | 3,820 | 132,783 | |||||||||||
| a | Ulta Beauty, Inc. |
Specialty Retail | 943 | 514,567 | ||||||||||
| franklintempleton.com | Annual Report |
19 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Equity Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| United States (continued) | ||||||||||||||
| Union Pacific Corp. |
Ground Transportation | 11,460 | $ | 2,306,440 | ||||||||||
| a | United Airlines Holdings, Inc. |
Airlines | 6,112 | 270,456 | ||||||||||
| United Parcel Service, Inc., Class B |
Air Freight & Logistics | 13,752 | 2,667,750 | |||||||||||
| a | United Rentals, Inc. |
Trading Companies & Distributors | 1,325 | 524,382 | ||||||||||
| UnitedHealth Group, Inc. |
Health Care Providers & Services | 17,572 | 8,304,352 | |||||||||||
| a | Unity Software, Inc. |
Software | 4,584 | 148,705 | ||||||||||
| Universal Health Services, Inc., Class B |
Health Care Providers & Services | 1,146 | 145,657 | |||||||||||
| Vail Resorts, Inc. |
Hotels, Restaurants & Leisure | 764 | 178,532 | |||||||||||
| Valero Energy Corp. |
Oil, Gas & Consumable Fuels | 7,258 | 1,013,217 | |||||||||||
| a | Veeva Systems, Inc., Class A |
Health Care Technology | 2,674 | 491,454 | ||||||||||
| Ventas, Inc. |
Diversified REITs | 7,640 | 331,194 | |||||||||||
| a | VeriSign, Inc. |
IT Services | 1,707 | 360,740 | ||||||||||
| Verisk Analytics, Inc. |
Professional Services | 3,056 | 586,324 | |||||||||||
| Verizon Communications, Inc. |
Diversified Telecommunication Services | 80,220 | 3,119,756 | |||||||||||
| a | Vertex Pharmaceuticals, Inc. |
Biotechnology | 4,966 | 1,564,638 | ||||||||||
| VF Corp. |
Textiles, Apparel & Luxury Goods | 5,909 | 135,375 | |||||||||||
| Viatris, Inc. |
Pharmaceuticals | 22,920 | 220,490 | |||||||||||
| VICI Properties, Inc. |
Diversified REITs | 19,100 | 623,042 | |||||||||||
| Visa, Inc., Class A |
IT Services | 30,942 | 6,976,183 | |||||||||||
| Vistra Corp. |
Independent Power Producers & Energy Traders | 7,258 | 174,192 | |||||||||||
| a | VMware, Inc., Class A |
Software | 3,820 | 476,927 | ||||||||||
| Voya Financial, Inc. |
Financial Services | 1,910 | 136,489 | |||||||||||
| Vulcan Materials Co. |
Construction Materials | 2,471 | 423,925 | |||||||||||
| W R Berkley Corp. |
Insurance | 3,820 | 237,833 | |||||||||||
| Walgreens Boots Alliance, Inc. |
Consumer Staples Distribution & Retail | 13,752 | 475,544 | |||||||||||
| Walmart, Inc. |
Consumer Staples Distribution & Retail | 26,740 | 3,942,813 | |||||||||||
| a | Walt Disney Co. |
Media | 34,762 | 3,480,719 | ||||||||||
| Waste Management, Inc. |
Commercial Services & Supplies | 7,055 | 1,151,164 | |||||||||||
| a | Waters Corp. |
Life Sciences Tools & Services | 1,146 | 354,836 | ||||||||||
| Watsco, Inc. |
Trading Companies & Distributors | 561 | 178,488 | |||||||||||
| WEC Energy Group, Inc. |
Multi-Utilities | 6,112 | 579,356 | |||||||||||
| Wells Fargo & Co. |
Banks | 72,198 | 2,698,761 | |||||||||||
| Welltower, Inc. |
Diversified REITs | 9,168 | 657,254 | |||||||||||
| West Pharmaceutical Services, Inc. |
Life Sciences Tools & Services | 1,528 | 529,406 | |||||||||||
| a | Western Digital Corp. |
Technology Hardware, Storage & Peripherals | 6,112 | 230,239 | ||||||||||
| Westinghouse Air Brake Technologies Corp. |
Machinery | 3,438 | 347,444 | |||||||||||
| Westlake Corp. |
Chemicals | 561 | 65,065 | |||||||||||
| Westrock Co. |
Containers & Packaging | 4,584 | 139,674 | |||||||||||
| Weyerhaeuser Co. |
Diversified REITs | 13,752 | 414,348 | |||||||||||
| Whirlpool Corp. |
Household Durables | 1,146 | 151,295 | |||||||||||
| Williams Cos., Inc. |
Oil, Gas & Consumable Fuels | 22,920 | 684,391 | |||||||||||
| Willis Towers Watson PLC |
Insurance | 2,089 | 485,442 | |||||||||||
| a | Workday, Inc., Class A |
Software | 3,820 | 788,983 | ||||||||||
| WP Carey, Inc. |
Diversified REITs | 3,999 | 309,723 | |||||||||||
| WW Grainger, Inc. |
Trading Companies & Distributors | 764 | 526,251 | |||||||||||
| a | Wynn Resorts Ltd. |
Hotels, Restaurants & Leisure | 1,910 | 213,748 | ||||||||||
| Xcel Energy, Inc. |
Electric Utilities | 10,314 | 695,576 | |||||||||||
| Xylem, Inc. |
Machinery | 3,438 | 359,959 | |||||||||||
| Yum! Brands, Inc. |
Hotels, Restaurants & Leisure | 5,348 | 706,364 | |||||||||||
| a | Zebra Technologies Corp., Class A |
Electronic Equipment, Instruments & Components | 943 | 299,874 | ||||||||||
| a | Zillow Group, Inc., Class A |
Real Estate Management & Development | 1,325 | 57,903 | ||||||||||
| a | Zillow Group, Inc., Class C |
Real Estate Management & Development | 3,056 | 135,900 | ||||||||||
| Zimmer Biomet Holdings, Inc. |
Health Care Equipment & Supplies | 3,999 | 516,671 | |||||||||||
| Zions Bancorp NA |
Banks | 2,853 | 85,390 | |||||||||||
| Zoetis, Inc. |
Pharmaceuticals | 8,786 | 1,462,342 | |||||||||||
| a | Zoom Video Communications, Inc., Class A |
Software | 4,202 | 310,276 | ||||||||||
| a | ZoomInfo Technologies, Inc., Class A |
Interactive Media & Services | 5,145 | 127,133 | ||||||||||
| 20 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Equity Index ETF (continued)
| Industry | Shares | Value | ||||||||||||
| Common Stocks (continued) | ||||||||||||||
| United States (continued) | ||||||||||||||
| a | Zscaler, Inc. |
Software | 1,528 | $ | 178,516 | |||||||||
|
|
|
|||||||||||||
| 676,873,231 | ||||||||||||||
|
|
|
|||||||||||||
| Preferred Stock 0.0%† | ||||||||||||||
| Russia 0.0%† | ||||||||||||||
| b | Surgutneftegas PJSC, pfd |
Oil, Gas & Consumable Fuels | 10,688 | — | ||||||||||
|
|
|
|||||||||||||
| Total Preferred Stocks |
— | |||||||||||||
|
|
|
|||||||||||||
| Total Investments before Short-Term |
679,982,967 | |||||||||||||
|
|
|
|||||||||||||
| Short-Term Investments 0.1% | ||||||||||||||
| Investments from Cash Collateral Received for Loaned Securities 0.1% |
||||||||||||||
| United States 0.1% | ||||||||||||||
| d,e | Institutional Fiduciary Trust Portfolio, 4.47% |
Money Market Funds | 266,830 | 266,830 | ||||||||||
|
|
|
|||||||||||||
| Total Short-Term Investments |
266,830 | |||||||||||||
|
|
|
|||||||||||||
| Total Investments |
680,249,797 | |||||||||||||
| Other Assets, less Liabilities 0.2% |
1,662,887 | |||||||||||||
|
|
|
|||||||||||||
| Net Assets 100.0% |
$ | 681,912,684 | ||||||||||||
|
|
|
|||||||||||||
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bFair valued using significant unobservable inputs. Note 8 regarding fair value measurements.
cA portion or all of the security is on loan at March 31, 2023 Note 1(c).
dThe rate shown is the annualized seven-day effective yield at period end.
eSee Note 3(c) regarding investments in affiliated management investment companies.
At March 31, 2023, 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 | 8 | $ | 1,655,100 | 6/16/23 | $ | 82,436 | |||||||||||||
*As of year end.
See Note 7 regarding other derivative information.
See Abbreviations on page 32.
