Legg Mason International Low Volatility High Dividend ETF

LOGO


Annual Report		October 31, 2021

LEGG MASON

INTERNATIONAL

LOW VOLATILITY

HIGH DIVIDEND ETF

LVHI

The Fund intends to no longer mail paper copies of the Fund’s shareholder reports like this one, unless you specifically request paper copies of the reports from your financial intermediary (such as a broker-dealer or bank). Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.

If you already elected to receive shareholder reports electronically (“e-delivery”), you will not be affected by this change and you need not take any action. If you have not already elected e-delivery, you may elect to receive shareholder reports and other communications from the Fund electronically by contacting your financial intermediary.

You may elect to receive all future reports in paper free of charge by contacting your financial intermediary to request that you continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all Legg Mason Funds held in your account with your financial intermediary.

INVESTMENT PRODUCTS: NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE


What’s inside
Letter from the president			II
Fund overview			1
Fund at a glance			8
Fund expenses			9
Fund performance			10
Schedule of investments			12
Statement of assets and liabilities			18
Statement of operations			19
Statements of changes in net assets			20
Financial highlights			21
Notes to financial statements			22
Report of independent registered public accounting firm			35
Amended subadvisory agreement			36
Additional shareholder information			37
Statement regarding liquidity risk management program			38
Additional information			40
Important tax information			46

Fund objective

The Fund seeks to track the investment results of an index composed of publicly traded equity securities of developed markets outside of the United States with relatively high yield and low price and earnings volatility while mitigating exposure to fluctuations between the values of the U.S. dollar and other international currencies.

Letter from the president

LOGO

Dear Shareholder,

We are pleased to provide the annual report of Legg Mason International Low Volatility High Dividend ETF for the twelve-month reporting period ended October 31, 2021. Please read on for a detailed look at prevailing economic and market conditions during the Fund’s reporting period and to learn how those conditions have affected Fund performance.

Special shareholder notice

Effective August 7, 2021, QS Investors, LLC (“QS Investors”), a subadviser of the Fund and a wholly-owned subsidiary of Franklin Resources, Inc. (“Franklin Resources”), merged with and into Franklin Advisers, Inc. (“Franklin Advisers”), also a wholly-owned subsidiary of Franklin Resources. As a result of the merger, Franklin Advisers replaced QS Investors as the subadviser. The merger did not change the manner in which the Fund’s portfolio is managed, nor did it result in any change in the nature or amount of services provided by, or the fees payable to, the subadviser. For additional information, please see the Fund’s prospectus supplement dated July 6, 2021.

As always, we remain committed to providing you with excellent service and a full spectrum of investment choices. We also remain committed to supplementing the support you receive from your financial advisor. One way we accomplish this is through our website, www.franklintempleton.com. Here you can gain immediate access to market and investment information, including:

•

Fund net asset value and market price,

•

Market insights and commentaries from our portfolio managers, and

•

A host of educational resources.


II		Legg Mason International Low Volatility High Dividend ETF

We look forward to helping you meet your financial goals.

Sincerely,

LOGO

Patrick O’Connor

President and Chief Executive Officer - Investment Management President

November 30, 2021

Legg Mason International Low Volatility High Dividend ETF

III

Fund overview

Q. What is the Fund’s investment strategy?

A. Legg Mason International Low Volatility High Dividend ETF (the “Fund”) seeks to track the investment results of the QS International Low Volatility High Dividend Hedged Index (the “Underlying Index”). The Underlying Index seeks to provide more stable income through investments in stocks of profitable companies in developed markets outside of the United States with relatively high dividend yields or anticipated dividend yields and lower price and earnings volatility, while mitigating exposure to exchange-rate fluctuations between the U.S. dollar and other international currencies. The Underlying Index is designed to have higher returns than an equivalent unhedged investment when the currencies in which its component securities are denominated are weakening relative to the U.S. dollar. Conversely, the Underlying Index is designed to have lower returns than an equivalent unhedged investment when the currencies in which its component securities are denominated are rising relative to the U.S. dollar. The Underlying Index is based on a proprietary methodology created and sponsored by Franklin Advisers, Inc. (“Franklin Advisers”) (prior to August 7, 2021, known as QS Investors, LLC), the Fund’s subadviser.

The Fund will invest at least 80% of its net assets, plus borrowings for investment purposes, if any, in securities that compose its Underlying Index. Securities that compose the Underlying Index include depositary receipts representing securities in the Underlying Index.

The Underlying Index is composed of equity securities in developed markets outside of the United States across a range of market capitalizations that are included in the MSCI World ex-US IMI Local Indexi. The Underlying Index’s components are reconstituted annually and rebalanced quarterly. The Fund’s securities portfolio is rebalanced when the Underlying Index is rebalanced or reconstituted. The composition of the Underlying Index and the Fund after reconstitution and rebalancing may fluctuate and exceed the Underlying Index limitations due to market movements. The components of the Underlying Index, and the degree to which these components represent certain sectors and industries, may change over time.

The Fund may invest up to 20% of its net assets in foreign currency forward contracts and other currency hedging instruments, certain index futures, options, options on index futures, swap contracts or other derivatives related to its Underlying Index and its component securities; cash and cash equivalents; other investment companies, including exchange-traded funds; and in securities and other instruments not included in its Underlying Index, but which Franklin Advisers believes will help the Fund track its Underlying Index.

The Fund invests in currency hedging instruments to offset the Fund’s exposure to the currencies in which the Fund’s holdings are denominated. The Fund may also invest in equity index futures and currency derivatives to gain exposure to local markets or segments of local markets for cash flow management purposes and as a portfolio management technique.

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Fund overview (cont’d)

Q. What were the overall market conditions during the Fund’s reporting period?

A. Global equity returns were volatile but strongly positive across regions and sectors for the twelve-month reporting period ending October 31, 2021. The MSCI World ex USA Indexii (the “Index”) returned 35.58%, led in the major regions by the U.K. and continental Europe. Japan underperformed. The energy and financials sectors were notably strong for the full period, but all sectors had returns in the double digits.

International equities as measured by the Index had a positive return for much of the reporting period, including the final months of 2020 when global equity markets advanced nearly across the board. The bulk of gains occurred in November following positive coronavirus vaccine trials and Joe Biden’s win in the U.S. presidential election. Positive news appeared to outweigh concerns that economic recoveries would stall amid renewed lockdowns resulting from rising coronavirus infection rates and the identification of a new, more infectious COVID-19 strain. Sentiment was buoyed toward the end of 2020 by the start of vaccinations for essential medical workers in parts of the United States and Europe.

The equity market advance was more muted in the first quarter of 2021, although investors’ optimism around policy stimulus and economic reopening appeared to outweigh concerns about higher bond yields and potential economic overheating. Credit markets influenced stock markets for much of the quarter, with the U.S. 10-year Treasury note’s yield finishing near its highest levels in more than a year amid rising inflation expectations and improving macro prospects. The backup in yields prompted a style rotation in equity markets, with “duration plays” (meaning companies with long-dated cash flows within certain growth industries like technology and media) and “bond proxies” (those equity sectors with fixed income characteristics like utilities and consumer staples) mostly lagging, while commodity price-sensitive and other economically cyclical sectors (e.g., energy, industrials and financials) generally performed well. In terms of investment style, global value equities surged and significantly outperformed the slight gain of global growth stocks.

Progress in vaccination campaigns and businesses reopening, along with ongoing monetary and fiscal stimulus, aided continued economic recovery in several parts of the world in the second quarter of 2021. Inflation was the dominant market theme as supply chain disruptions and higher commodity prices combined with low base effects to drive up inflation around the globe. Investors weighed signals on whether the inflation jump would be temporary and if governments and central banks would begin tightening accommodative policies sooner than expected.

In the third quarter of 2021, the Index return was modestly negative, as a selloff in September erased the gains of many markets earlier in the quarter. Only Japan had a positive return for the quarter. Early in the period, strong corporate earnings in several parts of the world, full U.S. regulatory approval for a COVID-19 vaccine and the Chinese central bank’s liquidity-boosting measures aided markets. However, many investors were also pricing in the potential for the Federal Reserve Board (the “Fed”) to begin tapering stimulus sooner than expected. Late in the quarter persistent inflation, more hawkish central bank

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

messaging and a continued regulatory crackdown in China all affected investor sentiment. In October, all markets except Japan rebounded, as investors appeared to “buy the dip”.

The U.K. was the best performing major equity market in the Index for the full reporting period, meaningfully outperforming other regions in the first half of the reporting period. At the end of 2020, and after months of post-Brexit vote negotiations, a deal was finalized on Christmas Eve just before the expiration of the transition period. The successful vaccine rollout in early 2021 and a significant decline in infections in February and March further bolstered the equity market. U.K. equity market returns were more muted in the second quarter of 2021, slightly negative for the third quarter and modestly positive in the final month of the reporting period.

Continental Europe performed in line with the Index for the full reporting period. At the end of 2020, the rollout of coronavirus vaccines and expected additional stimulus measures helped offset worries about rising COVID-19 cases and renewed stay-at-home orders. In December, the European Central Bank (“ECB”) increased its bond-buying program and opened up a new set of cheap loans for banks in response to the resurging pandemic, extending both measures into 2022. By the end of the first quarter of 2021, gains were restrained by the increase in global bond yields amid mounting worries about a possible rise in inflation, along with new lockdown measures in several countries. In June 2021, ECB raised its economic forecast for the euro area, but stated it intended to continue its accommodative monetary stimulus. European stock markets collectively declined in the third quarter on mixed underlying results but recovered in October.

Japan underperformed the Index overall for the full reporting period, while still posting a strong return. Japanese equity markets surged in November 2020 on positive vaccine news, leading to optimism for a potential recovery in foreign demand for Japanese products, while domestic demand remained subdued. In the first quarter of 2021, however, Japan was the laggard in the Index while still posting a modestly positive return. Equity returns turned negative in the second calendar quarter of 2021; the economy contracted as private consumption and government spending decreased amid rising coronavirus cases and slow vaccine rollouts. Japan outperformed in the third quarter of the reporting period with one of the few positive returns regionally, as Japanese equities found support from vaccination progress and lessening political uncertainty as the decision on a new prime minister took shape but underperformed in the final month of the reporting period.

Q. How did we respond to these changing market conditions?

The Fund uses a passive investment approach to achieve its investment objective, and therefore made no change in investment approach in response to market conditions. The Fund employs a currency hedging strategy to reduce the volatility associated with exposure to shifts in relative value between the U.S. Dollar and the currency of local markets. The currency hedge did not materially impact overall performance during the reporting period, as the U.S. Dollar only marginally appreciated.

