SEMIANNUAL REPORT
FRANKLIN TEMPLETON
ETF TRUST
September 30, 2022
Franklin Emerging Market Core Dividend Tilt Index ETF |
Formerly, Franklin LibertyQ Emerging Markets ETF |
Franklin International Core Dividend Tilt Index ETF |
Formerly, Franklin LibertyQ International Equity Hedged ETF |
Franklin U.S. Core Dividend Tilt Index ETF |
Formerly, Franklin LibertyQ Global Dividend ETF |
Franklin U.S. Large Cap Multifactor Index ETF |
Formerly, Franklin LibertyQ U.S. Equity ETF |
Franklin U.S. Mid Cap Multifactor Index ETF |
Formerly, Franklin LibertyQ U.S. Mid Cap Equity ETF |
Franklin U.S. Small Cap Multifactor Index ETF |
Formerly, Franklin LibertyQ U.S. Small Cap Equity ETF |
Not FDIC Insured | | | May Lose Value | | | No Bank Guarantee |
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SEMIANNUAL REPORT
Global developed and emerging market equities, as measured by the MSCI All Country World Index-NR (net of tax withholding when dividends are paid), posted a -21.41% total return for the six months ended September 30, 2022.1 Supply-chain disruptions and volatile prices for energy and commodities contributed to higher inflation in many countries. This inflationary pressure led many of the world’s central banks to adopt less accommodative stances regarding monetary policy. New lockdowns imposed by China’s government to quell the spread of the Omicron variant of COVID-19 pressured Asian and global emerging market stocks. Geopolitical instability disrupted financial markets amid the ongoing war in Ukraine and international sanctions on Russia, adding to investor uncertainty about the trajectory of the global economy.
U.S. equities, as measured by the Standard & Poor’s® 500 Index, posted a -20.20% total return for the six months ended September 30, 2022.1 Elevated inflation was a major concern for both consumers and investors, as inflation accelerated in June 2022 to the highest rate since 1981. Continued supply-chain disruptions, strong consumer demand, and volatile energy prices drove inflation higher. Russia’s invasion of Ukraine also disrupted financial markets and led to a rise in oil and commodity prices, although much of that increase abated by period-end. The unemployment rate declined marginally from 3.6% in March 2022 to 3.5% in September 2022 as notable employment gains occurred in the leisure and hospitality and health care sectors. Wage growth remained strong throughout the period, adding to some investors’ inflation concerns.
U.S. gross domestic product contracted in the second quarter of 2022, with the economy technically entering a recession, amid lower investments in inventories and fixed assets. An inventory drawdown, declining residential and business investment and lower levels of government spending contributed to the economic slowdown. Rising interest rates translated to higher borrowing costs for individuals and businesses, which dampened economic activity. Mortgage rates reached the highest level since 2007, and new home construction slowed toward period-end. In an effort to control inflation, the U.S. Federal Reserve (Fed) continued to raise the federal funds target rate. The Fed raised the federal funds rate at each of its four meetings during the period to end at a range of 3.00%–3.25%. The Fed noted in its September 2022 meeting that inflation remained elevated amid robust job growth and low unemployment. Furthermore,
the Fed said it would continue to reduce its bond holdings, and Fed Chair Jerome Powell indicated that reducing inflation was likely to require a period of below-trend growth.
Economies in the eurozone maintained a slow growth rate in the second quarter of 2022 as the easing of COVID-related restrictions and a strong start to the summer tourism season increased household spending. The war in Ukraine contributed to record high inflation across the eurozone as commodity and oil prices soared. The European Central Bank raised interest rates in July 2022 for the first time in more than a decade, increasing rates again at its subsequent meeting in September, to fight growing inflation. In this environment, European developed market equities, as measured by the MSCI Europe Index-NR, posted a -23.17% total return for the six months under review.1
Asian developed and emerging market equities, as measured by the MSCI All Country Asia Index-NR, posted a -21.45% total return for the six-month period.1 Japan’s economy expanded in the second quarter of 2022 as private consumption increased following the lifting of COVID-related restrictions and expansion of government spending. For the first time since 2020, China’s economy contracted in the second quarter, pressured by COVID-related restrictions and government measures to limit real estate speculation. Unexpected regulatory changes by China’s government, which negatively impacted technology-related businesses, and investor concerns about the solvency of several large property developers in China further pressured stocks in that country.
Global emerging market stocks, as measured by the MSCI Emerging Markets Index-NR, posted a -21.70% total return for the six months under review.1 Following Russia’s invasion of Ukraine, climbing food and energy prices kindled inflationary pressures, which, combined with a strong U.S. dollar, raised concerns over the possibility of government debt defaults in some countries. Rising U.S. interest rates led investors to sell off many holdings in emerging markets, including the major markets of India, South Korea and Taiwan.
The foregoing information reflects our analysis and opinions as of September 30, 2022. The information is not a complete analysis of every aspect of any market, country, industry, security or fund. Statements of fact are from sources considered reliable.
1. Source: Morningstar.
See www.franklintempletondatasources.com for additional data provider information.
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Franklin Emerging Market Core Dividend Tilt Index ETF
Formerly, Franklin LibertyQ Emerging Markets ETF
This semiannual report for Franklin Emerging Market Core Dividend Tilt Index ETF covers the period ended September 30, 2022. Effective August 1, 2022, Franklin LibertyQ Emerging Markets ETF changed its name to Franklin Emerging Market Core Dividend Tilt Index ETF. The Fund also changed its ticker symbol, underlying index, investment universe, investment goal and strategy, distribution frequency and reduced its unified management fee.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Morningstar® Emerging Markets Dividend Enhanced Select IndexSM (the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the Underlying Index and in depositary receipts representing such securities. The Underlying Index is based on the Morningstar® Emerging Markets Target Market Exposure Index (the Parent Index), and is constructed by applying an optimization process to the Parent Index that aims to deliver a higher dividend yield than the Parent Index, while limiting expected tracking error to the Parent Index (i.e., to provide a “dividend tilt” through the selection and weighting of securities from the Parent Index). The Parent Index includes large- and mid-capitalization stocks representing the top 85% of emerging markets equity markets by float-adjusted market capitalization (“float-adjusted” means that only shares that are estimated to be publicly available to investors are included in the calculation of market capitalization).
Geographic Composition* | ||||
9/30/22 | ||||
% of Total Net Assets |
||||
Asia |
72.6% | |||
Latin America & Caribbean |
11.9% | |||
Middle East & Africa |
10.2% | |||
North America |
2.8% | |||
Europe |
1.9% | |||
Other Net Assets |
0.6% |
*Figures are stated as a percentage of total and may not equal 100% or may be negative due to rounding, use of any derivatives, unsettled trades or other factors.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of -23.78% based on market price and -23.72% based on net asset value (NAV).
On August 1, 2022, the Fund changed its underlying index from the LibertyQ Emerging Markets Index-NR to the Morningstar® Emerging Markets Dividend Enhanced Select IndexSM, which commenced calculation and publication on June 17, 2022. For the period from June 17, 2022, through September 30, 2022, the new Underlying Index posted a cumulative total return of -15.31%.2 For the six-month period under review, the Blended Morningstar® Emerging Markets Dividend Enhanced Select Index-NR, which measures the performance of the old underlying index through July 31, 2022, followed by the performance of the new Underlying Index, posted a -23.51% cumulative total return.2
The Parent Index posted a cumulative total return of -20.51% for the six-month period.2 The Blended Morningstar® Emerging Markets Target Market Exposure Index-NR, which measures the performance of the old primary benchmark, the MSCI Emerging Markets (EM) Index-NR, through July 31, 2022, followed by the performance of the Parent Index, posted a -20.79% cumulative total return for the same period.2 The MSCI EM Index-NR posted a -21.70% cumulative total return for the six-month period.3 The Underlying Index replaced the MSCI EM Index-NR as the Fund’s primary benchmark effective August 1, 2022 to more accurately reflect the Fund’s new investment strategy.
You can find more of the Fund’s performance data in the Performance Summary beginning on page 5.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
1. The Morningstar® Emerging Markets Dividend Enhanced Select IndexSM is a systematic, rules-based proprietary index that is maintained and calculated by Morningstar, Inc.
2. Source: FactSet.
3. Source: Morningstar.
The indexes are unmanaged and include reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Returns (NR) include income net of tax withholding when dividends are paid.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Schedule of Investments (SOI). The SOI begins on page 35.
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FRANKLIN EMERGING MARKET CORE DIVIDEND TILT INDEX ETF
Top 10 Sectors/Industries | ||||
9/30/22 | ||||
% of Total Net Assets |
||||
Banks |
17.5% | |||
Semiconductors & Semiconductor Equipment |
9.0% | |||
Oil, Gas & Consumable Fuels |
7.0% | |||
Metals & Mining |
5.9% | |||
Technology Hardware, Storage & Peripherals |
5.5% | |||
Internet & Catalog Retail |
4.9% | |||
Insurance |
4.4% | |||
Interactive Media & Services |
3.8% | |||
IT Services |
3.6% | |||
Chemicals |
3.3% |
Investment Strategy
The Fund, using a passive or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the Underlying Index. The Fund may use either a replication strategy or representative sampling strategy. The Fund’s portfolio is generally reconstituted quarterly following the quarterly reconstitution of the Underlying Index.
The Fund may invest in equity futures and equity total return swaps and enter into foreign currency forward contracts and/or currency futures contracts to provide the Fund with additional opportunities to add value and better track the performance of the Fund’s Underlying Index.
Top 10 Holdings | ||||
9/30/22 | ||||
Company Sector/Industry, Country |
% of Total Net Assets |
|||
Taiwan
Semiconductor Manufacturing Co. Ltd. Semiconductors & Semiconductor Equipment, Taiwan |
4.6% | |||
Samsung
Electronics Co. Ltd. Technology Hardware, Storage & Peripherals, South Korea |
3.1% | |||
Tencent
Holdings Ltd. Interactive Media & Services, China |
3.0% | |||
Alibaba Group
Holding Ltd., A Internet & Catalog Retail, China |
2.4% | |||
Infosys
Ltd. IT Services, India |
1.6% | |||
China
Construction Bank Corp., H Banks, China |
1.6% | |||
Meituan
Dianping, B, 144A Internet & Catalog Retail, China |
1.5% | |||
Vale
SA Metals & Mining, Brazil |
1.5% | |||
Petroleo
Brasileiro SA, 38.601%, pfd. Oil, Gas & Consumable Fuels, Brazil |
1.3% | |||
Industrial and
Commercial Bank of China Ltd., H Banks, China |
1.0% |
Top 10 Countries | ||||
9/30/22 | ||||
% of Total Net Assets |
||||
China |
29.9% | |||
Taiwan |
17.9% | |||
India |
11.5% | |||
South Korea |
9.5% | |||
Brazil |
6.5% | |||
South Africa |
5.1% | |||
Saudi Arabia |
2.9% | |||
Mexico |
2.7% | |||
Hong Kong |
2.4% | |||
Malaysia |
2.4% |
As of July 20, 2022, the Franklin Emerging Market Core Dividend Tilt Index ETF held Russian securities that were fair valued at zero. While Russian securities were removed from the Fund’s former underlying index and Russian securities are not included in the Fund’s new Underlying Index, as of July 20, 2022 the Fund has not been able to dispose of all such securities due to ongoing issues related to Russia’s invasion of Ukraine. The Fund will continue to monitor Russian related developments and will seek to dispose of such securities as soon as it is practicable.
Thank you for your participation in Franklin Emerging Market Core Dividend Tilt Index ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2022, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
CFA® is a trademark owned by CFA Institute.
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FRANKLIN EMERGING MARKET CORE DIVIDEND TILT INDEX ETF
Performance Summary as of September 30, 2022
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. Market Price returns typically are based upon the official closing price of the ETF’s shares. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (6/3/16), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/221
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
6-Month |
-23.72% | -23.78% | -23.72% | -23.78% | ||||||||||||
1-Year |
-27.49% | +27.80% | -27.49% | +27.80% | ||||||||||||
5-Year |
-16.06% | -16.98% | -5.67% | -4.20% | ||||||||||||
Since Inception (6/1/16) |
+2.55% | +1.25% | +0.40% | +0.20% |
Distribution Rate5 | 30-Day Standardized Yield6 | |||
12.34% |
6.83% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 6 for Performance Summary footnotes.
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FRANKLIN EMERGING MARKET CORE DIVIDEND TILT INDEX ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
Net Investment
Income
$0.988041 |
Total Annual Operating Expenses7
0.19% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in emerging markets involve heightened risks related to the same factors. To the extent the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. Dividends may fluctuate and a company may reduce or eliminate its dividend at any time. The Fund might not always include dividend paying companies, in attempt to reduce tracking error. The Fund may experience tracking error and may not closely track the Underlying Index for various reasons. Performance of the Fund may vary significantly from the performance of an index as a result of transaction costs, expenses and other factors. There can be no assurance that the Underlying Index’s calculation methodology or sources of information will provide an accurate assessment of included issuers or that the included issuers will provide the Fund with the market exposure it seeks. Securities issued by mid capitalization companies may be more volatile in price than those of larger companies, involve substantial risks and should be considered speculative. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
Russia’s military invasion of Ukraine in February 2022, the resulting responses by the United States and other countries, and the potential for wider conflict could increase volatility and uncertainty in the financial markets and adversely affect regional and global economies. The United States and other countries have imposed broad-ranging economic sanctions on Russia and certain Russian individuals, banking entities and corporations as a response to its invasion of Ukraine. The United States and other countries have also imposed economic sanctions on Belarus and may impose sanctions on other countries that support Russia’s military invasion. These sanctions, as well as any other economic consequences related to the invasion, such as additional sanctions, boycotts or changes in consumer or purchaser preferences or cyberattacks on governments, companies or individuals, may further decrease the value and liquidity of certain Russian securities and securities of issuers in other countries that are subject to economic sanctions related to the invasion. To the extent that the Fund has exposure to Russian investments or investments in countries affected by the invasion, the Fund’s ability to price, buy, sell, receive or deliver such investments may be impaired. The Fund could determine at any time that certain of the most affected securities have zero value. In addition, any exposure that the Fund may have to counterparties in Russia or in countries affected by the invasion could negatively impact the Fund’s portfolio. The extent and duration of Russia’s military actions and the repercussions of such actions (including any retaliatory actions or countermeasures that may be taken by those subject to sanctions) are impossible to predict, but could result in significant market disruptions, including in the oil and natural gas markets, and may negatively affect global supply chains, inflation and global growth. These and any related events could significantly impact the Fund’s performance and the value of an investment in the Fund, even beyond any direct exposure the Fund may have to Russian issuers or issuers in other countries affected by the invasion.
ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns.
1. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
2. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/22.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Management fees have been restated to reflect current fiscal year fees as a result of a decrease in the Fund’s contractual management fee rate effective August 1, 2022. If the management fees were not restated to reflect such decrease in fees, the amounts shown above would be greater. Consequently, the Fund’s total annual Fund operating expenses differ from the ratio of expenses to average net assets shown in the Financial Highlights.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN EMERGING MARKET CORE DIVIDEND TILT INDEX ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
Beginning Account Value 4/1/22 |
Ending Account Value 9/30/22 |
Expenses Paid During Period 4/1/22–9/30/221,2 |
Ending Account Value 9/30/22 |
Expenses Paid During Period 4/1/22–9/30/221,2 |
Net Annualized Expense Ratio2 |
|||||||||||||||||
$1,000.00 | $ | 762.80 | $ | 1.64 | $ | 1,023.21 | $ | 1.88 | 0.37 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2. Effective August 1, 2022, the unified management fee was reduced from 0.45% to 0.19%. Had the new unified management fee been in effect for the full period, the expenses paid would have been $0.84 based upon the Fund’s actual performance and $0.96 based upon a hypothetical 5% return.
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Franklin International Core Dividend Tilt Index ETF
Formerly, Franklin LibertyQ International Equity Hedged ETF
This semiannual report for Franklin International Core Dividend Tilt Index ETF covers the period ended September 30, 2022. Effective August 1, 2022, Franklin LibertyQ International Equity Hedged ETF changed its name to Franklin International Core Dividend Tilt Index ETF. The Fund also changed its ticker symbol, underlying index, investment universe, distribution frequency, investment goal and strategy and reduced its unified management fee.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Morningstar® Developed Markets ex-North America Dividend Enhanced Select IndexSM (the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the Underlying Index and in depositary receipts representing such securities. The Underlying Index is based on the Morningstar® Developed Markets ex-North America Target Market Exposure Index (the Parent Index) and is constructed by applying an optimization process to the Parent Index that aims to deliver a higher dividend yield than the Parent Index, while limiting expected tracking error to the Parent Index (i.e., to provide a “dividend tilt” through the selection and weighting of securities from the Parent Index). The Parent Index includes large- and mid-capitalization stocks representing the top 85% of developed markets equity markets excluding North America by float-adjusted market capitalization (“float-adjusted” means that only shares that are estimated to be publicly available to investors are included in the calculation of market capitalization).
Geographic Composition* | ||||
9/30/22 | ||||
% of Total Net Assets |
||||
Europe |
59.0% | |||
Asia |
28.7% | |||
Australia & New Zealand |
10.5% | |||
North America |
0.6% | |||
Middle East & Africa |
0.5% | |||
Other Net Assets |
0.7% |
*Figures are stated as a percentage of total and may not equal 100% or may be negative due to rounding, use of any derivatives, unsettled trades or other factors.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of -16.72% based on market price and -16.78% based on net asset value (NAV).
On August 1, 2022, the Fund changed its underlying index from the LibertyQ International Equity Hedged Index-NR to the Morningstar® Developed Markets ex-North America Dividend Enhanced Select IndexSM, which commenced calculation and publication on June 17, 2022. For the period from June 17, 2022, through September 30, 2022, the new Underlying Index posted a cumulative total return of -9.57%.2 For the six-month period under review, the Blended Morningstar® Developed Markets ex-North America Dividend Enhanced Select Index-NR, which measures the performance of the old underlying index through July 31, 2022, followed by the performance of the new Underlying Index, posted a -16.48% cumulative total return.2
The Parent Index posted a cumulative total return of -22.51% for the six-month period.2 The Blended Morningstar® Developed Markets ex-North America Target Market Exposure Index-NR, which measures the performance of the old primary benchmark, MSCI Europe, Australasia and the Far East (EAFE) 100% Hedged to USD Index-NR, through July 31, 2022, followed by the performance of the Parent Index,
1. The Morningstar® Developed Markets ex-North America Dividend Enhanced Select Index is a systematic, rules-based proprietary index that is maintained and calculated by Morningstar, Inc.
2. Source: FactSet.
3. Source: Morningstar.
The indexes are unmanaged and include reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Returns (NR) include income net of tax withholding when dividends are paid.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Schedule of Investments (SOI). The SOI begins on page 48.
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FRANKLIN INTERNATIONAL CORE DIVIDEND TILT INDEX ETF
posted a -15.70% cumulative total return for the same period.2 The MSCI EAFE 100% Hedged to USD Index-NR posted a -9.89% cumulative total return for the six-month period.3 The Underlying Index replaced the MSCI EAFE 100% Hedged to USD Index-NR as the Fund’s primary benchmark to more accurately reflect the Fund’s new investment strategy.
You can find more of the Fund’s performance data in the Performance Summary beginning on page 11.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Top 10 Sectors/Industries | ||||
9/30/22 | ||||
% of Total Net Assets |
||||
Pharmaceuticals |
10.8% | |||
Banks |
10.5% | |||
Insurance |
6.6% | |||
Metals & Mining |
5.0% | |||
Automobiles |
4.2% | |||
Semiconductors & Semiconductor Equipment |
3.6% | |||
Oil, Gas & Consumable Fuels |
3.2% | |||
Electric Utilities |
3.2% | |||
Food Products |
2.8% | |||
Textiles, Apparel & Luxury Goods |
2.7% |
Investment Strategy
The Fund, using a passive or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the Underlying Index. The Fund may use either a replication strategy or representative sampling strategy. The Fund’s portfolio is generally reconstituted quarterly following the quarterly reconstitution of the Underlying Index.