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
21 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
March 31, 2023
Franklin U.S. Equity Index ETF
| Assets: |
||||
| Investments in securities: |
||||
| Cost – Unaffiliated issuers |
$ | 658,925,146 | ||
| Cost – Non-controlled affiliates (Note 3c) |
266,830 | |||
| Value – Unaffiliated issuers+ |
$ | 679,982,967 | ||
| Value – Non-controlled affiliates (Note 3c) |
266,830 | |||
| Cash |
1,715,605 | |||
| Foreign currency, at value (cost $767) |
769 | |||
| Receivables: |
||||
| Dividends |
477,514 | |||
| Investment securities sold |
28,200,735 | |||
| Variation margin on futures contracts |
23,142 | |||
| Deposits with brokers for: |
||||
| Futures contracts |
89,600 | |||
|
|
|
|||
| Total assets |
710,757,162 | |||
|
|
|
|||
| Liabilities: |
||||
| Payables: |
||||
| Capital shares redeemed |
28,561,720 | |||
| Management fees |
15,928 | |||
| Payable upon return of securities loaned |
266,830 | |||
|
|
|
|||
| Total liabilities |
28,844,478 | |||
|
|
|
|||
| Net assets, at value |
$ | 681,912,684 | ||
|
|
|
|||
| Net assets consist of: |
||||
| Paid-in capital |
$ | 661,550,760 | ||
| Total distributable earnings (loss) |
20,361,924 | |||
|
|
|
|||
| Net assets, at value |
$ | 681,912,684 | ||
|
|
|
|||
| Shares outstanding |
19,100,000 | |||
|
|
|
|||
| Net asset value per share |
$ | 35.70 | ||
|
|
|
|||
| +Includes securities loaned |
259,144 |
| 22 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statement of Operations
for the year ended March 31, 2023
Franklin U.S. Equity Index ETF
| Investment income: |
||||
| Dividends: (net of foreign taxes)a |
||||
| Unaffiliated issuers |
$ | 6,219,628 | ||
| Interest: |
||||
| Unaffiliated issuers |
5,590 | |||
| Interest from securities loaned (Note 1d): |
||||
| Unaffiliated issuers (net of fees and rebates) |
5,129 | |||
| Non-Controlled affiliates (Note 3c) |
4,455 | |||
|
|
|
|||
| Total investment income |
6,234,802 | |||
|
|
|
|||
| Expenses: |
||||
| Management fees (Note 3a) |
121,940 | |||
| Other |
55 | |||
|
|
|
|||
| Total expenses |
121,995 | |||
| Expenses waived/paid by affiliates (Note 3c) |
(444 | ) | ||
|
|
|
|||
| Net expenses |
121,551 | |||
|
|
|
|||
| Net investment income |
6,113,251 | |||
|
|
|
|||
| Realized and unrealized gains (losses): |
||||
| Net realized gain (loss) from: |
||||
| Investments: |
||||
| Unaffiliated issuers |
(1,397,343 | ) | ||
| In-kind redemptions |
7,791,109 | |||
| Foreign currency transactions |
(5,295 | ) | ||
| Futures contracts |
(218,545 | ) | ||
|
|
|
|||
| Net realized gain (loss) |
6,169,926 | |||
|
|
|
|||
| Net change in unrealized appreciation (depreciation) on: |
||||
| Investments: |
||||
| Unaffiliated issuers |
18,068,675 | |||
| Translation of other assets and liabilities denominated in foreign currencies |
(277 | ) | ||
| Futures contracts |
82,022 | |||
| Change in deferred taxes on unrealized appreciation |
3,475 | |||
|
|
|
|||
| Net change in unrealized appreciation (depreciation) |
18,153,895 | |||
|
|
|
|||
| Net realized and unrealized gain (loss) |
24,323,821 | |||
|
|
|
|||
| Net increase (decrease) in net assets resulting from operations |
$ | 30,437,072 | ||
|
|
|
| aForeign taxes withheld on dividends |
$ | 14,577 | ||
|
|
|
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
23 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
Franklin U.S. Equity Index ETF
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||
| Increase (decrease) in net assets: |
||||||||
| Operations: |
||||||||
| Net investment income |
$ | 6,113,251 | $ | 421,555 | ||||
| Net realized gain |
6,169,926 | 732,588 | ||||||
| Net change in unrealized appreciation (depreciation) |
18,153,895 | 201,548 | ||||||
|
|
|
|||||||
| Net increase (decrease) in net assets resulting from operations |
30,437,072 | 1,355,691 | ||||||
|
|
|
|||||||
| Distributions to shareholders (Note 1f) |
(5,371,807 | ) | (401,042 | ) | ||||
|
|
|
|||||||
| Capital share transactions: (Note 2) |
640,833,384 | — | ||||||
|
|
|
|||||||
| Net increase (decrease) in net assets |
665,898,649 | 954,649 | ||||||
| Net assets: |
||||||||
| Beginning of year |
16,014,035 | 15,059,386 | ||||||
|
|
|
|||||||
| End of year |
$ | 681,912,684 | $ | 16,014,035 | ||||
|
|
|
|||||||
| 24 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
1. Organization and Significant Accounting Policies
Franklin Templeton ETF Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company. consisting of forty-eight separate funds, one of which is included in this report (Fund). The Fund follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standard 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 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 fund are valued at the closing NAV.
Certain derivative financial instruments are centrally cleared or trade in the OTC market. The Fund’s 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 Fund’s net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.
The Fund has 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
| franklintempleton.com | Annual Report |
25 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
a. Financial Instrument Valuation (continued)
used to adjust the Fund’s portfolio securities to the latest indications of fair value at 4 p.m. Eastern time on March 31, 2023. At March 31, 2023, 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. 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 Fund 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 Fund 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
The Fund invested in derivative financial instruments in order to manage risk or gain exposure to various other investments or markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown in the Statement of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statement of Operations.
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 Statement 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.
| 26 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
c. Derivative Financial Instruments (continued)
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 Statement 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 between the Fund and a counterparty to buy or sell a foreign currency at a specific exchange rate on a future date.
See Note 7 regarding other derivative information.
d. 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 fund 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 Statement 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 Statement 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 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 invests. 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 records 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 March 31, 2023, 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
| franklintempleton.com | Annual Report |
27 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
e. Income and Deferred Taxes (continued)
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 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 to 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.
g. Accounting Estimates
The preparation of financial statement 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 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 Fund regardless of the number of Creation Units that are being created or redeemed on the same day by the Authorized Participant. The standard transaction fee is imposed to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units and is not charged to or paid by the Fund.
In addition, for cash Creation Unit transactions, a variable fee for creation transactions and redemption transactions may be charged to the Authorized Participant to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades. Variable fees, if any, are included in capital share transactions in the Statements of Changes in Net Assets.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
2. Shares of Beneficial Interest (continued)
At March 31, 2023, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
| Shares sold |
20,200,000 | $ | 693,370,004 | — | $ | — | ||||||||||||||
| Shares redeemed |
(1,500,000 | ) | (52,536,620 | ) | — | — | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
18,700,000 | $ | 640,833,384 | — | $ | — | ||||||||||||||
|
|
|
|||||||||||||||||||
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 Distributors, LLC (Distributors) |
Principal underwriter | |
a. Management fees
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 March 31, 2023 the annualized fee rate was 0.03%.
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 Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the year ended March 31, 2023, investments in affiliated management investment companies were as follows:
| Value at Beginning of Year |
Purchases |
Sales | Realized Gain (Loss) |
Net Change in Unrealized Appreciation (Depreciation) |
Value at End of Year |
Number of Shares Held at End of Year |
Investment Income |
|||||||||||||||||||||||||
| Non-Controlled Affiliates | Income from Securities loaned |
|||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||
| Institutional Fiduciary Trust Money Market Portfolio 4.47% |
$ | — | $ | 989,096 | $ | (722,266 | ) | $ | — | $ | — | $ | 266,830 | 266,830 | $ | 4,455 | ||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains, if any. At March 31, 2023, the capital loss carryforwards were as follows:
| Year Ended March 31, 2023 |
||||
| Capital loss carryforwards not subject to expiration: | ||||
| Long term |
$ | 74,246 | ||
| Short term |
1,439,455 | |||
|
|
|
|||
| Total capital loss carryforwards |
$ | 1,513,701 | ||
|
|
|
|||
The tax character of distributions paid during the period ended March 31, 2023 and 2022, were as follows:
| 2023 | 2022 | |||||||
| Distributions paid from Ordinary income |
$ | 5,371,807 | $ | 401,042 | ||||
|
|
|
|||||||
At March 31, 2023, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:
| Year Ended March 31, 2023 |
||||
| Cost of investments |
$ | 659,238,083 | ||
|
|
|
|||
| Unrealized appreciation |
$ | 49,113,164 | ||
| Unrealized depreciation |
(28,101,450 | ) | ||
|
|
|
|||
| Net unrealized appreciation (depreciation) |
$ | 21,011,714 | ||
|
|
|
|||
| Distributable earnings – undistributed ordinary income |
$ | 863,796 | ||
|
|
|
|||
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of financial futures transactions and gains/losses realized on in-kind shareholder redemptions and wash sales.
5. Investment Transactions
Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the year ended March 31, 2023, $29,593,430 and $23,552,316, respectively.
In-kind transactions associated with creation and redemptions for the year ended March 31, 2023, $685,655,944 and $51,987,593, respectively.
At March 31, 2023, in connection with securities lending transactions, Fund loaned investments and received cash collateral for Equity Investments are $266,830.
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.
| 30 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
6. Concentration of Risk (continued)
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 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. Other Derivative Information
At March 31, 2023, the Fund’s investments in derivative contracts are reflected in the Statement of Assets and Liabilities as follows:
| Asset Derivatives |
Liability Derivatives |
|||||||||||
| Statement of Assets and Liabilities Location |
Fair Value | Statement of Assets and Liabilities Location |
Fair Value | |||||||||
| Equity contracts |
Variation margin on futures contracts |
$ | 82,436 | Variation margin on futures contracts |
$ | — | ||||||
|
|
|
|
|
|||||||||
For the year ended March 31, 2023, the effect of derivative contracts in the Fund’s Statement of Operations was as follows:
| Derivative Contracts Not Accounted for as Hedging Instruments |
Statement of Operations Locations |
Net Realized Gain (Loss) for the Period |
Statement 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 |
$ | (218,545 | ) | Futures contracts |
$ | 82,022 | |||||
|
|
|
|
|
|||||||||
For the period ended March 31, 2023, the average month end notional amount of futures contracts was $711,790.