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Fund overview (cont’d)

Performance review

For the twelve months ended October 31, 2021, Legg Mason International Low Volatility High Dividend ETF generated a 28.28% return on a net asset value (“NAV”)iii basis and 28.90% based on its market priceiv per share.

The performance table shows the Fund’s total return for the twelve months ended October 31, 2021 based on its NAV and market price as of October 31, 2021. The Fund seeks to track the QS International Low Volatility High Dividend Hedged Index (NR), which returned 28.65% for the same period. The Fund’s broad-based market index, the MSCI World ex-US IMI Local Index (NR), returned 35.76% over the same time frame. The Lipper International Multi-Cap Value Funds Category Averagev returned 37.68% for the period. Please note that Lipper performance returns are based on each fund’s NAV.


Performance Snapshot as of October 31, 2021 (unaudited)
	6 months			12 months
Legg Mason International Low Volatility High Dividend ETF:
$25.83 (NAV)		4.91	%		28.28	%*†
$25.99 (Market Price)		5.10	%		28.90	%*‡
QS International Low Volatility High Dividend Hedged Index (NR)		5.04	%		28.65	%
MSCI World ex-US IMI Local Index (NR)		7.31	%		35.76	%
Lipper International Multi-Cap Value Funds Category Average		1.99	%		37.68	%

The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown above. Principal value and investment returns will fluctuate so shares, when sold, may be worth more or less than their original cost. Performance data current to the most recent month-end is available at www.franklintempleton.com.

Investors buy and sell shares of an exchange-traded fund (“ETF”) at market price (not NAV) in the secondary market throughout the trading day. These shares are not individually available for direct purchase from or direct redemption to the ETF. Market price returns are typically based upon the official closing price of the Fund’s shares. These returns do not represent investors’ returns had they traded shares at other times. Performance figures for periods shorter than one year represent cumulative figures and are not annualized.

Information showing the Fund’s net asset value, market price, premiums and discounts, and bid-ask spreads for various time periods is available by visiting the Fund’s website at www.franklintempleton.com.

As of the Fund’s current prospectus dated March 1, 2021, the gross total annual fund operating expense ratio for the Fund was 0.40%.

* Total returns are based on changes in NAV or market price, respectively. Returns reflect the deduction of all Fund expenses. Returns do not reflect the deduction of brokerage commissions or taxes that investors pay on distributions or the sale of shares.

† Total return assumes the reinvestment of all distributions at NAV.


4		Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

‡ Total return assumes the reinvestment of all distributions at market price, which typically is based upon the official closing price of the Fund’s shares.

Q. What were the leading contributors to performance?

A. Looking at the performance of the Underlying Index by country for the reporting period and considering both returns and weights in the Underlying Index, the leading contributors were Canada and the UK. From a sector perspective, financials and communication services fared best, with the former having the highest return in the Underlying Index.

Q. What were the leading detractors from performance?

A. While Austria and Belgium had positive returns for the reporting period, when combined with their weight in the Underlying Index they contributed the least to absolute performance for the reporting period. Similarly, the energy and information technology sectors contributed the least to absolute performance; the energy sector had the lowest return in the Underlying Index, and the Information technology sector represented a small weight.

Looking for additional information?

The Fund’s daily NAV is available online at www.franklintempleton.com. The Fund is traded under the symbol “LVHI” and its closing market price is available on most financial websites. In a continuing effort to provide information concerning the Fund, shareholders may call 1-877-721-1926 (toll free), Monday through Friday from 8:00 a.m. to 5:30 p.m. Eastern time, for the Fund’s current NAV, market price and other information.

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Fund overview (cont’d)

Thank you for your investment in Legg Mason International Low Volatility High Dividend ETF. As always, we appreciate that you have chosen us to manage your assets and we remain focused on achieving the Fund’s investment goals.

Sincerely,

LOGO

Michael LaBella, CFA

Portfolio Manager

Franklin Advisers, Inc

LOGO

Russell Shtern, CFA

Portfolio Manager

Franklin Advisers, Inc

November 15, 2021

RISKS: Equity securities are subject to market and price fluctuations. Dividends are not guaranteed, and a company may reduce or eliminate its dividend at any time. International investments are subject to special risks including currency fluctuations, social, economic, and political uncertainties, which could increase volatility. Currency investing contains heightened risks that include market, political, regulatory, and national conditions, and may not be suitable for all investors. In rising markets, the value of large-cap stocks may not rise as much as smaller-cap stocks. Small- and mid-cap stocks involve greater risks and volatility than large-cap stocks. The Fund may focus its investments in certain industries, increasing its vulnerability to market volatility. There is no guarantee that the Fund will achieve a high degree of correlation to the index it seeks to track. The Fund does not seek to outperform the index it tracks and does not seek temporary defensive positions when markets decline or appear overvalued. Derivatives, such as options and futures, can be illiquid, may disproportionately increase losses and have a potentially large impact on Fund performance. Distributions are not guaranteed and are subject to change. Please see the Fund’s prospectus for a more complete discussion of these and other risks and the Fund’s investment strategies.

The mention of sector breakdowns is for informational purposes only and should not be construed as a recommendation to purchase or sell any securities. The information provided regarding such sectors is not a sufficient basis upon which to make an investment decision. Investors seeking financial advice regarding the appropriateness of investing in any securities or investment strategies discussed should consult their financial professional. The Fund’s top five sector holdings (as a percentage of net assets)


6				Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

as of October 31, 2021 were: utilities (19.9%), financials (18.9%), consumer staples (17.4%), communication services (12.4%), and industrials (11.8%). The Fund’s composition may differ over time. All investments are subject to risk including the possible loss of principal. Past performance is no guarantee of future results. An index is a statistical composite that tracks a specified financial market, sector or rules-based investment process. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. All index performance reflects no deduction for fees, expenses or taxes. Please note that an investor cannot invest directly in an index.

The information provided is not intended to be a forecast of future events, a guarantee of future results or investment advice. Views expressed may differ from those of the firm as a whole.

ⁱ

MSCI World ex-US IMI Local Index captures large, mid and small cap representation across 22 of 23 Developed Markets (DM) countries — excluding the United States. With 3,501 constituents, the index covers approximately 99% of the free float-adjusted market capitalization in each country. The index calculates performance utilizing local currencies taking out the effect of the converting to the U.S. dollar.

ⁱⁱ	The MSCI World ex USA Index captures large and mid cap representation across 22 of 23 Developed Markets countries -- excluding the United States. With 933 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country.

ⁱⁱⁱ	Net Asset Value (NAV) is calculated by subtracting total liabilities from total assets and dividing the results by the number of shares outstanding.

^iv	Market Price is determined by supply and demand. It is the price at which an investor purchases or sells shares of the Fund. The Market Price may differ from the Fund’s NAV.

Lipper, Inc., a wholly-owned subsidiary of Refinitiv, provides independent insight on global collective investments. Returns are based on the period ended October 31, 2021, including the reinvestment of all distributions, including returns of capital, if any, calculated among the 225 funds for the six-month period and 223 funds for the twelve-month period in the Fund’s Lipper category.

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Fund at a glance^†(unaudited)

Investment breakdown (%) as a percent of total investments

LOGO

†	The bar graph above represents the composition of the Fund’s investments as of October 31, 2021 and October 31, 2020 and does not include derivatives, such as futures contracts and forward foreign currency contracts. The composition of the Fund’s investments is subject to change at any time.

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Fund expenses (unaudited)

Example

As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, such as brokerage commissions paid on purchases and sales of Fund shares; and (2) ongoing costs, including management fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other funds.

This example is based on an investment of $1,000 invested on May 1, 2021 and held for the six months ended October 31, 2021.

Actual expenses

The table below titled “Based on Actual Total Return” provides information about actual account values and actual expenses. You may use the information provided in this table, together with the amount you invested, to estimate the expenses that you paid over the period. To estimate the expenses you paid on your account, divide your ending account value by $1,000 (for example, an $8,600 ending account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During the Period”.

Hypothetical example for comparison purposes

The table below titled “Based on Hypothetical Total Return” provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio and an assumed rate of return of 5.00% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use the information provided in this table to compare the ongoing costs of investing in the Fund and other funds. To do so, compare the 5.00% hypothetical example relating to the Fund with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of Fund shares. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.



Based on actual total return¹														Based on hypothetical total return¹
Actual Total Return²		Beginning Account Value			Ending Account Value			Annualized Expense Ratio			Expenses Paid During the Period³			Hypothetical Annualized Total Return			Beginning Account Value		Ending Account Value			Annualized Expense Ratio			Expenses Paid During the Period³
	4.91%		$	1,000.00		$	1,049.10		0.40	%		$	2.07		5.00	%		$1,000.00		$	1,023.19		0.40	%		$	2.04

¹	For the six months ended October 31, 2021.

Assumes the reinvestment of all distributions, including returns of capital, if any, at net asset value. Total return is not annualized, as it may not be representative of the total return for the year. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results.

³	Expenses (net of fee waivers and/or expense reimbursements) are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (184), then divided by 365.

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Fund performance (unaudited)


Net Asset Value
Average annual total returns¹
Twelve Months Ended 10/31/21	28.28	%
Five Years Ended 10/31/21	6.52
Inception* through 10/31/21	6.33

Cumulative total returns¹
Inception date of 7/27/16 through 10/31/21	38.15	%

Market Price
Average annual total returns²
Twelve Months Ended 10/31/21	28.90	%
Five Years Ended 10/31/21	4.76
Inception* through 10/31/21	6.40

Cumulative total returns²
Inception date of 7/27/16 through 10/31/21	38.59	%

All figures represent past performance and are not a guarantee of future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. The returns shown do not reflect the deduction of brokerage commissions or taxes that investors would pay on distributions or the sale of shares. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would have been lower.

Investors buy and sell shares of the Fund at market price, not NAV, in the secondary market throughout the trading day. These shares are not individually available for direct purchase from or direct redemption to the Fund. The Fund’s per share NAV is the value of one share of the Fund and is calculated by dividing the value of total assets less total liabilities by the number of shares outstanding. The NAV return is based on the NAV of the Fund and effective July 1, 2020, market price returns typically are based upon the official closing price of the Fund’s shares. Prior to July 1, 2020, market price returns generally were based upon the mid-point between the bid and ask on the Fund’s principal trading market when the Fund’s NAV was determined, which was typically 4:00 p.m. Eastern time (U.S.). Market price performance reported for periods prior to July 1, 2020 continue to reflect market prices calculated based upon the mid-point between the bid and ask on the Fund’s principal trading market typically as of 4:00 p.m. Eastern time (U.S.). These returns do not represent investors’ returns had they traded shares at other times. NAV and market price returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV and market price, respectively. As with other exchange-traded funds, NAV returns and market price returns may differ because of factors such as the supply and demand for Fund shares and investors’ assessment of the underlying value of the Fund’s portfolio securities.