The Fund may invest in equity futures and equity total return swaps and enter into foreign currency forward contracts and/or currency futures contracts to provide the Fund with additional opportunities to add value and better track the performance of the Fund’s Underlying Index.
Top 10 Holdings | ||||
9/30/22 | ||||
Company Sector/Industry, Country |
% of Total Net Assets |
|||
Nestle
SA Food Products, Switzerland |
2.4% | |||
Novartis
AG Pharmaceuticals, Switzerland |
1.9% | |||
BHP Group
Ltd. Metals & Mining, Australia |
1.6% | |||
ASML Holding
NV Semiconductors & Semiconductor Equipment, Netherlands |
1.6% | |||
Roche Holding
AG, Non-Voting Pharmaceuticals, Switzerland |
1.5% | |||
AstraZeneca
PLC Pharmaceuticals, United Kingdom |
1.4% | |||
Novo Nordisk
AS, B Pharmaceuticals, Denmark |
1.4% | |||
LVMH Moet
Hennessy Louis Vuitton SE Textiles, Apparel & Luxury Goods, France |
1.3% | |||
Toyota Motor
Corp. Automobiles, Japan |
1.2% | |||
British
American Tobacco PLC Tobacco, United Kingdom |
1.1% |
Top 10 Countries | ||||
9/30/22 | ||||
% of Total Net Assets |
||||
Japan |
24.1% | |||
United Kingdom |
12.7% | |||
Switzerland |
10.5% | |||
Australia |
10.2% | |||
France |
9.1% | |||
Germany |
7.9% | |||
Netherlands |
4.6% | |||
Hong Kong |
3.0% | |||
Italy |
2.8% | |||
Sweden |
2.5% |
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FRANKLIN INTERNATIONAL CORE DIVIDEND TILT INDEX ETF
Thank you for your participation in Franklin International Core Dividend Tilt Index ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2022, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
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FRANKLIN INTERNATIONAL CORE DIVIDEND TILT INDEX ETF
Performance Summary as of September 30, 2022
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. Market Price returns typically are based upon the official closing price of the ETF’s shares. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (6/3/16), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/221
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
6-Month |
-16.78% | -16.72% | -16.78% | -16.72% | ||||||||||||
1-Year |
-12.50% | -12.24% | -12.50% | -12.24% | ||||||||||||
5-Year |
+16.37% | +15.78% | +3.08% | +2.97% | ||||||||||||
Since Inception (6/1/16) |
+32.04% | +31.47% | +4.49% | +4.42% |
Distribution Rate5 | 30-Day Standardized Yield6 | |||
10.18% |
4.48% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page12 for Performance Summary footnotes.
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Semiannual Report |
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FRANKLIN INTERNATIONAL CORE DIVIDEND TILT INDEX ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
Net Investment Income |
Long-Term Capital Gain |
Total | ||||||
$1.139902 |
$0.466738 | $1.606640 |
Total Annual Operating Expenses7
0.09% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. To the extent the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. Dividends may fluctuate and a company may reduce or eliminate its dividend at any time. The Fund might not always include dividend paying companies, in attempt to reduce tracking error. The Fund may experience tracking error and may not closely track the Underlying Index various reasons. Performance of the Fund may vary significantly from the performance of an index as a result of transaction costs, expenses and other factors. There can be no assurance that the Underlying Index’s calculation methodology or sources of information will provide an accurate assessment of included issuers or that the included issuers will provide the Fund with the market exposure it seeks. Securities issued by mid capitalization companies may be more volatile in price than those of larger companies, involve substantial risks and should be considered speculative. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
Russia’s military invasion of Ukraine in February 2022, the resulting responses by the United States and other countries, and the potential for wider conflict could increase volatility and uncertainty in the financial markets and adversely affect regional and global economies. The United States and other countries have imposed broad-ranging economic sanctions on Russia and certain Russian individuals, banking entities and corporations as a response to its invasion of Ukraine. The United States and other countries have also imposed economic sanctions on Belarus and may impose sanctions on other countries that support Russia’s military invasion. These sanctions, as well as any other economic consequences related to the invasion, such as additional sanctions, boycotts or changes in consumer or purchaser preferences or cyberattacks on governments, companies or individuals, may further decrease the value and liquidity of certain Russian securities and securities of issuers in other countries that are subject to economic sanctions related to the invasion.
ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns.
1. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
2. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/22.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Management fees have been restated to reflect current fiscal year fees as a result of a decrease in the Fund’s contractual management fee rate effective August 1, 2022. If the management fees were not restated to reflect such decrease in fees, the amounts shown above would be greater. Consequently, the Fund’s total annual Fund operating expenses differ from the ratio of expenses to average net assets shown in the Financial Highlights.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN INTERNATIONAL CORE DIVIDEND TILT INDEX ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
Beginning Account Value 4/1/22 |
Ending Account Value 9/30/22 |
Expenses Paid During Period 4/1/22–9/30/221,2 |
Ending Account Value 9/30/22 |
Expenses Paid During Period 4/1/22–9/30/221,2 |
Net Annualized Expense Ratio2 |
|||||||||||||||||
$1,000.00 | $ | 832.20 | $ | 1.24 | $ | 1,023.72 | $ | 1.37 | 0.27 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2. Effective August 1, 2022, the unified management fee was reduced from 0.40% to 0.09%. Had the new unified management fee been in effect for the full period, the expenses paid would have been $0.41 based upon the Fund’s actual performance and $0.46 based upon a hypothetical 5% return.
franklintempleton.com |
Semiannual Report |
13 |
Franklin U.S. Core Dividend Tilt Index ETF
Formerly, Franklin LibertyQ Global Dividend ETF
This semiannual report for Franklin U.S. Core Dividend Tilt Index ETF covers the period ended September 30, 2022. Effective August 1, 2022, Franklin LibertyQ Global Dividend ETF changed its name to Franklin U.S. Core Dividend Tilt Index ETF. The Fund also changed its ticker, underlying index, investment universe, investment goal and strategy and reduced its unified management fee.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Morningstar® US Dividend Enhanced Select IndexSM (the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the Underlying Index. The Underlying Index is based on the Morningstar® US Target Market Exposure Index (the Parent Index) and is constructed by applying an optimization process to the Parent Index that aims to deliver a higher dividend yield than the Parent Index, while limiting expected tracking error to the Parent Index (i.e., to provide a “dividend tilt” through the selection and weighting of securities from the Parent Index). The Parent Index includes large- and mid-capitalization stocks representing the top 85% of the U.S. equity market by float-adjusted market capitalization (“float-adjusted” means that only shares that are estimated to be publicly available to investors are included in the calculation of market capitalization).
Geographic Composition* | ||||
9/30/22 | ||||
% of Total Net Assets |
||||
North America |
97.8% | |||
Europe |
1.7% | |||
Latin America & Caribbean |
0.2% | |||
Other Net Assets |
0.3% |
*Figures are stated as a percentage of total and may not equal 100% or may be negative due to rounding, use of any derivatives, unsettled trades or other factors.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of -20.01% based on market price and -20.14% based on net asset value (NAV).2
On August 1, 2022, the Fund changed its underlying index from the LibertyQ Global Dividend Index to the Morningstar® US Dividend Enhanced Select IndexSM, which commenced calculation and publication on June 17, 2022. For the period from June 17, 2022, through September 30, 2022, the new Underlying Index posted a cumulative total return of -3.05%.2 For the six-month period under review, the Blended Morningstar® US Dividend Enhanced Select Index, which measures the performance of the old underlying index through July 31, 2022, followed by the performance of the new Underlying Index, posted a -20.06% cumulative total return.2
The Parent Index posted a cumulative total return of -20.76% for the six-month period.2 The Blended Morningstar® US Target Market Exposure Index, which measures the performance of the old primary benchmark, the MSCI All Country World Index (ACWI) ex REITs Index-NR, through July 31, 2022, followed by the performance of the Parent Index, posted a -21.38% cumulative total return for the same period.2 The MSCI ACWI ex REITs Index-NR posted a -21.34% cumulative total return for the six-month period.2 The Underlying Index replaced the MSCI ACWI ex REITS Index-NR as the Fund’s primary benchmark to more accurately reflect the Fund’s new investment strategy.
You can find more of the Fund’s performance data in the Performance Summary beginning on page 16.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
1. The Morningstar US Dividend Enhanced Select IndexSM is a systematic, rules-based proprietary index that is maintained and calculated by Morningstar, Inc.
2. Source: FactSet.
The indexes are unmanaged and include reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Returns (NR) include income net of tax withholding when dividends are paid.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Schedule of Investments (SOI). The SOI begins on page 61.
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FRANKLIN U.S. CORE DIVIDEND TILT INDEX ETF
Top 10 Sectors/Industries | ||||
9/30/22 | ||||
% of Total Net Assets |
||||
Software |
8.8% | |||
Semiconductors & Semiconductor Equipment |
8.2% | |||
Technology Hardware, Storage & Peripherals |
7.6% | |||
Pharmaceuticals |
6.1% | |||
Banks |
5.4% | |||
Equity Real Estate Investment Trusts (REITs) |
5.3% | |||
Oil, Gas & Consumable Fuels |
5.0% | |||
Interactive Media & Services |
3.9% | |||
IT Services |
3.9% | |||
Internet & Direct Marketing Retail |
3.6% |
Investment Strategy
The Fund, using a passive or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the Underlying Index. The Fund may use either a replication strategy or representative sampling strategy. The Fund’s portfolio is generally reconstituted quarterly following the quarterly reconstitution of the Underlying Index.
The Fund may invest in equity futures and equity total return swaps to provide additional opportunities to add value and better track the performance of the Fund’s Underlying Index.
Top 10 Holdings | ||||
9/30/22 | ||||
Company Sector/Industry |
% of Total Net Assets |
|||
Apple
Inc. Information Technology |
7.1% | |||
Microsoft
Corp. Information Technology |
5.9% | |||
Amazon.com
Inc. Consumer Discretionary |
3.2% | |||
Tesla
Inc. Consumer Discretionary |
2.1% | |||
Johnson & Johnson Health Care |
1.9% | |||
Exxon Mobil
Corp. Energy |
1.6% | |||
Alphabet Inc.,
A Communication Services |
1.4% | |||
Alphabet Inc.,
C Information Technology |
1.3% | |||
UnitedHealth
Group Inc. Health Care |
1.3% | |||
AbbVie
Inc. Health Care |
1.3% |
As of July 20, 2022, the Franklin U.S. Core Dividend Tilt Index ETF held Russian securities that were fair valued at zero. While Russian securities were removed from the Fund’s former underlying index and Russian securities are not included in the Fund’s new Underlying Index, as of July 20, 2022 the Fund has not been able to dispose of all such securities due to ongoing issues related to Russia’s invasion of Ukraine. The Fund will continue to monitor Russian related developments and will seek to dispose of such securities as soon as it is practicable.
Thank you for your participation in Franklin U.S. Core Dividend Tilt Index ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2022, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
franklintempleton.com |
Semiannual Report |
15 |
FRANKLIN U.S. CORE DIVIDEND TILT INDEX ETF
Performance Summary as of September 30, 2022
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. Market Price returns typically are based upon the official closing price of the ETF’s shares. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (6/3/16), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/221
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
6-Month |
-20.14% | -20.01% | -20.14% | -20.01% | ||||||||||||
1-Year |
-14.56% | -14.69% | -14.56% | -14.69% | ||||||||||||
5-Year |
+18.74% | +18.21% | +3.49% | +3.40% | ||||||||||||
Since Inception (6/1/16) |
+37.21% | +37.17% | +5.12% | +5.12% |
Distribution Rate5 | 30-Day Standardized Yield6 | |||
3.15% |
2.62% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 17 for Performance Summary footnotes.
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FRANKLIN U.S. CORE DIVIDEND TILT INDEX ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
Net Investment Income |
$0.524014 |
Total Annual Operating Expenses7
0.06% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. To the extent the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas of focus than a fund that invests in a wider variety of industries, sectors or investments. Dividends may fluctuate and a company may reduce or eliminate its dividend at any time. The Fund might not always include dividend paying companies, in attempt to reduce tracking error. The Fund may experience tracking error and may not closely track the Underlying Index various reasons. Performance of the Fund may vary significantly from the performance of an index as a result of transaction costs, expenses and other factors. There can be no assurance that the Underlying Index’s calculation methodology or sources of information will provide an accurate assessment of included issuers or that the included issuers will provide the Fund with the market exposure it seeks. Securities issued by mid capitalization companies may be more volatile in price than those of larger companies, involve substantial risks and should be considered speculative. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
Russia’s military invasion of Ukraine in February 2022, the resulting responses by the United States and other countries, and the potential for wider conflict could increase volatility and uncertainty in the financial markets and adversely affect regional and global economies. The United States and other countries have imposed broad-ranging economic sanctions on Russia and certain Russian individuals, banking entities and corporations as a response to its invasion of Ukraine. The United States and other countries have also imposed economic sanctions on Belarus and may impose sanctions on other countries that support Russia’s military invasion. These sanctions, as well as any other economic consequences related to the invasion, such as additional sanctions, boycotts or changes in consumer or purchaser preferences or cyberattacks on governments, companies or individuals, may further decrease the value and liquidity of certain Russian securities and securities of issuers in other countries that are subject to economic sanctions related to the invasion. To the extent that the Fund has exposure to Russian investments or investments in countries affected by the invasion, the Fund’s ability to price, buy, sell, receive or deliver such investments may be impaired. The Fund could determine at any time that certain of the most affected securities have zero value. In addition, any exposure that the Fund may have to counterparties in Russia or in countries affected by the invasion could negatively impact the Fund’s portfolio. The extent and duration of Russia’s military actions and the repercussions of such actions (including any retaliatory actions or countermeasures that may be taken by those subject to sanctions) are impossible to predict, but could result in significant market disruptions, including in the oil and natural gas markets, and may negatively affect global supply chains, inflation and global growth. These and any related events could significantly impact the Fund’s performance and the value of an investment in the Fund, even beyond any direct exposure the Fund may have to Russian issuers or issuers in other countries affected by the invasion.
ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns.
1. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
2. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/22.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Management fees have been restated to reflect current fiscal year fees as a result of a decrease in the Fund’s contractual management fee rate effective August 1, 2022. If the management fees were not restated to reflect such decrease in fees, the amounts shown above would be greater. Consequently, the Fund’s total annual Fund operating expenses differ from the ratio of expenses to average net assets shown in the Financial Highlights.
See www.franklintempletondatasources.com for additional data provider information.
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Semiannual Report |
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FRANKLIN U.S. CORE DIVIDEND TILT INDEX ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
Beginning Account Value 4/1/22 |
Ending Account Value 9/30/22 |
Expenses Paid During Period 4/1/22–9/30/221,2 |
Ending Account Value 9/30/22 |
Expenses Paid During Period 4/1/22–9/30/221,2 |
Net Annualized Expense Ratio2 |
|||||||||||||||||
$1,000.00 | $ | 798.60 | $ | 1.35 | $ | 1,023.56 | $ | 1.52 | 0.30 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
2. Effective August 1, 2022, the unified management fee was reduced from 0.45% to 0.06%. Had the new unified management fee been in effect for the full period, the expenses paid would have been $0.27 based upon the Fund’s actual performance and $0.30 based upon a hypothetical 5% return.
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Franklin U.S. Large Cap Multifactor Index ETF
Formerly, Franklin LibertyQ U.S. Equity ETF
This semiannual report for Franklin U.S. Large Cap Multifactor Index ETF covers the period ended September 30, 2022. Effective August 1, 2022, Franklin LibertyQ U.S. Equity ETF changed its name to Franklin U.S. Large Cap Multifactor Index ETF.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ U.S. Large Cap Equity Index (the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the Underlying Index. The Underlying Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the Russell 1000® Index over the long term by applying a multi-factor selection process, which is designed to select equity securities from the Russell 1000® Index that have favorable exposure to three investment style factors: quality, value and momentum.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of -17.61% based on market price and -17.61% based on net asset value (NAV). In comparison, the LibertyQ U.S. Large Cap Equity Index posted a -17.56% cumulative total return for the same period, while the Russell 1000® Index posted a -20.51% cumulative total return.2
You can find more of the Fund’s performance data in the Performance Summary beginning on page 21.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Top 10 Sectors/Industries | ||||
9/30/22 | ||||
% of Total Net Assets |
||||
Information Technology |
31.8% | |||
Health Care |
20.2% | |||
Consumer Discretionary |
11.6% | |||
Energy |
7.8% | |||
Industrials |
7.5% | |||
Consumer Staples |
5.9% | |||
Communication Services |
5.2% | |||
Financials |
4.3% | |||
Real Estate |
2.6% | |||
Materials |
1.8% |
Investment Strategy
The Fund, using a passive or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the Underlying Index. The Fund may use either a replication strategy or representative sampling strategy. The Fund’s portfolio is reconstituted quarterly following the quarterly reconstitution of the Underlying Index.
The Fund may invest in equity futures and equity total return swaps to provide additional opportunities to add value and better track the performance of the Fund’s Underlying Index.
1. Frank Russell Company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. The LibertyQ U.S. Large Cap Equity Index is a systematic, rules-based proprietary index maintained and calculated by FTSE Russell (Russell) based on the Russell 1000® Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. Russell 1000® Index is market capitalization weighted and measures performance of the largest companies in the Russell 3000® Index, which represents the majority of the U.S. market’s total capitalization.
2. Source: FactSet.
The indexes are unmanaged and include reinvestment of any income or distributions (after the deduction of certain withholding taxes). They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Schedule of Investments (SOI). The SOI begins on page 69.
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FRANKLIN U.S. LARGE CAP MULTIFACTOR INDEX ETF
Top 10 Holdings | ||||
9/30/22 | ||||
Company Sector/Industry |
% of Total Net Assets |
|||
Apple
Inc. Information Technology |
7.2% | |||
Microsoft
Corp. Information Technology |
5.3% | |||
Amazon.com
Inc. Consumer Discretionary |
2.0% | |||
Eli
Lilly & Co. Health Care |
1.9% | |||
Tesla
Inc. Consumer Discretionary |
1.9% | |||
Chevron
Corp. Energy |
1.8% | |||
AbbVie
Inc. Health Care |
1.7% | |||
Pfizer
Inc. Health Care |
1.7% | |||
Merck & Co. Inc. Health Care |
1.7% | |||
UnitedHealth
Group Inc. Health Care |
1.7% |
Thank you for your participation in Franklin U.S. Large Cap Multifactor Index ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2022, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
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FRANKLIN U.S. LARGE CAP MULTIFACTOR INDEX ETF
Performance Summary as of September 30, 2022
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. Market Price returns typically are based upon the official closing price of the ETF’s shares. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (4/28/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/221
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
6-Month |
-17.61% | -17.61% | -17.61% | -17.61% | ||||||||||||
1-Year |
-11.53% | -11.42% | -11.53% | -11.42% | ||||||||||||
5-Year |
+50.63% | +50.86% | +8.54% | +8.57% | ||||||||||||
Since Inception (4/26/17) |
+59.49% | +59.61% | +8.98% | +8.99% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 22 for Performance Summary footnotes.