See Note 1(c) regarding derivative financial instruments.
8. 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 |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
8. Fair Value Measurements (continued)
| • | 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 March 31, 2023, 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 |
$ | 679,982,769 | $ | — | $ | 198 | c | $ | 679,982,967 | |||||||
| Short-Term Investments |
266,830 | — | — | 266,830 | ||||||||||||
| Total Investments in Securities |
$ | 680,249,599 | $ | — | $ | 198 | $ | 680,249,797 | ||||||||
| Other Financial Instruments: |
||||||||||||||||
| Futures Contracts |
$ | 82,436 | $ | — | $ | — | $ | 82,436 | ||||||||
aFor detailed categories, see the accompanying Schedules of Investments.
bIncludes common and preferred stocks.
cIncludes securities determined to have no value at March 31, 2023.
9. New Accounting Pronouncements
In June 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-03, Fair Value Measurement (Topic 820) - Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in the ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, should not be considered in measuring fair value. The ASU is effective for interim and annual reporting periods beginning after December 15, 2023, with the option of early adoption. Management has reviewed the requirements and believes that the adoption of the ASU will not have a material impact on the financial statements.
10. Subsequent Events
The Fund has evaluated subsequent events through the issuance of these Financial Statements and determined that no events have occurred that require disclosure.
Abbreviations
| GDR | Global Depositary Receipt | |
| REIT | Real Estate Investment Trust | |
| SBA | Small Business Administration |
| 32 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Franklin Templeton ETF Trust and Shareholders of Franklin U.S. Equity Index ETF
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedule of investments, of Franklin U.S. Equity Index ETF (one of the funds constituting Franklin Templeton ETF Trust, hereafter collectively referred to as the “Fund” ) as of March 31, 2023, the related statements of operations for the year ended March 31, 2023, the statements of changes in net assets for each of the two years in the period ended March 31, 2023, including the related notes, and the financial highlights for each of the five years in the period ended March 31, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of March 31, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended March 31, 2023 and the financial highlights for each of the five years in the period ended March 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of March 31, 2023 by correspondence with the custodian, and transfer agent. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
May 23, 2023
We have served as the auditor of one or more investment companies in the Franklin Templeton funds since 1948.
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33 | ||||||||
By mid-February, tax information related to a shareholder’s proportionate share of distributions paid during the preceding calendar year will be received, if applicable. Please also refer to www.franklintempleton.com for per share tax information related to any distributions paid during the preceding calendar year. Shareholders are advised to consult with their tax advisors for further information on the treatment of these amounts on their tax returns.
The following tax information for the Fund is required to be furnished to shareholders with respect to the income earned and distributions paid during their fiscal year.
The Fund below hereby report the following amounts, or if subsequently determined to be different, the maximum allowable amounts, for the period ended March 31, 2023:
| Pursuant to: | Franklin U.S. Equity Index ETF |
|||||||
| Dividends Received Deduction (DRD) |
§854(b)(1)(A) | $ | 5,371,807 | |||||
| Qualified Dividend Income (QDI) |
§854(b)(1)(B) | $ | 5,371,807 | |||||
| 34 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
The name, year of birth and address of the officers and board members, as well as their affiliations, positions held with the Trust, principal occupations during at least the past five years and number of U.S. registered portfolios overseen in the Franklin Templeton/Legg Mason fund complex, are shown below. Generally, each board member serves until that person’s successor is elected and qualified.
Independent Board Members
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| Rohit Bhagat (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Lead Independent Trustee | Since 2016 | 59 | AssetMark Financial Holdings, Inc. (investment solutions) (2018-present) and PhonePe (2020-present) (payment and financial services); formerly, Axis Bank (financial) (2013- 2021), FlipKart Limited (2019-2020) (eCommerce company); CapFloat Financial Services Pvt., Ltd. (non-banking finance company) (2018) and Zentific Investment Management (hedge fund) (2015-2018). | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Managing Member, Mukt Capital, LLC (private investment firm) (2014-present); Advisor, Optimal Asset Management (investment technology and advisory services company) (2015-present); Chief Executive Officer and Director, FinTech Evolution Acquisition (eCommerce company) (February 2021-present); and formerly, Chairman, Asia Pacific, BlackRock (2009-2012); Global Chief Operating Officer, Barclays Global Investors (investment management) (2005-2009); and Senior Partner, The Boston Consulting Group (management consulting) (1992-2005). | ||||||||
| Deborah D. McWhinney (1955) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee | Since 2020 | 59 | S&P Global, Inc. (financial information services) (February 2022), Borg Warner (automotive) (2018-present), LegalShield (consumer services) (2020-present); and formerly, IHS Markit (information services) (2015-2022), Fluor Corporation (construction and engineering) (2014-2020) and Focus Financial Partner, LLC (financial services) (2018-2020). | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Director of various companies; and formerly, Board Member, Lloyds Banking Group (2015-2018) (financial institution) and Fresenius Medical Group (2016-2018) (healthcare); Chief Executive Officer (2013-2014) and Chief Operating Officer (2011-2013), CitiGroup Global Enterprise Payments (financial services); and President, Citi’s Personal Banking and Wealth Management (2009-2011). | ||||||||
| Anantha K. Pradeep (1963) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee | Since 2016 | 59 | None | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Chief Executive Officer, Smilable, Inc. (technology company) (2014-present); Chief Executive Officer, MachineVantage (technology company) (2018-present); Founder and Managing Partner, Consult Meridian, LLC (consulting company) (2009-present); and formerly, Founder, BoardVantage (board portal solutions provider delivering paperless process for boards and leadership) (2000-2002). | ||||||||
| franklintempleton.com | Annual Report |
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FRANKLIN TEMPLETON ETF TRUST
Interested Board Members and Officers
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| **Jennifer M. Johnson (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee and Chairperson of the Board | Since 2016 | 70 | None | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Chief Executive Officer, President and Director, Franklin Resources, Inc.; officer and/or director or trustee, of some of the other subsidiaries of Franklin Resources, Inc. and of certain funds in the Franklin Templeton/Legg Mason fund complex; and formerly, Chief Operating Officer and Executive Vice President, Franklin Resources, Inc. (1994-2015); Executive Vice President of Operations and Technology, Franklin Resources, Inc. (2005-2010); and Senior Vice President, Franklin Resources, Inc. (2003-2005). | ||||||||
| Alison E. Baur (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President | Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Deputy General Counsel, Franklin Templeton; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Steven J. Gray (1955) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President | Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Distributors, LLC; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Matthew T. Hinkle (1971) One Franklin Parkway San Mateo, CA 94403-1906 |
Chief Executive Officer – Finance and Administration | Since 2017 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Vice President, Franklin Templeton Services, LLC; officer of certain funds in the Franklin Templeton/Legg Mason fund complex; and formerly, Vice President, Global Tax (2012-April 2017) and Treasurer/Assistant Treasurer, Franklin Templeton (2009-2017). | ||||||||
| Fred Jensen (1963) 620 Eighth Avenue, 47th Floor New York, NY 10018 |
Chief Compliance Officer | Since 2021 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Director - Global Compliance of Franklin Templeton; Managing Director of Legg Mason & Co.; Director of Compliance, Legg Mason Office of the Chief Compliance Officer; Chief Compliance Officer, Franklin Advisory Services, LLC; Compliance Officer, Franklin Advisers, Inc.; officer of certain funds in the Franklin Templeton/Legg Mason fund complex; formerly, Chief Compliance Officer of Legg Mason Global Asset Allocation; Chief Compliance Officer, Legg Mason Private Portfolio; Chief Compliance Officer to The Reserves Funds (investment adviser, funds and broker-dealer) and Ambac Financial Group (investment adviser, funds and broker-dealer). | ||||||||
| Susan Kerr (1949) 620 Eighth Avenue New York, NY 10018 |
Vice President – AML Compliance | Since 2021 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Compliance Analyst, Franklin Templeton; Chief Anti-Money Laundering Compliance Officer, Legg Mason & Co., or its affiliates; Anti Money Laundering Compliance Officer; Senior Compliance Officer, LMIS; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Todd Mathias (1983) One Franklin Parkway, San Mateo, Ca 94403-1906 |
Vice President | Since March 2022 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Head of US ETF Product Strategy, Franklin Templeton; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
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FRANKLIN TEMPLETON ETF TRUST
Interested Board Members and Officers (continued)
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| Patrick O’Connor (1967) One Franklin Parkway San Mateo, CA 94403-1906 |
President and Chief Executive Officer – Investment Management | Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| President and Chief Investment Officer, Franklin Advisory Services, LLC; Senior Vice President, Franklin Advisers, Inc.; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Vivek Pai (1970) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 |
Treasurer, Chief Financial Officer and Chief Accounting Officer | Since 2019 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Treasurer, U.S. Fund Administration & Reporting and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Navid J. Tofigh (1972) One Franklin Parkway, San Mateo, Ca 94403-1906 |
Vice President and Secretary | Since 2015 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Lori A. Weber (1964) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 |
Vice President and Secretary | Vice President since 2011 and Secretary since 2013 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Resources, Inc.; Vice President and Secretary, Templeton Investment Counsel, LLC; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
*We base the number of portfolios on each separate series of the U.S. registered investment companies within the Franklin Templeton fund complex. These portfolios have a common investment manager or affiliated investment managers.
**Jennifer M. Johnson is considered to be an interested person of the Fund under the federal securities laws due to her position as an officer and director of Franklin Resources, Inc. (Resources), which is the parent company of the Fund’s investment manager and distributor.