¹	Assumes the reinvestment of all distributions, including returns of capital, if any, at net asset value.

²	Assumes the reinvestment of all distributions, including returns of capital, if any, at market price.

*	Inception date of the Fund is July 27, 2016.


10		Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Historical performance

Value of $10,000 invested in

Legg Mason International Low Volatility High Dividend ETF vs. QS International Low Volatility High Dividend Hedged Index and MSCI World ex-US IMI Local Index (Net)† — July 27, 2016 - October 31, 2021

LOGO

All figures represent past performance and are not a guarantee of future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at NAV. The returns shown do not reflect the deduction of brokerage commissions or taxes that investors would pay on distributions or the sale of shares. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would have been lower.

†

Hypothetical illustration of $10,000 invested Legg Mason International Low Volatility High Dividend ETF on July 27, 2016 (inception date), assuming the reinvestment of all distributions, including returns of capital, if any, at net asset value through October 31, 2021. The hypothetical illustration also assumes a $10,000 investment in the QS International Low Volatility High Dividend Hedged Index and MSCI World ex-US IMI Local Index (Net). The Fund’s per share NAV is the value of one share of the Fund and is calculated by dividing the value of total assets less total liabilities by the number of shares outstanding. The NAV return is based on the NAV of the Fund. The QS International Low Volatility High Dividend Hedged Index (the “Underlying Index”) is an index composed of publicly traded equity securities of developed markets outside of the United States with relatively high yield and low price and earnings volatility. The Underlying Index is based on a proprietary methodology created and sponsored by Franklin Advisers, Inc., the Fund’s subadviser. The MSCI World ex-US IMI Local Index (Net) captures large-, mid- and small-cap representation across 22 of 23 developed markets. The local version of the index calculates performance utilizing local currencies taking out the effect of converting to the U.S. dollar. The indices are not subject to the same management and trading expenses as a fund. An index is a statistical composite that tracks a specified financial market, sector, or rules-based investment process. Unlike a fund, an index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by a fund. These expenses negatively impact fund performance. All index performance reflects no deduction for fees, expenses or taxes. Please note that an investor cannot invest directly in an index.

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Schedule of investments

October 31, 2021

Legg Mason International Low Volatility High Dividend ETF

(Percentages shown based on Fund net assets)


Security	Shares		Value
Common Stocks — 98.8%
Communication Services — 12.4%
Diversified Telecommunication Services — 8.8%
CITIC Telecom International Holdings Ltd.		143,574	$	50,940
Deutsche Telekom AG, Registered Shares		93,347		1,736,840
Elisa oyj		8,975		541,958
HKT Trust & HKT Ltd.		221,355		300,488
Nippon Telegraph & Telephone Corp.		70,800		1,979,482
Proximus SADP		16,604		312,916
Swisscom AG, Registered Shares		3,001		1,636,879
Telenor ASA		36,486		575,155
Total Diversified Telecommunication Services				7,134,658
Media — 0.4%
Eutelsat Communications SA		15,395		218,779
Telenet Group Holding NV		2,337		84,001
Total Media				302,780
Wireless Telecommunication Services — 3.2%
Freenet AG		16,951		437,057
SoftBank Corp.		155,900		2,125,381
Total Wireless Telecommunication Services				2,562,438
Total Communication Services				9,999,876
Consumer Discretionary — 0.2%
Specialty Retail — 0.1%
T-Gaia Corp.		5,400		96,042
Textiles, Apparel & Luxury Goods — 0.1%
Pacific Textiles Holdings Ltd.		88,477		44,130
Total Consumer Discretionary				140,172
Consumer Staples — 17.4%
Food & Staples Retailing — 5.6%
Axfood AB		9,562		234,360
Koninklijke Ahold Delhaize NV		62,128		2,022,482
Tesco PLC		612,546		2,266,210
Total Food & Staples Retailing				4,523,052
Food Products — 2.9%
Danone SA		28,656		1,868,689
Orkla ASA		35,733		347,053
Rogers Sugar Inc.		17,308		78,752
Total Food Products				2,294,494
Personal Products — 2.3%
Unilever PLC		34,940		1,872,514

See Notes to Financial Statements.


12				Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Legg Mason International Low Volatility High Dividend ETF

(Percentages shown based on Fund net assets)


Security	Shares		Value
Tobacco — 6.6%
British American Tobacco PLC		55,739	$	1,945,636
Imperial Brands PLC		58,744		1,241,671
Japan Tobacco Inc.		105,700		2,072,285
Scandinavian Tobacco Group A/S		3,131		70,429
Total Tobacco				5,330,021
Total Consumer Staples				14,020,081
Energy — 0.1%
Oil, Gas & Consumable Fuels — 0.1%
Itochu Enex Co. Ltd.		9,400		82,685
Financials — 18.9%
Banks — 13.3%
Bank of Nova Scotia		32,459		2,124,742
Banque Cantonale Vaudoise, Registered Shares		1,384		111,629
BOC Hong Kong Holdings Ltd.		264,457		839,703
Canadian Imperial Bank of Commerce		18,594		2,252,641
DBS Group Holdings Ltd.		98,500		2,303,081
Oversea-Chinese Banking Corp. Ltd.		119,100		1,042,180
Seven Bank Ltd.		357,100		754,756
United Overseas Bank Ltd.		60,400		1,198,146
Valiant Holding AG, Registered Shares		468		46,403
Total Banks				10,673,281
Capital Markets — 0.4%
IGM Financial Inc.		6,381		252,965
Jupiter Fund Management PLC		28,831		98,563
Total Capital Markets				351,528
Insurance — 5.2%
Assicurazioni Generali SpA		50,192		1,094,897
Gjensidige Forsikring ASA		8,404		208,726
Great-West Lifeco Inc.		16,725		491,273
Legal & General Group PLC		83,358		330,106
Zurich Insurance Group AG		4,600		2,043,382
Total Insurance				4,168,384
Total Financials				15,193,193
Health Care — 7.5%
Pharmaceuticals — 7.5%
GlaxoSmithKline PLC		107,594		2,224,953
Novartis AG, Registered Shares		21,878		1,811,055
Sanofi		20,328		2,033,231
Total Health Care				6,069,239

See Notes to Financial Statements.

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Schedule of investments (cont’d)

October 31, 2021

Legg Mason International Low Volatility High Dividend ETF

(Percentages shown based on Fund net assets)


Security	Shares		Value
Industrials — 11.8%
Air Freight & Logistics — 0.2%
Cia de Distribucion Integral Logista Holdings SA		4,149	$	88,538
Oesterreichische Post AG		1,794		75,778
Total Air Freight & Logistics				164,316
Construction & Engineering — 2.3%
ACS Actividades de Construccion y Servicios SA		16,382		429,021
Bouygues SA		20,254		820,364
Chudenko Corp.		2,700		52,733
Nishimatsu Construction Co. Ltd.		15,800		455,190
Sanki Engineering Co. Ltd.		10,500		132,050
Total Construction & Engineering				1,889,358
Industrial Conglomerates — 1.4%
CK Hutchison Holdings Ltd.		161,522		1,086,981
Machinery — 1.5%
Kone oyj, Class B Shares		17,389		1,186,477
Road & Rail — 1.4%
Aurizon Holdings Ltd.		440,775		1,115,693
Trading Companies & Distributors — 5.0%
ITOCHU Corp.		63,600		1,808,298
Mitsubishi Corp.		68,400		2,166,725
Nippon Steel Trading Corp.		1,500		67,617
Total Trading Companies & Distributors				4,042,640
Total Industrials				9,485,465
Information Technology — 0.1%
Communications Equipment — 0.1%
VTech Holdings Ltd.		10,959		84,316
Materials — 3.4%
Metals & Mining — 3.4%
BHP Group Ltd.		51,247		1,408,024
Rio Tinto Ltd.		19,536		1,324,869
Total Materials				2,732,893
Real Estate — 7.1%
Equity Real Estate Investment Trusts (REITs) — 3.6%
AEON REIT Investment Corp.		222		299,829
Ascendas Real Estate Investment Trust		297,200		681,014
Charter Hall Long Wale REIT		38,458		140,385
Cofinimmo SA		893		144,163
Cromwell Property Group		193,741		117,870
CT Real Estate Investment Trust		11,153		159,708

See Notes to Financial Statements.


14		Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Legg Mason International Low Volatility High Dividend ETF

(Percentages shown based on Fund net assets)


Security	Shares		Value
Equity Real Estate Investment Trusts (REITs) — continued
Frontier Real Estate Investment Corp.		45	$	198,904
SmartCentres Real Estate Investment Trust		28,181		709,100
Waypoint REIT		217,487		445,958
Total Equity Real Estate Investment Trusts (REITs)				2,896,931
Real Estate Management & Development — 3.5%
Allreal Holding AG, Registered Shares		523		110,810
Cibus Nordic Real Estate AB		3,284		86,875
Henderson Land Development Co. Ltd.		65,912		276,220
Kerry Properties Ltd.		82,600		233,071
LEG Immobilien SE		3,728		555,026
Samhallsbyggnadsbolaget i Norden AB, Class D Shares		18,173		66,103
Sun Hung Kai Properties Ltd.		81,772		1,087,974
Swiss Prime Site AG, Registered Shares		3,447		350,830
Yanlord Land Group Ltd.		49,400		41,029
Total Real Estate Management & Development				2,807,938
Total Real Estate				5,704,869
Utilities — 19.9%
Electric Utilities — 12.8%
CK Infrastructure Holdings Ltd.		33,468		201,779
CLP Holdings Ltd.		78,451		767,966
Emera Inc.		45,074		2,093,793
Fortis Inc.		41,068		1,825,208
Fortum oyj		42,023		1,249,820
Iberdrola SA		168,912		1,996,762
Okinawa Electric Power Co. Inc.		11,400		139,769
Power Assets Holdings Ltd.		75,086		458,003
Red Electrica Corp. SA		32,436		676,034
Terna Rete Elettrica Nazionale SpA		121,081		902,660
Total Electric Utilities				10,311,794
Gas Utilities — 2.7%
Enagas SA		27,187		610,523
Italgas SpA		43,579		276,871
Snam SpA		226,084		1,281,231
Total Gas Utilities				2,168,625
Multi-Utilities — 4.4%
A2A SpA		297,288		625,459
ACEA SpA		3,607		78,308
Algonquin Power & Utilities Corp.		133,611		1,922,972

See Notes to Financial Statements.