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FRANKLIN U.S. LARGE CAP MULTIFACTOR INDEX ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
Net Investment Income |
$0.397917 |
Total Annual Operating Expenses5
0.15% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. To the extent the Fund concentrates in a specific industry or group of industries, the Fund will carry much greater risks of adverse developments and price movements in such industries than a fund that invests in a wider variety of industries; there is also the risk that the Fund will perform poorly during a slump in demand for securities of companies in such industries. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transactions costs, expenses and other factors. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
Russia’s military invasion of Ukraine in February 2022, the resulting responses by the United States and other countries, and the potential for wider conflict could increase volatility and uncertainty in the financial markets and adversely affect regional and global economies. The United States and other countries have imposed broad-ranging economic sanctions on Russia and certain Russian individuals, banking entities and corporations as a response to its invasion of Ukraine. The United States and other countries have also imposed economic sanctions on Belarus and may impose sanctions on other countries that support Russia’s military invasion. These sanctions, as well as any other economic consequences related to the invasion, such as additional sanctions, boycotts or changes in consumer or purchaser preferences or cyberattacks on governments, companies or individuals, may further decrease the value and liquidity of certain Russian securities and securities of issuers in other countries that are subject to economic sanctions related to the invasion.
ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns.
1. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
2. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN U.S. LARGE CAP MULTIFACTOR INDEX ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
Beginning Account Value 4/1/22 |
Ending Account Value 9/30/22 |
Expenses Paid During Period 4/1/22–9/30/221 |
Ending Account Value 9/30/22 |
Expenses Paid During Period 4/1/22–9/30/221 |
Net Annualized Expense Ratio |
|||||||||||||||||
$1,000.00 | $ | 823.90 | $ | 0.69 | $ | 1,024.32 | $ | 0.76 | 0.15 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
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Franklin U.S. Mid Cap Multifactor Index ETF
Formerly, Franklin LibertyQ U.S. Mid Cap Equity ETF
This semiannual report for Franklin U.S. Mid Cap Multifactor Index ETF covers the period ended September 30, 2022. Effective August 1, 2022, Franklin LibertyQ U.S. Mid Cap Equity ETF changed its name to Franklin U.S. Mid Cap Multifactor Index ETF.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ U.S. Mid Cap Equity Index (the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the Underlying Index. The Underlying Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the Russell Midcap® Index over the long term by applying a multi-factor selection process, which is designed to select equity securities from the Russell Midcap® Index that have favorable exposure to four investment style factors: quality, value, momentum and low volatility, subject to a maximum 1% per company weighting.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of -16.18% based on market price and -16.04% based on net asset value (NAV). In comparison, the LibertyQ U.S. Mid Cap Equity Index posted a -15.95% cumulative total return for the same period, while the Russell Midcap® Index posted a -19.71% cumulative total return for the same period.2
You can find more of the Fund’s performance data in the Performance Summary beginning on page 26.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Top 10 Sectors/Industries | ||||
9/30/22 | ||||
% of Total Net Assets |
||||
Information Technology |
20.0% | |||
Industrials |
17.7% | |||
Consumer Discretionary |
16.3% | |||
Health Care |
9.5% | |||
Financials |
9.3% | |||
Consumer Staples |
8.1% | |||
Materials |
6.3% | |||
Utilities |
5.6% | |||
Real Estate |
3.9% | |||
Communication Services |
2.5% |
Investment Strategy
The Fund, using a passive or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the Underlying Index. The Fund may use either a replication strategy or representative sampling strategy. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the Underlying Index.
The Fund may invest in equity futures and equity total return swaps to provide additional opportunities to add value and better track the performance of the Fund’s Underlying Index.
1. The LibertyQ U.S. Mid Cap Equity Index is a systematic, rules-based proprietary index that is maintained and calculated by FTSE Russell (Russell). It is based on the Russell Midcap® Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. Russell Midcap® Index is market capitalization weighted and measures performance of the smallest companies in the Russell 1000® Index, which represents a modest amount of the Russell 1000® Index’s total market capitalization.
2. Source: FactSet.
The indexes are unmanaged and include reinvestment of any income or distributions (after the deduction of certain withholding taxes). They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Schedule of Investments (SOI). The SOI begins on page 75.
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FRANKLIN U.S. MID CAP MULTIFACTOR INDEX ETF
Top 10 Holdings | ||||
9/30/22 | ||||
Company Sector/Industry |
% of Total Net Assets |
|||
Arista Networks
Inc. Information Technology |
1.3% | |||
O’Reilly
Automotive Inc. Consumer Discretionary |
1.3% | |||
ResMed
Inc. Health Care |
1.2% | |||
Cadence Design
Systems Inc. Information Technology |
1.2% | |||
Trane
Technologies PLC Industrials |
1.2% | |||
AutoZone
Inc. Consumer Discretionary |
1.2% | |||
The Hershey
Co. Consumer Staples |
1.2% | |||
Motorola
Solutions Inc. Information Technology |
1.2% | |||
W.W. Grainger
Inc. Industrials |
1.2% | |||
Tractor Supply
Co. Consumer Discretionary |
1.1% |
Thank you for your participation in Franklin U.S. Mid Cap Multifactor Index ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2022, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
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FRANKLIN U.S. MID CAP MULTIFACTOR INDEX ETF
Performance Summary as of September 30, 2022
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. Market Price returns typically are based upon the official closing price of the ETF’s shares. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (4/28/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/221
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
6-Month |
-16.04% | -16.18% | -16.04% | -16.18% | ||||||||||||
1-Year |
-13.32% | -13.42% | -13.32% | -13.42% | ||||||||||||
5-Year |
+54.90% | +54.79% | +9.15% | +9.13% | ||||||||||||
Since Inception (4/26/17) |
+57.79% | +57.79% | +8.75% | +8.76% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 27 for Performance Summary footnotes.
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FRANKLIN U.S. MID CAP MULTIFACTOR INDEX ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
Net Investment Income |
$0.279102 |
Total Annual Operating Expenses5
0.30% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Historically, mid-size company securities have been more volatile in price than larger company securities, especially over the short term. Mid-size companies may be more susceptible to particular economic events or competitive factors than are larger, more broadly diversified companies. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transactions costs, expenses and other factors. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
Russia’s military invasion of Ukraine in February 2022, the resulting responses by the United States and other countries, and the potential for wider conflict could increase volatility and uncertainty in the financial markets and adversely affect regional and global economies. The United States and other countries have imposed broad-ranging economic sanctions on Russia and certain Russian individuals, banking entities and corporations as a response to its invasion of Ukraine. The United States and other countries have also imposed economic sanctions on Belarus and may impose sanctions on other countries that support Russia’s military invasion. These sanctions, as well as any other economic consequences related to the invasion, such as additional sanctions, boycotts or changes in consumer or purchaser preferences or cyberattacks on governments, companies or individuals, may further decrease the value and liquidity of certain Russian securities and securities of issuers in other countries that are subject to economic sanctions related to the invasion.
ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns.
1. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
2. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN U.S. MID CAP MULTIFACTOR INDEX ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
Beginning Account Value 4/1/22 |
Ending Account Value 9/30/22 |
Expenses Paid During Period 4/1/22–9/30/221 |
Ending Account Value 9/30/22 |
Expenses Paid During Period 4/1/22–9/30/221 |
Net Annualized Expense Ratio |
|||||||||||||||||
$1,000.00 | $ | 839.60 | $ | 1.38 | $ | 1,023.56 | $ | 1.52 | 0.30 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
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Franklin U.S. Small Cap Multifactor Index ETF
Formerly, Franklin LibertyQ U.S. Small Cap Equity ETF
This semiannual report for Franklin U.S. Small Cap Multifactor Index ETF covers the period ended September 30, 2022. Effective August 1, 2022, Franklin LibertyQ U.S. Small Cap Equity ETF changed its name to Franklin U.S. Small Cap Multifactor Index ETF.
Your Fund’s Goal and Main Investments
The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the LibertyQ U.S. Small Cap Equity Index (the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the Underlying Index. The Underlying Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the Russell 2000® Index over the long term by applying a multi-factor selection process, which is designed to select equity securities from the Russell 2000® Index that have favorable exposure to four investment style factors: quality, value, momentum and low volatility, subject to a maximum 1% per company weighting.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of -16.83% based on market price and -16.74% based on net asset value (NAV). In comparison, the LibertyQ U.S. Small Cap Equity Index posted a -16.66% cumulative total return for the same period, while the Russell 2000® Index posted a -19.01% cumulative total return.2
You can find more of the Fund’s performance data in the Performance Summary beginning on page 31.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Top 10 Sectors/Industries | ||||
9/30/22 | ||||
% of Total Net Assets |
||||
Industrials |
21.4% | |||
Consumer Discretionary |
18.9% | |||
Information Technology |
11.8% | |||
Financials |
10.9% | |||
Health Care |
9.5% | |||
Utilities |
7.9% | |||
Consumer Staples |
6.4% | |||
Real Estate |
4.5% | |||
Materials |
3.6% | |||
Communication Services |
2.9% |
Investment Strategy
The Fund, using a passive or indexing investment approach, seeks investment results that closely correspond, before fees and expenses, to the performance of the Underlying Index. The Fund may use either a replication strategy or representative sampling strategy. The Fund’s portfolio is reconstituted semiannually following the semiannual reconstitution of the Underlying Index.
The Fund may invest in equity futures and equity total return swaps to provide additional opportunities to add value and better track the performance of the Fund’s Underlying Index.
1. The LibertyQ U.S. Small Cap Equity Index is a systematic, rules-based proprietary index that is maintained and calculated by FTSE Russell (Russell). It is based on the Russell 2000® Index using a methodology developed with Franklin Templeton to reflect Franklin Templeton’s desired investment strategy. Russell 2000® Index is market capitalization weighted and measures performance of the approximately 2,000 smallest companies in the Russell 3000® Index, which represent a small amount of the total market capitalization of the Russell 3000® Index.
2. Source: FactSet.
The indexes are unmanaged and include reinvestment of any income or distributions (after the deduction of certain withholding taxes). They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Schedule of Investments (SOI). The SOI begins on page 81.
franklintempleton.com |
Semiannual Report |
29 |
FRANKLIN U.S. SMALL CAP MULTIFACTOR INDEX ETF
Top 10 Holdings | ||||
9/30/22 | ||||
Company Sector/Industry |
% of Total Net Assets |
|||
Texas Roadhouse
Inc. Consumer Discretionary |
1.3% | |||
Murphy USA
Inc. Consumer Discretionary |
1.2% | |||
Qualys
Inc. Information Technology |
1.1% | |||
AMN Healthcare
Services Inc. Health Care |
1.0% | |||
Saia
Inc. Industrials |
0.9% | |||
Southwest Gas
Holdings Inc. Utilities |
0.9% | |||
Kinsale Capital
Group Inc. Financials |
0.9% | |||
Exponent
Inc. Industrials |
0.9% | |||
SPS Commerce
Inc. Information Technology |
0.8% | |||
LHC Group
Inc. Health Care |
0.8% |
Thank you for your participation in Franklin U.S. Small Cap Multifactor Index ETF. We look forward to serving your future investment needs.
Dina Ting, CFA
Hailey Harris
Joe Diederich
Basit Amin, CFA
Portfolio Management Team
The foregoing information reflects our analysis, opinions and portfolio holdings as of September 30, 2022, the end of the reporting period. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
30 |
Semiannual Report |
franklintempleton.com |
FRANKLIN U.S. SMALL CAP MULTIFACTOR INDEX ETF
Performance Summary as of September 30, 2022
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance table does not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares.
Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. Market Price returns typically are based upon the official closing price of the ETF’s shares. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (4/28/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/221
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
6-Month |
-16.74% | -16.83% | -16.74% | -16.83% | ||||||||||||
1-Year |
-19.61% | -19.71% | -19.61% | -19.71% | ||||||||||||
5-Year |
+24.09% | +28.23% | +4.41% | +5.10% | ||||||||||||
Since Inception (4/26/17) |
+26.36% | +26.41% | +4.40% | +4.41% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 32 for Performance Summary footnotes.
franklintempleton.com |
Semiannual Report |
31 |
FRANKLIN U.S. SMALL CAP MULTIFACTOR INDEX ETF
PERFORMANCE SUMMARY
Distributions (4/1/22–9/30/22)
Net Investment Income |
$0.204570 |
Total Annual Operating Expenses5
0.35% |
All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Smaller, mid-sized and relatively new or unseasoned companies can be particularly sensitive to changing economic conditions, and their prospects for growth are less certain than those of larger, more established companies. Historically, these securities have experienced more price volatility than larger company stocks, especially over the short term. Smaller companies may be more susceptible to particular events or economic conditions, less certain growth prospects, lack of depth of management and funds for growth and development and limited or less developed product lines and markets. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transactions costs, expenses and other factors. Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund’s prospectus also includes a description of the main investment risks.
Russia’s military invasion of Ukraine in February 2022, the resulting responses by the United States and other countries, and the potential for wider conflict could increase volatility and uncertainty in the financial markets and adversely affect regional and global economies. The United States and other countries have imposed broad-ranging economic sanctions on Russia and certain Russian individuals, banking entities and corporations as a response to its invasion of Ukraine. The United States and other countries have also imposed economic sanctions on Belarus and may impose sanctions on other countries that support Russia’s military invasion. These sanctions, as well as any other economic consequences related to the invasion, such as additional sanctions, boycotts or changes in consumer or purchaser preferences or cyberattacks on governments, companies or individuals, may further decrease the value and liquidity of certain Russian securities and securities of issuers in other countries that are subject to economic sanctions related to the invasion.
ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns.
1. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
2. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.
See www.franklintempletondatasources.com for additional data provider information.
32 |
Semiannual Report |
franklintempleton.com |
FRANKLIN U.S. SMALL CAP MULTIFACTOR INDEX ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
Beginning Account Value 4/1/22 |