Note 1: Officer information is current as of the date of this report. It is possible that after this date, information about officers may change.
The Sarbanes-Oxley Act of 2002 and Rules adopted by the Securities and Exchange Commission require the Fund to disclose whether the Fund’s Audit Committee includes at least one member who is an audit committee financial expert within the meaning of such Act and Rules. The Fund’s Board has determined that there is at least one such financial expert on the Audit Committee and has designated Rohit Bhagat and Deboarah D. McWhinney as its audit committee financial experts. The Board believes that Mr. Bhagat and Ms. McWhinney qualify as such an expert in view of their extensive business background and experience, including extensive experience in the asset management and financial services industries. Mr. Bhagat has been a Member and Chairman of the Fund’s Audit Committee since 2017. Ms. McWhinney has been a member of the Fund Audit Committee since 2020. As a result of such background and experience, the Board believes that Mr. Bhagat and Ms. McWhinney have acquired an understanding of generally accepted accounting principles and financial statements, the general application of such principles in connection with the accounting estimates, accruals and reserves, and analyzing and evaluating financial statements that presents a breadth and level of complexity of accounting issues generally comparable to those of the Fund, as well as an understanding of internal controls and procedures for financial reporting and an understanding of audit committee functions. Mr. Bhagat and Ms. McWhinney are independent Board members as that term is defined under the relevant Securities and Exchange Commission Rules and Releases.
The Statement of Additional Information (SAI) includes additional information about the board members and is available, without charge, upon request. Shareholders may call (800) DIAL BEN/342-5236 to request the SAI.
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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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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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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
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SHAREHOLDER INFORMATION
liquidity categories (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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Annual 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 | ||||
| © 2023 Franklin Templeton Investments. All rights reserved. | USPX A 05/23 | |||||
ANNUAL REPORT
FRANKLIN FTSE
RUSSIA ETF
A Series of Franklin Templeton ETF Trust
March 31, 2023
| Visit franklintempleton.com for fund updates and documents, or to find helpful financial planning tools. |
| Not FDIC Insured | May Lose Value | No Bank Guarantee |
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This annual report for Franklin FTSE Russia ETF covers the period ended March 31, 2023. Effective March 1, 2022, the Fund suspended new creations of its shares 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 (“NYSE Arca”), halted trading of the Fund. 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 March 31, 2023, such securities continue to be fair valued at $0). Accordingly, as of March 31, 2023, 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.
On July 20, 2022, the Board of Trustees of the Trust (the “Board”) unanimously voted to close and liquidate the Fund, contingent on receiving any necessary relief from the U.S. Securities and Exchange Commission (“SEC”). On December 23, 2022, the SEC granted exemptive relief to the Fund permitting the Fund to suspend the right of redemption with respect to shares of the Fund and, if necessary, postpone the date of payment of redemption proceeds with respect to redemption orders received but not yet paid until the Fund completes the liquidation of its portfolio and distributes all its assets to remaining shareholders. The Fund was delisted from NYSE Arca effective December 27, 2022.
The Fund is in the process of liquidating its assets and winding up its business pursuant to a plan of liquidation. The Fund may make one or more liquidating distributions. It is possible that the liquidation of the Fund will take an extended period of time if circumstances involving Russian securities do not improve. While the Fund is in the process of liquidating its portfolio, the Fund will hold cash and securities that may not be consistent with the Fund’s investment goal and strategies and will experience significantly higher tracking error than is typical for the Fund. Furthermore, because of the delisting of the Fund by NYSE Arca and the liquidation of the Fund, the Fund is no longer an exchange-traded fund. Upon payment of the final liquidating distribution, it is anticipated that the Fund will be terminated.
Franklin Templeton anticipates that the Fund will remain in existence until at least December 31, 2023, to allow the Fund to sell the securities, if conditions permit; the Fund may be terminated sooner if all of the Russian securities have been sold before that date (or they cease to represent valid interests in their issuers). After December 31, 2023, the Fund may be terminated at any time, at the discretion of the Board, even if not all of the Russian securities have been sold. Due to the uncertainty involved, there can be no assurance that shareholders will receive any liquidating distribution relating to any unsold Russian securities. Refer to the notes to financial statements for additional information about the plan of liquidation.
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
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.
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, NYSE Arca halted trading of the Fund effective March 4, 2022 and the Fund was delisted from NYSE Arca effective December 27, 2022. Therefore, from March 4 2022 through March 31, 2023, the Fund did not have a daily closing market price.
3. Source: Morningstar.
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 12.
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FRANKLIN FTSE RUSSIA ETF
Capped Index and in depositary receipts representing such securities. The Fund is in the process of liquidating its assets and winding up its business pursuant to a plan of liquidation.
| Top 10 Sectors/Industries | ||
| 3/31/23 | ||
This disclosure has not been included as all securities of the Fund are valued at zero as of March 31, 2023. As noted, due to the circumstances surrounding the Russian invasion of Ukraine, the Fund is primarily holding cash. Please refer to Note 6 under Notes to Financial Statements.
| Top 10 Holdings | ||
| 3/31/23 | ||
This disclosure has not been included as all securities of the Fund are valued at zero as of March 31, 2023. As noted, due to the circumstances surrounding the Russian invasion of Ukraine, the Fund is primarily holding cash. Please refer to Note 6 under Notes to Financial Statements.
Performance Overview
During the 12-month period ended March 31, 2023, 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 $0.005857 as of March 31, 2023. In comparison, the FTSE Russia Capped Index posted a -19.34% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 6.
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.
Global developed and emerging market equities, as measured by the MSCI All Country World Index-NR (net of tax withholding when dividends are paid), posted a -7.44% total return for the 12 months ended March 31, 2023.3 Inflation increased substantially in most parts of the world and remained elevated despite some signs of slowing in the second half of the period. This inflationary pressure led many of the world’s central banks to tighten monetary policy, which pressured stocks and negatively impacted the outlook
for economic growth. Russia’s ongoing invasion of Ukraine and related disruptions to the global economy also increased investor uncertainty and led to substantial volatility in commodity markets. In China, COVID-19-related lockdowns sharply restricted economic activity prior to the government easing controls in December 2022.
In the U.S., gross domestic product (GDP) recovered from a slight contraction during the first half of the year, expanding in the second half of 2022 amid rising government spending and private investment. The labor market remained strong, as hiring continued at a brisk pace and unemployment reached its lowest level in over 50 years. In an effort to control inflation, the U.S. Federal Reserve (Fed) raised the federal funds target rate at each of its eight meetings during the period to end at a range of 4.75%–5.00%, a full 450 basis points higher than at the beginning of the period. Furthermore, the Fed indicated it would continue to reduce its U.S. Treasury and agency debt and mortgage-backed security holdings.
Economic growth in the eurozone was tepid during 2022, ending with zero growth in the fourth quarter. The ongoing war in Ukraine disrupted supply chains, weakened the economic outlook and contributed to record high inflation across the eurozone, as energy prices soared in the first half of the period. However, governments spent significant sums to subsidize consumers and find alternative supplies. Consequently, price of natural gas in Europe declined notably in the period’s second half, providing a tailwind for European stocks. The European Central Bank increased interest rates in July 2022 for the first time in 11 years to curtail growing inflation and further raised rates in five subsequent meetings. In this environment, European developed market equities, as measured by the MSCI Europe Index-NR, posted a +1.38% total return for the 12 months under review.3
Asian developed and emerging market equities, as measured by the MSCI All Country Asia Index-NR, posted a -7.61% total return for the 12-month period.3 Economic activity in Japan remained slow, alternating between positive quarterly GDP growth and contraction before stalling in 2022’s fourth quarter with zero growth. On an annual basis, China’s economic growth slowed, hindered by investor concerns about the solvency of several large property developers and a period of strict COVID-19 lockdowns.
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.
| 4 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE RUSSIA ETF
Global emerging market stocks, as measured by the MSCI Emerging Markets Index-NR, posted a -10.70% total return for the 12 months under review.3 Central bank tightening, the threat of recession, and a U.S. dollar that strengthened relative to many emerging market currencies contributed to the downturn. While most of the commodity price increases related to the war in Ukraine moderated by period-end, this volatility disrupted some emerging market economies that are dependent on energy and food imports.
Manager’s Discussion
Following Russia’s invasion of Ukraine in February 2022 and subsequent related economic sanctions, our Fund operations were significantly impacted. As disclosed previously, trading in the Fund was halted by NYSE Arca prior to market open on March 4, 2022. No further trading occurred for the entire fiscal year ending March 31, 2023, and the Fund was delisted on December 27, 2022. On July 20, 2022, the Board unanimously approved the closure and liquidation of the Fund, and the SEC granted necessary relief to suspend redemptions on December 23, 2022. The Fund is in the process of liquidating its assets and winding up its business pursuant to a plan of liquidation. The Fund may make one or more liquidating distributions. Given current market conditions in Russia and related sanctions that remain in effect, it is possible that the liquidation of the Fund will take an extended period of time if circumstances involving Russian securities do not improve. Please see above as well as Note 7 under Notes to Financial Statements for more information.
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 March 31, 2023, 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.
| franklintempleton.com | Annual Report |
5 | ||||||||
FRANKLIN FTSE RUSSIA ETF
Performance Summary as of March 31, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and graph do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. 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.
The Fund is in the process of liquidating its assets and winding up its business pursuant to a plan of liquidation.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 3/31/231
| Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
| Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
| 1-Year |
* | N/A | * | N/A | ||||||||||||
| 3-Year |
-99.97% | -44.98% | -92.97% | -18.06% | ||||||||||||
| Since Inception (2/6/18) |
-99.97% | -53.30% | -79.32% | -13.76% | ||||||||||||
* During the 12-month period ended March 31, 2023, the Fund’s unrounded NAV per share increased from $0.003378 as of March 31, 2022 to $0.005857 as of March 31, 2023.
