FRANKLIN TEMPLETON ETF TRUST

Semiannual Report

BrandywineGLOBAL – ETFs

Investment Manager

Distributor

Investor Services

Franklin Advisers, Inc.

Subadvisor

Brandywine Global Investment Management, LLC

Franklin Distributors, LLC

(800) DIAL BEN^®/342-5236

franklintempleton.com

Transfer Agent

State Street Bank and

Trust Company

1 Heritage Drive

Mail Stop OHD0100

North Quincy, MA 02171

© 2023 Franklin Templeton Investments. All rights reserved.

BWETF S 11/23

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BrandywineGLOBAL - Dynamic US Large Cap Value ETF		BrandywineGLOBAL - U.S. Fixed Income ETF

The Securities and Exchange Commission has adopted new regulations that will result in changes to the design and delivery of annual and semiannual shareholder reports beginning in July 2024.

If you have previously elected to receive shareholder reports electronically, you will continue to do so and need not take any action.

Otherwise, paper copies of the Fund’s shareholder reports will be mailed to you beginning in July 2024. If you would like to receive shareholder reports and other communications from the Fund electronically instead of by mail, you may make that request at any time by contacting your financial intermediary (such as a broker-dealer or bank).



Contents

BrandywineGLOBAL - Dynamic US Large Cap Value ETF			2
BrandywineGLOBAL U.S. Fixed Income ETF			7
Financial Highlights and Schedule of Investments			11
Financial Statements			19
Notes to Financial Statements			22
Shareholder Information			29

Visit franklintempleton.com for fund
updates and documents, or to find helpful
financial planning tools.


Not FDIC Insured		\|		May Lose Value		\|		No Bank Guarantee



franklintempleton.com	Semiannual Report	1

BrandywineGLOBAL - Dynamic US Large Cap Value ETF

This semiannual report for BrandywineGLOBAL - Dynamic US Large Cap Value ETF covers the period ended September 30, 2023. As approved by the Board of Trustees at a meeting held on November 18, 2022, the fiscal year-end for BrandywineGLOBAL - Dynamic US Large Cap Value ETF (the “Fund”) was changed to March 31, effective March 31, 2023. Effective after the market close on October 28, 2022, the Fund’s predecessor mutual fund, BrandywineGLOBAL - Dynamic US Large Cap Value Fund, reorganized into this Fund (the “Reorganization”). The Fund has an identical investment goal and substantially similar investment strategies as the predecessor mutual fund.

Fund Overview

Your Fund’s Goal and Main Investments

The Fund seeks long-term capital appreciation by quantitatively investing in U.S. equities. The Portfolio Managers use proprietary quantitative models that evaluate multiple quantitative characteristics for each potential stock investment and apply specific rules to select stocks for investment based on these characteristics. The sub-advisor’s quantitative models seek to identify stocks that appear to have upside potential and relatively low downside risk relative to the Russell 1000^® Value Index. The quantitative models analyze factors regarding a stock’s valuation and quality, as well as market sentiment toward a stock, to select stocks that may have the potential to outperform the Russell 1000^® Value Index. Under normal market conditions, the Fund invests at least 80% of its net assets in issuers domiciled, or having their principal activities, in the United States, at the time of investment or other instruments with similar economic characteristics. In addition, under normal market conditions, the Fund invests at least 80% of its net assets in equity securities of large capitalization companies or other instruments with similar economic characteristics.


Geographic Composition*

9/30/23

	% of Total Net Assets
North America		98.2%
Short-Term Investments & Other Net Assets		1.8%

*Figures are stated as a percentage of total and may not equal 100% or may be negative due to rounding, use of any derivatives, unsettled trades or other factors.


Top 10 Sectors/Industries

9/30/23

	% of Total Net Assets
Oil, Gas & Consumable Fuels		16.3%
Insurance		12.5%
Ground Transportation		5.6%
Health Care Providers & Services		5.4%
Capital Markets		5.4%
Biotechnology		4.9%
Pharmaceuticals		4.7%
Aerospace & Defense		4.2%
Specialty Retail		3.6%
Media		3.3%

Performance Overview

During the six-month period under review the Fund posted cumulative total returns of +1.05% based on market price and +0.96% based on net asset value (NAV). In comparison, the Russell 1000^® Value Index, which measures the performance of Russell 1000^® Index companies with relatively lower forecasted growth rates, posted a +0.78% cumulative total return for the same period.¹ Also in comparison, the Standard & Poor’s^® 500 (S&P 500^®), which is designed to measure total U.S. equity market performance, posted a +5.18% cumulative total return.¹

You can find more of the Fund’s performance data in the Performance Summary beginning on page 4.

Performance data represent past performance, which does not guarantee future results. Investment return and principal

1. Source: Morningstar. Frank Russell Company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell^® is a trademark of Frank Russell Company.

The indexes are unmanaged and include reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index.

See www.franklintempletondatasources.com for additional data provider information.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Schedule of Investments (SOI). The SOI begins on page 12.



2	Semiannual Report	franklintempleton.com

BRANDYWINEGLOBAL - DYNAMIC US LARGE CAP VALUE ETF

value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.


Top 10 Holdings

9/30/23

Company *Sector/Industry, Country*	% of Total Net Assets
Cigna Group Health Care Providers & Services, United States		4.3%
Lockheed Martin Corp. Aerospace & Defense, United States		4.2%
ConocoPhillips Oil, Gas & Consumable Fuels, United States		3.7%
Gilead Sciences, Inc. Biotechnology, United States		3.6%
CSX Corp. Ground Transportation, United States		3.2%
Marathon Petroleum Corp. Oil, Gas & Consumable Fuels, United States		3.2%
Chevron Corp. Oil, Gas & Consumable Fuels, United States		2.9%
Pioneer Natural Resources Co. Oil, Gas & Consumable Fuels, United States		2.7%
Ameriprise Financial, Inc. Capital Markets, United States		2.5%
Aflac, Inc. Insurance, United States		2.3%

Thank you for your participation in BrandywineGLOBAL -Dynamic US Large Cap Value ETF. We look forward to serving your future investment needs.

Michael Fleisher

Lead Portfolio Manager

Henry Otto

Steven Tonkovich

Portfolio Management Team



franklintempleton.com	Semiannual Report	3

BRANDYWINEGLOBAL - DYNAMIC US LARGE CAP VALUE ETF

Performance Summary as of September 30, 2023

Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table and does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (October 31, 2022), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.

Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.

Performance as of 9/30/23¹

Cumulative Total Return²

Average Annual Total Return²

Based on
NAV³

Based on
market price⁴

Based on
NAV³

Based on
market price⁴

6-Month

+0.96%

+1.05%

+0.96%

+1.05%

1-Year

+15.12%

+15.03%

+15.12%

+15.03%

3-Year

+41.93%

+41.81%

+12.38%

+12.35%

5-Year

+44.29%

+44.18%

+7.61%

+7.59%

10-Year

+150.76%

+150.57%

+9.63%

+9.62%

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.

See page 5 for Performance Summary footnotes.



4	Semiannual Report	franklintempleton.com

BRANDYWINEGLOBAL - DYNAMIC US LARGE CAP VALUE ETF

PERFORMANCE SUMMARY

Total Annual Operating Expenses⁵

0.49%

Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance.

All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. The investment style may become out of favor, which may have a negative impact on performance. To the extent the portfolio invests in a concentration of certain securities, regions or industries, it is subject to increased volatility. These and other risks are discussed in the Fund’s prospectus.

ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns.

1. The total annual operating expenses are as of the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.

2. The Fund adopted the performance of the predecessor mutual fund as the result of the Reorganization. Prior to the Reorganization, the Fund had not yet commenced operations. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized. The returns shown for periods ended on or prior to October 28, 2022, are those of the predecessor mutual fund (except as noted below). The predecessor mutual fund’s performance is represented by the performance of the predecessor mutual fund’s Class IS Shares. Prior to the Fund’s listing on October 31, 2022, the NAV performance of the Class IS Shares of the predecessor mutual fund is used as a proxy for the Fund’s market price returns.

The predecessor mutual fund was the successor to an unregistered private fund (the “predecessor private fund” and, together with the predecessor mutual fund, the “predecessor funds”), as described in greater detail below. Performance prior to October 31, 2014, is that of the predecessor private fund. Had the predecessor funds been structured as an ETF, their performance may have differed.

The performance prior to the predecessor mutual fund’s inception is that of the predecessor private fund. On October 31, 2014, the predecessor private fund transferred its assets to the predecessor mutual fund in exchange for the predecessor mutual fund’s Class IS shares. The investment policies, objectives, guidelines and restrictions of the predecessor mutual fund were in all material respects equivalent to those of the predecessor private fund. In addition, the predecessor private fund’s portfolio managers were the portfolio managers of the predecessor mutual fund. As a mutual fund registered under the Investment Company Act of 1940 (1940 Act), the predecessor mutual fund was subject to certain restrictions under the 1940 Act and the Internal Revenue Code of 1986, as amended (Code) to which the predecessor private fund was not subject. Had the predecessor private fund been registered under the 1940 Act and been subject to the provisions of the 1940 Act and the Code, its investment performance could have been adversely affected, but these restrictions were not expected to have a material effect on the predecessor mutual fund’s investment program. The performance information for the predecessor private fund reflects the gross expenses of the predecessor private fund adjusted to reflect the higher fees and expenses of Class IS shares of the predecessor mutual fund. The performance is shown net of an annual management fee of 0.55% and other expenses of 0.10% which reflects the application of the predecessor mutual fund’s Class IS shares’ expense limitation agreement. If the expense limitation agreement were not applicable, expenses would have been higher and performance lower.

3. Assumes reinvestment of distributions based on net asset value.

4. Assumes reinvestment of distributions based on market price.

5. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.

See www.franklintempletondatasources.com for additional data provider information.



franklintempleton.com	Semiannual Report	5

BRANDYWINEGLOBAL - DYNAMIC US LARGE CAP VALUE ETF

Your Fund’s Expenses

As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.

Actual Fund Expenses

The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.

Hypothetical Example for Comparison with Other Funds

Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.


		Actual (actual return after expenses)				Hypothetical (5% annual return before expenses)

Beginning Account Value 4/1/23		Ending Account Value 9/30/23		Expenses Paid During Period 4/1/23–9/30/23¹		Ending Account Value 9/30/23		Expenses Paid During Period 4/1/23–9/30/23¹		Net Annualized Expense Ratio
	$1,000.00		$1,009.60		$2.46		$1,022.55		$2.48		0.49	%

1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period.



6	Semiannual Report	franklintempleton.com

BrandywineGLOBAL - U.S. Fixed Income ETF

This inaugural semiannual report for the Fund covers the shortened period between the Fund’s inception on, July 25, 2023, through September 30, 2023.

Fund Overview

Your Fund’s Goal and Main Investments

The Fund seeks total return. Under normal market conditions, the Fund invests at least 80% of its net assets in U.S. fixed income securities, and in derivatives and other instruments that have economic characteristics and provide investment exposure similar to U.S. fixed income securities. U.S. fixed income securities include debt securities issued or guaranteed by the U.S. government, its agencies or instrumentalities and political sub-divisions; U.S. corporate debt securities, including debentures, bonds, bankers acceptances, convertible and non-convertible notes, commercial paper, certificates of deposits, and freely transferable promissory notes; mortgage-backed securities; and asset-backed securities.

Performance Overview

During the period since the Fund’s inception on July 25, 2023, through September 30, 2023, the Fund posted cumulative total returns of -5.62% based on market price and -5.78% based on net asset value (NAV).¹ In comparison, the Bloomberg U.S. Aggregate Index, which measures the performance of the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, posted a -5.00% cumulative total return for the same period.² You can find more of the Fund’s performance data in the Performance Summary beginning on page 8.


Portfolio Composition

9/30/23

	% of Total Net Assets
U.S. Government & Agency Securities		72.7%
Mortgage-Backed Securities		20.6%
Corporate Bonds & Notes		3.8%
Short-Term Investments & Other Net Assets		2.9%

Top 10 Holdings

9/30/23

Issue/Issuer	% of Total Net Assets
U.S. Treasury Bonds, 3.00%, 8/15/52		26.7%
U.S. Treasury Notes, 4.00%, 2/29/28		11.5%
U.S. Treasury Notes, 4.125%, 11/15/32		7.7%
U.S. Treasury Bonds, 2.875%, 5/15/52		7.3%
Government National Mortgage Association, 5.50%, 4/20/53		5.2%
Federal National Mortgage Association, 4.00%, 6/01/52		5.2%
Government National Mortgage Association, 5.50%, 5/20/53		5.2%
Federal National Mortgage Association, 5.50%, 1/01/53		4.4%
Government National Mortgage Association, 5.00%, 6/20/53		3.9%
Federal Home Loan Mortgage Corp., 4.50%, 10/01/52		3.9%

Thank you for your participation in BrandywineGLOBAL -U.S. Fixed Income ETF. We look forward to serving your future investment needs.

Jack P. McIntyre, CFA

Anujeet Sareen, CFA

BrianL.Kloss,JD, CPA

Tracy Chen, CFA, CAIA

Portfolio Management Team

CFA^® is a trademark owned by CFA Institute.

1. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading July 27, 2023, the Fund’s NAV performance is used as a proxy for the Fund’s market price returns.

2. Source: Morningstar.

The index is unmanaged and includes reinvestment of any income or distributions. It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index.

See www.franklintempletondatasources.com for additional data provider information.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Schedule of Investments (SOI). The SOI begins on page 17.



franklintempleton.com	Semiannual Report	7

BRANDYWINEGLOBAL - U.S. FIXED INCOME ETF

Performance Summary as of September 30, 2023

Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale or redemption of Fund shares.

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (July 27, 2023), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.

Performance as of 9/30/23¹

Cumulative Total Return

Average Annual Total Return

Based on
NAV²

Based on
market price³

Based on
NAV²

Based on
market price³

Since Inception (7/25/23)

-5.78%

-5.62%

-5.78%

-5.62%


Distribution Rate⁴	30-Day Standardized Yield⁵
0.38%		4.68%

See page 9 for Performance Summary footnotes.



8	Semiannual Report	franklintempleton.com

BRANDYWINEGLOBAL - U.S. FIXED INCOME ETF

PERFORMANCE SUMMARY

Distributions (4/1/23–9/30/23)

Net Investment
Income

$0.099298

Total Annual Operating Expenses⁶

0.39%

Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance.

All investments involve risks, including possible loss of principal. Fixed income securities involve interest rate, credit, inflation and reinvestment risks, and possible loss of principal. As interest rates rise, the value of fixed income securities falls. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. To the extent the Fund invests in companies in a specific country or region, the Fund may experience greater volatility than a fund that is more broadly diversified geographically. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance. Asset-backed, mortgage-backed or mortgage-related securities are subject to prepayment and extension risks. Active and frequent trading may increase a shareholder’s tax liability and transaction costs.

ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns.

1. The total annual operating expenses are as of the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.

2. Assumes reinvestment of distributions based on net asset value.

3. Assumes reinvestment of distributions based on market price.

4. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/23.

5. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.

6. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.

See www.franklintempletondatasources.com for additional data provider information.



franklintempleton.com	Semiannual Report	9

BRANDYWINEGLOBAL - U.S. FIXED INCOME ETF

Your Fund’s Expenses

Actual Fund Expenses

Hypothetical Example for Comparison with Other Funds


		Actual (actual return after expenses)				Hypothetical (5% annual return before expenses)

Beginning Account Value 7/25/23		Ending Account Value 9/30/23		Expenses Paid During Period 7/25/23–9/30/23¹		Ending Account Value 9/30/23		Expenses Paid During Period 7/25/23–9/30/23¹		Net Annualized Expense Ratio
	$1,000.00		$942.20		$0.69		$1,023.05		$1.97		0.39	%



10	Semiannual Report	franklintempleton.com

FRANKLIN TEMPLETON ETF TRUST

Financial Highlights

BrandywineGLOBAL - Dynamic US Large Cap Value ETF


	Six Months Ended September 30, 2023 (unaudited)			Period Ended March 31, 2023^a			Year Ended September 30,
	Six Months Ended September 30, 2023 (unaudited)			Period Ended March 31, 2023^a			2022			2021			2020			2019			2018

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$11.49			$11.36			$15.45			$11.49			$11.77			$13.04			$11.72


Income from investment operations^b:

Net investment income^c		0.12			0.14			0.17			0.19			0.20			0.22			0.17

Net realized and unrealized gains (losses)		(0.01	)		1.49			(1.87	)		4.44			0.02			(0.31	)		1.51


Total from investment operations		0.11			1.63			(1.70	)		4.63			0.22			(0.09	)		1.68


Less distributions from:

Net investment income		—			(0.18	)		(0.20	)		(0.17	)		(0.18	)		(0.20	)		(0.11	)

Net realized gains		—			(1.32	)		(2.19	)		(0.50	)		(0.32	)		(0.98	)		(0.25	)


Total distributions		—			(1.50	)		(2.39	)		(0.67	)		(0.50	)		(1.18	)		(0.36	)


Net asset value, end of period		$11.60			$11.49			$11.36			$15.45			$11.49			$11.77			$13.04


Total return^d		0.96%			14.03%^e			(13.03)%			41.75%			1.66%			0.01%			14.51%

Ratios to average net assets^f

Expenses before waiver and payments by affiliates		0.49%			0.65%			0.67%			0.67%			0.71%^g			0.72%^g			0.72%^g

Expenses net of waiver and payments by affiliates		0.49%			0.61%			0.65%			0.65%			0.65%^g			0.65%^g			0.65%^g

Net investment income		2.08%			2.40%			1.24%			1.37%			1.75%			1.88%			1.37%

Supplemental data

Net assets, end of period (000’s)		$143,898			$158,053			$155,901			$207,109			$169,544			$167,688			$156,361

Portfolio turnover rate^h		50.72%ⁱ			52.48%ⁱ			124.00%			83.00%			141.00%			126.00%			91.00%

^a For the period October 1, 2022 through March 31, 2023. ^b The amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund. ^c Based on average daily shares outstanding. ^d Total return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. ^e The Fund adopted the performance of the predecessor mutual fund as the result of the Reorganization. Prior to the Reorganization, the Fund had not yet commenced operations. The returns shown for periods ending on or prior to October 28, 2022, are those of the predecessor mutual fund. The predecessor mutual fund’s performance is represented by the performance of the predecessor mutual fund’s Class IS Shares. Had the predecessor mutual fund been structured as an ETF, its performance may have differed. ^f Ratios are annualized for periods less than one year. ^g Reflects recapture of expenses waived/reimbursed from prior fiscal years for period prior to the Reorganization. ^h Portfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).

ⁱ Portfolio turnover rate excluding cash creations was as follows:					46.03%			52.48%			—			—			—			—



franklintempleton.com	The accompanying notes are an integral part of these financial statements. \| Semiannual Report	11

FRANKLIN TEMPLETON ETF TRUST

Schedule of Investments, September 30, 2023 (unaudited)

BrandywineGLOBAL - Dynamic US Large Cap Value ETF



	Country		Shares		Value

Common Stocks 98.2%
Aerospace & Defense 4.2%
Lockheed Martin Corp.		United States		14,674	$	6,001,079

Air Freight & Logistics 1.6%
CH Robinson Worldwide, Inc.		United States		10,937		942,004
Expeditors International of Washington, Inc.		United States		11,737		1,345,412


						2,287,416

Automobiles 0.1%
Harley-Davidson, Inc.		United States		4,217		139,414

Banks 1.2%
Huntington Bancshares, Inc.		United States		22,491		233,906
Regions Financial Corp.		United States		84,454		1,452,609


						1,686,515

Banks 1.5%
BOK Financial Corp.		United States		4,708		376,546
Commerce Bancshares, Inc.		United States		11,704		561,558
Cullen/Frost Bankers, Inc.		United States		5,642		514,607
Popular, Inc.		Puerto Rico		5,334		336,095
Synovus Financial Corp.		United States		11,253		312,833


						2,101,639

Biotechnology 4.9%
Amgen, Inc.		United States		7,035		1,890,726
Gilead Sciences, Inc.		United States		68,322		5,120,051


						7,010,777

Broadline Retail 0.0%^†
Dillard’s, Inc., Class A		United States		210		69,470
Building Products 2.0%^aBuilders FirstSource, Inc.		United States		18,984		2,363,318
Fortune Brands Innovations, Inc.		United States		8,564		532,338


						2,895,656

Capital Markets 5.4%
Affiliated Managers Group, Inc.		United States		2,846		370,948
Ameriprise Financial, Inc.		United States		10,808		3,563,181
Charles Schwab Corp.		United States		53,295		2,925,895
Evercore, Inc., Class A		United States		2,186		301,406
Jefferies Financial Group, Inc.		United States		15,558		569,890


						7,731,320

Chemicals 2.7%
Ashland, Inc.		United States		1,920		156,826
Chemours Co.		United States		8,588		240,893
Eastman Chemical Co.		United States		8,732		669,919
LyondellBasell Industries NV, Class A		United States		24,049		2,277,440
Olin Corp.		United States		12,327		616,104


						3,961,182

Communications Equipment 1.1%
Cisco Systems, Inc.		United States		30,676		1,649,142

Construction Materials 0.5%
Eagle Materials, Inc.		United States		4,521		752,837

Consumer Finance 2.3%
Discover Financial Services		United States		17,666		1,530,406
OneMain Holdings, Inc.		United States		9,262		371,314



12	Semiannual Report	franklintempleton.com

FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENTS

BrandywineGLOBAL - Dynamic US Large Cap Value ETF (continued)



		Country		Shares		Value
	Common Stocks (continued)
	Consumer Finance (continued)
	Synchrony Financial		United States		44,962	$	1,374,488


							3,276,208

	Consumer Staples Distribution & Retail 1.5%
	Kroger Co.		United States		13,943		623,949
	Walmart, Inc.		United States		9,853		1,575,791