Ending Account Value 9/30/22 |
Expenses Paid During Period 4/1/22–9/30/221 |
Ending Account Value 9/30/22 |
Expenses Paid During Period 4/1/22–9/30/221 |
Net Annualized Expense Ratio |
|||||||||||||||||
$1,000.00 | $ | 832.60 | $ | 1.61 | $ | 1,023.31 | $ | 1.78 | 0.35 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/365 to reflect the one-half year period.
franklintempleton.com |
Semiannual Report |
33 |
FRANKLIN TEMPLETON ETF TRUST
Franklin Emerging Market Core Dividend Tilt Index ETFa
Six Months Ended (unaudited) |
Year Ended March 31, | |||||||||||||||||||||||
2022 | 2021 | 2020 | 2019 | 2018 | ||||||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||||||
Net asset value, beginning of period |
$ | 28.33 | $ | 30.78 | $ | 22.20 | $ | 29.70 | $ | 33.41 | $ | 29.29 | ||||||||||||
|
|
|||||||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec |
1.02 | 1.32 | 0.84 | 1.24 | 1.14 | 0.83 | ||||||||||||||||||
Net realized and unrealized gains (losses) |
(7.65 | ) | (2.55 | ) | 8.55 | (6.96 | ) | (3.76 | ) | 4.15 | ||||||||||||||
|
|
|||||||||||||||||||||||
Total from investment operations |
(6.63 | ) | (1.23 | ) | 9.39 | (5.72 | ) | (2.62 | ) | 4.98 | ||||||||||||||
|
|
|||||||||||||||||||||||
Less distributions from net investment income | (0.99 | ) | (1.22 | ) | (0.81 | ) | (1.78 | ) | (1.09 | ) | (0.86 | ) | ||||||||||||
|
|
|||||||||||||||||||||||
Net asset value, end of period |
$ | 20.71 | $ | 28.33 | $ | 30.78 | $ | 22.20 | $ | 29.70 | $ | 33.41 | ||||||||||||
|
|
|||||||||||||||||||||||
Total returnd |
(23.72)% | (4.21)% | 42.57% | (20.55)% | (7.70)% | 17.20% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.37% | 0.45% | 0.45% | 0.49% | 0.55% | 0.69% | f | |||||||||||||||||
Expenses net of waiver and payments by affiliates |
0.37% | 0.45% | 0.45% | 0.49% | 0.55% | 0.54% | f | |||||||||||||||||
Net investment income |
8.17% | 4.28% | 3.15% | 4.26% | 3.75% | 2.61% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) |
$12,427 | $17,000 | $24,627 | $57,711 | $344,484 | $400,908 | ||||||||||||||||||
Portfolio turnover rateg |
82.74% | h | 34.27% | h | 40.22% | h | 44.11% | h | 52.42% | 32.87% |
aEffective August 1, 2022, Formerly, Franklin LibertyQ Emerging Markets ETF was renamed Franklin Emerging Market Core Dividend Tilt Index ETF.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
gPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
hPortfolio turnover rate excluding cash creations was as follows: | 82.74% | 34.27% | 36.91% | 41.78% |
34 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin Emerging Market Core Dividend Tilt Index ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 97.4% | ||||||||||||||
Brazil 5.2% | ||||||||||||||
Alupar Investimento SA, UNIT |
Electric Utilities | 600 | $ | 3,017 | ||||||||||
Ambev SA |
Beverages | 27,000 | 77,573 | |||||||||||
Americanas SA |
Internet & Catalog Retail | 4,200 | 13,185 | |||||||||||
B3 SA – Brasil Bolsa Balcao |
Capital Markets | 31,800 | 76,724 | |||||||||||
Banco Bradesco SA |
Banks | 600 | 1,809 | |||||||||||
Banco do Brasil SA |
Banks | 5,400 | 38,457 | |||||||||||
BB Seguridade Participacoes SA |
Insurance | 4,200 | 20,632 | |||||||||||
Caixa Seguridade Participacoes S/A |
Insurance | 4,200 | 6,608 | |||||||||||
Cia Energetica de Minas Gerais |
Electric Utilities | 1,800 | 5,391 | |||||||||||
CPFL Energia SA |
Electric Utilities | 1,200 | 7,490 | |||||||||||
Energisa SA |
Electric Utilities | 1,800 | 13,941 | |||||||||||
Engie Brasil Energia SA |
Independent Power Producers & Energy Traders | 1,200 | 8,544 | |||||||||||
Hypera SA |
Pharmaceuticals | 2,400 | 19,635 | |||||||||||
Itausa SA |
Banks | 600 | 1,095 | |||||||||||
Klabin SA |
Containers & Packaging | 5,400 | 18,120 | |||||||||||
Neoenergia SA |
Electric Utilities | 1,200 | 3,394 | |||||||||||
Petroleo Brasileiro SA |
Oil, Gas & Consumable Fuels | 13,200 | 80,730 | |||||||||||
Porto Seguro SA |
Insurance | 1,200 | 4,688 | |||||||||||
a |
Rede D’Or Sao Luiz SA, 144A |
Health Care Providers & Services | 4,800 | 26,375 | ||||||||||
Telefonica Brasil SA |
Diversified Telecommunication Services | 3,000 | 22,458 | |||||||||||
TIM SA |
Wireless Telecommunication Services | 4,800 | 10,720 | |||||||||||
Transmissora Alianca de Energia Eletrica SA |
Electric Utilities | 1,200 | 8,641 | |||||||||||
Vale SA |
Metals & Mining | 13,720 | 182,735 | |||||||||||
|
|
|||||||||||||
651,962 | ||||||||||||||
|
|
|||||||||||||
Chile 0.7% | ||||||||||||||
Banco de Chile |
Banks | 269,028 | 23,919 | |||||||||||
Banco Santander Chile |
Banks | 383,760 | 13,549 | |||||||||||
Cencosud SA |
Food & Staples Retailing | 8,148 | 10,420 | |||||||||||
Cencosud Shopping SA |
Real Estate Management & Development | 3,174 | 3,346 | |||||||||||
Cia Cervecerias Unidas SA |
Beverages | 822 | 4,514 | |||||||||||
Cia Sud Americana de Vapores SA |
Marine | 102,078 | 7,108 | |||||||||||
Empresas CMPC SA |
Paper & Forest Products | 7,242 | 11,137 | |||||||||||
Empresas Copec SA |
Oil, Gas & Consumable Fuels | 2,190 | 14,177 | |||||||||||
Quinenco SA |
Industrial Conglomerates | 1,644 | 3,604 | |||||||||||
|
|
|||||||||||||
91,774 | ||||||||||||||
|
|
|||||||||||||
China 29.9% | ||||||||||||||
Agricultural Bank of China Ltd., A |
Banks | 84,000 | 33,698 | |||||||||||
Agricultural Bank of China Ltd., H |
Banks | 204,000 | 61,071 | |||||||||||
b |
Alibaba Group Holding Ltd., A |
Internet & Catalog Retail | 29,400 | 291,944 | ||||||||||
Anhui Conch Cement Co. Ltd., A |
Construction Materials | 2,400 | 9,699 | |||||||||||
Anhui Conch Cement Co. Ltd., H |
Construction Materials | 8,000 | 25,376 | |||||||||||
Anta Sports Products Ltd., A |
Textiles, Apparel & Luxury Goods | 2,200 | 23,317 | |||||||||||
b |
Baidu Inc. |
Interactive Media & Services | 3,300 | 47,966 | ||||||||||
Bank of Beijing Co. Ltd., A |
Banks | 10,800 | 6,226 | |||||||||||
Bank of Changsha Co. Ltd., A |
Banks | 2,400 | 2,229 | |||||||||||
Bank of Chengdu Co. Ltd., A |
Banks | 1,800 | 4,131 | |||||||||||
Bank of China Ltd., A |
Banks | 28,200 | 12,223 | |||||||||||
Bank of China Ltd., H |
Banks | 342,000 | 111,968 | |||||||||||
Bank of Communications Co. Ltd., A |
Banks | 20,400 | 13,220 | |||||||||||
Bank of Communications Co. Ltd., H |
Banks | 138,000 | 72,781 | |||||||||||
Bank of Jiangsu Co. Ltd., A |
Banks | 7,200 | 7,514 | |||||||||||
Bank of Nanjing Co. Ltd., A |
Banks | 4,800 | 7,083 | |||||||||||
Bank of Shanghai Co. Ltd., A |
Banks | 8,400 | 6,893 | |||||||||||
Baoshan Iron & Steel Co. Ltd., A |
Metals & Mining | 11,400 | 8,411 | |||||||||||
b |
BeiGene Ltd. |
Biotechnology | 1,200 | 12,390 | ||||||||||
Beijing Enterprises Holdings Ltd., H |
Industrial Conglomerates | 3,000 | 8,427 |
franklintempleton.com |
Semiannual Report |
35 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
b |
Bilibili Inc. |
Entertainment | 600 | $ | 9,142 | |||||||||
a |
Blue Moon Group Holdings Ltd., 144A |
Household Products | 9,000 | 6,352 | ||||||||||
BOC Hong Kong (Holdings) Ltd. |
Banks | 24,000 | 79,950 | |||||||||||
BOE Technology Group Co. Ltd., A |
Electronic Equipment, Instruments & Components | 20,500 | 9,403 | |||||||||||
BOE Technology Group Co. Ltd., B |
Electronic Equipment, Instruments & Components | 7,800 | 3,329 | |||||||||||
BYD Co. Ltd., A |
Automobiles | 100 | 3,535 | |||||||||||
BYD Co. Ltd., H |
Automobiles | 500 | 12,382 | |||||||||||
BYD Electronic International Co. Ltd. |
Communications Equipment | 3,000 | 7,246 | |||||||||||
Changjiang Securities Co. Ltd., A |
Capital Markets | 3,000 | 2,192 | |||||||||||
China CITIC Bank Corp. Ltd., H |
Banks | 54,000 | 21,463 | |||||||||||
China Conch Venture Holdings Ltd. |
Construction & Engineering | 12,000 | 19,139 | |||||||||||
China Construction Bank Corp., A |
Banks | 2,400 | 1,858 | |||||||||||
China Construction Bank Corp., H |
Banks | 339,000 | 196,061 | |||||||||||
China Everbright Bank Co. Ltd., A |
Banks | 22,200 | 8,781 | |||||||||||
China Everbright Bank Co. Ltd., H |
Banks | 18,000 | 4,953 | |||||||||||
a,c |
China Feihe Ltd., 144A, Reg S |
Food Products | 18,000 | 12,612 | ||||||||||
China Hongqiao Group Ltd. |
Metals & Mining | 15,000 | 12,421 | |||||||||||
China International Marine Containers (Group) Co. Ltd., H |
Machinery | 4,800 | 3,057 | |||||||||||
China International Marine Containers Group Co. Ltd., A |
Machinery | 1,200 | 1,163 | |||||||||||
China Lesso Group Holdings Ltd. |
Building Products | 6,000 | 5,587 | |||||||||||
China Life Insurance Co. Ltd., H |
Insurance | 48,000 | 61,514 | |||||||||||
China Longyuan Power Group Corp., A |
Independent Power Producers & Energy Traders | 3,000 | 3,764 | |||||||||||
China Medical System Holdings Ltd. |
Pharmaceuticals | 9,000 | 10,743 | |||||||||||
China Merchants Bank Co. Ltd., A |
Banks | 5,400 | 25,488 | |||||||||||
China Merchants Bank Co. Ltd., H |
Banks | 12,500 | 58,122 | |||||||||||
China Merchants Expressway Network & Technology Holdings Co. Ltd., A |
Transportation Infrastructure | 1,800 | 1,914 | |||||||||||
China Merchants Port Holdings Co. Ltd. |
Transportation Infrastructure | 8,000 | 10,059 | |||||||||||
a |
China Merchants Securities Co. Ltd., A, 144A |
Capital Markets | 1,200 | 1,039 | ||||||||||
China Merchants Securities Co. Ltd., A |
Capital Markets | 1,800 | 3,116 | |||||||||||
China Merchants Shekou Industrial Zone Holdings Co. Ltd., A |
Real Estate Management & Development | 4,200 | 9,626 | |||||||||||
China Minsheng Banking Corp. Ltd., A |
Banks | 18,600 | 8,845 | |||||||||||
China Minsheng Banking Corp. Ltd., H |
Banks | 42,000 | 12,038 | |||||||||||
China National Building Material Co. Ltd., H |
Construction Materials | 30,000 | 22,968 | |||||||||||
China Pacific Insurance Group Co. Ltd., A |
Insurance | 3,000 | 8,555 | |||||||||||
China Pacific Insurance Group Co. Ltd., H |
Insurance | 13,200 | 24,315 | |||||||||||
China Petroleum & Chemical Corp., A |
Oil, Gas & Consumable Fuels | 18,600 | 11,193 | |||||||||||
China Petroleum & Chemical Corp., H |
Oil, Gas & Consumable Fuels | 168,000 | 72,123 | |||||||||||
China Resources Cement Holdings Ltd. |
Construction Materials | 14,000 | 6,492 | |||||||||||
China Resources Power Holdings Co. Ltd. |
Independent Power Producers & Energy Traders | 1,000 | 1,554 | |||||||||||
China Shenhua Energy Co. Ltd., A |
Oil, Gas & Consumable Fuels | 3,600 | 15,977 | |||||||||||
China Shenhua Energy Co. Ltd., H |
Oil, Gas & Consumable Fuels | 21,000 | 62,733 | |||||||||||
China Suntien Green Energy Corp. Ltd. |
Oil, Gas & Consumable Fuels | 12,000 | 4,403 | |||||||||||
China Taiping Insurance Holdings Co. Ltd. |
Insurance | 9,600 | 8,084 | |||||||||||
a,c |
China Tower Corp. Ltd., H, 144A, Reg S |
Diversified Telecommunication Services | 276,000 | 29,534 | ||||||||||
China Vanke Co. Ltd., A |
Real Estate Management & Development | 4,800 | 12,005 | |||||||||||
China Vanke Co. Ltd., H |
Real Estate Management & Development | 10,200 | 18,581 | |||||||||||
China Yangtze Power Co. Ltd., A |
Independent Power Producers & Energy Traders | 2,400 | 7,655 | |||||||||||
b |
China Zheshang Bank Co. Ltd., A |
Banks | 9,000 | 3,762 | ||||||||||
Chongqing Rural Commercial Bank Co. Ltd., A |
Banks | 4,800 | 2,404 | |||||||||||
Chongqing Rural Commercial Bank Co. Ltd., H |
Banks | 12,000 | 3,898 | |||||||||||
Chow Tai Fook Jewellery Co. Ltd., A |
Specialty Retail | 14,400 | 27,113 | |||||||||||
CIFI Holdings Group Co. Ltd., A |
Real Estate Management & Development | 36,000 | 3,669 | |||||||||||
CITIC Ltd., B |
Industrial Conglomerates | 42,000 | 39,593 | |||||||||||
Citic Pacific Special Steel Group Co. Ltd., A |
Metals & Mining | 1,800 | 4,449 |
36 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
COSCO SHIPPING Holdings Co. Ltd., B |
Marine | 24,000 | $ | 28,158 | ||||||||||
Country Garden Holdings Co. Ltd. |
Real Estate Management & Development | 48,000 | 11,129 | |||||||||||
Country Garden Services Holdings Co. Ltd. |
Commercial Services & Supplies | 8,000 | 11,781 | |||||||||||
a |
Dali Foods Group Co. Ltd., 144A |
Food Products | 15,000 | 6,459 | ||||||||||
b |
Datang International Power Generation Co. Ltd., H |
Independent Power Producers & Energy Traders | 12,000 | 2,293 | ||||||||||
ENN Energy Holdings Ltd. |
Gas Utilities | 700 | 9,363 | |||||||||||
Far East Horizon Ltd. |
Diversified Financial Services | 12,000 | 8,102 | |||||||||||
Faw Jiefang Group Co. Ltd. |
Automobiles | 1,200 | 1,209 | |||||||||||
Focus Media Information Technology Co. Ltd. |
Technology Hardware, Storage & Peripherals | 8,400 | 6,504 | |||||||||||
Fosun International Ltd. |
Industrial Conglomerates | 18,000 | 11,167 | |||||||||||
Foxconn Industrial Internet Co. Ltd., A |
Electronic Equipment, Instruments & Components | 5,400 | 6,453 | |||||||||||
b |
GDS Holdings Ltd. |
IT Services | 3,000 | 6,573 | ||||||||||
Gemdale Corp., A |
Real Estate Management & Development | 2,400 | 3,868 | |||||||||||
Gree Electric Appliances Inc. of Zhuhai |
Household Durables | 3,000 | 13,647 | |||||||||||
Guangxi Guiguan Electric Power Co. Ltd., A |
Independent Power Producers & Energy Traders | 2,400 | 1,973 | |||||||||||
Guangzhou TInc.i Materials Technology Co. Ltd. |
Chemicals | 600 | 3,708 | |||||||||||
Guangzhou Yuexiu Financial Holdings Group Co. Ltd., A |
Capital Markets | 2,400 | 1,912 | |||||||||||
Guosen Securities Co. Ltd. |
Capital Markets | 4,200 | 5,067 | |||||||||||
a |
Guotai Junan Securities Co. Ltd., 144A |
Capital Markets | 6,000 | 6,375 | ||||||||||
Guotai Junan Securities Co. Ltd., A |
Capital Markets | 4,200 | 8,053 | |||||||||||
Guoyuan Securities Co. Ltd. |
Capital Markets | 2,400 | 2,155 | |||||||||||
Haitian International Holdings Ltd. |
Machinery | 5,000 | 9,503 | |||||||||||
Henan Shuanghui Investment & Development Co. Ltd. |
Food Products | 1,800 | 6,176 | |||||||||||
Hengan International Group Co. Ltd. |
Personal Products | 4,500 | 20,121 | |||||||||||
Hengli Petrochemical Co. Ltd., A |
Chemicals | 3,000 | 7,120 | |||||||||||
Hopson Development Holdings Ltd. |
Real Estate Management & Development | 6,000 | 6,283 | |||||||||||
Huadian Power International Corp. Ltd., A |
Independent Power Producers & Energy Traders | 3,600 | 3,005 | |||||||||||
Huadian Power International Corp. Ltd., H |
Independent Power Producers & Energy Traders | 12,000 | 4,387 | |||||||||||
Huaxia Bank Co. Ltd., A |
Banks | 8,400 | 5,927 | |||||||||||
Huaxin Cement Co. Ltd., H |
Construction Materials | 2,400 | 2,473 | |||||||||||
Huaxin Cement Co. Ltd., A |
Construction Materials | 600 | 1,410 | |||||||||||
Huayu Automotive Systems Co. Ltd. |
Auto Components | 1,800 | 4,171 | |||||||||||
Huizhou Desay Sv Automotive Co. Ltd. |
Household Durables | 200 | 3,870 | |||||||||||
Industrial and Commercial Bank of China Ltd. |
Banks | 33,000 | 20,136 | |||||||||||
Industrial and Commercial Bank of China Ltd., H . |
Banks | 264,000 | 123,762 | |||||||||||
Industrial Bank Co. Ltd., A |
Banks | 10,200 | 23,822 | |||||||||||
b |
Industrial Securities Co. Ltd., A |
Capital Markets | 3,080 | 2,355 | ||||||||||
a,b |
Innovent Biologics Inc., B, 144A |
Biotechnology | 3,000 | 9,344 | ||||||||||
JA Solar Technology Co. Ltd., A |
Semiconductors & Semiconductor Equipment | 600 | 5,390 | |||||||||||
a,b |
JD Health International Inc., 144A |
Internet & Catalog Retail | 1,500 | 8,618 | ||||||||||
JD.com Inc., A |
Internet & Catalog Retail | 4,050 | 102,464 | |||||||||||
Jiangsu Expressway Co. Ltd., A |
Transportation Infrastructure | 600 | 605 | |||||||||||
Jiangsu Expressway Co. Ltd., H |
Transportation Infrastructure | 12,000 | 9,004 | |||||||||||
b |
KE Holdings Inc., ADR |
Real Estate Management & Development | 1,044 | 18,291 | ||||||||||
Kingboard Holdings Ltd. |
Electronic Equipment, Instruments & Components | 4,000 | 11,312 | |||||||||||
a,b |
Kuaishou Technology, B, 144A |
Interactive Media & Services | 3,000 | 19,472 | ||||||||||
Lenovo Group Ltd. |
Technology Hardware, Storage & Peripherals | 48,000 | 33,386 | |||||||||||
b |
Li Auto Inc., A |
Automobiles | 900 | 10,387 | ||||||||||
Li Ning Co. Ltd. |
Textiles, Apparel & Luxury Goods | 2,500 | 19,140 | |||||||||||
Livzon Pharmaceutical Group Inc., H |
Pharmaceuticals | 1,200 | 3,008 | |||||||||||
Lomon Billions Group Co. Ltd. |
Chemicals | 1,200 | 2,651 | |||||||||||
a,c |
Longfor Group Holdings Ltd., 144A, Reg S |
Real Estate Management & Development | 9,500 | 27,290 | ||||||||||
a,b |
Meituan Dianping, B, 144A |
Internet & Catalog Retail | 8,700 | 183,534 | ||||||||||
b |
Microport Scientific Corp. |
Health Care Equipment & Supplies | 1,800 | 3,100 | ||||||||||
Midea Group Co. Ltd., A |
Household Durables | 2,400 | 16,600 |
franklintempleton.com |
Semiannual Report |
37 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Minth Group Ltd. |
Auto Components | 4,000 | $ | 8,856 | ||||||||||
NetEase Inc. |
Entertainment | 4,100 | 61,892 | |||||||||||
New China Life Insurance Co. Ltd., A |
Insurance | 1,200 | 4,535 | |||||||||||
New China Life Insurance Co. Ltd., H |
Insurance | 5,400 | 10,305 | |||||||||||
Nine Dragons Paper Holdings Ltd. |
Paper & Forest Products | 12,000 | 7,460 | |||||||||||
Perfect World Co. Ltd. |
Entertainment | 1,200 | 2,091 | |||||||||||
PetroChina Co. Ltd., H |
Oil, Gas & Consumable Fuels | 132,000 | 54,146 | |||||||||||
PICC Property and Casualty Co. Ltd., H |
Insurance | 42,000 | 43,552 | |||||||||||
Ping An Insurance Group Co. of China Ltd., A |
Insurance | 3,000 | 17,497 | |||||||||||
Ping An Insurance Group Co. of China Ltd., H |