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 9 for Performance Summary footnotes.
| 6 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE RUSSIA ETF
PERFORMANCE SUMMARY
Total Return Index Comparison for a Hypothetical $10,000 Investment1
Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged index includes reinvestment of any income or distributions. It differs from the Fund in composition and does not pay management fees or expenses. One cannot invest directly in an index.
2/6/18–3/31/23
See page 9 for Performance Summary footnotes.
| franklintempleton.com | Annual Report |
7 | ||||||||
FRANKLIN FTSE RUSSIA ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–3/31/23)
| Net Investment Income |
| $0.000000 |
Total Annual Operating Expenses6,7
| 0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Investments in securities of Russian issuers involve significant risks that are specific to Russia, including certain legal, regulatory, political and economic risks. Because the Fund invests its assets primarily in companies in a specific country or region, the Fund may also experience greater volatility than a fund that is more broadly diversified geographically. As a non-diversified fund, the Fund may invest in a relatively small number of issuers which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
Russia’s military invasion of Ukraine in February 2022, the resulting responses by the United States and other countries, and the potential for wider conflict has increased volatility and uncertainty in the financial markets and adversely affected the Fund. The United States and other countries and certain international organizations have imposed broad-ranging economic sanctions on Russia and certain Russian individuals, banking entities and corporations as a response to Russia’s invasion of Ukraine. These sanctions froze certain Russian assets and prohibited, among other things, trading in certain Russian securities and doing business with specific Russian corporate entities, large financial institutions, officials and oligarchs. The sanctions also included the removal of some Russian banks from the Society for Worldwide Interbank Financial Telecommunications (SWIFT), the electronic network that connects banks globally, and imposed restrictive measures to prevent the Russian Central Bank from undermining the impact of the sanctions. A number of large corporations and U.S. states have also announced plans to divest interests or otherwise curtail business dealings with certain Russian businesses. In response, the government of Russia has imposed capital controls to restrict movements of capital entering and exiting the country. These sanctions and any additional sanctions or other intergovernmental actions that may be undertaken against Russia in the future may result in the devaluation of the Russian currency and a downgrade in the country’s credit rating. Ongoing developments related to the war have caused and may continue to cause severe declines and a decline in 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 severely 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. These as well as any other 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. 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. These circumstances could also have adverse tax, regulatory and/or other consequences to the Fund.
| 8 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN FTSE RUSSIA ETF
PERFORMANCE SUMMARY
1. The total annual operating expenses are as of the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns. Effective March 1, 2022, Franklin Advisory Services, LLC (the Fund’s investment manager) implemented a voluntary waiver of its management fee for the Fund. This voluntary waiver may be eliminated by the investment manager at any time.
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, NYSE Arca halted trading of the Fund effective March 4, 2022, and the Fund was delisted from NYSE Arca effective December 27, 2022. Therefore, from March 4, 2022, through March 31, 2023, the Fund did not have a daily closing market price.
5. Source: FactSet. The FTSE Russia Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Russia Capped Index is based on the FTSE Russia Index and is designed to measure the performance of Russian large and mid-capitalization stocks. The Fund’s returns based on net asset value include the Fund’s valuation of its Russian securities based on fair value prices. The value of the FTSE Russia Capped Index, on the other hand, is based on securities’ last closing prices on local foreign markets (i.e., the value of the FTSE Russia Capped Index is not based on fair value prices). FTSE Russell has temporarily suspended rebalancings/reconstitutions of the FTSE Russia Capped Index, including application of the capping methodology.
6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
7. Effective March 1, 2022, Franklin Advisory Services, LLC (the Fund’s investment manager) 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.
| franklintempleton.com | Annual Report |
9 | ||||||||
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, NYSE Arca halted trading of the Fund effective March 4, 2022 and the fund was delisted from NYSE Arca effective December 27, 2022. During the 12-month period ended March 31, 2023, the Fund’s portfolio was comprised of Russian equity securities (fair valued at $0 as noted above) and cash, and Fund shares were not 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 10/1/22 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231,2 |
Ending Account Value 3/31/23 |
Expenses Paid During Period 10/1/22–3/31/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
| $1,000.00 | $ | 1,006.20 | 3 | $ | 0.00 | $ | 1,024.93 | $ | 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 182/365 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 unrounded NAV per share increasing from $0.005827 as of September 30, 2022 to $0.005857 as of March 31, 2023.
| 10 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Franklin FTSE Russia ETF
| Year Ended March 31, | ||||||||||||||||||||
| 2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
| Per share operating performance (for a share outstanding throughout the year) |
||||||||||||||||||||
| Net asset value, beginning of year |
$ | — | a | $ | 26.98 | $ | 18.91 | $ | 23.37 | $ | 24.24 | |||||||||
|
|
|
|||||||||||||||||||
| Income from investment operationsb: | ||||||||||||||||||||
| Net investment incomec |
— | a | 1.68 | 1.41 | 1.73 | 1.03 | ||||||||||||||
| Net realized and unrealized gains (losses) |
0.01 | d | (27.28 | ) | 8.34 | (4.44 | ) | (1.26 | ) | |||||||||||
|
|
|
|||||||||||||||||||
| Total from investment operations |
0.01 | d | (25.60 | ) | 9.75 | (2.71 | ) | (0.23 | ) | |||||||||||
|
|
|
|||||||||||||||||||
| Less distributions from net investment income |
— | (1.38 | ) | (1.68 | ) | (1.75 | ) | (0.64 | ) | |||||||||||
|
|
|
|||||||||||||||||||
| Net asset value, end of year |
$ | 0.01 | d | $ | — | a | $ | 26.98 | $ | 18.91 | $ | 23.37 | ||||||||
|
|
|
|||||||||||||||||||
| Total returne |
73.56% | f | (100.00)% | 52.27% | (13.90)% | (0.63)% | ||||||||||||||
| Ratios to average net assetsg | ||||||||||||||||||||
| Expenses before waiver and payments by affiliates |
0.19% | 0.19% | 0.19% | 0.19% | 0.19% | |||||||||||||||
| Expenses net of waiver and payments by affiliates |
—% | 0.19% | 0.19% | 0.19% | —% | |||||||||||||||
| Net investment income |
49.38% | h | 6.19% | 6.02% | 6.49% | 4.57% | ||||||||||||||
| Supplemental data | ||||||||||||||||||||
| Net assets, end of year (000’s) |
$5 | $3 | $10,794 | $13,240 | $11,683 | |||||||||||||||
| Portfolio turnover ratei |
—% | j | 20.45% | j | 18.82% | j | 15.74% | j | 31.57% | |||||||||||
aAmount rounds to less than $0.005 per share.
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.
dActual amount less than $0.01 per share. Amount shown reflects effect of rounding.
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.
fThe amount shown above reflects the Fund’s unrounded NAV per share increasing from $0.003378 as of March 31, 2022 to $0.005857 as of March 31, 2023.
gRatios are annualized for periods less than one year.
h47.52% of this amount represents income from refunds of foreign tax withheld included in net investment income.
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% | 5.74% |
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 11 | ||||||||||
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, March 31, 2023
Franklin FTSE Russia ETF
| Industry | Shares | Value | ||||||||||||
| Common Stocks 0.0%† | ||||||||||||||
| a | Russia 0.0%† | |||||||||||||
| b | Aeroflot Russian Airline PJSC |
Airlines | 174,496 | $ | — | |||||||||
| b | Alrosa PJSC |
Metals & Mining | 361,232 | — | ||||||||||
| b | Credit Bank of Moscow PJSC |
Banks | 2,127,840 | — | ||||||||||
| b | 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 | — | |||||||||||
| b | M.Video PJSC |
Specialty Retail | 8,000 | — | ||||||||||
| b | Magnit PJSC |
Consumer Staples Distribution & Retail | 8,112 | — | ||||||||||
| b | 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 | — | |||||||||||
| b | Moscow Exchange MICEX |
Capital Markets | 253,248 | — | ||||||||||
| Mosenergo PJSC |
Electric Utilities | 1,418,704 | — | |||||||||||
| Novatek PJSC |
Oil, Gas & Consumable Fuels | 47,472 | — | |||||||||||
| b | Novolipetsk Steel PJSC |
Metals & Mining | 200,944 | — | ||||||||||
| PhosAgro PJSC |
Chemicals | 6,208 | — | |||||||||||
| b | Polyus PJSC |
Metals & Mining | 3,504 | — | ||||||||||
| b | Raspadskaya OJSC |
Metals & Mining | 10,720 | — | ||||||||||
| Rosneft Oil Co. PJSC |
Oil, Gas & Consumable Fuels | 92,320 | — | |||||||||||
| b | Rosseti PJS |
Electric Utilities | 34,561,909 | — | ||||||||||
| Rostelecom PJSC |
Diversified Telecommunication Services | 165,056 | — | |||||||||||
| RusHydro PJSC |
Electric Utilities | 20,149,712 | — | |||||||||||
| b | Sberbank of Russia PJSC |
Banks | 959,968 | — | ||||||||||
| c | Segezha Group PJSC, 144A |
Paper & Forest Products | 666,096 | — | ||||||||||
| b | Severstal PAO |
Metals & Mining | 27,744 | — | ||||||||||
| b | Sistema PJSFC |
Wireless Telecommunication Services | 499,664 | — | ||||||||||
| b | Sovcomflot OAOSovcomflotOAO |
Oil, Gas & Consumable Fuels | 72,128 | — | ||||||||||
| Surgutneftegas PJSC |
Oil, Gas & Consumable Fuels | 634,480 | — | |||||||||||
| Tatneft PJSC |
Oil, Gas & Consumable Fuels | 105,552 | — | |||||||||||
| b | Unipro PJSC |
Independent Power Producers & Energy Traders | 1,811,376 | — | ||||||||||
| United Co. RUSAL International PJSC |
Metals & Mining | 447,600 | — | |||||||||||
| b | VTB Bank PJSC |
Banks | 886,353,216 | — | ||||||||||
|
|
|
|||||||||||||
| Preferred Stocks 0.0%† | ||||||||||||||
| b | 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% |
4,691 | |||||||||||||
|
|
|
|||||||||||||
| Net Assets 100.0% |
$ | 4,691 | ||||||||||||
|
|
|
|||||||||||||
†Rounds to less than 0.1% of net assets.