							2,199,740

	Containers & Packaging 1.9%
	Amcor PLC		United States		125,827		1,152,575
	Berry Global Group, Inc.		United States		9,538		590,498
	Packaging Corp. of America		United States		6,166		946,789


							2,689,862

	Distributors 1.2%
	LKQ Corp.		United States		34,605		1,713,294

	Diversified Consumer Services 0.7%
	Service Corp. International		United States		18,810		1,074,803

	Electric Utilities 1.5%
	Exelon Corp.		United States		46,775		1,767,627
	NextEra Energy, Inc.		United States		6,576		376,739


							2,144,366

	Electrical Equipment 0.3%
	Acuity Brands, Inc.		United States		2,385		406,189

	Electronic Equipment, Instruments & Components 0.6%
a	Arrow Electronics, Inc.		United States		5,846		732,153
a	Insight Enterprises, Inc.		United States		600		87,300

						819,453

	Entertainment 0.5%
a	Walt Disney Co.		United States		8,305		673,120

	Financial Services 1.1%
	Equitable Holdings, Inc.		United States		20,303		576,402
	Essent Group Ltd.		United States		8,646		408,870
	MGIC Investment Corp.		United States		19,164		319,847
	Voya Financial, Inc.		United States		3,820		253,839


							1,558,958

	Food Products 2.4%
	Archer-Daniels-Midland Co.		United States		14,210		1,071,718
	General Mills, Inc.		United States		26,732		1,710,581
	Ingredion, Inc.		United States		3,416		336,135
	Mondelez International, Inc., Class A		United States		5,263		365,252


							3,483,686

	Ground Transportation 5.6%
	CSX Corp.		United States		151,783		4,667,327
	Norfolk Southern Corp.		United States		16,611		3,271,204
	Ryder System, Inc.		United States		770		82,352


							8,020,883

	Health Care Providers & Services 5.4%
	Cigna Group		United States		21,427		6,129,622
	Quest Diagnostics, Inc.		United States		13,205		1,609,161


							7,738,783



franklintempleton.com	Semiannual Report	13

FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENTS

BrandywineGLOBAL - Dynamic US Large Cap Value ETF (continued)



		Country		Shares		Value
	Common Stocks (continued)
	Hotels, Restaurants & Leisure 1.0%
	Boyd Gaming Corp.		United States		6,923	$	421,126
a	MGM Resorts International		United States		18,932		695,940
	Wyndham Hotels & Resorts, Inc.		United States		5,312		369,397


							1,486,463

	Household Durables 0.1%
a	Taylor Morrison Home Corp.		United States		3,590		152,970

	Household Products 1.0%
	Procter & Gamble Co.		United States		10,190		1,486,313

	Industrial Conglomerates 1.8%
	General Electric Co.		United States		23,480		2,595,714

	Insurance 12.5%
	Aflac, Inc.		United States		43,739		3,356,968
	American Financial Group, Inc.		United States		5,914		660,416
	American International Group, Inc.		United States		52,768		3,197,741
	CNA Financial Corp.		United States		17,174		675,797
	Fidelity National Financial, Inc.		United States		18,968		783,378
	Globe Life, Inc.		United States		5,165		561,591
	Hartford Financial Services Group, Inc.		United States		22,291		1,580,655
	MetLife, Inc.		United States		28,640		1,801,742
	Old Republic International Corp.		United States		21,273		573,095
	Primerica, Inc.		United States		1,288		249,885
	Principal Financial Group, Inc.		United States		17,516		1,262,378
	RLI Corp.		United States		1,760		239,166
	Travelers Cos., Inc.		United States		14,850		2,425,154
	Unum Group		United States		13,614		669,673


							18,037,639

	Leisure Products 0.1%
	Brunswick Corp.		United States		1,190		94,010

	Media 3.3%
a	Charter Communications, Inc., Class A		United States		3,960		1,741,687
	Interpublic Group of Cos., Inc.		United States		17,595		504,273
	Nexstar Media Group, Inc.		United States		4,587		657,638
	Omnicom Group, Inc.		United States		24,696		1,839,358


							4,742,956

	Metals & Mining 2.7%
	Nucor Corp.		United States		14,364		2,245,812
	Reliance Steel & Aluminum Co.		United States		1,000		262,230
	Steel Dynamics, Inc.		United States		9,615		1,030,920
	U.S. Steel Corp.		United States		10,205		331,458


							3,870,420

	Oil, Gas & Consumable Fuels 16.3%
	Chevron Corp.		United States		24,939		4,205,214
	Civitas Resources, Inc.		United States		1,600		129,392
	ConocoPhillips		United States		43,974		5,268,085
	Coterra Energy, Inc., Class A		United States		35,350		956,218
	Exxon Mobil Corp.		United States		6,824		802,366
	HF Sinclair Corp.		United States		3,140		178,760
	Marathon Oil Corp.		United States		37,548		1,004,409
	Marathon Petroleum Corp.		United States		30,076		4,551,702
	ONEOK, Inc.		United States		7,700		488,411
	Pioneer Natural Resources Co.		United States		17,276		3,965,706



14	Semiannual Report	franklintempleton.com

FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENTS

BrandywineGLOBAL - Dynamic US Large Cap Value ETF (continued)



		Country		Shares		Value
	Common Stocks (continued)
	Oil, Gas & Consumable Fuels (continued)
	Valero Energy Corp.		United States		13,290	$	1,883,326


							23,433,589

	Paper & Forest Products 0.2%
	Louisiana-Pacific Corp.		United States		4,782		264,301

	Pharmaceuticals 4.7%
	Bristol-Myers Squibb Co.		United States		35,071		2,035,521
	Johnson & Johnson		United States		12,559		1,956,064
	Merck & Co., Inc.		United States		6,609		680,396
	Pfizer, Inc.		United States		54,939		1,822,327
	Viatris, Inc.		United States		31,960		315,126


							6,809,434

	Semiconductors & Semiconductor Equipment 0.3%
	Teradyne, Inc.		United States		4,052		407,064

	Specialty Retail 3.5%
a	AutoNation, Inc.		United States		6,838		1,035,273
	Best Buy Co., Inc.		United States		21,183		1,471,583
	Murphy USA, Inc.		United States		2,743		937,365
	Penske Automotive Group, Inc.		United States		8,633		1,442,229
a	RH		United States		869		229,729


							5,116,179

	Textiles, Apparel & Luxury Goods 0.5%
	Ralph Lauren Corp.		United States		690		80,102
	Tapestry, Inc.		United States		21,586		620,598

						700,700

	Total Common Stocks (Cost $137,393,677)						141,283,544

	Total Investments before Short-Term Investments (Cost $137,393,677)						141,283,544

	Short-Term Investments 1.7%
	Money Market Funds 1.7%
b	State Street Institutional U.S. Government Money Market Fund, 5.30%		United States		2,536,354		2,536,354

	Total Short-Term Investments (Cost $2,536,354)						2,536,354

	Total Investments (Cost $139,930,031) 99.9%						143,819,898
	Other Assets, less Liabilities 0.1%						78,119

	Net Assets 100.0%					$	143,898,017

^† Rounds to less than 0.1% of net assets.

^a Non-income producing.