Insurance | 23,000 | 114,855 | |||||||||||
Poly Developments and Holdings Group Co. Ltd., A |
Real Estate Management & Development | 2,400 | 6,060 | |||||||||||
a |
Pop Mart International Group Ltd., 144A |
Specialty Retail | 3,600 | 6,622 | ||||||||||
a |
Postal Savings Bank of China Co. Ltd., 144A |
Banks | 60,000 | 35,389 | ||||||||||
Postal Savings Bank of China Co. Ltd. |
Banks | 19,200 | 12,012 | |||||||||||
SAIC Motor Corp Ltd. |
Automobiles | 5,400 | 10,832 | |||||||||||
Shaanxi Coal Industry Co. Ltd. |
Oil, Gas & Consumable Fuels | 4,200 | 13,414 | |||||||||||
Shanghai Bairun Investment Holding Group Co. Ltd. |
Beverages | 600 | 2,267 | |||||||||||
Shanghai Baosight Software Co. Ltd., A |
Software | 600 | 3,096 | |||||||||||
Shanghai Baosight Software Co. Ltd., B |
Software | 3,000 | 8,730 | |||||||||||
Shanghai Construction Group Co. Ltd., A |
Construction & Engineering | 5,400 | 1,916 | |||||||||||
Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., A |
Real Estate Management & Development | 1,200 | 1,621 | |||||||||||
Shanghai Lujiazui Finance & Trade Zone Development Co. Ltd., B |
Real Estate Management & Development | 7,800 | 6,107 | |||||||||||
Shanghai Pudong Development Bank Co. Ltd., A |
Banks | 15,600 | 15,405 | |||||||||||
Shanxi Xishan Coal & Electricity Power Co. Ltd. |
Oil, Gas & Consumable Fuels | 1,800 | 3,782 | |||||||||||
Shengyi Technology Co. Ltd., A |
Electronic Equipment, Instruments & Components | 1,200 | 2,205 | |||||||||||
Shenzhen Transsion Holdings Co. Ltd., A |
Technology Hardware, Storage & Peripherals | 510 | 4,161 | |||||||||||
Shenzhou International Group Holdings Ltd. |
Textiles, Apparel & Luxury Goods | 2,400 | 18,757 | |||||||||||
Shijiazhuang Yiling Pharmaceutical Co. Ltd. |
Pharmaceuticals | 600 | 1,827 | |||||||||||
Sichuan Chuantou Energy Co Ltd., A |
Independent Power Producers & Energy Traders | 2,400 | 4,050 | |||||||||||
Sichuan Road & Bridge Co. Ltd., A |
Construction & Engineering | 2,400 | 3,441 | |||||||||||
Silergy Corp. |
Semiconductors & Semiconductor Equipment | 300 | 3,978 | |||||||||||
Sinotruk Hong Kong Ltd. |
Machinery | 3,000 | 2,511 | |||||||||||
a |
Smoore International Holdings Ltd., 144A |
Tobacco | 12,000 | 14,354 | ||||||||||
Sun Art Retail Group Ltd. |
Food & Staples Retailing | 12,000 | 2,568 | |||||||||||
Sunac China Holdings Ltd. |
Real Estate Management & Development | 18,000 | 2,440 | |||||||||||
Sunny Optical Technology Group Co. Ltd. |
Electronic Equipment, Instruments & Components | 2,400 | 22,976 | |||||||||||
Tencent Holdings Ltd. |
Interactive Media & Services | 10,800 | 366,517 | |||||||||||
The People’s Insurance Co. Group of China Ltd., H |
Insurance | 54,000 | 15,684 | |||||||||||
Tianshan Aluminum Group Co. Ltd., A |
Machinery | 2,400 | 2,410 | |||||||||||
Tongwei Co. Ltd., A |
Food Products | 1,800 | 11,857 | |||||||||||
a |
Topsports International Holdings Ltd., 144A |
Specialty Retail | 18,000 | 12,680 | ||||||||||
Uni-President China Holdings Ltd. |
Food Products | 6,000 | 5,037 | |||||||||||
Universal Scientific Industrial Shanghai Co. Ltd., A |
Electronic Equipment, Instruments & Components | 1,200 | 2,538 | |||||||||||
Want Want China Holdings Ltd. |
Food Products | 18,000 | 11,763 | |||||||||||
Weichai Power Co. Ltd., H |
Machinery | 1,000 | 949 | |||||||||||
Wuhan Guide Infrared Co. Ltd. |
Electronic Equipment, Instruments & Components | 1,800 | 2,934 | |||||||||||
Wuhu Sanqi Interactive Entertainment NetworkTechnology Group Co. Ltd. |
Entertainment | 1,200 | 2,932 | |||||||||||
Xiamen C & D Inc., A |
Trading Companies & Distributors | 1,200 | 2,331 | |||||||||||
Xinyi Solar Holdings Ltd. |
Semiconductors & Semiconductor Equipment | 30,000 | 31,758 | |||||||||||
b |
XPeng Inc., A |
Automobiles | 1,800 | 10,548 | ||||||||||
Youngor Group Co. Ltd., A |
Real Estate Management & Development | 2,400 | 2,128 |
38 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
China (continued) | ||||||||||||||
Yunnan Baiyao Group Co. Ltd. |
Pharmaceuticals | 600 | $ | 4,406 | ||||||||||
Yunnan Energy New Material Co. Ltd. |
Containers & Packaging | 500 | 12,212 | |||||||||||
Zhuzhou CRRC Times Electric Co. Ltd., H |
Electrical Equipment | 1,200 | 5,045 | |||||||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd. |
Machinery | 4,200 | 3,264 | |||||||||||
Zoomlion Heavy Industry Science and Technology Co. Ltd., H |
Machinery | 10,800 | 3,756 | |||||||||||
|
|
|||||||||||||
3,715,046 | ||||||||||||||
|
|
|||||||||||||
Colombia 0.4% | ||||||||||||||
Banco de Bogota SA |
Banks | 642 | 3,988 | |||||||||||
Bancolombia SA |
Banks | 1,794 | 12,145 | |||||||||||
b |
Corp. Financiera Colombiana SA |
Diversified Financial Services | 504 | 1,832 | ||||||||||
Ecopetrol SA |
Oil, Gas & Consumable Fuels | 32,484 | 14,665 | |||||||||||
Grupo Energia Bogota SA ESP |
Gas Utilities | 16,662 | 6,786 | |||||||||||
Interconexion Electrica SA ESP |
Electric Utilities | 3,252 | 11,680 | |||||||||||
|
|
|||||||||||||
51,096 | ||||||||||||||
|
|
|||||||||||||
Czech Republic 0.4% | ||||||||||||||
CEZ AS |
Electric Utilities | 1,002 | 34,356 | |||||||||||
Komercni Banka AS |
Banks | 462 | 11,586 | |||||||||||
a |
Moneta Money Bank AS, 144A |
Banks | 2,844 | 8,005 | ||||||||||
|
|
|||||||||||||
53,947 | ||||||||||||||
|
|
|||||||||||||
Greece 0.5% | ||||||||||||||
Hellenic Petroleum Holdings SA |
Oil, Gas & Consumable Fuels | 378 | 2,318 | |||||||||||
Hellenic Telecommunications Organization SA |
Diversified Telecommunication Services | 1,494 | 21,734 | |||||||||||
JUMBO SA |
Specialty Retail | 792 | 10,591 | |||||||||||
Motor Oil Hellas Corinth Refineries SA |
Oil, Gas & Consumable Fuels | 450 | 7,115 | |||||||||||
OPAP SA |
Hotels, Restaurants & Leisure | 1,320 | 15,880 | |||||||||||
|
|
|||||||||||||
57,638 | ||||||||||||||
|
|
|||||||||||||
Hong Kong 2.4% | ||||||||||||||
Beijing Enterprises Water Group Ltd., A |
Water Utilities | 24,000 | 5,534 | |||||||||||
Bosideng International Holdings Ltd., A |
Household Durables | 24,000 | 11,893 | |||||||||||
China Everbright Environment Group Ltd., B |
Commercial Services & Supplies | 24,000 | 9,967 | |||||||||||
China Gas Holdings Ltd., A |
Gas Utilities | 15,600 | 18,700 | |||||||||||
China Jinmao Holdings Group Ltd., A |
Real Estate Management & Development | 24,000 | 4,892 | |||||||||||
China Overseas Land & Investment Ltd., A |
Real Estate Management & Development | 23,000 | 59,918 | |||||||||||
China Resources Gas Group Ltd., A |
Gas Utilities | 6,000 | 19,070 | |||||||||||
China Resources Land Ltd., H |
Real Estate Management & Development | 18,000 | 70,854 | |||||||||||
Geely Automobile Holdings Ltd. |
Automobiles | 13,000 | 17,919 | |||||||||||
Guangdong Investment Ltd. |
Water Utilities | 18,000 | 14,423 | |||||||||||
Kingboard Laminates Holdings Ltd. |
Electronic Equipment, Instruments & Components | 6,000 | 5,404 | |||||||||||
Orient Overseas International Ltd. |
Marine | 1,700 | 29,778 | |||||||||||
Shimao Group Holdings Ltd. |
Real Estate Management & Development | 9,000 | 2,124 | |||||||||||
Xinyi Glass Holdings Ltd. |
Auto Components | 18,000 | 26,186 | |||||||||||
|
|
|||||||||||||
296,662 | ||||||||||||||
|
|
|||||||||||||
Hungary 0.4% | ||||||||||||||
MOL Hungarian Oil & Gas PLC |
Oil, Gas & Consumable Fuels | 3,828 | 21,326 | |||||||||||
OTP Bank Nyrt |
Banks | 1,374 | 25,160 | |||||||||||
|
|
|||||||||||||
46,486 | ||||||||||||||
|
|
|||||||||||||
India 11.5% | ||||||||||||||
ACC Ltd. |
Construction Materials | 510 | 15,144 | |||||||||||
b |
Adani Green Energy Ltd. |
Independent Power Producers & Energy Traders | 450 | 12,506 | ||||||||||
Ambuja Cements Ltd. |
Construction Materials | 3,264 | 20,687 |
franklintempleton.com |
Semiannual Report |
39 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
India (continued) | ||||||||||||||
Apollo Hospitals Enterprise Ltd. |
Health Care Providers & Services | 18 | $ | 970 | ||||||||||
Asian Paints Ltd. |
Chemicals | 402 | 16,517 | |||||||||||
Aurobindo Pharma Ltd. |
Pharmaceuticals | 1,848 | 11,599 | |||||||||||
Bajaj Auto Ltd. |
Automobiles | 450 | 19,514 | |||||||||||
Bajaj Holdings & Investment Ltd. |
Diversified Financial Services | 144 | 11,312 | |||||||||||
Bharat Electronics Ltd. |
Aerospace & Defense | 6,588 | 8,175 | |||||||||||
Bharat Petroleum Corp. Ltd. |
Oil, Gas & Consumable Fuels | 6,270 | 23,492 | |||||||||||
Bharti Infratel Ltd. |
Diversified Telecommunication Services | 4,950 | 12,014 | |||||||||||
Britannia Industries Ltd. |
Food Products | 312 | 14,739 | |||||||||||
Coal India Ltd. |
Oil, Gas & Consumable Fuels | 13,230 | 34,518 | |||||||||||
Colgate-Palmolive India Ltd. |
Personal Products | 852 | 17,065 | |||||||||||
Dr Reddy’s Laboratories Ltd. |
Pharmaceuticals | 204 | 10,872 | |||||||||||
Embassy Office Parks REIT |
Equity Real Estate Investment Trusts (REITs | ) | 3,426 | 14,565 | ||||||||||
GAIL India Ltd. |
Gas Utilities | 17,316 | 18,529 | |||||||||||
HCL Technologies Ltd. |
IT Services | 6,954 | 79,698 | |||||||||||
a |
HDFC Asset Management Co. Ltd., 144A |
Capital Markets | 222 | 5,157 | ||||||||||
Hero MotoCorp Ltd. |
Automobiles | 822 | 25,758 | |||||||||||
Hindustan Petroleum Corp. Ltd. |
Oil, Gas & Consumable Fuels | 4,098 | 10,896 | |||||||||||
Hindustan Unilever Ltd. |
Household Products | 2,268 | 75,175 | |||||||||||
Housing Development Finance Corp. Ltd. |
Thrifts & Mortgage Finance | 1,686 | 47,414 | |||||||||||
Indian Oil Corp. Ltd. |
Oil, Gas & Consumable Fuels | 23,646 | 19,460 | |||||||||||
Info Edge India Ltd. |
Interactive Media & Services | 384 | 18,223 | |||||||||||
Infosys Ltd. |
IT Services | 11,490 | 199,635 | |||||||||||
ITC Ltd. |
Tobacco | 18,228 | 74,435 | |||||||||||
a,c |
Larsen & Toubro Infotech Ltd.,, 144A, Reg S |
IT Services | 294 | 16,110 | ||||||||||
LIC Housing Finance Ltd. |
Thrifts & Mortgage Finance | 1,806 | 9,187 | |||||||||||
Mahindra & Mahindra Ltd. |
Automobiles | 162 | 2,525 | |||||||||||
Marico Ltd. |
Personal Products | 3,312 | 21,897 | |||||||||||
Mindtree Ltd. |
IT Services | 396 | 15,378 | |||||||||||
Mphasis Ltd. |
IT Services | 534 | 13,704 | |||||||||||
NMDC Ltd. |
Metals & Mining | 5,952 | 9,347 | |||||||||||
NTPC Ltd. |
Independent Power Producers & Energy Traders | 29,652 | 58,191 | |||||||||||
Oil & Natural Gas Corp. Ltd. |
Oil, Gas & Consumable Fuels | 8,556 | 13,336 | |||||||||||
Oracle Financial Services Software Ltd. |
Software | 162 | 5,939 | |||||||||||
Piramal Enterprises Ltd. |
Pharmaceuticals | 828 | 8,796 | |||||||||||
Power Finance Corp. Ltd. |
Diversified Financial Services | 7,506 | 9,651 | |||||||||||
Power Grid Corp. of India Ltd. |
Electric Utilities | 22,224 | 57,970 | |||||||||||
REC Ltd. |
Diversified Financial Services | 7,776 | 8,985 | |||||||||||
Reliance Industries Ltd. |
Oil, Gas & Consumable Fuels | 3,540 | 103,468 | |||||||||||
Shriram Transport Finance Co. Ltd. |
Consumer Finance | 1,266 | 18,636 | |||||||||||
Steel Authority of India Ltd. |
Metals & Mining | 9,162 | 8,644 | |||||||||||
Tata Consultancy Services Ltd. |
IT Services | 2,562 | 94,623 | |||||||||||
Tata Consumer Products Ltd. |
Food Products | 1,068 | 10,540 | |||||||||||
Tata Steel Ltd. |
Metals & Mining | 44,532 | 54,357 | |||||||||||
Tech Mahindra Ltd. |
IT Services | 1,302 | 16,142 | |||||||||||
Torrent Pharmaceuticals Ltd. |
Pharmaceuticals | 642 | 12,310 | |||||||||||
TVS Motor Co. Ltd. |
Automobiles | 774 | 9,821 | |||||||||||
Vedanta Ltd. |
Metals & Mining | 8,508 | 28,243 | |||||||||||
b |
Zomato Ltd. |
Internet & Catalog Retail | 10,248 | 7,854 | ||||||||||
|
|
|||||||||||||
1,433,723 | ||||||||||||||
|
|
|||||||||||||
Indonesia 1.0% | ||||||||||||||
Adaro Energy Tbk PT, B |
Oil, Gas & Consumable Fuels | 80,400 | 20,909 | |||||||||||
Bank Mandiri Persero Tbk PT, A |
Banks | 24,600 | 15,226 | |||||||||||
Bank Rakyat Indonesia Persero Tbk PT, A |
Banks | 118,200 | 34,853 | |||||||||||
Bukit Asam Tbk PT, A |
Oil, Gas & Consumable Fuels | 25,800 | 7,065 | |||||||||||
Indocement Tunggal Prakarsa Tbk PT |
Construction Materials | 10,800 | 6,738 | |||||||||||
Indofood Sukses Makmur Tbk PT |
Food Products | 27,600 | 10,920 |
40 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Indonesia (continued) | ||||||||||||||
Perusahaan Perseroan (Persero) PT TelekomunikasiIndonesia Tbk, B |
Diversified Telecommunication Services | 67,800 | $ | 19,858 | ||||||||||
Unilever Indonesia Tbk PT |
Household Products | 37,200 | 11,799 | |||||||||||
|
|
|||||||||||||
127,368 | ||||||||||||||
|
|
|||||||||||||
Kuwait 0.2% | ||||||||||||||
Mobile Telecommunications Co. KSCP |
Wireless Telecommunication Services | 13,848 | 26,137 | |||||||||||
|
|
|||||||||||||
Malaysia 2.4% | ||||||||||||||
CIMB Group Holdings Bhd., A |
Banks | 44,400 | 49,121 | |||||||||||
Digi.com Bhd |
Wireless Telecommunication Services | 22,200 | 16,182 | |||||||||||
HAP Seng Consolidated Bhd |
Industrial Conglomerates | 4,200 | 5,543 | |||||||||||
Hartalega Holdings Bhd |
Health Care Equipment & Supplies | 13,200 | 4,725 | |||||||||||
Kuala Lumpur Kepong Bhd |
Food Products | 3,600 | 16,071 | |||||||||||
Malayan Banking Bhd |
Banks | 44,400 | 82,155 | |||||||||||
Maxis Bhd |
Wireless Telecommunication Services | 15,600 | 11,808 | |||||||||||
MISC Bhd |
Marine | 8,400 | 12,246 | |||||||||||
Petronas Gas Bhd |
Gas Utilities | 6,000 | 21,350 | |||||||||||
RHB Bank Bhd |
Banks | 13,200 | 15,827 | |||||||||||
Sime Darby Bhd |
Industrial Conglomerates | 15,000 | 6,923 | |||||||||||
Sime Darby Plantation Bhd |
Food Products | 18,000 | 15,877 | |||||||||||
Tenaga Nasional Bhd |
Electric Utilities | 18,000 | 31,249 | |||||||||||
Top Glove Corp. Bhd |
Health Care Equipment & Supplies | 30,600 | 4,124 | |||||||||||
Westports Holdings Bhd |
Transportation Infrastructure | 5,400 | 3,564 | |||||||||||
YTL Corp. Bhd |
Multi-Utilities | 39,000 | 4,878 | |||||||||||
|
|
|||||||||||||
301,643 | ||||||||||||||
|
|
|||||||||||||
Mexico 2.7% | ||||||||||||||
America Movil SAB de CV |
Wireless Telecommunication Services | 67,218 | 55,593 | |||||||||||
Arca Continental SAB de CV |
Beverages | 2,598 | 18,737 | |||||||||||
Coca-Cola Femsa SAB de CV |
Beverages | 3,276 | 19,171 | |||||||||||
Fibra Uno Administracion SA de CV |
Equity Real Estate Investment Trusts (REITs | ) | 18,072 | 18,632 | ||||||||||
Gruma SAB de CV |
Food Products | 1,242 | 11,915 | |||||||||||
Grupo Aeroportuario del Pacifico SAB de CV |
Transportation Infrastructure | 2,154 | 27,268 | |||||||||||
Grupo Aeroportuario del Sureste SAB de CV |
Transportation Infrastructure | 1,230 | 24,265 | |||||||||||
Grupo Financiero Banorte SAB de CV |
Banks | 14,028 | 90,220 | |||||||||||
Grupo Mexico SAB de CV, B |
Metals & Mining | 18,726 | 63,440 | |||||||||||
|
|
|||||||||||||
329,241 | ||||||||||||||
|
|
|||||||||||||
Pakistan 0.0% | ||||||||||||||
Oil & Gas Development Co. Ltd. |
Oil, Gas & Consumable Fuels | 6,156 | 2,044 | |||||||||||
|
|
|||||||||||||
Peru 0.1% | ||||||||||||||
a |
InRetail Peru Corp., 144A |
Food & Staples Retailing | 174 | 5,786 | ||||||||||
|
|
|||||||||||||
Philippines 0.3% | ||||||||||||||
Aboitiz Power Corp., A |
Independent Power Producers & Energy Traders | 9,600 | 5,043 | |||||||||||
First Gen Corp. |
Independent Power Producers & Energy Traders | 6,000 | 1,666 | |||||||||||
Globe Telecom Inc. |
Wireless Telecommunication Services | 210 | 7,272 | |||||||||||
Manila Electric Co. |
Electric Utilities | 1,800 | 8,075 | |||||||||||
PLDT Inc. |
Wireless Telecommunication Services | 570 | 14,662 | |||||||||||
|
|
|||||||||||||
36,718 | ||||||||||||||
|
|
|||||||||||||
Romania 0.1% | ||||||||||||||
NEPI Rockcastle PLC |
Real Estate Management & Development | 3,078 | 13,883 | |||||||||||
|
|
|||||||||||||
Russia 0.0%† | ||||||||||||||
b,d |
Alrosa PJSC |
Metals & Mining | 54,971 | — | ||||||||||
b,d |
Gazprom PJSC |
Oil, Gas & Consumable Fuels | 44,709 | — | ||||||||||
b,d |
Inter RAO UES PJSC |
Electric Utilities | 811,741 | — |
franklintempleton.com |
Semiannual Report |
41 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Russia† (continued) | ||||||||||||||
d |
LUKOIL PJSC |
Oil, Gas & Consumable Fuels | 2,268 | — | ||||||||||
d |
MMC Norilsk Nickel PJSC |
Metals & Mining | 693 | — | ||||||||||
b,d |
Moscow Exchange MICEX |
Capital Markets | 21,224 | — | ||||||||||
b,d |
Novolipetsk Steel PJSC |
Metals & Mining | 35,119 | — | ||||||||||
d |
PhosAgro PJSC |
Chemicals | 1,073 | — | ||||||||||
d |
PhosAgro PJSC |
Chemicals | 21 | — | ||||||||||
d |
PhosAgro PJSC |
Chemicals | 1 | — | ||||||||||
b,d |
Polymetal International PLC |
Metals & Mining | 7,294 | — | ||||||||||
b,d |
Polyus PJSC |
Metals & Mining | 756 | — | ||||||||||
d |
Rosneft Oil Co. PJSC |
Oil, Gas & Consumable Fuels | 20,055 | — | ||||||||||
d |
Severstal PAO |
Metals & Mining | 6,090 | — | ||||||||||
d |
Surgutneftegas PJSC |
Oil, Gas & Consumable Fuels | 132,846 | — | ||||||||||
d |
Tatneft PAO |
Oil, Gas & Consumable Fuels | 29,792 | — | ||||||||||
b,d |
TCS Group Holding PLC, GDR |
Banks | 1,778 | — | ||||||||||
b,d |
United Co. RUSAL International PJSC |
Metals & Mining | 24,749 | — | ||||||||||
|
|
|||||||||||||
— | ||||||||||||||
|
|
|||||||||||||
Saudi Arabia 2.9% | ||||||||||||||
Advanced Petrochemical Co. |
Chemicals | 816 | $ | 9,698 | ||||||||||
Banque Saudi Fransi |
Banks | 1,068 | 11,939 | |||||||||||
Jarir Marketing Co. |
Specialty Retail | 384 | 17,069 | |||||||||||
SABIC Agri-Nutrients Co. |
Chemicals | 402 | 16,906 | |||||||||||
Sahara International Petrochemical Co. |