aFair valued using significant unobservable inputs. Note 8 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 March 31, 2023, the value of was $0, representing 0.0% of net assets.
dVariable rate security. The rate shown represents the yield at period end.
| 12 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
March 31, 2023
| Assets: |
||||
| Investments in securities: |
||||
| Cost – Unaffiliated issuers |
$ | 22,476,787 | ||
| Value – Unaffiliated issuers |
$ | — | ||
| Cash |
4,527 | |||
| Receivables: |
||||
| Affiliates |
82 | |||
| Other assets |
82 | |||
|
|
|
|||
| Total assets |
4,691 | |||
|
|
|
|||
| Liabilities: |
||||
| Payables: |
||||
| Total liabilities |
— | |||
|
|
|
|||
| Net assets, at value |
$ | 4,691 | ||
|
|
|
|||
| Net assets consist of: |
||||
| Paid-in capital |
$ | 23,212,734 | ||
| Total distributable earnings (loss) |
(23,208,043 | ) | ||
|
|
|
|||
| Net assets, at value |
$ | 4,691 | ||
|
|
|
|||
| Shares outstanding |
800,000 | |||
|
|
|
|||
| Net asset value per share |
$ | 0.01a | ||
|
|
|
a Actual 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. | Annual Report |
13 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statement of Operation
| Investment income: |
||||
| Dividends: (net of foreign taxes)a |
||||
| Unaffiliated issuers |
$ | 2,075 | ||
| Interest: |
||||
| Unaffiliated issuers |
81 | |||
|
|
|
|||
| Total investment income |
2,156 | |||
|
|
|
|||
| Expenses: |
||||
| Management fees (Note 3a) |
8 | |||
|
|
|
|||
| Total expenses |
8 | |||
| Expenses waived/paid by affiliates (Note 3c) |
(8 | ) | ||
|
|
|
|||
| Net investment income |
2,156 | |||
|
|
|
|||
| Realized and unrealized gains (losses): |
||||
| Net realized gain (loss) from: |
||||
| Investments: |
||||
| Foreign currency transactions |
(167 | ) | ||
|
|
|
|||
| Net realized gain (loss) |
(167 | ) | ||
|
|
|
|||
| Net change in unrealized appreciation (depreciation) on: |
||||
| Investments: |
||||
| Net change in unrealized appreciation (depreciation) |
— | |||
|
|
|
|||
| Net realized and unrealized gain (loss) |
(167 | ) | ||
|
|
|
|||
| Net increase (decrease) in net assets resulting from operations |
$ | 1,989 | ||
|
|
|
|||
| aForeign taxes withheld on dividends |
$ | (2,075 | ) | |
|
|
|
| 14 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statement of Changes in Net assets
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||
| Increase (decrease) in net assets: |
||||||||
| Operations: |
||||||||
| Net investment income |
$ | 2,156 | $ | 1,109,115 | ||||
| Net realized loss |
(167 | ) | (184,908 | ) | ||||
| Net change in unrealized appreciation (depreciation) |
— | (23,581,497 | ) | |||||
|
|
|
|||||||
| Net increase (decrease) in net assets resulting from operations |
1,989 | (22,657,290 | ) | |||||
|
|
|
|||||||
| Distributions to shareholders (Note 1d) |
— | (1,062,975 | ) | |||||
|
|
|
|||||||
| Capital share transactions: (Note 2) |
— | 12,929,102 | ||||||
|
|
|
|||||||
| Net increase (decrease) in net assets |
1,989 | (10,791,163 | ) | |||||
| Net assets: |
||||||||
| Beginning of year |
2,702 | 10,793,865 | ||||||
|
|
|
|||||||
| End of year |
$ | 4,691 | $ | 2,702 | ||||
|
|
|
|||||||
| franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report |
15 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statement of Cash Flows
for the year ended March 31, 2023
| Franklin FTSE Russia ETF |
||||
| Cash Flows from Operating Activities |
||||
| Net increase in net assets resulting from operations |
$ | 1,989 | ||
| Adjustments to reconcile net decrease in net assets resulting from operations to net cash used in operating activities: |
||||
| Increase in miscellaneous receivable |
(164 | ) | ||
| Decrease in management fees payable |
(82 | ) | ||
|
|
|
|||
| Net cash used in operating activities |
1,743 | |||
|
|
|
|||
| Cash Flows from Financing Activities |
||||
| Net change in cash |
1,743 | |||
| Cash/(bank overdraft) at beginning of year |
2,784 | |||
|
|
|
|||
| Cash at end of year |
$ | 4,527 | ||
|
|
|
|||
| 16 | Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
1. Organization and Significant Accounting Policies
Franklin Templeton ETF Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company consisting of forty-eight separate funds, one of which is included in this report (Fund) 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 Fund follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946, Financial Services -Investment Companies (“ASC 946”). The Fund seeks to provide the investment results that closely correspond, before fees and expenses, to the performance of the Fund’s underlying index.
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 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 Fund 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 Fund’s 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 Fund’s net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.
The Fund has 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 employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are 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’s 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. At March 31, 2023, 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”).
| franklintempleton.com | Annual Report |
17 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
a. Financial Instrument Valuation (continued)
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. 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 Fund 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 Fund does 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. Income and Deferred Taxes
It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
The Fund may 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 invests. 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 records 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 March 31, 2023, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.
d. 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 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
| 18 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies (continued)
d. Security Transactions, Investment Income, Expenses and Distributions (continued)
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 to 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.
e. Accounting Estimates
The preparation of financial statement in accordance with U.S. GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
f. Guarantees and Indemnifications
Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the 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 are issued and redeemed at their respective NAV only in aggregations of a specified number of shares or multiples thereof (Creation Units). Only certain large institutional investors (Authorized Participants) may engage in creation or redemption transactions directly with the Fund. Once created, shares of the Fund generally trade in the secondary market in amounts less than one Creation Unit. The market price of the Fund’s shares will be based on the price in the secondary 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 Fund regardless of the number of Creation Units that are being created or redeemed on the same day by the Authorized Participant. The standard transaction fee is imposed to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units and is not charged to or paid by the Fund.
In addition, for cash Creation Unit transactions, a variable fee for creation transactions and redemption transactions may be charged to the Authorized Participant to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades. Variable fees, if any, are included in capital share transactions in the Statements of Changes in Net Assets.
At March 31, 2023, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:
| Franklin FTSE Russia ETF1, 2 | ||||||||||||||||||||
| Year Ended March 31, 2023 |
Year Ended March 31, 2022 |
|||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||
| Shares sold |
— | $ | — | 400,000 | $ | 12,929,102 | ||||||||||||||
|
|
|
|||||||||||||||||||
| Net increase (decrease) |
— | $ | — | 400,000 | $ | 12,929,102 | ||||||||||||||
|
|
|
|||||||||||||||||||
1. Effective 4 AM Eastern Time on March 4, 2022: The NYSE Arca, Inc. announced a trading halt of the Fund.
2. Effective March 1, 2022: The Fund has temporarily suspended new creations of its shares until further notice. Please refer to the prospectus for further detail.
| franklintempleton.com | Annual Report |
19 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:
| Subsidiary | Affiliation | |
| Franklin Advisory Services, LLC (FASL) |
Investment manager | |
| Franklin Templeton Services, LLC (FT Services) |
Administrative manager | |
| Franklin Distributors, LLC (Distributors) |
Principal underwriter | |
a. Management fees
The Fund pays a unified management fee to FASL whereby FASL 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. Effective March 1, 2022, FASL 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. For the period April 1, 2022 through March 31, 2023 the annualized contractual management fee rate was 0.19%. FASL waived it’s management fee for the period.
b. Administrative Fees
Under an agreement with FASL, FT Services provides administrative services to the Fund. The fee is paid by FASL based on the Fund’s average daily net assets, and is not an additional expense of the Fund.
4. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains. At March 31, 2023, the capital loss carryforwards were as follows:
| Year Ended March 31, 2023 |
||||
| Capital loss carryforwards not subject to expiration: | ||||
| Long term |
$ | 313,328 | ||
| Short term |
235,236 | |||
|
|
|
|||
| Total capital loss carryforwards |
$ | 548,564 | ||
|
|
|
|||
The tax character of distributions paid during the period ended March 31, 2023 and 2022, were as follows:
| 2023 | 2022 | |||||||
| Distributions paid from Ordinary income |
$ | — | $ | 1,062,975 | ||||
| 20 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
4. Income Taxes (continued)
At March 31, 2023, the cost of investments, net unrealized appreciation (depreciation) and undistributed ordinary income for income tax purposes were as follows:
| Year Ended March 31, 2023 |
||||
| Cost of investments |
$ | 22,661,468 | ||
|
|
|
|||
| Unrealized appreciation |
$ | — | ||
| Unrealized depreciation |
(22,661,468 | ) | ||
|
|
|
|||
| Net unrealized appreciation (depreciation) |
$ | (22,661,468 | ) | |
|
|
|
|||
| Distributable earnings – undistributed ordinary income |
$ | 1,989 | ||
|
|
|
|||
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of foreign currency transactions, and wash sales.