^b The rate shown is the annualized seven-day effective yield at period end.



franklintempleton.com	The accompanying notes are an integral part of these financial statements. \| Semiannual Report	15

FRANKLIN TEMPLETON ETF TRUST

Financial Highlights

BrandywineGLOBAL - U.S. Fixed Income ETF



	Period Ended September 30, 2023^b

Per share operating performance (for a share outstanding throughout the period)

Net asset value, beginning of period		$25.00


Income from investment operations^a:

Net investment income^b		0.19

Net realized and unrealized gains (losses)		(1.63	)


Total from investment operations		(1.44	)


Less distributions from net investment income		(0.10	)


Net asset value, end of period		$23.46


Total return^c		(5.78)%

Ratios to average net assets^d

Total expenses		0.39%

Net investment income		4.22%

Supplemental data

Net assets, end of period (000’s)		$11,732

Portfolio turnover rate^e		8.36%	^f

^bFor the period July 25, 2023 (commencement of operations) to September 30, 2023.

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund

^bBased on average daily shares outstanding.

^cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period

^dRatios are annualized for periods less than one year

^ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).


^fPortfolio turnover rate excluding cash creations was as follows:			8.36%



16	Semiannual Report \| The accompanying notes are an integral part of these financial statements.	franklintempleton.com

FRANKLIN TEMPLETON ETF TRUST

Schedule of Investments, September 30, 2023 (unaudited)

BrandywineGLOBAL - U.S. Fixed Income ETF



		Country		Principal Amount*		Value
	Corporate Bonds & Notes 3.8%
	Financial Services 0.8%
	Golub Capital BDC, Inc., 2.50%, 8/24/26		United States		110,000	$	96,474

	IT Services 0.6%
a	Dell International LLC/EMC Corp., 3.375%, 12/15/41		United States		100,000		67,232

	Oil & Gas 1.6%
	Devon Energy Corp., 7.875%, 9/30/31		United States		30,000		32,936
	Diamondback Energy, Inc., 6.25%, 3/15/33		United States		120,000		120,134
	Hess Corp.,
	7.875%, 10/01/29		United States		10,000		10,850
	7.30%, 8/15/31		United States		20,000		21,217

							185,137

	Real Estate Investment Trusts (REITs) 0.8%
	Equinix, Inc., 2.50%, 5/15/31		United States		120,000		93,772

	Total Corporate Bonds & Notes (Cost $459,791)						442,615

	U.S. Government & Agency Securities 72.7%
	Government National Mortgage Association,
	5.00%, 2/20/53		United States		439,762		417,373
	5.00%, 6/20/53		United States		486,991		461,888
	5.50%, 4/20/53		United States		629,886		611,858
	5.50%, 5/20/53		United States		623,864		605,995
	6.00%, 8/20/53		United States		199,540		197,921
	U.S. Treasury Bonds,
	2.875%, 5/15/52		United States		1,200,000		851,109
	3.00%, 8/15/52		United States		4,300,000		3,134,465
	U.S. Treasury Notes,
	4.00%, 2/29/28		United States		1,390,000		1,354,218
	4.125%, 11/15/32		United States		930,000		897,087

	Total U.S. Government & Agency Securities (Cost $9,209,239)						8,531,914

	Mortgage-Backed Securities 20.6%
	Fannie Mae 7.4%
	Federal Home Loan Mortgage Corp.,
	4.50%, 10/1/52		United States		498,054		457,795
	5.50%, 12/1/52		United States		429,396		415,631


							873,426

	Freddie Mac 13.2%
	Federal National Mortgage Association,
	4.00%, 6/1/52		United States		682,954		609,048
	5.50%, 11/1/52		United States		442,863		418,412
	5.50%, 12/1/53		United States		533,560		516,455


							1,543,915

	Total Mortgage-Backed Securities (Cost $2,510,298)						2,417,341

	Total Investments before Short-Term Investments (Cost $12,179,328)						11,391,870



franklintempleton.com	Semiannual Report	17

FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENTS

BrandywineGLOBAL - U.S. Fixed Income ETF (continued)



		Country		Principal Amount*		Value
	Short-Term Investments 2.3%
	Money Market Funds 2.3%
b	State Street Institutional U.S. Government Money Market Fund, 5.30%		United States		268,765	$	268,765

	Total Short-Term Investments (Cost $268,765)						268,765

	Total Investments (Cost $12,448,093) 99.4%						11,660,635
	Other Assets, less Liabilities 0.6%						71,516

	Net Assets 100.0%					$	11,732,151

*The principal amount is stated in U.S. dollars unless otherwise indicated.

^aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2023, the value of was $67,232, representing 0.6% of net assets.

^bThe rate shown is the annualized seven-day effective yield at period end.

See Abbreviations on page 28.



18	Semiannual Report \| The accompanying notes are an integral part of these financial statements.	franklintempleton.com

FRANKLIN TEMPLETON ETF TRUST

FINANCIAL STATEMENTS

Statements of Assets and Liabilities

September 30, 2023 (unaudited)



	BrandywineGLOBAL - Dynamic US Large Cap Value ETF		BrandywineGLOBAL - U.S. Fixed Income ETF
Assets:
Investments in securities:
Cost – Unaffiliated issuers		$139,930,031		$12,448,093
Value – Unaffiliated issuers		$143,819,898		$11,660,635
Receivables:
Dividends and interest		160,424		75,354

Total assets		143,980,322		11,735,989

Liabilities:
Payables:
Management fees		58,879		3,838
Accrued expenses and other liabilities		23,426		—

Total liabilities		82,305		3,838

Net assets, at value		$143,898,017		$11,732,151

Net assets consist of:
Paid-in capital		$142,232,252		$12,500,000
Total distributable earnings (loss)		1,665,765		(767,849	)

Net assets, at value		$143,898,017		$11,732,151

Shares outstanding		12,402,953		500,000

Net asset value per share		$11.60		$23.46



franklintempleton.com	The accompanying notes are an integral part of these financial statements. \| Semiannual Report	19

FRANKLIN TEMPLETON ETF TRUST

FINANCIAL STATEMENTS

Statements of Operations



	BrandywineGLOBAL - Dynamic US Large Cap Value ETF						BrandywineGLOBAL - U.S. Fixed Income ETF

	Six Months Ended September 30, 2023 (unaudited)			Period Ended March 31, 2023^†			Period Ended September 30, 2023^b(unaudited)

Investment income:
Dividends: (net of foreign taxes)^a
Unaffiliated issuers		$ 1,914,691			$ 2,432,774			$ —
Interest:
Unaffiliated issuers		56,366			101,330			102,290

Total investment income		1,971,057			2,534,104			102,290

Expenses:
Management fees (Note 3a)		375,220			498,408			8,656
Transfer agent fees		—			2,847			—
Custodian fees		—			83			—
Fund accounting fees		—			5,782			—
Reports to shareholders		—			1,492			—
Distribution and service fees		—			2,561			—
Registration and filing fees		—			27,037			—
Professional fees		—			2,886			—
Trustee fees		—			723			—
Other		—			1,855			—

Total expenses		375,220			543,674			8,656

Expenses waived/paid by affiliates (Note 3c)		—			(27,988	)		—

Net expenses		375,220			515,686			8,656

Net investment income		1,595,837			2,018,418			93,634

Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		(3,275,786	)		(327,510	)		(24,376	)
In-kind redemptions		2,837,563			11,162,020			—

Net realized gain (loss)		(438,223	)		10,834,510			(24,376	)

Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		746,054			11,214,241			(787,458	)

Net change in unrealized appreciation (depreciation)		746,054			11,214,241			(787,458	)

Net realized and unrealized gain (loss)		307,831			22,048,751			(811,834	)

Net increase (decrease) in net assets resulting from operations		$ 1,903,668			$ 24,067,169			$ (718,200	)



^aForeign taxes withheld on dividends		$614			$584			$—

^†For the period October 1, 2022 through March 31, 2023.