Chemicals | 2,340 | 26,066 | |||||||||||
a |
Saudi Arabian Oil Co., 144A |
Oil, Gas & Consumable Fuels | 9,942 | 94,868 | ||||||||||
Saudi Basic Industries Corp. |
Chemicals | 450 | 10,636 | |||||||||||
Saudi Electricity Co. |
Electric Utilities | 2,076 | 13,560 | |||||||||||
Saudi Industrial Investment Group |
Chemicals | 2,490 | 15,151 | |||||||||||
Saudi Investment Bank |
Banks | 3,180 | 14,457 | |||||||||||
Saudi National Bank |
Banks | 198 | 3,325 | |||||||||||
Saudi Telecom Co. |
Diversified Telecommunication Services | 9,702 | 101,617 | |||||||||||
Yanbu National Petrochemical Co. |
Chemicals | 1,764 | 21,739 | |||||||||||
|
|
|||||||||||||
357,031 | ||||||||||||||
|
|
|||||||||||||
South Africa 5.1% | ||||||||||||||
Absa Group Ltd. |
Banks | 3,678 | 36,147 | |||||||||||
African Rainbow Minerals Ltd. |
Metals & Mining | 624 | 8,490 | |||||||||||
Anglo American Platinum Ltd. |
Metals & Mining | 408 | 29,245 | |||||||||||
Exxaro Resources Ltd. |
Oil, Gas & Consumable Fuels | 1,602 | 18,044 | |||||||||||
FirstRand Ltd. |
Diversified Financial Services | 30,846 | 104,247 | |||||||||||
Gold Fields Ltd. |
Metals & Mining | 3,708 | 30,421 | |||||||||||
Growthpoint Properties Ltd. |
Equity Real Estate Investment Trusts (REITs | ) | 21,936 | 14,390 | ||||||||||
Impala Platinum Holdings Ltd. |
Metals & Mining | 5,196 | 49,053 | |||||||||||
Kumba Iron Ore Ltd. |
Metals & Mining | 360 | 7,768 | |||||||||||
Mr Price Group Ltd. |
Specialty Retail | 1,656 | 15,921 | |||||||||||
MultiChoice Group |
Media | 2,976 | 19,148 | |||||||||||
Naspers Ltd., N |
Internet & Direct Marketing Retail | 378 | 47,602 | |||||||||||
Nedbank Group Ltd. |
Banks | 2,952 | 32,807 | |||||||||||
Old Mutual Ltd. |
Insurance | 29,142 | 15,858 | |||||||||||
Pick ‘N Pay Stores Ltd. |
Food & Staples Retailing | 2,526 | 7,798 | |||||||||||
Sanlam Ltd. |
Insurance | 11,424 | 32,793 | |||||||||||
Santam Ltd. |
Insurance | 288 | 4,007 | |||||||||||
Sibanye Stillwater Ltd. |
Metals & Mining | 16,680 | 38,989 | |||||||||||
SPAR Group Ltd. |
Food & Staples Retailing | 1,290 | 10,290 | |||||||||||
Standard Bank Group Ltd. |
Banks | 8,922 | 71,485 | |||||||||||
Tiger Brands Ltd. |
Food Products | 1,170 | 11,030 | |||||||||||
Vodacom Group Ltd. |
Wireless Telecommunication Services | 4,542 | 30,852 | |||||||||||
|
|
|||||||||||||
636,385 | ||||||||||||||
|
|
42 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
South Korea 9.1% | ||||||||||||||
BNK Financial Group Inc., H |
Banks | 1,944 | $ | 8,180 | ||||||||||
Cheil Worldwide Inc., A |
Media | 468 | 7,425 | |||||||||||
DB Insurance Co. Ltd., A |
Insurance | 324 | 12,501 | |||||||||||
GS Retail Co. Ltd. |
Food & Staples Retailing | 246 | 4,402 | |||||||||||
Hana Financial Group Inc. |
Banks | 2,082 | 51,588 | |||||||||||
Hanon Systems |
Auto Components | 978 | 5,687 | |||||||||||
HD Hyundai Co. Ltd. |
Machinery | 372 | 14,067 | |||||||||||
b |
HYBE Co. Ltd. |
Entertainment | 30 | 2,831 | ||||||||||
Hyundai Marine & Fire Insurance Co. Ltd. |
Insurance | 78 | 1,597 | |||||||||||
Industrial Bank of Korea |
Banks | 1,824 | 12,137 | |||||||||||
Kakao Corp. |
Interactive Media & Services | 558 | 22,270 | |||||||||||
b |
Kakao Games Corp. |
Entertainment | 258 | 7,691 | ||||||||||
b |
KakaoBank Corp. |
Banks | 150 | 2,102 | ||||||||||
KB Financial Group Inc. |
Banks | 2,598 | 79,355 | |||||||||||
Kia Corp. |
Automobiles | 1,284 | 64,528 | |||||||||||
Korea Gas Corp.. |
Gas Utilities | 216 | 5,103 | |||||||||||
Korea Investment Holdings Co. Ltd. |
Capital Markets | 270 | 8,964 | |||||||||||
KT Corp. |
Diversified Telecommunication Services | 828 | 20,950 | |||||||||||
KT&G Corp. |
Tobacco | 744 | 45,034 | |||||||||||
Kumho Petrochemical Co. Ltd. |
Chemicals | 114 | 9,203 | |||||||||||
b |
L&F Co. Ltd. |
Electronic Equipment, Instruments & Components | 12 | 1,490 | ||||||||||
LG Chem Ltd. |
Chemicals | 48 | 17,983 | |||||||||||
LG Corp. |
Industrial Conglomerates | 480 | 24,827 | |||||||||||
LG Display Co. Ltd. |
Electronic Equipment, Instruments & Components | 1,536 | 12,883 | |||||||||||
LG Uplus Corp. |
Diversified Telecommunication Services | 1,374 | 10,324 | |||||||||||
NH Investment & Securities Co. Ltd. |
Capital Markets | 960 | 6,032 | |||||||||||
POSCO Holdings Inc. |
Metals & Mining | 522 | 76,985 | |||||||||||
S-1 Corp. |
Commercial Services & Supplies | 120 | 4,856 | |||||||||||
Samsung Card Co. Ltd. |
Consumer Finance | 144 | 3,040 | |||||||||||
Samsung Electronics Co. Ltd. |
Technology Hardware, Storage & Peripherals | 9,060 | 336,259 | |||||||||||
Samsung Fire & Marine Insurance Co. Ltd. |
Insurance | 216 | 27,779 | |||||||||||
Samsung Securities Co. Ltd. |
Capital Markets | 414 | 8,898 | |||||||||||
SD Biosensor Inc. |
Health Care Equipment & Supplies | 234 | 4,351 | |||||||||||
Seegene Inc. |
Biotechnology | 306 | 5,732 | |||||||||||
Shinhan Financial Group Co. Ltd. |
Banks | 3,498 | 81,906 | |||||||||||
b |
SK Biopharmaceuticals Co. Ltd. |
Pharmaceuticals | 114 | 4,534 | ||||||||||
b |
SK Bioscience Co. Ltd. |
Biotechnology | 54 | 3,031 | ||||||||||
SK Hynix Inc. |
Semiconductors & Semiconductor Equipment | 870 | 50,533 | |||||||||||
SK Telecom Co. Ltd. |
Wireless Telecommunication Services | 702 | 24,926 | |||||||||||
SSANGYONG C&E Co. Ltd. |
Construction Materials | 684 | 2,806 | |||||||||||
Wemade Co. Ltd. |
Entertainment | 78 | 2,497 | |||||||||||
Woori Financial Group Inc. |
Banks | 3,990 | 29,841 | |||||||||||
|
|
|||||||||||||
1,127,128 | ||||||||||||||
|
|
|||||||||||||
Taiwan 17.9% | ||||||||||||||
Acer Inc., H |
Technology Hardware, Storage & Peripherals | 18,000 | 12,416 | |||||||||||
ASE Industrial Holding Co. Ltd., A |
Semiconductors & Semiconductor Equipment | 24,000 | 60,550 | |||||||||||
Asia Cement Corp. |
Construction Materials | 18,000 | 22,338 | |||||||||||
ASMedia Technology Inc. |
Semiconductors & Semiconductor Equipment | 240 | 5,019 | |||||||||||
Asustek Computer Inc. |
Technology Hardware, Storage & Peripherals | 4,620 | 34,051 | |||||||||||
AU Optronics Corp., H |
Electronic Equipment, Instruments & Components | 54,000 | 25,002 | |||||||||||
b |
Catcher Technology Co. Ltd. |
Technology Hardware, Storage & Peripherals | 5,000 | 27,166 | ||||||||||
Cathay Financial Holding Co. Ltd., A |
Insurance | 57,000 | 71,724 | |||||||||||
Chicony Electronics Co. Ltd. |
Technology Hardware, Storage & Peripherals | 4,000 | 10,381 | |||||||||||
China Development Financial Holding Corp., A |
Banks | 114,000 | 43,088 | |||||||||||
China Steel Corp., A |
Metals & Mining | 78,000 | 65,596 | |||||||||||
Compal Electronics Inc., H |
Technology Hardware, Storage & Peripherals | 24,000 | 16,404 | |||||||||||
CTBC Financial Holding Co. Ltd., A |
Banks | 126,000 | 78,777 |
franklintempleton.com |
Semiannual Report |
43 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Taiwan (continued) | ||||||||||||||
Far EasTone Telecommunications Co. Ltd. |
Wireless Telecommunication Services | 10,000 | $ | 22,804 | ||||||||||
Farglory Land Development Co. Ltd. |
Real Estate Management & Development | 1,000 | 1,811 | |||||||||||
Feng Hsin Steel Co. Ltd. |
Metals & Mining | 3,000 | 5,632 | |||||||||||
Formosa Chemicals & Fibre Corp. |
Chemicals | 22,000 | 47,882 | |||||||||||
Formosa Plastics Corp. |
Chemicals | 30,000 | 81,829 | |||||||||||
Fubon Financial Holding Co. Ltd. |
Insurance | 12,600 | 19,803 | |||||||||||
Globalwafers Co. Ltd. |
Semiconductors & Semiconductor Equipment | 1,380 | 15,930 | |||||||||||
Hon Hai Precision Industry Co. Ltd. |
Electronic Equipment, Instruments & Components | 29,000 | 93,168 | |||||||||||
Innolux Corp. |
Electronic Equipment, Instruments & Components | 66,000 | 21,724 | |||||||||||
Inventec Corp. |
Technology Hardware, Storage & Peripherals | 18,000 | 12,983 | |||||||||||
Largan Precision Co. Ltd. |
Electronic Equipment, Instruments & Components | 600 | 31,655 | |||||||||||
Lite-On Technology Corp. |
Technology Hardware, Storage & Peripherals | 14,000 | 28,133 | |||||||||||
Macronix International Co. Ltd. |
Semiconductors & Semiconductor Equipment | 12,000 | 11,774 | |||||||||||
MediaTek Inc. |
Semiconductors & Semiconductor Equipment | 7,000 | 121,484 | |||||||||||
Micro-Star International Co. Ltd. |
Technology Hardware, Storage & Peripherals | 4,000 | 13,544 | |||||||||||
Nan Ya Plastics Corp. |
Chemicals | 36,000 | 75,858 | |||||||||||
Nanya Technology Corp. |
Semiconductors & Semiconductor Equipment | 6,000 | 9,251 | |||||||||||
Nien Made Enterprise Co. Ltd. |
Household Durables | 1,140 | 9,031 | |||||||||||
Novatek Microelectronics Corp. Ltd. |
Semiconductors & Semiconductor Equipment | 4,000 | 27,591 | |||||||||||
Pegatron Corp. |
Technology Hardware, Storage & Peripherals | 14,000 | 25,796 | |||||||||||
Phison Electronics Corp. |
Semiconductors & Semiconductor Equipment | 1,000 | 8,362 | |||||||||||
Powerchip Semiconductor Manufacturing Corp. |
Semiconductors & Semiconductor Equipment | 18,000 | 16,158 | |||||||||||
Powertech Technology Inc. |
Semiconductors & Semiconductor Equipment | 6,000 | 14,571 | |||||||||||
Quanta Computer Inc. |
Technology Hardware, Storage & Peripherals | 18,000 | 43,655 | |||||||||||
Radiant Opto-Electronics Corp. |
Semiconductors & Semiconductor Equipment | 3,000 | 9,496 | |||||||||||
Realtek Semiconductor Corp. |
Semiconductors & Semiconductor Equipment | 3,200 | 27,213 | |||||||||||
Ruentex Industries Ltd. |
Textiles, Apparel & Luxury Goods | 6,000 | 9,657 | |||||||||||
Shin Kong Financial Holding Co. Ltd. |
Insurance | 90,000 | 23,273 | |||||||||||
Simplo Technology Co. Ltd. |
Electronic Equipment, Instruments & Components | 1,000 | 8,315 | |||||||||||
Sino-American Silicon Products Inc. |
Semiconductors & Semiconductor Equipment | 4,000 | 16,504 | |||||||||||
SinoPac Financial Holdings Co. Ltd. |
Banks | 11,780 | 6,419 | |||||||||||
Synnex Technology International Corp. |
Electronic Equipment, Instruments & Components | 9,000 | 14,967 | |||||||||||
Taiwan Glass Industry Corp. |
Building Products | 6,000 | 3,298 | |||||||||||
Taiwan Mobile Co. Ltd. |
Wireless Telecommunication Services | 6,000 | 18,067 | |||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. |
Semiconductors & Semiconductor Equipment | 42,720 | 567,824 | |||||||||||
Teco Electric & Machinery Co. Ltd. |
Electrical Equipment | 6,000 | 5,320 | |||||||||||
Tripod Technology Corp. |
Electronic Equipment, Instruments & Components | 3,000 | 8,825 | |||||||||||
United Microelectronics Corp. |
Semiconductors & Semiconductor Equipment | 78,000 | 87,830 | |||||||||||
Vanguard International Semiconductor Corp. |
Semiconductors & Semiconductor Equipment | 6,000 | 12,284 | |||||||||||
Walsin Technology Corp. |
Electronic Equipment, Instruments & Components | 2,000 | 4,693 | |||||||||||
Wan Hai Lines Ltd. |
Marine | 11,000 | 23,144 | |||||||||||
Win Semiconductors Corp. |
Semiconductors & Semiconductor Equipment | 3,000 | 11,670 | |||||||||||
Wistron Corp. |
Technology Hardware, Storage & Peripherals | 18,000 | 15,052 | |||||||||||
Wiwynn Corp. |
Technology Hardware, Storage & Peripherals | 540 | 13,743 | |||||||||||
WPG Holdings Ltd. |
Electronic Equipment, Instruments & Components | 9,000 | 13,167 | |||||||||||
Yang Ming Marine Transport Corp. |
Marine | 12,000 | 23,245 | |||||||||||
Yuanta Financial Holding Co. Ltd. |
Capital Markets | 78,520 | 48,350 | |||||||||||
Zhen Ding Technology Holding Ltd. |
Electronic Equipment, Instruments & Components | 4,000 | 13,355 | |||||||||||
|
|
|||||||||||||
2,218,652 | ||||||||||||||
|
|
|||||||||||||
Thailand 1.5% | ||||||||||||||
Advanced Info Service PCL, NVDR |
Wireless Telecommunication Services | 6,400 | 33,086 | |||||||||||
BTS Group Holdings PCL, A, NVDR |
Road & Rail | 39,000 | 8,582 | |||||||||||
Intouch Holdings PCL, NVDR |
Wireless Telecommunication Services | 6,400 | 12,344 | |||||||||||
IRPC PCL, NVDR |
Oil, Gas & Consumable Fuels | 76,200 | 6,303 | |||||||||||
Land and Houses PCL, NVDR |
Real Estate Management & Development | 24,600 | 5,804 | |||||||||||
Osotspa PCL, NVDR |
Beverages | 10,000 | 7,224 | |||||||||||
PTT Global Chemical PCL, NVDR |
Chemicals | 10,800 | 11,882 |
44 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Thailand (continued) | ||||||||||||||
PTT PCL, NVDR |
Oil, Gas & Consumable Fuels | 55,800 | $ | 50,297 | ||||||||||
Ratch Group PCL, NVDR |
Independent Power Producers & Energy Traders | 2,400 | 2,609 | |||||||||||
Ratch Group PCL |
Independent Power Producers & Energy Traders | 1,200 | 1,304 | |||||||||||
Sri Trang Gloves Thailand PCL, NVDR |
Health Care Equipment & Supplies | 9,600 | 2,901 | |||||||||||
Srisawad Corp. PCL, NVDR |
Consumer Finance | 4,200 | 4,788 | |||||||||||
Thai Union Group PCL, NVDR |
Food Products | 13,800 | 6,842 | |||||||||||
The Siam Cement PCL, NVDR |
Construction Materials | 1,800 | 15,557 | |||||||||||
Tisco Financial Group PCL, NVDR |
Banks | 2,400 | 5,901 | |||||||||||
Total Access Communication PCL, NVDR |
Wireless Telecommunication Services | 4,800 | 5,790 | |||||||||||
|
|
|||||||||||||
181,214 | ||||||||||||||
|
|
|||||||||||||
Turkey 0.5% | ||||||||||||||
Arcelik AS |
Household Durables | 1,704 | 6,177 | |||||||||||
BIM Birlesik Magazalar AS |
Food & Staples Retailing | 282 | 1,760 | |||||||||||
Enka Insaat ve Sanayi AS |
Industrial Conglomerates | 10,926 | 9,966 | |||||||||||
Eregli Demir ve Celik Fabrikalari TAS |
Metals & Mining | 8,064 | 12,606 | |||||||||||
Ford Otomotiv Sanayi AS |
Automobiles | 438 | 7,726 | |||||||||||
Haci Omer Sabanci Holding AS |
Diversified Financial Services | 7,512 | 10,446 | |||||||||||
Tofas Turk Otomobil Fabrikasi AS |
Automobiles | 762 | 3,761 | |||||||||||
Turk Telekomunikasyon AS |
Diversified Telecommunication Services | 1,968 | 1,150 | |||||||||||
Turkcell Iletisim Hizmetleri AS |
Wireless Telecommunication Services | 780 | 834 | |||||||||||
Turkiye Is Bankasi AS, C |
Banks | 14,892 | 6,041 | |||||||||||
|
|
|||||||||||||
60,467 | ||||||||||||||
|
|
|||||||||||||
United Arab Emirates 2.0% | ||||||||||||||
Abu Dhabi Commercial Bank PJSC |
Banks | 17,310 | 42,509 | |||||||||||
Abu Dhabi Islamic Bank PJSC |
Banks | 9,132 | 22,500 | |||||||||||
Abu Dhabi National Oil Co. for Distribution PJSC |
Specialty Retail | 20,304 | 24,544 | |||||||||||
Aldar Properties PJSC |
Real Estate Management & Development | 7,062 | 8,094 | |||||||||||
Dubai Islamic Bank PJSC |
Banks | 18,552 | 30,204 | |||||||||||
Emirates NBD Bank PJSC |
Banks | 12,594 | 44,060 | |||||||||||
Emirates Telecommunications Group Co. PJSC |
Diversified Telecommunication Services | 5,196 | 33,046 | |||||||||||
b |
International Holding Co. PJSC |
Industrial Conglomerates | 432 | 41,870 | ||||||||||
|
|
|||||||||||||
246,827 | ||||||||||||||
|
|
|||||||||||||
United States 0.2% | ||||||||||||||
JBS SA |
Food Products | 4,800 | 22,292 | |||||||||||
Parade Technologies Ltd. |
Semiconductors & Semiconductor Equipment | 360 | 6,713 | |||||||||||
|
|
|||||||||||||
29,005 | ||||||||||||||
|
|
|||||||||||||
Total
Common Stocks |
12,097,863 | |||||||||||||
|
|
|||||||||||||
Preferred Stocks 2.0% | ||||||||||||||
Brazil 1.3% | ||||||||||||||
e |
Banco Bradesco SA, 3.165%, pfd. |
Banks | 1,800 | 6,602 | ||||||||||
e |
Braskem SA, 35.194%, pfd., A |
Chemicals | 1,200 | 5,822 | ||||||||||
e |
Companhia Energetica de Minas Gerais, 12.825%, pfd. |
Electric Utilities | 9,001 | 17,906 | ||||||||||
e |
Gerdau SA, 14.894%, pfd. |
Metals & Mining | 7,200 | 32,533 | ||||||||||
e |
Itausa SA, 5.807%, pfd. |
Banks | 3,600 | 6,476 | ||||||||||
e |
Petroleo Brasileiro SA, 38.601%, pfd. |
Oil, Gas & Consumable Fuels | 16,200 | 89,254 | ||||||||||
|
|
|||||||||||||
158,593 | ||||||||||||||
|
|
|||||||||||||
Chile 0.2% | ||||||||||||||
e |
Sociedad Quimica y Minera de Chile SA, 0.005%, pfd., B |
Chemicals | 264 | 24,831 | ||||||||||
|
|
franklintempleton.com |
Semiannual Report |
45 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Preferred Stocks (continued) | ||||||||||||||
Colombia 0.1% | ||||||||||||||
Bancolombia SA, 8.583%, pfd. |
Banks | 2,826 | $ | 17,237 | ||||||||||
Grupo Aval Acciones y Valores SA, 5.062%, pfd. |
Banks | 26,250 | 3,314 | |||||||||||
|
|
|||||||||||||
20,551 | ||||||||||||||
|
|
|||||||||||||
Russia 0.0%† | ||||||||||||||
d,e |
Surgutneftegas PJSC, pfd. |
Oil, Gas & Consumable Fuels | 162,582 | — | ||||||||||
|
|
|||||||||||||
South Korea 0.4% | ||||||||||||||
e |
Kumho Petrochemical Co. Ltd., 12.094%, pfd. |
Chemicals | 18 | 1,045 | ||||||||||
e |
LG Chem Ltd., 4.782%, pfd. |
Chemicals | 6 | 1,057 | ||||||||||
e |
Samsung Electronics Co. Ltd., 2.311%, pfd. |
Technology Hardware, Storage & Peripherals | 1,416 | 46,418 | ||||||||||
e |
Samsung Fire & Marine Insurance Co. Ltd., 7.77%, pfd. |
Insurance | 18 | 1,944 | ||||||||||
|
|
|||||||||||||
50,464 | ||||||||||||||
|
|
|||||||||||||
Total
Preferred Stocks |
254,439 | |||||||||||||
|
|
|||||||||||||
Right 0.0%† | ||||||||||||||
Philippines 0.0%† | ||||||||||||||
GLOBE TELECOM Inc. RIGHTS |
Wireless Telecommunication Services | 15 | 89 | |||||||||||
|
|
|||||||||||||
Total Rights (Cost $0) |
89 | |||||||||||||
|
|
|||||||||||||
Total Investments (Cost $15,608,816) 99.4% |
12,352,391 | |||||||||||||
Other Assets, less Liabilities 0.6% |
74,916 | |||||||||||||
|
|
|||||||||||||
Net Assets 100.0% |
$ | 12,427,307 | ||||||||||||
|
|
†Rounds to less than 0.1% of net assets.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2022, the value of was $535,975, representing 4.3% of net assets.