5. Investment Transactions
There were no purchases and sales of investments for the year ended March 31, 2023.
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 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 and a downgrade in the country’s credit rating. Ongoing developments related to the war have caused and may continue to cause severe declines in 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 severely 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
| franklintempleton.com | Annual Report |
21 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
6. Concentration of Risk (continued)
to significantly impact the Fund’s performance and the value of an investment in the Fund. These as well as any other 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. 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. These circumstances could also have adverse tax, regulatory and/or other consequences to the Fund.
At March 31, 2023, 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 March 31, 2023.
7. Plan of Liquidation
Russia’s large-scale invasion of Ukraine on February 24, 2022 has led to economic sanctions on certain Russian individuals and Russian corporate and banking entities, the imposition of capital controls in Russia, and the closure of Russian securities markets. Previously, on March 1, 2022, the Fund suspended new creations of its shares in light of circumstances involving Russia and Ukraine and trading in the Fund was halted by the Fund’s listing exchange, NYSE Arca, Inc. (“NYSE Arca”), prior to market open on March 4, 2022. The Fund had 100% of its net assets invested in securities with significant economic risk or exposure to Russia. The Fund fair valued all Russian equity securities at $0 (as of March 31, 2023, such securities continue to be fair valued at $0). Accordingly, as of March 31, 2023, the Fund’s portfolio is comprised of Russian equity securities (currently fair valued at $0 as noted above) and cash.
On July 20, 2022, the Board of Trustees of the Trust (the “Board”) unanimously voted to close and liquidate the Fund, contingent on receiving any necessary relief from the U.S. Securities and Exchange Commission (“SEC”). On December 23, 2022, the SEC granted exemptive relief to the Fund permitting the Fund to suspend the right of redemption with respect to shares of the Fund and, if necessary, postpone the date of payment of redemption proceeds with respect to redemption orders received but not yet paid until the Fund completes the liquidation of its portfolio and distributes all its assets to remaining shareholders. The Fund was delisted from NYSE Arca effective December 27, 2022.
The Fund is in the process of liquidating its assets and winding up its business pursuant to a plan of liquidation. The Fund may make one or more liquidating distributions. It is possible that the liquidation of the Fund will take an extended period of time if circumstances involving Russian securities do not improve. While the Fund is in the process of liquidating its portfolio, the Fund will hold cash and securities that may not be consistent with the Fund’s investment goal and strategies and will experience significantly higher tracking error than is typical for the Fund. Furthermore, because of the delisting of the Fund by NYSE Arca and the liquidation of the Fund, the Fund is no longer an exchange-traded fund. Upon payment of the final liquidating distribution, it is anticipated that the Fund will be terminated.
Franklin Templeton anticipates that the Fund will remain in existence until at least December 31, 2023, to allow the Fund to sell the securities, if conditions permit; the Fund may be terminated sooner if all of the Russian securities have been sold before that date (or they cease to represent valid interests in their issuers). After December 31, 2023, the Fund may be terminated at any time, at the discretion of the Board, even if not all of the Russian securities have been sold. Due to the uncertainty involved, there can be no assurance that shareholders will receive any liquidating distribution relating to any unsold Russian securities.
8. Fair Value Measurements
The Fund follows 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 |
| 22 | Annual Report | franklintempleton.com | ||||||||
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS
8. Fair Value Measurements (continued)
| • | 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 March 31, 2023, in valuing the Fund’s assets and liabilities carried at fair value, is as follows:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Franklin FTSE Russia ETF | ||||||||||||||||
| Assets: | ||||||||||||||||
| Investments in Securities:a |
||||||||||||||||
| Equity Investmentsb |
$ | — | $ | — | $ | —c | $ | — | ||||||||
|
|
|
|||||||||||||||
a For detailed categories, see the accompanying Schedules of Investments.
b Includes common and preferred stocks, warrants, as well as other equity investments.
c Includes securities determined to have no value at March 31, 2023.
9. New Accounting Pronouncements
In June 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-03, Fair Value Measurement (Topic 820) – Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in the ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, should not be considered in measuring fair value. The ASU is effective for interim and annual reporting periods beginning after December 15, 2023, with the option of early adoption. Management has reviewed the requirements and believes that the adoption of the ASU will not have a material impact on the financial statements.
10. Subsequent Events
The Fund has evaluated subsequent events through the issuance of these Financial Statements and determined that no events have occurred that require disclosure.
| franklintempleton.com | Annual Report |
23 | ||||||||
FRANKLIN TEMPLETON ETF TRUST
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Franklin Templeton ETF Trust and Shareholders of Franklin FTSE Russia ETF
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedule of investments, of Franklin FTSE Russia ETF (one of the funds constituting Franklin Templeton ETF Trust, hereafter collectively referred to as the “Fund”) as of March 31, 2023, the related statement of operations and its cash flows for the year ended March 31, 2023, the statements of changes in net assets for each of the two years in the period ended March 31, 2023, including the related notes, and the financial highlights for each of the five years in the period ended March 31, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of March 31, 2023, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended March 31, 2023 and the financial highlights for each of the five years in the period ended March 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of March 31, 2023 by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.
Emphasis of Matter
As discussed in Note 7 to the financial statements, on July 20, 2022, the Board of Trustees of the Trust unanimously voted to close and liquidate the Fund, contingent on receiving any necessary relief from the U.S. Securities and Exchange Commission (SEC). On December 23, 2022, the SEC granted exemptive relief to the Fund permitting the Fund to suspend the right of redemption with respect to shares of the Fund and, if necessary, postpone the date of payment of redemption proceeds with respect to redemption orders received but not yet paid until the Fund completes the liquidation of its portfolio and distributes all its assets to remaining shareholders. The Fund may be terminated at the discretion of the Fund’s Board based on the facts and circumstances as discussed in Note 7.
PricewaterhouseCoopers LLP
San Francisco, California
May 23, 2023
We have served as the auditor of one or more investment companies in the Franklin Templeton funds since 1948.
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FRANKLIN TEMPLETON ETF TRUST
The name, year of birth and address of the officers and board members, as well as their affiliations, positions held with the Trust, principal occupations during at least the past five years and number of U.S. registered portfolios overseen in the Franklin Templeton/Legg Mason fund complex, are shown below. Generally, each board member serves until that person’s successor is elected and qualified.