^bFor the period July 25, 2023 (commencement of operations) to September 30, 2023.



20	Semiannual Report \| The accompanying notes are an integral part of these financial statements.	franklintempleton.com

FRANKLIN TEMPLETON ETF TRUST

FINANCIAL STATEMENTS

Statements of Changes in Net Assets



	BrandywineGLOBAL - Dynamic US Large Cap Value ETF									BrandywineGLOBAL - U.S. Fixed Income ETF

	Six Months Ended September 30, 2023 (unaudited)			Period Ended March 31, 2023^a,†			Year ended September 30, 2022			Six Months Ended September 30, 2023^b (unaudited)
Increase (decrease) in net assets:
Operations:
Net investment income		$1,595,837			$2,018,418			$2,805,869			$93,634
Net realized gain (loss)		(438,223	)		10,834,510			16,810,000			(24,376	)
Net change in unrealized appreciation (depreciation)		746,054			11,214,241			(49,039,398	)		(787,458	)

Total Operations:		1,903,668			24,067,169			(29,423,529	)		(718,200	)

Distributions to shareholders (Note 1e)		—			(20,520,894	)		(35,713,355	)		(49,649	)

Capital share transactions: (Note 2)		(16,058,392	)		(26,987,678	)		20,691,101			12,500,000

Net increase (decrease) in net assets		(14,154,724	)		(23,441,403	)		(44,445,783	)		11,732,151
Net assets:
Beginning of period		158,052,741			181,494,144			225,939,927			—

End of period		$143,898,017			$158,052,741			$181,494,144			$11,732,151

^†For the period October 1, 2022 through March 31, 2023.

^bFor the period July 25, 2023 (commencement of operations) to September 30, 2023.



franklintempleton.com	The accompanying notes are an integral part of these financial statements. \| Semiannual Report	21

FRANKLIN TEMPLETON ETF TRUST

Notes to Financial Statements (unaudited)

1. Organization and Significant Accounting Policies

Franklin Templeton ETF Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company consisting of fifty-one separate funds, two of which are included in this report (Funds). The Funds follow the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946, Financial Services - Investment Companies (“ASC 946”) and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP), including, but not limited to, ASC 946. The Funds are exchange traded funds (ETF) and seek to provide the investment results that closely correspond, before fees and expenses, to the performance of Fund’s corresponding underlying index.

The Fund adopted the performance of the BrandywineGLOBAL—Dynamic US Large Cap Value Fund (the predecessor mutual fund) as the result of a reorganization of the predecessor mutual fund into the fund (the Reorganization) that was effective after the market close on October 28, 2022. Prior to the Reorganization, the Fund had not yet commenced operations. The returns shown for periods ended on or prior to October 28, 2022 are those of the predecessor mutual fund. The predecessor mutual fund’s performance is represented by the performance of the predecessor mutual fund’s Class IS Shares.

Prior to the Fund’s listing on October 31, 2022, the NAV performance of the Class IS Shares of the predecessor mutual fund is used as a proxy for the Fund’s market price returns. Had the predecessor mutual fund have been structured as an ETF, its performance may have differed.

Effective July 25, 2023, the Trust began offering shares of BrandywineGlobal—U.S. Fixed Income ETF. Each of the Funds are an exchange traded fund (ETF) and are actively managed, thus they are not designed to track an index.

The following summarizes the Funds’ significant accounting policies.

a. Financial Instrument Valuation

The Funds’ investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Funds calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under

compliance policies and procedures approved by the Funds’ Board of Trustees (the Board), the Board has designated the Fund’s investment manager as the valuation designee and has responsibility for oversight of valuation. The investment manager is assisted by the Fund’s administrator in performing this responsibility, including leading the cross-functional Valuation Committee (VC).

The Funds may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Equity securities, exchange trade funds and derivative financial instruments listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. London time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.

Investments in open-end mutual funds are valued at the closing NAV.

The Funds have procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Funds primarily employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not



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FRANKLIN TEMPLETON ETF TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

1. Organization and Significant Accounting Policies (continued)

a. Financial Instrument Valuation (continued)

take place on every Funds’ business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Funds’ portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, an independent pricing service may be used to adjust the Funds’ portfolio securities to the latest indications of fair value at 4 p.m. Eastern time on September 30, 2023. At September 30, 2023, certain securities may have been fair valued using these procedures, in which case the securities were categorized as Level 2 inputs within the fair value hierarchy (referred to as “market level fair value”).

When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Funds’ NAV is not calculated, which could result in differences between the value of the Funds’ portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Funds for financial reporting purposes.

b. Foreign Currency Translation

Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Funds may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, income and expense items denominated in foreign currencies are translated into U.S. dollar based upon prevailing exchange rates on the respective dates of such transactions.

The Funds do 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 in the Statements of Operations.

Net realized foreign exchange gains or losses arise from sales of foreign currencies, including gains and losses on

forward foreign currency contracts, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the values of assets and liabilities, other than investments in securities, on the date of valuation, resulting from changes in exchange rates.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

The Funds’ investments in foreign securities may involve risks not present in domestic investments. Since securities may be denominated in foreign currencies, may require settlement in foreign currencies or may pay interest or dividends in foreign currencies, changes in the relationship of these foreign currencies to the U.S. dollar can significantly affect the value of the investments and earnings of the Fund. Foreign investments may also subject the Fund to foreign government exchange restrictions, expropriation, taxation or other political, social or economic developments, all of which affect the market and/or credit risk of the investments.

c. Derivative Financial Instruments

During the period ended September 30, 2023, the Funds did not invest in derivative instruments.

d. Income and Deferred Taxes

It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.

The Funds may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which the Funds invest. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Funds invests. When a capital gain tax is determined to apply, certain or all Funds



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FRANKLIN TEMPLETON ETF TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

1. Organization and Significant Accounting Policies (continued)

d. Income and Deferred Taxes (continued)

record an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.

Each Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of September 30, 2023, Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

e. Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Dividend income and capital gain distributions are recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Funds. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications

have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of Fund to the combined net assets of the Trust. Certain Fund specific expenses are allocated directly to the Fund that incurred the expense. These expenses are paid by the Fund or by the investment manager, as applicable, according to the terms of the unified management fee agreement.

f. Compensating Balance Arrangements

Prior to the reorganization, the predecessor mutual fund had an arrangement with its custodian bank whereby a portion of the custodian’s fees is paid indirectly by credits earned on the Fund’s cash on deposit with the bank.

g. Accounting Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

h. Guarantees and Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Funds, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.

2. Shares of Beneficial Interest

Shares of the Funds are issued and redeemed at their respective NAV only in aggregations of a specified number of shares or multiples thereof (Creation Units). Only certain large institutional investors (Authorized Participants) may engage in creation or redemption transactions directly with the Funds. Once created, shares of the Funds generally trade in the secondary market in amounts less than one Creation Unit. The market price of the Funds’ shares will be based on the price in the secondary market which may be at, above or below the most recent NAV. Creation Units may be issued and redeemed in exchange for a designated portfolio of securities and/or cash (which may include cash in lieu of certain securities).