bNon-income producing.
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2022, the value of was $85,546, representing 0.7% of net assets.
dFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.
eVariable rate security. The rate shown represents the yield at period end.
At September 30, 2022, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts |
Notional Amount* |
Expiration Date |
Value/Unrealized Appreciation (Depreciation) |
|||||||||||||||
Equity Contracts | ||||||||||||||||||||
MSCI Emerging Markets Index |
Long | 2 | $ | 87,150 | 12/16/22 | $ | (9,794 | ) |
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 110.
46 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin International Core Dividend Tilt Index ETFa
Six Months Ended September 30, 2022 (unaudited) |
Year Ended March 31, | |||||||||||||||||||||||
2022 | 2021 | 2020 | 2019 | 2018 | ||||||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||||||
Net asset value, beginning of period |
$ | 28.65 | $ | 26.52 | $ | 22.55 | $ | 24.70 | $ | 24.25 | $ | 24.70 | ||||||||||||
|
|
|||||||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec |
0.62 | 1.00 | 0.73 | 0.89 | 0.93 | 0.77 | ||||||||||||||||||
Net realized and unrealized gains (losses) |
(5.27 | ) | 1.93 | 5.27 | (2.61 | ) | 0.79 | 0.10 | ||||||||||||||||
|
|
|||||||||||||||||||||||
Total from investment operations |
(4.65 | ) | 2.93 | 6.00 | (1.72 | ) | 1.72 | 0.87 | ||||||||||||||||
|
|
|||||||||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income |
(1.14 | ) | (0.80 | ) | (0.91 | ) | (0.19 | ) | (0.30 | ) | (1.32 | ) | ||||||||||||
Net realized gains |
(0.47 | ) | — | (1.12 | ) | (0.24 | ) | (0.97 | ) | — | ||||||||||||||
|
|
|||||||||||||||||||||||
Total Distributions |
(1.61 | ) | (0.80 | ) | (2.03 | ) | (0.43 | ) | (1.27 | ) | (1.32 | ) | ||||||||||||
|
|
|||||||||||||||||||||||
Net asset value, end of period |
$ | 22.39 | $ | 28.65 | $ | 26.52 | $ | 22.55 | $ | 24.70 | $ | 24.25 | ||||||||||||
|
|
|||||||||||||||||||||||
Total returnd |
(16.78)% | 11.13% | 27.54% | (7.12)% | 7.53% | 3.47% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.27% | 0.40% | 0.40% | 0.40% | 0.40% | 1.42% | f | |||||||||||||||||
Expenses net of waiver and payments by affiliates |
0.27% | 0.40% | 0.40% | 0.40% | 0.40% | 0.40% | f | |||||||||||||||||
Net investment income |
4.70% | 3.54% | 2.97% | 3.44% | 3.75% | 3.07% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) |
$31,343 | $17,192 | $13,260 | $9,021 | $7,410 | $9,702 | ||||||||||||||||||
Portfolio turnover rateg |
93.59% | h | 30.20% | h | 42.33% | h | 26.82% | h | 39.24% | 32.55% |
aEffective August 1, 2022, Formerly, Franklin LibertyQ International Equity Hedged ETF was renamed Franklin International Core Dividend Tilt Index ETF.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
gPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
hPortfolio turnover rate excluding cash creations was as follows: | 93.59% | 30.20% | 41.62% | 26.82% |
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
47 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin International Core Dividend Tilt Index ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 98.9% | ||||||||||||||
Australia 10.2% | ||||||||||||||
Alumina Ltd. |
Metals & Mining | 17,668 | $ | 14,370 | ||||||||||
Apa Group |
Gas Utilities | 8,792 | 54,211 | |||||||||||
Aristocrat Leisure Ltd. |
Hotels, Restaurants & Leisure | 420 | 8,890 | |||||||||||
Aurizon Holdings Ltd. |
Road & Rail | 13,804 | 30,620 | |||||||||||
Australia & New Zealand Banking Group Ltd. |
Banks | 10,094 | 147,971 | |||||||||||
Australian Stock Exchange Ltd. |
Capital Markets | 756 | 34,880 | |||||||||||
Bendigo and Adelaide Bank Ltd. |
Banks | 4,312 | 21,597 | |||||||||||
BHP Group Ltd. |
Metals & Mining | 20,510 | 507,960 | |||||||||||
Challenger Ltd. |
Diversified Financial Services | 2,394 | 9,004 | |||||||||||
Cochlear Ltd. |
Health Care Equipment & Supplies | 98 | 12,258 | |||||||||||
Coles Group Ltd. |
Food & Staples Retailing | 4,410 | 46,586 | |||||||||||
Commonwealth Bank of Australia |
Banks | 4,088 | 238,394 | |||||||||||
Computershare Ltd. |
IT Services | 1,092 | 17,384 | |||||||||||
CSL Ltd. |
Biotechnology | 1,078 | 197,547 | |||||||||||
Dexus |
Equity Real Estate Investment Trusts (REITs | ) | 7,980 | 39,609 | ||||||||||
Domino’s Pizza Enterprises Ltd. |
Hotels, Restaurants & Leisure | 504 | 16,695 | |||||||||||
Endeavour Group Ltd. |
Food & Staples Retailing | 6,300 | 28,354 | |||||||||||
Fortescue Metals Group Ltd. |
Metals & Mining | 13,706 | 148,222 | |||||||||||
Glencore PLC |
Metals & Mining | 7,448 | 39,754 | |||||||||||
Goodman Group |
Equity Real Estate Investment Trusts (REITs | ) | 1,456 | 14,772 | ||||||||||
Harvey Norman Holdings Ltd. |
Multiline Retail | 4,942 | 12,837 | |||||||||||
Incitec Pivot Ltd. |
Chemicals | 5,096 | 11,500 | |||||||||||
Macquarie Group Ltd. |
Capital Markets | 994 | 97,615 | |||||||||||
Medibank Private Ltd. |
Insurance | 21,028 | 46,914 | |||||||||||
Mirvac Group |
Equity Real Estate Investment Trusts (REITs | ) | 9,954 | 12,448 | ||||||||||
National Australia Bank Ltd. |
Banks | 8,232 | 152,485 | |||||||||||
Northern Star Resources Ltd. |
Metals & Mining | 2,450 | 12,334 | |||||||||||
Origin Energy Ltd. |
Oil, Gas & Consumable Fuels | 4,620 | 15,357 | |||||||||||
REA Group Ltd. |
Media | 154 | 11,372 | |||||||||||
Rio Tinto Ltd. |
Metals & Mining | 2,814 | 168,967 | |||||||||||
Rio Tinto PLC |
Metals & Mining | 5,740 | 313,714 | |||||||||||
Scentre Group |
Real Estate Investment Trusts (REITs | ) | 38,766 | 63,309 | ||||||||||
SEEK Ltd. |
Professional Services | 1,330 | 16,393 | |||||||||||
Seven Group Holdings Ltd. |
Trading Companies & Distributors | 1,162 | 12,663 | |||||||||||
Sonic Healthcare Ltd. |
Health Care Providers & Services | 1,470 | 28,902 | |||||||||||
Stockland |
Real Estate Investment Trusts (REITs | ) | 17,766 | 37,352 | ||||||||||
Suncorp-Metway Ltd. |
Insurance | 3,626 | 23,383 | |||||||||||
Tabcorp Holdings Ltd. |
Hotels, Restaurants & Leisure | 15,050 | 9,047 | |||||||||||
Telstra Corp. Ltd. |
Diversified Telecommunication Services | 8,232 | 20,377 | |||||||||||
The GPT Group |
Equity Real Estate Investment Trusts (REITs | ) | 13,986 | 34,441 | ||||||||||
TPG Telecom Limited |
Diversified Telecommunication Services | 2,702 | 8,426 | |||||||||||
Transurban Group |
Transportation Infrastructure | 8,708 | 69,089 | |||||||||||
Treasury Wine Estates Ltd. |
Beverages | 1,148 | 9,278 | |||||||||||
Vicinity Centres |
Real Estate Investment Trusts (REITs | ) | 27,468 | 30,641 | ||||||||||
Wesfarmers Ltd. |
Multiline Retail | 3,668 | 100,748 | |||||||||||
Westpac Banking Corp. |
Banks | 12,026 | 159,591 | |||||||||||
WiseTech Global Ltd. |
Software | 1,204 | 40,254 | |||||||||||
Woolworths Group Ltd. |
Food & Staples Retailing | 1,596 | 34,838 | |||||||||||
Worley Ltd. |
Energy Equipment & Services | 882 | 7,219 | |||||||||||
|
|
|||||||||||||
3,190,572 | ||||||||||||||
|
|
|||||||||||||
Austria 0.3% | ||||||||||||||
a |
BAWAG Group AG, 144A |
Banks | 504 | 21,952 | ||||||||||
Erste Group Bank AG |
Banks | 2,296 | 50,924 | |||||||||||
Raiffeisen Bank International AG |
Banks | 378 | 4,521 | |||||||||||
Strabag SE |
Construction & Engineering | 98 | 3,706 | |||||||||||
Voestalpine AG |
Metals & Mining | 392 | 6,724 | |||||||||||
|
|
|||||||||||||
87,827 | ||||||||||||||
|
|
48 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Belgium 0.8% | ||||||||||||||
Ageas SA/NV |
Insurance | 1,344 | $ | 49,295 | ||||||||||
Colruyt SA |
Food & Staples Retailing | 378 | 8,332 | |||||||||||
Groupe Bruxelles Lambert SA |
Diversified Financial Services | 658 | 46,335 | |||||||||||
KBC Groep NV |
Banks | 2,352 | 112,119 | |||||||||||
Proximus SADP |
Diversified Telecommunication Services | 1,204 | 12,497 | |||||||||||
Solvay SA |
Chemicals | 322 | 25,122 | |||||||||||
Telenet Group Holding NV |
Media | 378 | 5,225 | |||||||||||
|
|
|||||||||||||
258,925 | ||||||||||||||
|
|
|||||||||||||
Chile 0.1% | ||||||||||||||
Antofagasta PLC |
Metals & Mining | 2,422 | 30,160 | |||||||||||
|
|
|||||||||||||
China 0.2% | ||||||||||||||
a,b |
WuXi Biologics (Cayman) Inc., 144A |
Life Sciences Tools & Services | 8,908 | 53,789 | ||||||||||
|
|
|||||||||||||
Denmark 2.2% | ||||||||||||||
AP Moller-Maersk A/S, A |
Marine | 26 | 46,177 | |||||||||||
AP Moller-Maersk A/S, B |
Marine | 46 | 84,032 | |||||||||||
Coloplast AS, B |
Health Care Equipment & Supplies | 322 | 32,913 | |||||||||||
DSV A/S |
Air Freight & Logistics | 140 | 16,527 | |||||||||||
b |
Genmab A/S |
Biotechnology | 28 | 9,079 | ||||||||||
Novo Nordisk AS, B |
Pharmaceuticals | 4,298 | 431,165 | |||||||||||
a |
Orsted AS, 144A |
Electric Utilities | 126 | 10,085 | ||||||||||
Pandora AS |
Textiles, Apparel & Luxury Goods | 140 | 6,624 | |||||||||||
Vestas Wind Systems A/S |
Electrical Equipment | 2,044 | 38,139 | |||||||||||
|
|
|||||||||||||
674,741 | ||||||||||||||
|
|
|||||||||||||
Finland 1.7% | ||||||||||||||
Elisa OYJ |
Diversified Telecommunication Services | 1,106 | 50,220 | |||||||||||
c |
Fortum OYJ, Reg S |
Electric Utilities | 3,542 | 47,781 | ||||||||||
Huhtamaki OYJ |
Containers & Packaging | 252 | 8,063 | |||||||||||
Kesko OYJ |
Food & Staples Retailing | 1,078 | 20,218 | |||||||||||
Kesko OYJ, A |
Food & Staples Retailing | 378 | 6,821 | |||||||||||
Kone OYJ, B |
Machinery | 1,512 | 58,672 | |||||||||||
Neste Oil OYJ |
Oil, Gas & Consumable Fuels | 546 | 23,963 | |||||||||||
Nordea Bank Abp |
Banks | 24,276 | 209,280 | |||||||||||
Orion OYJ |
Pharmaceuticals | 350 | 14,771 | |||||||||||
Orion OYJ, A |
Pharmaceuticals | 70 | 2,976 | |||||||||||
Sampo OYJ, A |
Insurance | 1,764 | 75,622 | |||||||||||
UPM-Kymmene OYJ |
Paper & Forest Products | 364 | 11,618 | |||||||||||
Wartsila OYJ ABP |
Machinery | 2,072 | 13,360 | |||||||||||
|
|
|||||||||||||
543,365 | ||||||||||||||
|
|
|||||||||||||
France 9.1% | ||||||||||||||
Air Liquide SA |
Chemicals | 224 | 25,798 | |||||||||||
Airbus SE |
Aerospace & Defense | 280 | 24,383 | |||||||||||
a |
Amundi SA, 144A |
Capital Markets | 434 | 18,265 | ||||||||||
AXA SA |
Insurance | 9,226 | 203,135 | |||||||||||
BNP Paribas SA |
Banks | 6,328 | 270,317 | |||||||||||
Bouygues SA |
Construction & Engineering | 1,582 | 41,612 | |||||||||||
Capgemini SE |
IT Services | 70 | 11,349 | |||||||||||
Cie Generale des Etablissements Michelin SCA |
Auto Components | 546 | 12,385 | |||||||||||
Compagnie de Saint-Gobain |
Building Products | 1,092 | 39,635 | |||||||||||
Covivio |
Equity Real Estate Investment Trusts (REITs | ) | 378 | 18,338 | ||||||||||
Credit Agricole SA |
Banks | 9,940 | 81,446 | |||||||||||
Danone SA |
Food Products | 1,764 | 83,934 | |||||||||||
Dassault Systemes SE |
Software | 1,316 | 46,070 | |||||||||||
EDF SA |
Electric Utilities | 2,226 | 25,929 | |||||||||||
Engie SA |
Multi-Utilities | 10,108 | 117,263 |
franklintempleton.com |
Semiannual Report |
49 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
France (continued) | ||||||||||||||
EssilorLuxottica SA |
Textiles, Apparel & Luxury Goods | 476 | $ | 65,447 | ||||||||||
Gecina SA |
Equity Real Estate Investment Trusts (REITs | ) | 294 | 23,171 | ||||||||||
Hermes International |
Textiles, Apparel & Luxury Goods | 32 | 38,152 | |||||||||||
Kering SA |
Textiles, Apparel & Luxury Goods | 140 | 62,891 | |||||||||||
Legrand SA |
Electrical Equipment | 252 | 16,456 | |||||||||||
L’Oreal SA |
Personal Products | 210 | 67,941 | |||||||||||
LVMH Moet Hennessy Louis Vuitton SE |
Textiles, Apparel & Luxury Goods | 672 | 401,841 | |||||||||||
Orange SA |
Diversified Telecommunication Services | 13,874 | 125,696 | |||||||||||
Pernod Ricard SA |
Beverages | 238 | 44,032 | |||||||||||
Safran SA |
Aerospace & Defense | 42 | 3,868 | |||||||||||
Sanofi |
Pharmaceuticals | 4,004 | 307,525 | |||||||||||
Sartorius Stedim Biotech |
Life Sciences Tools & Services | 84 | 26,094 | |||||||||||
Schneider Electric SE |
Electrical Equipment | 1,414 | 161,988 | |||||||||||
Societe Generale SA |
Banks | 2,352 | 47,039 | |||||||||||
Teleperformance |
Professional Services | 42 | 10,735 | |||||||||||
TotalEnergies SE |
Oil, Gas & Consumable Fuels | 6,230 | 294,633 | |||||||||||
Veolia Environnement SA |
Multi-Utilities | 1,134 | 21,896 | |||||||||||
Vinci SA |
Construction & Engineering | 1,204 | 98,099 | |||||||||||
a,b,c |
Worldline SA, 144A, Reg S |
IT Services | 196 | 7,811 | ||||||||||
|
|
|||||||||||||
2,845,174 | ||||||||||||||
|
|
|||||||||||||
Germany 7.5% | ||||||||||||||
Adidas AG |
Textiles, Apparel & Luxury Goods | 420 | 48,913 | |||||||||||
Allianz SE |
Insurance | 1,890 | 299,579 | |||||||||||
Aroundtown SA |
Real Estate Management & Development | 7,574 | 16,747 | |||||||||||
BASF SE |
Chemicals | 5,124 | 198,781 | |||||||||||
Bayer AG |
Pharmaceuticals | 2,674 | 124,208 | |||||||||||
Bayerische Motoren Werke AG |
Automobiles | 2,044 | 140,148 | |||||||||||
Continental AG |
Auto Components | 70 | 3,151 | |||||||||||
a |
Covestro AG, 144A |
Chemicals | 1,358 | 39,299 | ||||||||||
Daimler AG |
Automobiles | 4,396 | 225,447 | |||||||||||
a,b |
Delivery Hero SE, 144A |
Internet & Direct Marketing Retail | 590 | 21,929 | ||||||||||
Deutsche Boerse AG |
Capital Markets | 336 | 55,382 | |||||||||||
Deutsche Post AG |
Air Freight & Logistics | 3,738 | 113,941 | |||||||||||
Deutsche Telekom AG |
Diversified Telecommunication Services | 8,652 | 148,261 | |||||||||||
E.ON SE |
Multi-Utilities | 14,980 | 115,875 | |||||||||||
Evonik Industries AG |
Chemicals | 1,372 | 23,185 | |||||||||||
GEA Group AG |
Machinery | 364 | 11,889 | |||||||||||
HeidelbergCement AG |
Construction Materials | 308 | 12,326 | |||||||||||
Infineon Technologies AG |
Semiconductors & Semiconductor Equipment | 4,564 | 101,539 | |||||||||||
KION Group AG |
Machinery | 504 | 9,784 | |||||||||||