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Schedule of investments (cont’d)

October 31, 2021

Legg Mason International Low Volatility High Dividend ETF

(Percentages shown based on Fund net assets)

Security

Value

Multi-Utilities — continued

E.ON SE

63,182

801,806

Iren SpA

51,590

160,361

Total Multi-Utilities

3,588,906

Total Utilities

16,069,325

Total Investments before Short-Term Investments (Cost — $76,404,990)

79,582,114

Rate

Short-Term Investments — 0.7%

Invesco Treasury Portfolio, Institutional Class (Cost — $573,289)

0.010%

573,289

573,289

Total Investments — 99.5% (Cost — $76,978,279)

80,155,403

Other Assets in Excess of Liabilities — 0.5%

420,745

Total Net Assets — 100.0%

80,576,148


Abbreviation(s) used in this schedule:

REIT		— Real Estate Investment Trust

At October 31, 2021, the Fund had the following open futures contracts:


	Number of Contracts		Expiration Date		Notional Amount		Market Value		Unrealized Depreciation
Contracts to Buy:
MSCI EAFE Index Futures		6		12/21	$	705,515	$	701,880	$	(3,635)

At October 31, 2021, the Fund had the following open forward foreign currency contracts:


Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
USD	119,003	CHF	109,890	Bank of New York Mellon		11/9/21	$	(1,287)
USD	5,933,794	CHF	5,498,710	Bank of New York Mellon		11/9/21		(85,352)
USD	438,211	EUR	377,587	Bank of New York Mellon		11/9/21		1,171
USD	21,840,077	EUR	18,883,326	Bank of New York Mellon		11/9/21		(16,483)
USD	242,531	JPY	27,702,634	Bank of New York Mellon		11/9/21		(436)
USD	12,461,788	JPY	1,389,648,908	Bank of New York Mellon		11/9/21		273,800
USD	22,771	NOK	191,834	Bank of New York Mellon		11/9/21		95
USD	1,119,479	NOK	9,591,009	Bank of New York Mellon		11/9/21		(14,238)
USD	7,515	SEK	65,080	Bank of New York Mellon		11/9/21		(63)
USD	369,998	SEK	3,247,704	Bank of New York Mellon		11/9/21		(8,175)
USD	93,801	AUD	126,539	UBS Securities LLC		11/9/21		(1,246)
USD	4,608,915	AUD	6,303,885	UBS Securities LLC		11/9/21		(126,094)
USD	234,613	CAD	290,171	UBS Securities LLC		11/9/21		521
USD	11,518,735	CAD	14,452,487	UBS Securities LLC		11/9/21		(140,666)
USD	191,834	GBP	139,822	UBS Securities LLC		11/9/21		172

See Notes to Financial Statements.


16		Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Legg Mason International Low Volatility High Dividend ETF

Currency
Purchased

Currency

Sold

Counterparty

Settlement
Date

Unrealized
Appreciation
(Depreciation)

USD

9,514,148

GBP

6,983,850

UBS Securities LLC

11/9/21

(59,028)

USD

100,565

SGD

135,728

UBS Securities LLC

11/9/21

(82)

USD

5,001,470

SGD

6,790,521

UBS Securities LLC

11/9/21

(33,942)

Total

(211,333)


Abbreviation(s) used in this table:

AUD		— Australian Dollar

CAD		— Canadian Dollar

CHF		— Swiss Franc

EUR		— Euro

GBP		— British Pound

JPY		— Japanese Yen

NOK		— Norwegian Krone

SEK		— Swedish Krona

SGD		— Singapore Dollar

USD		— United States Dollar


Summary of Investments by Country (unaudited)**
Japan	15.5	%
Canada	14.9
United Kingdom	13.8
Switzerland	7.6
Singapore	6.5
France	6.2
Australia	5.7
Italy	5.5
Spain	4.7
Germany	4.4
Hong Kong	4.3
Finland	3.7
Netherlands	2.5
Norway	1.4
China	1.2
Belgium	0.7
Sweden	0.5
Austria	0.1
Denmark	0.1
Short-Term Investments	0.7
	100.0	%

**	As a percentage of total investments. Please note that the Fund holdings are as of October 31, 2021 and are subject to change.

See Notes to Financial Statements.

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Statement of assets and liabilities

October 31, 2021



Assets:
Investments, at value (Cost — $76,978,279)	$	80,155,403
Foreign currency, at value (Cost — $84,623)		84,204
Dividends and interest receivable		516,848
Unrealized appreciation on forward foreign currency contracts		275,759
Deposits with brokers for open futures contracts		61,676
*Total Assets*		*81,093,890*

Liabilities:
Unrealized depreciation on forward foreign currency contracts		487,092
Investment management fee payable		27,015
Payable to broker — net variation margin on open futures contracts		3,635
*Total Liabilities*		*517,742*
Total Net Assets	$	80,576,148

Net Assets:
Par value (Note 5)	$	31
Paid-in capital in excess of par value		85,709,540
Total distributable earnings (loss)		(5,133,423)
Total Net Assets	$	80,576,148

Shares Outstanding		3,120,000

Net Asset Value		$25.83

See Notes to Financial Statements.


18		Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Statement of operations

For the Year Ended October 31, 2021



Investment Income:
Dividends	$	3,498,851
Less: Foreign taxes withheld		(283,515)
*Total Investment Income*		*3,215,336*

Expenses:
Investment management fee (Note 2)		262,101
*Total Expenses*		*262,101*
Net Investment Income		2,953,235

Realized and Unrealized Gain (Loss) on Investments, Futures Contracts, Forward Foreign Currency Contracts and Foreign Currency Transactions (Notes 1, 3 and 4):
Net Realized Gain (Loss) From:
Investment transactions		1,906,024
Futures contracts		92,437
Forward foreign currency contracts		916,158
Foreign currency transactions		(208,146)
*Net Realized Gain*		*2,706,473*
Change in Net Unrealized Appreciation (Depreciation) From:
Investments		9,303,500
Futures contracts		17,254
Forward foreign currency contracts		(347,541)
Foreign currencies		(6,582)
*Change in Net Unrealized Appreciation (Depreciation)*		*8,966,631*
Net Gain on Investments, Futures Contracts, Forward Foreign Currency Contracts and Foreign Currency Transactions		11,673,104
Increase in Net Assets From Operations	$	14,626,339

See Notes to Financial Statements.

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Statements of changes in net assets


For the Years Ended October 31,	2021		2020

Operations:
Net investment income	$	2,953,235	$	2,436,000
Net realized gain (loss)		2,706,473		(10,906,395)
Change in net unrealized appreciation (depreciation)		8,966,631		(3,295,129)
*Increase (Decrease) in Net Assets From Operations*		*14,626,339*		*(11,765,524)*

Distributions to Shareholders From (Note 1):
Total distributable earnings		(3,400,710)		(3,203,528)
*Decrease in Net Assets From Distributions to Shareholders*		*(3,400,710)*		*(3,203,528)*

Fund Share Transactions (Note 5):
Net proceeds from sale of shares (780,000 and 780,000 shares issued, respectively)		20,032,871		19,938,679
Cost of shares repurchased (180,000 and 240,000 shares repurchased, respectively)		(4,234,783)		(5,167,707)
*Increase in Net Assets From Fund Share Transactions*		*15,798,088*		*14,770,972*
*Increase (Decrease) in Net Assets*		*27,023,717*		*(198,080)*

Net Assets:
Beginning of year		53,552,431		53,750,511
End of year	$	80,576,148	$	53,552,431

See Notes to Financial Statements.


20		Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Financial highlights


For a share of beneficial interest outstanding throughout each year ended October 31, unless otherwise noted:
	2021¹			2020¹			2019¹			2018¹			2017¹

Net asset value, beginning of year		$21.25			$27.15			$26.42			$28.19			$25.25

Income (loss) from operations:
Net investment income		1.13			1.00			1.18			1.22			0.85
Net realized and unrealized gain (loss)		4.78			(5.47)			1.85			(1.65)			3.21
*Total income (loss) from operations*		*5.91*			*(4.47)*			*3.03*			*(0.43)*			*4.06*

Less distributions from:
Net investment income		(1.33)			(1.13)			(1.16)			(1.34)			(0.90)
Net realized gains		—			(0.30)			(1.14)			—			(0.22)
*Total distributions*		*(1.33)*			*(1.43)*			*(2.30)*			*(1.34)*			*(1.12)*

Net asset value, end of year		$25.83			$21.25			$27.15			$26.42			$28.19
*Total return, based on NAV²*		*28.28*	%		*(17.20)*	%		*12.65*	%		*(1.49)*	%		*16.35*	%

Net assets, end of year (000s)		$80,576			$53,552			$53,751			$49,144			$60,898

Ratios to average net assets:
Gross expenses		0.40	%		0.40	%		0.40	%		0.40	%		0.40	%
Net expenses		0.40			0.40			0.40			0.40			0.40
Net investment income		4.51			4.28			4.54			4.46			3.13

Portfolio turnover rate³		54	%		96	%		41	%		41	%		31	%

¹	Per share amounts have been calculated using the average shares method.

Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would have been lower. The total return calculation assumes that distributions are reinvested at NAV. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.

³	Portfolio turnover excludes the value of portfolio securities received or delivered as a result of in-kind fund share transactions.

See Notes to Financial Statements.

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Notes to financial statements

1. Organization and significant accounting policies

Legg Mason International Low Volatility High Dividend ETF (the “Fund”) is a separate diversified investment series of Legg Mason ETF Investment Trust (the “Trust”). The Trust, a Maryland 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 is an exchange-traded fund (“ETF”). ETFs are funds that trade like other publicly-traded securities. The Fund is designed to track an index. Similar to shares of an index mutual fund, each share of the Fund represents an ownership interest in an underlying portfolio of securities intended to track an index. Unlike shares of a mutual fund, which can be bought from and redeemed by the issuing fund by all shareholders at a price based on net asset value (“NAV”), shares of the Fund may be directly purchased from and redeemed by the Fund at NAV solely by certain large institutional investors who have entered into agreements with the Fund’s distributor (“Authorized Participants”). Also unlike shares of a mutual fund, shares of the Fund are listed on a national securities exchange and trade in the secondary market at market prices that change throughout the day.