Authorized participants pay a standard transaction fee to the shareholder servicing agent when purchasing or redeeming Creation Units of the Funds regardless of the number of Creation Units that are being created or redeemed on the same day by the Authorized Participant. The standard transaction fee is imposed to offset transfer and other transaction costs associated



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FRANKLIN TEMPLETON ETF TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

2. Shares of Beneficial Interest (continued)

with the issuance and redemption of Creation Units and is not charged to or paid by the Fund. Such transactions fees are treated as increases in capital and are disclosed in the Funds’ Statements of Changes in Net Assets

In addition, for cash Creation Unit transactions, a variable fee for creation transactions and redemption transactions may be charged to the Authorized Participant to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades. Variable fees, if any, are included in capital share transactions in the Statements of Changes in Net Assets.

At September 30, 2023, there were an unlimited number of shares authorized (without par value). Transactions in the Funds’ shares were as follows:



	BrandywineGLOBAL - Dynamic US Large Cap Value ETF

	Six Months Ended September 30, 2023						Period Ended March 31, 2023^a,b						Year Ended September 30, 2022

	Shares			Amount			Shares			Amount			Shares			Amount
Capital Transactions
Shares sold		750,000			8,572,687			7,044,346			85,629,495			2,776,923			37,193,756
Shares reinvested		—			—			—			—			2,460,970			32,443,766
Shares redeemed		(2,100,000	)		(24,631,079	)		(7,016,304	)		(85,983,005	)		(4,915,352	)		(63,639,979	)

Net increase (decrease)		(1,350,000	)		(16,058,392	)		28,042			(353,510	)		322,541			5,997,543


Class A
Shares sold		—			—			47			578			572,314			7,684,930
Shares reinvested		—			—			—			—			119,096			1,561,866
Shares redeemed		—			—			(953,559	)		(11,206,733	)		(355,767	)		(4,762,733	)

Net increase (decrease)		—			—			(953,512	)		(11,206,155	)		335,643			4,484,063


Class C
Shares sold		—			—			—			—			309,819			4,097,721
Shares reinvested		—			—			—			—			9,369			116,930
Shares redeemed		—			—			(298,070	)		(3,444,751	)		(67,396	)		(826,386	)

Net increase (decrease)		—			—			(298,070	)		(3,444,751	)		251,792			3,388,265


Class R
Shares sold		—			—			—			—			15,030			231,122
Shares reinvested		—			—			—			—			3,026			39,820
Shares redeemed		—			—			(19,625	)		(226,287	)		(9,309	)		(126,785	)

Net increase (decrease)		—			—			(19,625	)		(226,287	)		8,747			144,157


Class I
Shares sold		—			—			—			—			810,734			11,306,052
Shares reinvested		—			—			—			—			114,799			1,506,308
Shares redeemed		—			—			(996,323	)		(11,756,975	)		(477,495	)		(6,135,287	)

Net increase (decrease)		—			—			(996,323	)		(11,756,975	)		448,038			6,677,073



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FRANKLIN TEMPLETON ETF TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

2. Shares of Beneficial Interest (continued)



	BrandywineGLOBAL - U.S. Fixed Income ETF^c

	Period Ended September 30, 2023

	Shares			Amount
Shares sold		500,001		$	12,500,025
Shares redeemed		(1	)		(25	)

Net increase (decrease)		500,000		$	12,500,000

^a Effective after the market close on October 28, 2022, the Fund’s predecessor mutual fund, BrandywineGLOBAL - Dynamic US Large Cap Value Fund, reorganized into this Fund (the “Reorganization”). The predecessor mutual fund’s Class IS Shares’ performance and financial history have been adopted by BrandywineGLOBAL - Dynamic US Large Cap Value ETF and will be used going forward. As a result, the information prior to the Reorganization reflects that of the predecessor mutual fund’s Class IS Shares. Shares of the other classes of the predecessor mutual fund were converted into Class IS Shares as a part of the Reorganization. Such conversion of the other classes of shares into Class IS Shares is included under “Shares sold”.

^b Shares of the class of the Target Fund was converted into Class IS shares as a part of the Reorganization. Such conversion of shares into Class IS shares is included under “Shares redeemed”.

^c For the period July 25, 2023 (commencement of operations) to September 30, 2023.

3. Transactions with Affiliates

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Funds are also officers and/or directors of the following subsidiaries:



Subsidiary		Affiliation
Franklin Advisers, Inc. (Advisers)		Investment manager
Franklin Templeton Services, LLC (FT Services)		Administrative Manager
Franklin Distributors, LLC (Distributors)		Principal Underwriter

a. Management fees

The Funds pay a unified management fee to Advisers whereby Advisers has agreed to reimburse the Funds’ acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Funds, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding payments under the Funds’ Rule 12b-1 plan (if any), brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments), taxes, interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto), and other non-routine or extraordinary expenses. The fee is calculated daily and paid monthly according to the terms of the management agreement. The gross effective investment management fees are based on the average daily net assets of each of the Funds as follows:



		Gross Effective Investment Management Fee Rate
BrandywineGLOBAL - Dynamic US Large Cap Value ETF		0.49%
BrandywineGLOBAL - U.S. Fixed Income ETF		0.39%

b. Administrative Fees

Under an agreement with Advisers, FT Services provides administrative services to the Fund. The fee is paid by Advisers based on the Funds’ average daily net assets, and is not an additional expense of the Fund.

c. Other Affiliated Transactions

At September 30, 2023, the shares of the Fund is owned by the following entity.



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FRANKLIN TEMPLETON ETF TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

3. Transactions with Affiliates (continued)

c. Other Affiliated Transactions (continued)



Funds	Shares		Percentage of Outstanding Shares^a

BrandywineGLOBAL - U.S. Fixed Income ETF
Franklin Resources Inc.		100,000		20.0%

^a Investment activities of significant shareholders could have a material impact on the Funds.

4. Income Taxes

For tax purposes, capital losses may be carried over to offset future capital gains. At March 31, 2023, there were no capital loss carryforwards.

At September 30, 2023, the cost of investments, net unrealized appreciation (depreciation) and undistributed ordinary income for income tax purposes were as follows:



	BrandywineGLOBAL - Dynamic US Large Cap Value ETF			BrandywineGLOBAL - U.S. Fixed Income ETF
Cost of investments		$139,930,031			$12,448,093

Unrealized appreciation		$ 10,236,910			$ —
Unrealized depreciation		(6,347,043	)		(787,458	)

Net unrealized appreciation (depreciation)		$ 3,889,867			$ (787,458	)

5. Investment Transactions

Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the period ended September 30, 2023, were as follows:



	BrandywineGLOBAL - Dynamic US Large Cap Value ETF		BrandywineGLOBAL - U.S. Fixed Income ETF
Purchases		$77,424,717		$13,183,528
Sales		$68,918,074		$984,164

6. Fair Value Measurements

The Funds follow a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Funds’ own market assumptions (unobservable inputs). These inputs are used in determining the value of the Funds’ financial instruments and are summarized in the following fair value hierarchy:

•

Level 1 – quoted prices in active markets for identical financial instruments

•

Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)

•

Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of financial instruments)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.



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FRANKLIN TEMPLETON ETF TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

6. Fair Value Measurements (continued)

A summary of inputs used as of September 30, 2023, in valuing the Funds’ assets and liabilities carried at fair value, is as follows:



	Level 1		Level 2		Level 3		Total

BrandywineGLOBAL - Dynamic US Large Cap Value ETF

Assets:
Investments in Securities:^a
Equity Investments^b	$	141,283,544	$	—	$	—	$	141,283,544
Short-Term Investments		2,536,354		—		—		2,536,354

Total Investments in Securities	$	143,819,898	$	—	$	—	$	143,819,898


BrandywineGLOBAL - U.S. Fixed Income ETF

Assets:
Investments in Securities:^a
Corporate Bonds & Notes	$	—	$	442,615	$	—	$	442,615
Mortgage-Backed Securities		—		2,417,341		—		2,417,341
U.S. Government & Agency Securities		—		8,531,914		—		8,531,914
Short-Term Investments		268,765		—		—		268,765

Total Investments in Securities	$	268,765	$	11,391,870	$	—	$	11,660,635

^a For detailed categories, see the accompanying Schedules of Investments.