Independent Board Members
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| Rohit Bhagat (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Lead Independent Trustee | Since 2016 | 59 | AssetMark Financial Holdings, Inc. (investment solutions) (2018-present) and PhonePe (2020-present) (payment and financial services); formerly, Axis Bank (financial) (2013- 2021), FlipKart Limited (2019-2020) (eCommerce company); CapFloat Financial Services Pvt., Ltd. (non-banking finance company) (2018) and Zentific Investment Management (hedge fund) (2015-2018). | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Managing Member, Mukt Capital, LLC (private investment firm) (2014-present); Advisor, Optimal Asset Management (investment technology and advisory services company) (2015-present); Chief Executive Officer and Director, FinTech Evolution Acquisition (eCommerce company) (February 2021-present); and formerly, Chairman, Asia Pacific, BlackRock (2009-2012); Global Chief Operating Officer, Barclays Global Investors (investment management) (2005-2009); and Senior Partner, The Boston Consulting Group (management consulting) (1992-2005). | ||||||||
| Deborah D. McWhinney (1955) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee | Since 2020 | 59 | S&P Global, Inc. (financial information services) (February 2022), Borg Warner (automotive) (2018-present), LegalShield (consumer services) (2020-present); and formerly, IHS Markit (information services) (2015-2022), Fluor Corporation (construction and engineering) (2014-2020) and Focus Financial Partner, LLC (financial services) (2018-2020). | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Director of various companies; and formerly, Board Member, Lloyds Banking Group (2015-2018) (financial institution) and Fresenius Medical Group (2016-2018) (healthcare); Chief Executive Officer (2013-2014) and Chief Operating Officer (2011-2013), CitiGroup Global Enterprise Payments (financial services); and President, Citi’s Personal Banking and Wealth Management (2009-2011). | ||||||||
| Anantha K. Pradeep (1963) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee | Since 2016 | 59 | None | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Chief Executive Officer, Smilable, Inc. (technology company) (2014-present); Chief Executive Officer, MachineVantage (technology company) (2018-present); Founder and Managing Partner, Consult Meridian, LLC (consulting company) (2009-present); and formerly, Founder, BoardVantage (board portal solutions provider delivering paperless process for boards and leadership) (2000-2002). | ||||||||
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FRANKLIN TEMPLETON ETF TRUST
Interested Board Members and Officers
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| **Jennifer M. Johnson (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee and Chairperson of the Board | Since 2016 | 70 | None | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Chief Executive Officer, President and Director, Franklin Resources, Inc.; officer and/or director or trustee, of some of the other subsidiaries of Franklin Resources, Inc. and of certain funds in the Franklin Templeton/Legg Mason fund complex; and formerly, Chief Operating Officer and Executive Vice President, Franklin Resources, Inc. (1994-2015); Executive Vice President of Operations and Technology, Franklin Resources, Inc. (2005-2010); and Senior Vice President, Franklin Resources, Inc. (2003-2005). | ||||||||
| Alison E. Baur (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President | Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Deputy General Counsel, Franklin Templeton; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Steven J. Gray (1955) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President | Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Distributors, LLC; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Matthew T. Hinkle (1971) One Franklin Parkway San Mateo, CA 94403-1906 |
Chief Executive Officer – Finance and Administration | Since 2017 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Vice President, Franklin Templeton Services, LLC; officer of certain funds in the Franklin Templeton/Legg Mason fund complex; and formerly, Vice President, Global Tax (2012-April 2017) and Treasurer/Assistant Treasurer, Franklin Templeton (2009-2017). | ||||||||
| Fred Jensen (1963) 620 Eighth Avenue, 47th Floor New York, NY 10018 |
Chief Compliance Officer | Since 2021 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Director - Global Compliance of Franklin Templeton; Managing Director of Legg Mason & Co.; Director of Compliance, Legg Mason Office of the Chief Compliance Officer; Chief Compliance Officer, Franklin Advisory Services, LLC; Compliance Officer, Franklin Advisers, Inc.; officer of certain funds in the Franklin Templeton/Legg Mason fund complex; formerly, Chief Compliance Officer of Legg Mason Global Asset Allocation; Chief Compliance Officer, Legg Mason Private Portfolio; Chief Compliance Officer to The Reserves Funds (investment adviser, funds and broker-dealer) and Ambac Financial Group (investment adviser, funds and broker-dealer). | ||||||||
| Susan Kerr (1949) 620 Eighth Avenue New York, NY 10018 |
Vice President - AML Compliance | Since 2021 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Compliance Analyst, Franklin Templeton; Chief Anti-Money Laundering Compliance Officer, Legg Mason & Co., or its affiliates; Anti Money Laundering Compliance Officer; Senior Compliance Officer, LMIS; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Todd Mathias (1983) One Franklin Parkway, San Mateo, Ca 94403-1906 |
Vice President | Since March 2022 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Head of US ETF Product Strategy, Franklin Templeton; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
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FRANKLIN TEMPLETON ETF TRUST
Interested Board Members and Officers (continued)
| Name, Year of Birth and Address |
Position | Length of Time Served |
Number of Portfolios in Fund Complex Overseen by Board Member* |
Other Directorships Held During at Least the Past 5 Years | ||||
| Patrick O’Connor (1967) One Franklin Parkway San Mateo, CA 94403-1906 |
President and Chief Executive Officer – Investment Management | Since 2016 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| President and Chief Investment Officer, Franklin Advisory Services, LLC; Senior Vice President, Franklin Advisers, Inc.; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Vivek Pai (1970) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 |
Treasurer, Chief Financial Officer and Chief Accounting Officer | Since 2019 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Treasurer, U.S. Fund Administration & Reporting and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Navid J. Tofigh (1972) One Franklin Parkway, San Mateo, Ca 94403-1906 |
Vice President and Secretary | Since 2015 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
| Lori A. Weber (1964) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 |
Vice President and Secretary | Vice President since 2011 and Secretary since 2013 | Not Applicable | Not Applicable | ||||
| Principal Occupation During at Least the Past 5 Years: | ||||||||
| Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Resources, Inc.; Vice President and Secretary, Templeton Investment Counsel, LLC; and officer of certain funds in the Franklin Templeton/Legg Mason fund complex. | ||||||||
*We base the number of portfolios on each separate series of the U.S. registered investment companies within the Franklin Templeton fund complex. These portfolios have a common investment manager or affiliated investment managers.
**Jennifer M. Johnson is considered to be an interested person of the Fund under the federal securities laws due to her position as an officer and director of Franklin Resources, Inc. (Resources), which is the parent company of the Fund’s investment manager and distributor.
Note 1: Officer information is current as of the date of this report. It is possible that after this date, information about officers may change.
The Sarbanes-Oxley Act of 2002 and Rules adopted by the Securities and Exchange Commission require the Fund to disclose whether the Fund’s Audit Committee includes at least one member who is an audit committee financial expert within the meaning of such Act and Rules. The Fund’s Board has determined that there is at least one such financial expert on the Audit Committee and has designated Rohit Bhagat and Deboarah D. McWhinney as its audit committee financial experts. The Board believes that Mr. Bhagat and Ms. McWhinney qualify as such an expert in view of their extensive business background and experience, including extensive experience in the asset management and financial services industries. Mr. Bhagat has been a Member and Chairman of the Fund’s Audit Committee since 2017. Ms. McWhinney has been a member of the Fund Audit Committee since 2020. As a result of such background and experience, the Board believes that Mr. Bhagat and Ms. McWhinney have acquired an understanding of generally accepted accounting principles and financial statements, the general application of such principles in connection with the accounting estimates, accruals and reserves, and analyzing and evaluating financial statements that presents a breadth and level of complexity of accounting issues generally comparable to those of the Fund, as well as an understanding of internal controls and procedures for financial reporting and an understanding of audit committee functions. Mr. Bhagat and Ms. McWhinney are independent Board members as that term is defined under the relevant Securities and Exchange Commission Rules and Releases.
The Statement of Additional Information (SAI) includes additional information about the board members and is available, without charge, upon request. Shareholders may call (800) DIAL BEN/342-5236 to request the SAI.
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FRANKLIN TEMPLETON ETF TRUST
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 the Fund and the Fund’s net asset value may be found on the Fund’s website at franklintempleton.com. The Fund suspended new creations of its shares effective March 1, 2022, NYSE Arca halted trading of the Fund effective March 4, 2022, and the Fund was delisted from NYSE Arca effective December 27, 2022. Therefore, from March 4, 2022, through March 31, 2023, the Fund did not have a daily closing market price and and a premium/discount to net asset value (NAV) could not be calculated. The Fund is no longer an exchange-traded fund.
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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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Annual Report Franklin FTSE Russia ETF |
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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 | ||||
| © 2023 Franklin Templeton Investments. All rights reserved. | FLRU A 05/23 | |||||
| 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 experts are Rohit Bhagat and Deborah D. McWhinney. They are “independent” as defined under the relevant Securities and Exchange Commission Rules and Releases.
| Item 4. | Principal Accountant Fees and Services. |
(a) Audit Fees
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or for services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $999,623 for the fiscal year ended March 31, 2023 and $903,487 for the fiscal year ended March 31, 2022.
(b) Audit-Related Fees
There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of Item 4.
There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that are reasonably related to the performance of the audit of their financial statements.
(c) Tax Fees
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant for tax compliance, tax advice and tax planning were $6,000 for the fiscal year ended March 31, 2023 and $0 for the fiscal year ended March 31, 2022. The services for which these fees were paid included tax compliance services related to year-end.
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant for tax compliance, tax advice and tax planning were $418,850 for the fiscal year ended March 31, 2023 and $100,125 for the fiscal year ended March 31, 2022. The services for which these fees were paid included global access to tax platform International Tax View and tax compliance services related to year-end.
(d) All Other Fees
The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant not reported in paragraphs (a)-(c) of Item 4 were $0 for the fiscal year ended March 31, 2023 and $3,461 for the fiscal year ended March 31, 2022. The services for which these fees were paid included review of materials provided to the fund Board in connection with the investment management contract renewal process.
The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant not reported in paragraphs (a)-(c) of Item 4 were $59,560 for the fiscal year ended March 31, 2023 and $225,000 for the fiscal year ended March 31, 2022. The services for which these fees were paid included compliance examination for Investment Advisor Act rule 206(4)-2, professional services relating to the readiness assessment over Greenhouse Gas Emissions and Energy, professional fees in connection with determining the feasibility of a U.S. direct lending structure, fees in connection with a license for accounting and business knowledge platform Viewpoint, and fees in connection with license for employee development tool Pro Edge.
(e) (1) The registrant’s audit committee is directly responsible for approving the services to be provided by the auditors, including:
(i) pre-approval of all audit and audit related services;
(ii) pre-approval of all non-audit related services to be provided to the Fund by the auditors;
(iii) pre-approval of all non-audit related services to be provided to the registrant by the auditors to the registrant’s investment adviser or to any entity that controls, is controlled by or is under common control with the registrant’s investment adviser and that provides ongoing services to the registrant where the non-audit services relate directly to the operations or financial reporting of the registrant; and
(iv) establishment by the audit committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the auditors, as required by paragraphs (ii) and (iii) above, of policies and procedures to permit such services to be pre- approved by other means, such as through establishment of guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of audit committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of (ii) through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.
(e) (2) None of the services provided to the registrant described in paragraphs (b)-(d) of Item 4 were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of regulation S-X.
(f) No disclosures are required by this Item 4(f).
(g) The aggregate non-audit fees paid to the principal accountant for services rendered by the principal accountant to the registrant and the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant were $484,410 for the fiscal year ended March 31, 2023 and $328,586 for the fiscal year ended March 31, 2022
(h) The registrant’s audit committee of the board has considered whether the provision of non- audit services that were rendered to the registrant’s investment adviser (not including any sub- adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre- approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
(i) N/A
(j) N/A
| Item 5. | Audit Committee of Listed Registrants. |
Not Applicable.
| Item 6. | Investments. |
Not applicable.
| Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable.
| Item 8. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable.
| Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Not applicable.
| 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 Companies. |
Not applicable.
| Item 13. | Exhibits. |
(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.
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: 05/30/2023 |
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: 05/30/2023 | ||
| By | /s/ Vivek Pai | |
| Vivek Pai | ||
| Chief Financial Officer and Chief Accounting Officer Date: 05/30/2023 | ||