Shares of the Fund are listed and traded at market prices on the Cboe BZX Exchange, Inc. The market price for the Fund’s shares may be different from the Fund’s NAV. The Fund issues and redeems shares at NAV only in blocks of a specified number of shares or multiples thereof (“Creation Units”). Only Authorized Participants may purchase or redeem Creation Units directly with the Fund at NAV. Creation Units are issued and redeemed generally in-kind for a basket of securities and/or cash. Except when aggregated in Creation Units, shares of the Fund are not redeemable securities. Shareholders who are not Authorized Participants may not redeem shares directly from the Fund at NAV.

The Fund seeks to track the investment results of the QS International Low Volatility High Dividend Hedged Index (the “Underlying Index”). The Underlying Index seeks to provide more stable income through investments in stocks of profitable companies in developed markets outside of the United States with relatively high dividend yields or anticipated dividend yields and lower price and earnings volatility, while mitigating exposure to exchange-rate fluctuations between the U.S. dollar and other international currencies and is based on a proprietary methodology created and sponsored by Franklin Advisers, Inc. (“Franklin Advisers”), the Fund’s subadviser. Effective August 7, 2021, Franklin Advisers, Inc. (“Franklin Advisers”) is the Fund’s subadviser. Prior to August 7, 2021, QS Investors, LLC (“QS Investors”) was the Fund’s subadviser.

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.

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

(a) Investment valuation. Equity securities for which market quotations are available are valued at the last reported sales price or official closing price on the primary market or exchange on which they trade. The valuations for fixed income securities (which may include, but are not limited to, corporate, government, municipal, mortgage-backed, collateralized mortgage obligations and asset-backed securities) and certain derivative instruments are typically the prices supplied by independent third party pricing services, which may use market prices or broker/dealer quotations or a variety of valuation techniques and methodologies. The independent third party pricing services typically use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates and quoted prices for similar securities. Investments in open-end funds are valued at the closing net asset value per share of each fund on the day of valuation. Futures contracts are valued daily at the settlement price established by the board of trade or exchange on which they are traded. When the Fund holds securities or other assets that are denominated in a foreign currency, the Fund will use the currency exchange rates, generally determined as of 4:00 p.m. (London Time). If independent third party pricing services are unable to supply prices for a portfolio investment, or if the prices supplied are deemed by the manager to be unreliable, the market price may be determined by the manager using quotations from one or more broker/ dealers or at the transaction price if the security has recently been purchased and no value has yet been obtained from a pricing service or pricing broker. When reliable prices are not readily available, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the Fund calculates its net asset value, the Fund values these securities as determined in accordance with procedures approved by the Fund’s Board of Trustees.

The Board of Trustees is responsible for the valuation process and has delegated the supervision of the daily valuation process to the Global Fund Valuation Committee (known as Legg Mason North Atlantic Fund Valuation Committee prior to March 1, 2021) (the “Valuation Committee”). The Valuation Committee, pursuant to the policies adopted by the Board of Trustees, is responsible for making fair value determinations, evaluating the effectiveness of the Fund’s pricing policies, and reporting to the Board of Trustees. When determining the reliability of third party pricing information for investments owned by the Fund, the Valuation Committee, among other things, conducts due diligence reviews of pricing vendors, monitors the daily change in prices and reviews transactions among market participants.

The Valuation Committee will consider pricing methodologies it deems relevant and appropriate when making fair value determinations. Examples of possible methodologies include, but are not limited to, multiple of earnings; discount from market of a similar freely traded security; discounted cash-flow analysis; book value or a multiple thereof; risk premium/yield analysis; yield to maturity; and/or fundamental investment analysis. The Valuation Committee will also consider factors it deems relevant and appropriate in light of the facts and circumstances. Examples of possible factors include, but are not limited to,

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Notes to financial statements (cont’d)

the type of security; the issuer’s financial statements; the purchase price of the security; the discount from market value of unrestricted securities of the same class at the time of purchase; analysts’ research and observations from financial institutions; information regarding any transactions or offers with respect to the security; the existence of merger proposals or tender offers affecting the security; the price and extent of public trading in similar securities of the issuer or comparable companies; and the existence of a shelf registration for restricted securities.

For each portfolio security that has been fair valued pursuant to the policies adopted by the Board of Trustees, the fair value price is compared against the last available and next available market quotations. The Valuation Committee reviews the results of such back testing monthly and fair valuation occurrences are reported to the Board of Trustees quarterly.

The Fund uses valuation techniques to measure fair value that are consistent with the market approach and/or income approach, depending on the type of security and the particular circumstance. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable securities. The income approach uses valuation techniques to discount estimated future cash flows to present value.

GAAP establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. These inputs are summarized in the three broad levels listed below:

•

Level 1 — quoted prices in active markets for identical investments

•

Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•

Level 3 — significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used in valuing the Fund’s assets and liabilities carried at fair value:


ASSETS
Description	Quoted Prices (Level 1)		Other Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Common Stocks†	$	79,582,114		—		—	$	79,582,114
Short-Term Investments†		573,289		—		—		573,289
Total Investments	$	80,155,403		—		—	$	80,155,403

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report


ASSETS (cont’d)
Description	Quoted Prices (Level 1)		Other Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Other Financial Instruments:
Forward Foreign Currency Contracts††		—	$	275,759		—	$	275,759
Total	$	80,155,403	$	275,759		—	$	80,431,162

LIABILITIES
Description	Quoted Prices (Level 1)		Other Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Other Financial Instruments:
Futures Contracts††	$	3,635		—		—	$	3,635
Forward Foreign Currency Contracts††		—	$	487,092		—		487,092
Total	$	3,635	$	487,092		—	$	490,727

†	See Schedule of Investments for additional detailed categorizations.

††	Reflects the unrealized appreciation (depreciation) of the instruments.

(b) Futures contracts. The Fund uses futures contracts generally to gain or manage exposure to certain asset classes, sectors, or markets or for cash management purposes. A futures contract represents a commitment for the future purchase or sale of an asset at a specified price on a specified date.

Upon entering into a futures contract, the Fund is required to deposit cash or securities with a broker in an amount equal to a certain percentage of the contract amount. This is known as the ‘‘initial margin’’ and subsequent payments (‘‘variation margin’’) are made or received by the Fund each day, depending on the daily fluctuation in the value of the contract. For certain futures, including foreign denominated futures, variation margin is not settled daily, but is recorded as a net variation margin payable or receivable. The daily changes in contract value are recorded as unrealized appreciation or depreciation in the Statement of Operations and the Fund recognizes a realized gain or loss when the contract is closed.

Futures contracts involve, to varying degrees, risk of loss in excess of the amounts reflected in the financial statements. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market.

(c) Forward foreign currency contracts. The Fund enters into a forward foreign currency contract to hedge against foreign currency exchange rate risk on its non-U.S. dollar denominated securities or to facilitate settlement of a foreign currency denominated portfolio transaction. A forward foreign currency contract is an agreement between two parties to buy and sell a currency at a set price with delivery and settlement at a future date. The contract is marked-to-market daily and the change in value is recorded by the

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Notes to financial statements (cont’d)

Fund as an unrealized gain or loss. When a forward foreign currency contract is closed, through either delivery or offset by entering into another forward foreign currency contract, the Fund recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value of the contract at the time it is closed.

Non-deliverable forward foreign currency exchange contracts are settled with the counterparty in cash without the delivery of foreign currency.

Forward foreign currency contracts involve elements of market risk in excess of the amounts reflected on the Statement of Assets and Liabilities. The Fund bears the risk of an unfavorable change in the foreign exchange rate underlying the forward foreign currency contract. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.

(d) 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.

(e) Foreign investment risks. 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

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

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, all of which affect the market and/or credit risk of the investments.

(f) Counterparty risk and credit-risk-related contingent features of derivative instruments. The Fund may invest in certain securities or engage in other transactions where the Fund is exposed to counterparty credit risk in addition to broader market risks. The Fund may invest in securities of issuers, which may also be considered counterparties as trading partners in other transactions. This may increase the risk of loss in the event of default or bankruptcy by the counterparty or if the counterparty otherwise fails to meet its contractual obligations. The Fund’s subadviser attempts to mitigate counterparty risk by (i) periodically assessing the creditworthiness of its trading partners, (ii) monitoring and/or limiting the amount of its net exposure to each individual counterparty based on its assessment and (iii) requiring collateral from the counterparty for certain transactions. Market events and changes in overall economic conditions may impact the assessment of such counterparty risk by the subadviser. In addition, declines in the values of underlying collateral received may expose the Fund to increased risk of loss.

With exchange traded and centrally cleared derivatives, there is less counterparty risk to the Fund since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, the credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, the Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default of the clearing broker or clearinghouse.

The Fund has entered into master agreements, such as an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement, with certain of its derivative counterparties that govern over-the-counter (“OTC”) derivatives and provide for general obligations, representations, agreements, collateral posting terms, netting provisions in the event of default or termination and credit related contingent features. The credit related contingent features include, but are not limited to, a percentage decrease in the Fund’s net assets or net asset value per share over a specified period of time. If these credit related contingent features were triggered, the derivatives counterparty could terminate the positions and demand payment or require additional collateral.

Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. However, absent an event of default by the counterparty or a termination of the agreement, the terms of the ISDA Master Agreements do not result in an offset of reported amounts of financial assets and

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Notes to financial statements (cont’d)

financial liabilities in the Statement of Assets and Liabilities across transactions between the Fund and the applicable counterparty. The enforceability of the right to offset may vary by jurisdiction.

Collateral requirements differ by type of derivative. Collateral or margin requirements are set by the broker or exchange clearinghouse for exchange traded derivatives while collateral terms are contract specific for OTC traded derivatives. Cash collateral that has been pledged to cover obligations of the Fund under derivative contracts, if any, will be reported separately in the Statement of Assets and Liabilities. Securities pledged as collateral, if any, for the same purpose are noted in the Schedule of Investments.

As of October 31, 2021, the Fund held forward foreign currency contracts with credit related contingent features which had a net liability position of $487,092. If a contingent feature in the master agreements would have been triggered, the Fund would have been required to pay this amount to its derivatives counterparties.