^b Includes common stocks.

7. New Accounting Pronouncements

In June 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-03, Fair Value Measurement (Topic 820) - Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in the ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, should not be considered in measuring fair value. The ASU is effective for interim and annual reporting periods beginning after December 15, 2023, with the option of early adoption. Management has reviewed the requirements and concluded that the adoption of this ASU does not have a material impact on the financial statements. As permitted Management has elected to early adopt the provisions.

8. Subsequent Events

The Funds has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.

Abbreviations


Selected Portfolio
REIT		Real Estate Investment Trust



28	Semiannual Report	franklintempleton.com

Shareholder Information

Board Approval of Investment Management Agreements

FRANKLIN TEMPLETON ETF TRUST

BrandywineGLOBAL – U.S. Fixed Income ETF

(Fund)

At a meeting held on March 3, 2023 (Meeting), the Board of Trustees (Board) of Franklin Templeton ETF Trust (Trust), including a majority of the trustees who are not “interested persons” as defined in the Investment Company Act of 1940 (Independent Trustees), reviewed and approved (i) an investment management agreement between Franklin Advisers, Inc. (FAV) and the Trust; and (ii) an investment sub-advisory agreement between FAV and Brandywine Global Investment Management, LLC (BrandywineGlobal), on behalf of the Fund, for an initial two-year period (each a Management Agreement). The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve each Management Agreement. FAV and BrandywineGlobal are each referred to herein as a Manager.

In considering the approval of each Management Agreement, the Board reviewed and considered information provided by each Manager at the Meeting and throughout the year at meetings of the Board and its committees. The Board reviewed and considered all of the factors it deemed relevant in approving each Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services to be provided by each Manager; (ii) the costs of the services to be provided by each Manager; and (iii) the extent to which economies of scale may be realized as the Fund grows. The Board also reviewed and considered the form of the Management Agreement and the terms of the Management Agreement which were explained at the Meeting. The Board noted that FAV would provide general investment management and administrative services and that the Fund would operate under a unified management fee structure whereby FAV would reimburse the Fund for all acquired fund fees and expenses and pay all of the ordinary operating expenses of the Fund, except for certain excluded items (Unified Fee). The Board also noted that the Unified Fee was consistent with the current management fee structure for the existing Franklin Templeton (FT) exchange-traded funds.

In approving each Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of the proposed Management Agreements are fair and reasonable and that such Management Agreements are in the best interests of the Fund and its

shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.

Nature, Extent and Quality of Services

The Board reviewed and considered information regarding the nature, extent and quality of investment management services to be provided by the applicable Managers and their affiliates to the Fund and its shareholders. This information included, among other things, the Fund’s proposed investment strategies and the ability of the applicable Managers to implement such investment strategies; the qualifications, background and experience of the investment personnel that will be responsible for the day-to-day portfolio management of the Fund; each Manager’s experience as the Manager of other funds and accounts, including other series of the Trust and other funds in the FT family of funds; each Manager’s strength and reputation within the industry; the personnel, operations, financial condition, and investment management capabilities, methodologies and resources of each Manager; and each Manager’s compliance capabilities, as demonstrated by, among other things, its policies and procedures reasonably designed to prevent violations of the Federal Securities Laws (as defined in Rule 38a-1 of the Investment Company Act of 1940). Following consideration of such information, the Board was satisfied with the nature, extent and quality of services to be provided by each Manager and its affiliates to the Fund and its shareholders.

Fund Performance

The Board noted that, as the Fund had not yet commenced investment operations, there was no investment performance for the Fund. The Board also considered the proposed performance benchmark for the Fund and how such benchmark would be utilized to measure performance of each Manager.

Comparative Fees and Expenses

The Board reviewed and considered information regarding the Fund’s proposed total expense ratio, noting that the Fund will pay a Unified Fee. The Board considered the proposed total expense ratio and, separately, the proposed contractual management fee rate, without the effect of fee waivers, if any (Management Rate) of the Fund in comparison to the median expense ratio and median Management Rate, respectively, of other exchange-traded funds deemed comparable to and with a similar expense structure as the Fund (Expense Group) as selected by Broadridge Financial Solutions, Inc. (Broadridge), an independent provider of investment company data. Broadridge fee and expense data



franklintempleton.com	Semiannual Report	29

is based upon information taken from each fund’s most recent annual report (excluding the Fund), which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios and Management Rates generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Broadridge to be an appropriate measure of comparative fees and expenses. The Broadridge Management Rate includes administrative charges. The Board received a description of the methodology used by Broadridge to select the exchange-traded funds included in the Expense Group.

The Expense Group for the Fund was comprised of actively managed exchange-traded funds, which included the Fund and five core bond funds. The Board noted that the proposed Management Rate and estimated total expense ratio for the Fund were above the median of its Expense Group. The Board further noted that pursuant to the proposed Unified Fee arrangement FAV would reimburse the Fund for all of its acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, except for (i) the Fund’s Unified Fee, (ii) payments under the Fund’s Rule 12b-1 plan (if any), (iii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments), (iv) taxes, (v) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), (vi) litigation expenses (including litigation to which the Trust or the Fund may be a party and indemnification of the Trustees and officers with respect thereto), and (vii) other non-routine or extraordinary expenses. The Board also noted that BrandywineGlobal would be paid by FAV out of the Unified Fee FAV receives from the Fund and that the allocation of the fee between FAV and BrandywineGlobal reflected the services provided by BrandywineGlobal to the Fund. After consideration of the above, the Board concluded that the Management Rate to be charged to the Fund and the sub-advisory fee to be paid to BrandywineGlobal are reasonable.

Profitability

The Board noted that the Managers (and their affiliates) could not report any financial results from their relationships with the Fund because the Fund has not yet commenced investment operations, and thus, the Board could not evaluate each Manager’s (or its affiliates’) profitability with respect to the Fund.

Economies of Scale

The Board reviewed and considered the extent to which each Manager may realize economies of scale, if any, as the Fund grows larger and whether the Fund’s management fee structure reflects any economies of scale for the benefit of shareholders. With respect to possible economies of scale in the future, the Board noted that it is not anticipated that the Fund will generate significant, if any, profit for the Managers and/or their affiliates for some time.

Conclusion

Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved each Management Agreement for the Fund for an initial two-year period.

Liquidity Risk Management Program – In-Kind ETFs

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



30	Semiannual Report	franklintempleton.com

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 2023, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program for the year ended December 31, 2022. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP, including the Highly Liquid Investment Minimum (“HLIM”) where applicable, was implemented and operated effectively and achieved the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund.

Proxy Voting Policies and Procedures

The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at

franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.

Quarterly Schedule of Investments

The Trust files a complete schedule of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year as an exhibit to its report on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.

Premium/Discount Information

Information about the differences between the daily market price on the secondary market for the shares of each Fund and each Fund’s net asset value may be found on each Fund’s website at franklintempleton.com.



franklintempleton.com	Semiannual Report	31

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