(g) Security transactions and investment income. Security transactions are accounted for on a trade date basis. Interest income (including interest income from payment-in-kind securities), adjusted for amortization of premium and accretion of discount, is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date for dividends received in cash and/or securities. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Fund determines the existence of a dividend declaration after exercising reasonable due diligence. The cost of investments sold is determined by use of the specific identification method. To the extent any issuer defaults or a credit event occurs that impacts the issuer, the Fund may halt any additional interest income accruals and consider the realizability of interest accrued up to the date of default or credit event.

(h) Distributions to shareholders. Distributions from net investment income of the Fund, if any, are declared and paid on a quarterly basis. Distributions of net realized gains, if any, are declared at least annually. Distributions to shareholders of the Fund are recorded on the ex-dividend date and are determined in accordance with income tax regulations, which may differ from GAAP.

(i) Federal and other taxes. It is the Fund’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986 (the “Code”), as amended, applicable to regulated investment companies. Accordingly, the Fund intends to distribute its taxable income and net realized gains, if any, to shareholders in accordance with timing requirements imposed by the Code. Therefore, no federal or state income tax provision is required in the Fund’s financial statements.

Management has analyzed the Fund’s tax positions taken on income tax returns for all open tax years and has concluded that as of October 31, 2021, no provision for income tax is required in the Fund’s financial statements. The Fund’s federal and state income and federal

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

Under the applicable foreign tax laws, a withholding tax may be imposed on interest, dividends and capital gains at various rates.

(j) Reclassification. GAAP requires that certain components of net assets be reclassified to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. During the current year, the following reclassifications have been made:


	Total Distributable Earnings (Loss)		Paid-in Capital
(a)	$	(114,257)	$	114,257

^(a)	Reclassifications are due to book/tax differences in the treatment of an in-kind distribution of securities.

2. Investment management agreement and other transactions with affiliates

Legg Mason Partners Fund Advisor, LLC (“LMPFA”) is the Fund’s investment manager. Franklin Advisers is the Fund’s subadviser. Western Asset Management Company, LLC (“Western Asset”) manages the portion of the Fund’s cash and short-term instruments allocated to it. LMPFA, Franklin Advisers and Western Asset are wholly-owned subsidiaries of Franklin Resources, Inc. (“Franklin Resources”) and prior to August 7, 2021, QS Investors was a wholly-owned subsidiary of Franklin Resources.

LMPFA provides administrative and certain oversight services to the Fund. LMPFA delegates to the subadviser the day-to-day portfolio management of the Fund. The Fund is responsible for paying interest expenses, taxes, brokerage expenses, future 12b-1 fees (if any), acquired fund fees and expenses, extraordinary expenses and the management fee payable to LMPFA under the investment management agreement.

Under the investment management agreement and subject to the general supervision of the Fund’s Board of Trustees, LMPFA provides or causes to be furnished all investment management, supervisory, administrative and other services reasonably necessary for the operation of the Fund, including certain distribution services (provided pursuant to a separate distribution agreement) and investment advisory services (provided pursuant to separate subadvisory agreements) under a unitary fee structure. The Fund pays an investment management fee, calculated daily and paid monthly, at an annual rate of 0.40% of the Fund’s average daily net assets.

As compensation for its subadvisory services, LMPFA pays Franklin Advisers 90% of the management fee paid by the Fund to LMPFA, net of (i) all fees and expenses incurred by LMPFA under the investment management agreement (including without limitation any subadvisory fee paid to another subadviser to the Fund) and (ii) expense waivers, if any, and reimbursements. LMPFA pays Western Asset monthly a fee of 0.02% of the portion of the

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Notes to financial statements (cont’d)

Fund’s average daily net assets allocated to Western Asset for the management of cash and other short-term instruments, net of expense waivers, if any, and reimbursements.

Franklin Distributors, LLC (known as Legg Mason Investor Services, LLC prior to July 7, 2021) (“Franklin Distributors”) serves as the distributor of Creation Units for the Fund on an agency basis. Franklin Distributors is an indirect, wholly-owned broker-dealer subsidiary of Franklin Resources.

The Fund’s Board of Trustees has adopted a Rule 12b-1 shareholder services and distribution plan and under that plan, the Fund is authorized to pay service and/or distribution fees calculated at an annual rate of up to 0.25% of its average daily net assets. No service and/or distribution fees are currently paid by the Fund, and there are no current plans to impose these fees.

All officers and one Trustee of the Trust are employees of Franklin Resources or its affiliates and do not receive compensation from the Trust.

3. Investments

During the year ended October 31, 2021, the aggregate cost of purchases and proceeds from sales of investments (excluding in-kind transactions and short-term investments) were as follows:


Purchases	$	35,530,569
Sales		34,513,386

During the year ended October 31, 2021, in-kind transactions (Note 5) were as follows:


Contributions	$	18,661,822
Redemptions		(4,094,649)
Realized gain (loss)*		396,846

*	Net realized gains on redemptions in-kind are not taxable to the remaining shareholders of the Fund.

The in-kind contributions and in-kind redemptions shown in this table may not agree with the Fund Share Transactions on the Statement of Changes in Net Assets. This table represents the accumulation of the Fund’s daily net shareholder transactions while the Statement of Changes in Net Assets reflects gross shareholder transactions including any cash component of the transactions.

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

At October 31, 2021, the aggregate cost of investments and the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were as follows:


	Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Net Unrealized Appreciation (Depreciation)
Securities	$	77,623,568	$	4,933,668	$	(2,401,833)	$	2,531,835
Futures contracts		—		—		(3,635)		(3,635)
Forward foreign currency contracts		—		275,759		(487,092)		(211,333)

4. Derivative instruments and hedging activities

Below is a table, grouped by derivative type, that provides information about the fair value and the location of derivatives within the Statement of Assets and Liabilities at October 31, 2021.


ASSET DERIVATIVES¹
					Foreign Exchange Risk
Forward foreign currency contracts					$	275,759

LIABILITY DERIVATIVES¹
	Foreign Exchange Risk		Equity Risk		Total
Futures contracts²		—	$	3,635	$	3,635
Forward foreign currency contracts	$	487,092		—		487,092
Total	$	487,092	$	3,635	$	490,727

¹	Generally, the balance sheet location for asset derivatives is receivables/net unrealized appreciation and for liability derivatives is payables/net unrealized depreciation.

²	Includes cumulative unrealized appreciation (depreciation) of futures contracts as reported in the Schedule of Investments. Only net variation margin is reported within the receivables and/or payables on the Statement of Assets and Liabilities.

The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the year ended October 31, 2021. The first table provides additional detail about the amounts and sources of gains (losses) realized on derivatives during the period. The second table provides additional information about the change in unrealized appreciation (depreciation) resulting from the Fund’s derivatives and hedging activities during the period.


AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED
	Foreign Exchange Risk		Equity Risk		Total
Futures contracts		—	$	92,437	$	92,437
Forward foreign currency contracts	$	916,158		—		916,158
Total	$	916,158	$	92,437	$	1,008,595

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Notes to financial statements (cont’d)


CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED
	Foreign Exchange Risk		Equity Risk		Total
Futures contracts		—	$	17,254	$	17,254
Forward foreign currency contracts	$	(347,541)		—		(347,541)
Total	$	(347,541)	$	17,254	$	(330,287)

During the year ended October 31, 2021, the volume of derivative activity for the Fund was as follows:


	Average Market Value
Futures contracts (to buy)	$	453,957
Forward foreign currency contracts (to buy)		216,603
Forward foreign currency contracts (to sell)		64,352,082

The following table presents the Fund’s OTC derivative assets and liabilities by counterparty net of amounts available for offset under an ISDA Master Agreement and net of the related collateral pledged (received) by the Fund as of October 31, 2021.


Counterparty	Gross Assets Subject to Master Agreements¹		Gross Liabilities Subject to Master Agreements¹		Net Assets (Liabilities) Subject to Master Agreements		Collateral Pledged (Received)		Net Amount²
Bank of New York	$	275,066	$	(126,034)	$	149,032		—	$	149,032
UBS Securities LLC		693		(361,058)		(360,365)		—		(360,365)
Total	$	275,759	$	(487,092)	$	(211,333)		—	$	(211,333)

¹	Absent an event of default or early termination, derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

²	Represents the net amount receivable (payable) from (to) the counterparty in the event of default.

5. Fund share transactions

At October 31, 2021, the Trust had an unlimited number of shares of beneficial interest authorized with a par value of $0.00001 per share. Fund shares are issued and redeemed by the Fund only in Creation Units or Creation Unit aggregations, where 60,000 shares of the Fund constitute a Creation Unit. Such transactions are generally on an in-kind basis, with a separate cash payment, which is a balancing cash component to equate the transaction to the net asset value per share of the Fund on the transaction date. Transactions in capital shares of the Fund are disclosed in detail in the Statement of Changes in Net Assets. Authorized Participants are subject to standard creation and redemption transaction fees to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units. Creations and redemptions for cash (when cash creations and redemptions are available or specified) may be subject to an additional variable fee.

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

6. Income tax information and distributions to shareholders

The tax character of distributions paid during the fiscal years ended October 31, was as follows:


	2021		2020
Distributions paid from:
Ordinary income	$	3,400,710	$	2,978,894
Net long-term capital gains		—		224,634
Total distributions paid	$	3,400,710	$	3,203,528

As of October 31, 2021, the components of distributable earnings (loss) on a tax basis were as follows:


Undistributed ordinary income — net	$	265,682
Deferred capital losses*		(7,899,278)
Other book/tax temporary differences^(a)		180,945
Unrealized appreciation (depreciation)^(b)		2,319,228
Total distributable earnings (loss) — net	$	(5,133,423)

*	These capital losses have been deferred in the current year as either short-term or long-term losses. The losses will be deemed to occur on the first day of the next taxable year in the same character as they were originally deferred and will be available to offset future taxable capital gains.

^(a)	Other book/tax temporary differences are attributable to the realization for tax purposes of unrealized gains (losses) on certain futures and foreign currency contracts.

^(b)	The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies.

7. Recent accounting pronouncement

In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In January 2021, the FASB issued ASU No. 2021-01, with further amendments to Topic 848. The amendments in the ASUs provide optional temporary accounting recognition and financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the LIBOR and other interbank-offered based reference rates as of the end of 2021 and 2023. The ASUs are effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management has reviewed the requirements and believes the adoption of these ASUs will not have a material impact on the financial statements.

8. Other matter

The outbreak of the respiratory illness COVID-19 (commonly referred to as “coronavirus”) has continued to rapidly spread around the world, causing considerable uncertainty for the global economy and financial markets. The ultimate economic fallout from the pandemic, and the long-term impact on economies, markets, industries and individual issuers, are not known. The COVID-19 pandemic could adversely affect the value and liquidity of the Fund’s

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Notes to financial statements (cont’d)

investments, impair the Fund’s ability to satisfy redemption requests, and negatively impact the Fund’s performance. In addition, the outbreak of COVID-19, and measures taken to mitigate its effects, could result in disruptions to the services provided to the Fund by its service providers.

9. Subsequent event

In September 2021, the Fund’s Board of Trustees approved changing the Fund’s fiscal year end from October 31st to March 31st.

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Report of independent registered public accounting firm

To the Board of Trustees of Legg Mason ETF Investment Trust and Shareholders of Legg Mason International Low Volatility High Dividend ETF

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Legg Mason International Low Volatility High Dividend ETF (one of the funds constituting Legg Mason ETF Investment Trust, referred to hereafter as the “Fund”) as of October 31, 2021, the related statement of operations for the year ended October 31, 2021, the statement of changes in net assets for each of the two years in the period ended October 31, 2021, including the related notes, and financial highlights for each of the five years in the period ended October 31, 2021 (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 October 31, 2021, 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 October 31, 2021 and financial highlights for each of the five years in the period ended October 31, 2021 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 October 31, 2021 by correspondence with the custodian and brokers; where 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

December 17, 2021

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

Legg Mason International Low Volatility High Dividend ETF 2021 Annual Report

Amended subadvisory agreement (unaudited)

Effective August 7, 2021, QS Investors, LLC (“QS Investors”), a wholly-owned subsidiary of Franklin Resources, Inc. (“Franklin Resources”), merged with and into Franklin Advisers, Inc. (“Franklin Advisers”), also a wholly-owned subsidiary of Franklin Resources. As a result of the QS Investors merger, Franklin Advisers became the subadviser of the Fund. At a meeting of the Trust’s Board of Trustees held in May 2021, the Board, including a majority of the Trustees who are not “interested persons” (as defined in the Investment Company Act of 1940, as amended) of the Manager or Franklin Advisers (“Independent Trustees”), approved the amendment and restatement of a subadvisory agreement to reflect that Franklin Advisers assumed the rights and obligations of QS Investors under the agreement. The Board received an opinion from legal counsel that the amended and restated agreement, which took effect upon the closing of the QS Investors merger, did not require shareholder approval. The Board considered that the amended and restated agreement under which Franklin Advisers would provide services to the Fund were substantially identical to the agreement to which QS Investors had been a party, that there would be no change in services provided to the Fund, that there would be no change in the fees payable by the Fund, and that the amended and restated agreement would not continue beyond the term of the agreement with QS Investors unless approved by the Board or shareholders of the Fund. The Board also considered that the agreement with QS Investors had been approved by the Board at a meeting of the Board held in April 2020. At such meeting, the Board considered information regarding the nature, extent and quality of the services provided to the Fund, the Fund’s performance, management fees and expense ratios, the profitability of the Manager and its affiliates in providing services to the Fund, whether there had been economies of scale with respect to the management of the Fund and other benefits received by the Manager and its affiliates as a result of their relationship with the Fund. At its May 2021 meeting, the Board received and reviewed updated information regarding the performance and expenses of the Fund. After considering the factors described above as well as other factors, and in the exercise of their business judgment, the Board, including the Independent Trustees, concluded that the amended and restated agreement, including the fees payable thereunder, was fair and reasonable and that entering into the amended and restated agreement was in the best interests of the Fund and its shareholders.

Legg Mason International Low Volatility High Dividend ETF

Additional shareholder information (unaudited)

Results of special meeting of shareholders

A special meeting of shareholders was held on June 15, 2021 for shareholders of record as of March 1, 2021 (the “Record Date”) to elect the Board of Trustees of the Trust. Shareholders of the Fund and each other series of the Trust voted together as a single class to elect the Board.

Shareholders of the Trust voted as indicated below (vote totals are rounded to the nearest whole number). Effective July 1, 2021, the Board is composed of the following Trustees:


Trustees	For		Withheld
Deborah D. McWhinney		941,735,402		14,088,498
Rohit Bhagat		943,565,325		12,258,574
Anantha K. Pradeep		942,060,249		13,763,651
Jennifer M. Johnson		943,888,843		11,935,057

Legg Mason International Low Volatility High Dividend ETF

Statement regarding liquidity risk management program (unaudited)

Each of the Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. Each of the Funds is an exchange-traded fund (“ETF”) that is considered an “In-Kind ETF” under the Liquidity Rule, which means that the Fund satisfies requests for redemption through in-kind transfers of portfolio securities, positions, and other assets, except for a de minimis amount of cash, and publishes its portfolio holdings daily. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the SEC (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. As an In-Kind ETF, the Fund is not required to include in the LRMP policies and procedures relating to classification of portfolio holdings into four liquidity categories or establishing a highly liquid investment minimum (“HLIM”).

The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Legal, Investment Compliance, Investment Operations, Valuation Committee, Product Management and Global Product Strategy.

In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; its short and long-term cash flow projections; and its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit. Because the Funds are ETFs, the ILC also considers, as relevant, (1) the relationship between the Fund’s portfolio liquidity and the way in which, and the prices and spread at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants and (2) the effect of the composition of baskets on the overall liquidity of the Fund’s portfolio.

At meetings of the Funds’ Board of Trustees held in May 2021, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program for the year ended December 31, 2020. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to

Legg Mason International Low Volatility High Dividend ETF

Statement regarding liquidity risk management program (unaudited) (cont’d)

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.

Legg Mason International Low Volatility High Dividend ETF

Additional information (unaudited)

Information about Trustees and Officers

The business and affairs of Legg Mason International Low Volatility High Dividend ETF (the “Fund”) are conducted by management under the supervision and subject to the direction of its Board of Trustees. The business address of each Trustee is One Franklin Parkway, San Mateo, California 94403-1906. Information pertaining to the Trustees and officers of the Fund is set forth below.

The Statement of Additional Information includes additional information about Trustees and is available, without charge, upon request by calling the Fund at 1-877-721-1926.


Independent Trustees†

Rohit Bhagat
Year of birth		1964
Position(s) with Trust		Lead Independent Trustee
Term of office¹ and length of time served²		Since July 2021
Principal occupation(s) during the past five years		Managing Member, Mukt Capital, LLC (private investment firm) (2014-present); Advisor, Optimal Asset Management (investment technology and advisory services company) (2015-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).
Number of funds in fund complex overseen by Trustee		59
Other Directorships held by Trustee during the past five years		AssetMark Financial Holdings, Inc. (investment solutions) (2018-present) and PhonePe (payment and financial services) (2020-present); and formerly, Axis Bank (financial) (2013-2021), FlipKart Limited (eCommerce company) (2019-2020), CapFloat Financial Services Pvt., Ltd. (non-banking finance company) (2018) and Zentific Investment Management (hedge fund) (2015-2018).

Deborah D. McWhinney
Year of birth		1955
Position(s) with Trust		Trustee
Term of office¹ and length of time served²		Since July 2021
Principal occupation(s) during the past five 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).
Number of funds in fund complex overseen by Trustee		59
Other Directorships held by Trustee during the past five years		IHS Markit (information services) (2015-present), Borg Warner (automotive) (2018-present) and LegalShield (consumer services) (2020-present); and formerly, Fluor Corporation (construction and engineering) (2014-2020) and Focus Financial Partners, LLC (financial services) (2018-2020).

Legg Mason International Low Volatility High Dividend ETF

Additional information (unaudited) (cont’d)

Information about Trustees and Officers


Independent Trustees† (cont’d)

Anantha K. Pradeep
Year of birth		1963
Position(s) with Trust		Trustee
Term of office¹ and length of time served²		Since July 2021
Principal occupation(s) during the past five 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).
Number of funds in fund complex overseen by Trustee		59
Other Directorships held by Trustee during the past five years		None

Interested Trustee and Officer

Jennifer M. Johnson3*
Year of birth		1964
Position(s) with Trust		Trustee and Chairperson of the Board
Term of office¹ and length of time served²		Since July 2021
Principal occupation(s) during the past five years		Chief Executive Officer, President and Director, Franklin Resources, Inc.; officer and/or director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of eight of the investment companies in Franklin Templeton; 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).
Number of funds in fund complex overseen by Trustee		70
Other Directorships held by Trustee during the past five years		None

Additional Officers

Alison E. Baur Franklin Templeton One Franklin Parkway, San Mateo, CA 94403-1906
Year of birth		1964
Position(s) with Trust		Vice President
Term of office¹ and length of time served²		Since July 2021
Principal occupation(s) during the past five years		Deputy General Counsel, Franklin Templeton; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 44 of the investment companies in Franklin Templeton.

Legg Mason International Low Volatility High Dividend ETF


Additional Officers (cont’d)

Fred Jensen Franklin Templeton 620 Eighth Avenue, 47th Floor, New York, NY 10018
Year of birth		1963
Position(s) with Trust		Chief Compliance Officer
Term of office¹ and length of time served²		Since July 2021
Principal occupation(s) during the past five years		Director - Global Compliance of Franklin Templeton (since 2020); Managing Director of Legg Mason & Co. (2006 to 2020); Director of Compliance, Legg Mason Office of the Chief Compliance Officer (2006 to 2020); formerly, Chief Compliance Officer of Legg Mason Global Asset Allocation (prior to 2014); Chief Compliance Officer of Legg Mason Private Portfolio Group (prior to 2013); formerly, Chief Compliance Officer of The Reserve Funds (investment adviser, funds and broker-dealer) (2004) and Ambac Financial Group (investment adviser, funds and broker-dealer) (2000 to 2003).

Harris Goldblat Franklin Templeton 100 First Stamford Place, 6th Floor, Stamford, CT 06902
Year of birth		1969
Position(s) with Trust		Vice President and Assistant Secretary
Term of office¹ and length of time served²		Since July 2021
Principal occupation(s) during the past five years		Associate General Counsel to Franklin Templeton (since 2020); Assistant Secretary of certain funds associated with Legg Mason & Co. or its affiliates (since 2006); formerly, Managing Director and Associate General Counsel of Legg Mason & Co. (2005 to 2020).

Steven J. Gray Franklin Templeton One Franklin Parkway, San Mateo, CA 94403-1906
Year of birth		1955
Position(s) with Trust		Vice President
Term of office¹ and length of time served²		Since July 2021
Principal occupation(s) during the past five years		Senior Associate General Counsel, Franklin Templeton; Vice President, Franklin Templeton Distributors, Inc. and FASA, LLC; and officer of 44 of the investment companies in Franklin Templeton.

Legg Mason International Low Volatility High Dividend ETF

Additional information (unaudited) (cont’d)

Information about Trustees and Officers


Additional Officers (cont’d)

Matthew T. Hinkle Franklin Templeton One Franklin Parkway, San Mateo, CA 94403-1906
Year of birth		1971
Position(s) with Trust		Chief Executive Officer – Finance and Administration
Term of office¹ and length of time served²		Since July 2021
Principal occupation(s) during the past five years		Senior Vice President, Franklin Templeton Services, LLC; officer of 44 of the investment companies in Franklin Templeton; and formerly, Vice President, Global Tax (2012-April 2017) and Treasurer/Assistant Treasurer, Franklin Templeton (2009-2017).

Susan Kerr Franklin Templeton 620 Eighth Avenue, 47th Floor, New York, NY 10018
Year of birth		1949
Position(s) with Trust		Vice President – AML Compliance
Term of office¹ and length of time served²		Since July 2021
Principal occupation(s) during the past five years		Senior Compliance Analyst, Franklin Templeton (since 2020); Chief Anti-Money Laundering Compliance Officer of certain funds associated with Legg Mason & Co. or its affiliates (since 2013) and Anti-Money Laundering Compliance Officer (since 2012), Senior Compliance Officer (since 2011) and Assistant Vice President (since 2010) of Franklin Distributors, LLC; formerly, Assistant Vice President of Legg Mason & Co. (2010 to 2020)

Thomas C. Mandia Franklin Templeton 100 First Stamford Place, 6th Floor, Stamford, CT 06902
Year of birth		1962
Position(s) with Trust		Vice President and Assistant Secretary
Term of office¹ and length of time served²		Since July 2021
Principal occupation(s) during the past five years		Senior Associate General Counsel to Franklin Templeton (since 2020); Secretary of LMPFA (since 2006); Assistant Secretary of certain funds associated with Legg Mason & Co. or its affiliates (since 2006); Secretary of LMAS (since 2002) and LMFAM (formerly registered investment advisers) (since 2013); formerly, Managing Director and Deputy General Counsel of Legg Mason & Co. (2005 to 2020).

Legg Mason International Low Volatility High Dividend ETF


Additional Officers (cont’d)

Patrick O’Connor Franklin Templeton One Franklin Parkway, San Mateo, CA 94403-1906
Year of birth		1967
Position(s) with Trust		President and Chief Executive Officer – Investment Management
Term of office¹ and length of time served²		Since July 2021
Principal occupation(s) during the past five years		President and Chief Investment Officer, Franklin Advisory Services, LLC; Senior Vice President, Franklin Advisers, Inc.; officer of five of the investment companies in Franklin Templeton; and formerly, Managing Director, Head of iShares Product Canada, BlackRock (1998-2014).

Vivek Pai Franklin Templeton 300 S.E. 2nd Street, Fort Lauderdale, FL 33301-1923
Year of birth		1970
Position(s) with Trust		Treasurer, Chief Financial Officer and Chief Accounting Officer
Term of office¹ and length of time served²		Since July 2021
Principal occupation(s) during the past five years		Treasurer, U.S. Fund Administration & Reporting and officer of five of the investment companies in Franklin Templeton.

Navid J. Tofigh Franklin Templeton One Franklin Parkway, San Mateo, CA 94403-1906
Year of birth		1972
Position(s) with Trust		Vice President and Secretary
Term of office¹ and length of time served²		Since July 2021
Principal occupation(s) during the past five years		Associate General Counsel and officer of 44 of the investment companies in Franklin Templeton.

Craig S. Tyle Franklin Templeton One Franklin Parkway, San Mateo, CA 94403-1906
Year of birth		1960
Position(s) with Trust		Vice President
Term of office¹ and length of time served²		Since July 2021
Principal occupation(s) during the past five years		General Counsel and Executive Vice President, Franklin Resources, Inc.; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 44 of the investment companies in Franklin Templeton.

Legg Mason International Low Volatility High Dividend ETF

Additional information (unaudited) (cont’d)

Information about Trustees and Officers


Additional Officers (cont’d)

Lori A. Weber Franklin Templeton 300 S.E. 2nd Street, Fort Lauderdale, FL 33301-1923
Year of birth		1964
Position(s) with Trust		Vice President
Term of office¹ and length of time served²		Since July 2021
Principal occupation(s) during the past five years		Senior Associate General Counsel, Franklin Templeton; Assistant Secretary, Franklin Resources, Inc.; Vice President and Secretary, Templeton Investment Counsel, LLC; and officer of 44 of the investment companies in Franklin Templeton.

†	Trustees who are not “interested persons” of the Fund within the meaning of Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”).

*	Effective July 1, 2021, Ms. Johnson became Chair.

¹	Each Trustee and officer serves until his or her respective successor has been duly elected and qualified or until his or her earlier death, resignation, retirement or removal.

²	Indicates the earliest year in which the Trustee became a board member for a fund in the Legg Mason fund complex or the officer took such office.

³	Ms. Johnson is an “interested person” of the Fund, as defined in the 1940 Act, because of her position with LMPFA and/or certain of its affiliates.

Legg Mason International Low Volatility High Dividend ETF

Important tax information (unaudited)

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 income earned and distributions paid during its fiscal year.

The Fund hereby reports the following amounts, or if subsequently determined to be different, the maximum allowable amounts, for the fiscal year ended October 31, 2021:


	Pursuant to:		Amount Reported
Income Eligible for Dividends Received Deduction (DRD)	§	854(b)(1)(A)	$	42,270
Qualified Dividend Income Earned (QDI)	§	854(b)(1)(B)	$	2,482,155

Under Section 853 of the Internal Revenue Code, the Fund intends to elect to pass through to its 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 October 31, 2021:


Foreign Taxes Paid	$	250,252
Foreign Source Income Earned	$	3,457,161

Legg Mason International Low Volatility High Dividend ETF

Legg Mason

International Low Volatility High Dividend ETF

Trustees*

Rohit Bhagat

Deborah D. McWhinney

Anantha K. Pradeep

Jennifer M. Johnson**

Chair

Investment manager

Legg Mason Partners Fund Advisor, LLC

Subadviser

Franklin Advisers, Inc.†

Custodian

The Bank of New York Mellon

Transfer agent

The Bank of New York Mellon

240 Greenwich Street

New York, NY 10286

Independent registered public accounting firm

PricewaterhouseCoopers LLP

Baltimore, MD

*	During a June 15, 2021 special meeting of shareholders, a new group of Trustees were elected to oversee the funds of Legg Mason ETF Investment Trust, effective July 1, 2021.

**	Effective July 1, 2021, Ms. Johnson became Chair.

†	Effective August 7, 2021, QS Investors LLC merged with and into Franklin Advisers, Inc.

Legg Mason International Low Volatility High Dividend ETF

The Fund is a separate investment series of Legg Mason ETF Investment Trust, a Maryland statutory trust.

Legg Mason International Low Volatility High Dividend ETF

Legg Mason Funds

620 Eighth Avenue, 47th Floor

New York, NY 10018

The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. To obtain information on Form N-PORT, shareholders can call the Fund at 1-877-721-1926.

Information on how the Fund voted proxies relating to portfolio securities during the prior 12-month period ended June 30th of each year and a description of the policies and procedures that the Fund uses to determine how to vote proxies related to portfolio transactions are available (1) without charge, upon request, by calling the Fund at 1-877-721-1926, (2) at www.franklintempleton.com and (3) on the SEC’s website at www.sec.gov.

This report is submitted for the general information of the shareholders of Legg Mason International Low Volatility High Dividend ETF. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by a current prospectus.

Investors should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the Fund. Please read the prospectus carefully before investing.

www.franklintempleton.com

ETF Index Disclaimers

The MSCI World ex-US IMI Index (the “MSCI Index”) was used by Franklin Advisers, Inc. (“Franklin Advisers”), the Fund’s subadviser, as the reference universe for selection of the component securities included in the QS International Low Volatility High Dividend Hedged Index (the “Underlying Index”). MSCI Inc. does not in any way sponsor, support, promote or endorse the Underlying Index or Legg Mason International Low Volatility High Dividend ETF (the “Fund”). MSCI Inc. was not and is not involved in any way in the creation, calculation, maintenance or review of the Underlying Index. The MSCI Index was provided on an “as is” basis. MSCI Inc., its affiliates and any other person or entity involved in or related to compiling, computing or creating the MSCI Index (collectively, the “MSCI Parties”) expressly disclaim all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose). Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including without limitation lost profits) or any other damages in connection with the MSCI Index, the Underlying Index or the Fund.

The Fund is not sponsored, promoted, sold or supported in any other manner by Solactive AG nor does Solactive AG offer any express or implicit guarantee or assurance either with regard to the results of using the Underlying Index and/or Underlying Index trade mark or the Underlying Index Price at any time or in any other respect. The Underlying Index is calculated and published by Solactive AG. Solactive AG uses its best efforts to ensure that the Underlying Index is calculated correctly. Irrespective of its obligations towards the Fund, Solactive AG has no obligation to point out errors in the Underlying Index to third parties including but not limited to investors and/or financial intermediaries of the Fund. Neither publication of the Underlying Index by Solactive AG nor the licensing of the Underlying Index or the Underlying Index trade mark for the purpose of use in connection with the Fund constitutes a recommendation by Solactive AG to invest capital in this Fund nor does it in any way represent an assurance or opinion of Solactive AG with regard to any investment in this Fund.

Franklin Advisers does not guarantee the accuracy and/or the completeness of the Underlying Index or any data included therein, and Franklin Advisers shall not have any liability for any errors, omissions or interruptions therein. Franklin Advisers makes no warranty, express or implied, as to results to be obtained by the Fund, owners of the shares of the Fund or any other person or entity from the use of the Underlying Index, or any data included therein, either in connection with the Fund or for any other use. Franklin Advisers makes no express or implied warranties, and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to the Underlying Index or any data included therein. Without limiting any of the foregoing, in no event shall Franklin Advisers have any liability for any special, punitive, direct, indirect or consequential damages (including lost profits) arising out of matters relating to the use of the Underlying Index, even if notified of the possibility of such damages.

www.franklintempleton.com

ETFF323385 12/21 SR21-4282