Merck KGaA |
Pharmaceuticals | 42 | 6,863 | |||||||||||
Muenchener Rueckversicherungs-Gesellschaft Aktiengesellschaft in Muenchen |
Insurance | 406 | 98,440 | |||||||||||
RWE AG |
Multi-Utilities | 658 | 24,360 | |||||||||||
SAP SE |
Software | 2,506 | 206,515 | |||||||||||
Siemens AG |
Industrial Conglomerates | 2,072 | 205,419 | |||||||||||
Telefonica Deutschland Holding AG |
Diversified Telecommunication Services | 7,028 | 14,273 | |||||||||||
Vonovia SE |
Real Estate Management & Development | 3,486 | 75,848 | |||||||||||
a,b |
Zalando SE, 144A |
Internet & Direct Marketing Retail | 224 | 4,439 | ||||||||||
|
|
|||||||||||||
2,346,541 | ||||||||||||||
|
|
|||||||||||||
Hong Kong 3.0% | ||||||||||||||
AIA Group Ltd., A |
Insurance | 20,200 | 168,421 | |||||||||||
CK Asset Holdings Ltd. |
Real Estate Management & Development | 3,600 | 21,646 | |||||||||||
CK Infrastructure Holdings Ltd., A |
Electric Utilities | 4,200 | 21,428 | |||||||||||
CLP Holdings Ltd. |
Electric Utilities | 5,600 | 42,339 | |||||||||||
Dairy Farm International Holdings Ltd., A |
Food & Staples Retailing | 2,800 | 6,468 |
50 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Hong Kong (continued) | ||||||||||||||
Hang Lung Properties Ltd. |
Real Estate Management & Development | 14,000 | $ | 22,971 | ||||||||||
Hang Seng Bank Ltd. |
Banks | 3,500 | 53,147 | |||||||||||
Henderson Land Development Co. Ltd. |
Real Estate Management & Development | 10,500 | 29,427 | |||||||||||
HK Electric Investments & HK Electric Investments Ltd. |
Electric Utilities | 14,000 | 9,809 | |||||||||||
HKT Trust and HKT Ltd. |
Diversified Telecommunication Services | 26,157 | 30,656 | |||||||||||
Hong Kong and China Gas Co. Ltd. |
Gas Utilities | 42,000 | 37,025 | |||||||||||
Hong Kong Exchanges and Clearing Ltd. |
Capital Markets | 2,200 | 75,558 | |||||||||||
Jardine Matheson Holdings Ltd. |
Industrial Conglomerates | 600 | 30,384 | |||||||||||
Link REIT |
Equity Real Estate Investment Trusts (REITs | ) | 14,000 | 97,912 | ||||||||||
MTR Corp. Ltd. |
Road & Rail | 1,000 | 4,593 | |||||||||||
New World Development Co. Ltd. |
Real Estate Management & Development | 10,000 | 28,408 | |||||||||||
Power Assets Holdings Ltd. |
Electric Utilities | 10,500 | 52,701 | |||||||||||
Sino Land Co. Ltd. |
Real Estate Management & Development | 21,700 | 28,694 | |||||||||||
Sun Hung Kai Properties Ltd. |
Real Estate Management & Development | 7,378 | 81,629 | |||||||||||
Swire Pacific Ltd., A |
Real Estate Management & Development | 1,000 | 7,484 | |||||||||||
Swire Properties Ltd. |
Real Estate Management & Development | 6,800 | 14,640 | |||||||||||
Techtronic Industries Co. Ltd. |
Household Durables | 5,600 | 54,110 | |||||||||||
Wharf Real Estate Investment Co. Ltd. |
Real Estate Management & Development | 6,220 | 28,288 | |||||||||||
|
|
|||||||||||||
947,738 | ||||||||||||||
|
|
|||||||||||||
Ireland 0.2% | ||||||||||||||
Experian PLC |
Professional Services | 420 | 12,476 | |||||||||||
Smurfit Kappa Group PLC |
Containers & Packaging | 1,610 | 46,260 | |||||||||||
|
|
|||||||||||||
58,736 | ||||||||||||||
|
|
|||||||||||||
Isle Of Man 0.0%† | ||||||||||||||
GVC Holdings PLC |
Hotels, Restaurants & Leisure | 532 | 6,449 | |||||||||||
|
|
|
|
|||||||||||
Israel 0.5% | ||||||||||||||
Bank Leumi Le-Israel BM |
Banks | 8,918 | 76,768 | |||||||||||
ICL Group Ltd. |
Chemicals | 5,306 | 42,961 | |||||||||||
Mizrahi Tefahot Bank Ltd. |
Banks | 112 | 3,952 | |||||||||||
b |
Nice Ltd. |
Software | 182 | 34,772 | ||||||||||
|
|
|||||||||||||
158,453 | ||||||||||||||
|
|
|||||||||||||
Italy 2.8% | ||||||||||||||
A2A SpA |
Multi-Utilities | 12,922 | 12,656 | |||||||||||
Banca Mediolanum SpA |
Diversified Financial Services | 1,442 | 9,140 | |||||||||||
Banco BPM SpA |
Banks | 10,556 | 27,859 | |||||||||||
DiaSorin SpA |
Health Care Equipment & Supplies | 14 | 1,574 | |||||||||||
Enel SpA |
Electric Utilities | 53,914 | 223,098 | |||||||||||
Eni SpA |
Oil, Gas & Consumable Fuels | 12,320 | 131,676 | |||||||||||
Ferrari NV |
Automobiles | 112 | 21,033 | |||||||||||
FinecoBank Banca Fineco SpA |
Banks | 4,340 | 54,145 | |||||||||||
Hera SpA |
Multi-Utilities | 5,908 | 12,652 | |||||||||||
a,c |
Infrastrutture Wireless Italiane SpA, 144A, Reg S |
Diversified Telecommunication Services | 2,590 | 22,760 | ||||||||||
Intesa Sanpaolo SpA |
Banks | 45,654 | 76,158 | |||||||||||
Mediobanca Banca di Credito Finanziario SpA |
Banks | 5,012 | 39,575 | |||||||||||
Moncler SpA |
Textiles, Apparel & Luxury Goods | 616 | 25,581 | |||||||||||
a,c |
Poste Italiane SpA, 144A, Reg S |
Insurance | 3,262 | 24,894 | ||||||||||
Prysmian SpA |
Electrical Equipment | 266 | 7,719 | |||||||||||
Recordati Industria Chimica e Farmaceutica SpA |
Pharmaceuticals | 756 | 27,914 | |||||||||||
Snam SpA |
Gas Utilities | 15,134 | 61,469 | |||||||||||
Terna – Rete Elettrica Nazionale |
Electric Utilities | 10,486 | 64,204 | |||||||||||
UniCredit SpA |
Banks | 3,836 | 39,300 | |||||||||||
UnipolSai Assicurazioni SpA |
Insurance | 3,304 | 6,894 | |||||||||||
|
|
|||||||||||||
890,301 | ||||||||||||||
|
|
franklintempleton.com |
Semiannual Report |
51 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan 24.1% | ||||||||||||||
ABC-Mart Inc. |
Specialty Retail | 155 | $ | 6,671 | ||||||||||
Advance Residence Investment |
Equity Real Estate Investment Trusts (REITs | ) | 4 | 9,797 | ||||||||||
Advantest Corp. |
Semiconductors & Semiconductor Equipment | 1,400 | 64,804 | |||||||||||
AEON Co. Ltd. |
Food & Staples Retailing | 400 | 7,471 | |||||||||||
AGC Inc. |
Building Products | 600 | 18,612 | |||||||||||
Air Water Inc. |
Chemicals | 700 | 8,260 | |||||||||||
Aisin Seiki Co. Ltd. |
Auto Components | 1,400 | 35,884 | |||||||||||
Asahi Group Holdings Ltd. |
Beverages | 700 | 21,685 | |||||||||||
Asahi Kasei Corp. |
Chemicals | 2,800 | 18,484 | |||||||||||
Astellas Pharma Inc. |
Pharmaceuticals | 5,370 | 71,120 | |||||||||||
Bridgestone Corp. |
Auto Components | 2,600 | 83,868 | |||||||||||
Brother Industries Ltd. |
Technology Hardware, Storage & Peripherals | 120 | 2,065 | |||||||||||
CANON Inc. |
Technology Hardware, Storage & Peripherals | 4,800 | 105,189 | |||||||||||
Capcom Co. Ltd. |
Entertainment | 579 | 14,561 | |||||||||||
Chubu Electric Power Co. Inc. |
Electric Utilities | 3,200 | 28,829 | |||||||||||
Chugai Pharmaceutical Co. Ltd. |
Pharmaceuticals | 1,770 | 44,340 | |||||||||||
Concordia Financial Group Ltd. |
Banks | 1,400 | 4,323 | |||||||||||
CyberAgent Inc. |
Media | 2,800 | 23,561 | |||||||||||
Daifuku Co. Ltd. |
Machinery | 300 | 14,115 | |||||||||||
Daiichi Sankyo Co. Ltd. |
Pharmaceuticals | 4,100 | 114,492 | |||||||||||
Daikin Industries Ltd. |
Building Products | 412 | 63,460 | |||||||||||
Daito Trust Construction Co. Ltd. |
Real Estate Management & Development | 510 | 47,813 | |||||||||||
Daiwa House Industry Co. Ltd. |
Real Estate Management & Development | 1,720 | 34,978 | |||||||||||
Daiwa House Residential Investment Corp. |
Equity Real Estate Investment Trusts (REITs | ) | 14 | 29,113 | ||||||||||
Daiwa Securities Group Inc. |
Capital Markets | 11,200 | 43,827 | |||||||||||
Denso Corp. |
Auto Components | 1,600 | 72,801 | |||||||||||
Dentsu Group Inc. |
Media | 100 | 2,839 | |||||||||||
Disco Corp. |
Semiconductors & Semiconductor Equipment | 230 | 50,848 | |||||||||||
East Japan Railway Co. |
Road & Rail | 420 | 21,533 | |||||||||||
Eisai Co. Ltd. |
Pharmaceuticals | 1,200 | 64,243 | |||||||||||
ENEOS Holdings Inc. |
Oil, Gas & Consumable Fuels | 16,800 | 53,982 | |||||||||||
FANUC Corp. |
Machinery | 280 | 39,192 | |||||||||||
Fast Retailing Co. Ltd. |
Specialty Retail | 89 | 47,167 | |||||||||||
Fuji Electric Co. Ltd. |
Electrical Equipment | 100 | 3,655 | |||||||||||
FUJIFILM Holdings Corp. |
Technology Hardware, Storage & Peripherals | 150 | 6,849 | |||||||||||
Fujitsu Ltd. |
IT Services | 600 | 65,432 | |||||||||||
GLP J-Reit |
Equity Real Estate Investment Trusts (REITs | ) | 17 | 18,803 | ||||||||||
GMO Payment Gateway Inc. |
IT Services | 340 | 23,372 | |||||||||||
Hamamatsu Photonics K.K. |
Electronic Equipment, Instruments & Components | 100 | 4,283 | |||||||||||
Haseko Corp. |
Household Durables | 1,400 | 15,195 | |||||||||||
Hirose Electric Co. Ltd. |
Electronic Equipment, Instruments & Components | 60 | 7,868 | |||||||||||
Hitachi Construction Machinery Co. Ltd. |
Machinery | 800 | 14,790 | |||||||||||
Hitachi Ltd. |
Industrial Conglomerates | 1,200 | 50,688 | |||||||||||
Honda Motor Co. Ltd. |
Automobiles | 6,000 | 130,036 | |||||||||||
Hoya Corp. |
Health Care Equipment & Supplies | 620 | 59,454 | |||||||||||
Hulic Co. Ltd. |
Real Estate Management & Development | 4,260 | 31,285 | |||||||||||
Ibiden Co. Ltd. |
Electronic Equipment, Instruments & Components | 1,000 | 27,358 | |||||||||||
Iida Group Holdings Co. Ltd. |
Household Durables | 1,379 | 18,702 | |||||||||||
Isuzu Motors Ltd. |
Automobiles | 2,900 | 31,996 | |||||||||||
ITOCHU Corp. |
Trading Companies & Distributors | 2,120 | 51,277 | |||||||||||
ITOCHU Techno-Solutions Corp. |
IT Services | 600 | 14,052 | |||||||||||
Japan Exchange Group Inc. |
Capital Markets | 1,800 | 24,281 | |||||||||||
Japan Post Holdings Co. Ltd. |
Insurance | 8,800 | 58,225 | |||||||||||
Japan Prime Realty Investment Corp. |
Equity Real Estate Investment Trusts (REITs | ) | 6 | 16,291 | ||||||||||
Japan Real Estate Investment Corp. |
Equity Real Estate Investment Trusts (REITs | ) | 6 | 24,747 | ||||||||||
Japan Retail Fund Investment Corp. |
Equity Real Estate Investment Trusts (REITs | ) | 56 | 42,093 | ||||||||||
Japan Tobacco Inc. |
Tobacco | 8,140 | 133,506 | |||||||||||
JFE Holdings Inc. |
Metals & Mining | 4,200 | 38,911 |
52 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
JSR Corp. |
Chemicals | 600 | $ | 11,399 | ||||||||||
Kajima Corp. |
Construction & Engineering | 1,840 | 17,454 | |||||||||||
Kakaku.com Inc. |
Interactive Media & Services | 600 | 10,206 | |||||||||||
KAO Corp. |
Personal Products | 930 | 37,895 | |||||||||||
KDDI Corp. |
Wireless Telecommunication Services | 3,732 | 109,398 | |||||||||||
Keyence Corp. |
Electronic Equipment, Instruments & Components | 448 | 148,255 | |||||||||||
Kirin Holdings Co. Ltd. |
Beverages | 2,800 | 43,080 | |||||||||||
Koei Tecmo Holdings Co. Ltd. |
Entertainment | 986 | 16,178 | |||||||||||
Komatsu Ltd. |
Machinery | 2,100 | 37,881 | |||||||||||
Kubota Corp. |
Machinery | 600 | 8,307 | |||||||||||
Kyocera Corp. |
Electronic Equipment, Instruments & Components | 700 | 35,303 | |||||||||||
Kyowa Kirin Co. Ltd. |
Pharmaceuticals | 400 | 9,161 | |||||||||||
Kyushu Electric Power Co. Inc. |
Electric Utilities | 4,200 | 22,401 | |||||||||||
Kyushu Railway Co. |
Road & Rail | 800 | 17,272 | |||||||||||
Lasertec Corp. |
Semiconductors & Semiconductor Equipment | 560 | 56,853 | |||||||||||
Lawson Inc. |
Food & Staples Retailing | 350 | 11,462 | |||||||||||
LIXIL Group Corp. |
Building Products | 2,100 | 30,743 | |||||||||||
M3 Inc. |
Health Care Technology | 1,400 | 39,182 | |||||||||||
Marubeni Corp. |
Trading Companies & Distributors | 5,600 | 49,057 | |||||||||||
Marui Group Co. Ltd. |
Multiline Retail | 100 | 1,657 | |||||||||||
Minebea Mitsumi Inc. |
Machinery | 700 | 10,344 | |||||||||||
Mitsubishi Chemical Holdings Corp. |
Chemicals | 9,800 | 44,794 | |||||||||||
Mitsubishi Corp. |
Trading Companies & Distributors | 3,600 | 98,689 | |||||||||||
Mitsubishi Electric Corp. |
Electrical Equipment | 4,200 | 37,852 | |||||||||||
Mitsubishi Gas Chemical Co. Inc. |
Chemicals | 1,400 | 18,338 | |||||||||||
Mitsubishi Heavy Industries Ltd. |
Machinery | 500 | 16,602 | |||||||||||
Mitsubishi UFJ Financial Group Inc. |
Banks | 37,800 | 170,139 | |||||||||||
Mitsubishi UFJ Lease & Finance Co. Ltd. |
Diversified Financial Services | 4,200 | 18,048 | |||||||||||
Mitsui & Co. Ltd. |
Trading Companies & Distributors | 2,100 | 44,816 | |||||||||||
Mitsui OSK Lines Ltd. |
Marine | 2,900 | 52,132 | |||||||||||
Mizuho Financial Group Inc. |
Banks | 9,000 | 97,154 | |||||||||||
MonotaRO Co. Ltd. |
Trading Companies & Distributors | 1,030 | 15,812 | |||||||||||
MS&AD Insurance Group Holdings Inc. |
Insurance | 2,580 | 68,375 | |||||||||||
Murata Manufacturing Co. Ltd. |
Electronic Equipment, Instruments & Components | 1,970 | 90,262 | |||||||||||
NEC Corp. |
IT Services | 500 | 15,976 | |||||||||||
Nexon Co. Ltd. |
Entertainment | 150 | 2,645 | |||||||||||
NGK Spark Plug Co. Ltd. |
Auto Components | 1,400 | 24,780 | |||||||||||
Nidec Corp. |
Electrical Equipment | 1,400 | 78,635 | |||||||||||
Nihon M&A Center Inc. |
Professional Services | 2,380 | 27,344 | |||||||||||
Nintendo Co. Ltd. |
Entertainment | 5,880 | 237,808 | |||||||||||
Nippon Building Fund Inc. |
Equity Real Estate Investment Trusts (REITs | ) | 2 | 8,788 | ||||||||||
Nippon Paint Holdings Co. Ltd. |
Chemicals | 2,800 | 18,938 | |||||||||||
Nippon Prologis REIT Inc. |
Equity Real Estate Investment Trusts (REITs | ) | 4 | 8,746 | ||||||||||
Nippon Steel Corp. |
Metals & Mining | 3,300 | 45,746 | |||||||||||
Nippon Telegraph & Telephone Corp. |
Diversified Telecommunication Services | 1,557 | 42,016 | |||||||||||
Nippon Yusen KK |
Marine | 4,200 | 71,584 | |||||||||||
Nitto Denko Corp. |
Chemicals | 1,085 | 58,693 | |||||||||||
Nomura Holdings Inc. |
Capital Markets | 11,200 | 37,017 | |||||||||||
Nomura Real Estate Master Fund Inc. |
Equity Real Estate Investment Trusts (REITs | ) | 16 | 17,653 | ||||||||||
Nomura Research Institute Ltd. |
IT Services | 1,030 | 25,262 | |||||||||||
NSK Ltd. |
Machinery | 1,400 | 6,838 | |||||||||||
Obayashi Corp. |
Construction & Engineering | 1,400 | 8,976 | |||||||||||
OBIC Co. Ltd. |
IT Services | 40 | 5,358 | |||||||||||
Olympus Corp. |
Health Care Equipment & Supplies | 2,200 | 42,231 | |||||||||||
Omron Corp. |
Electronic Equipment, Instruments & Components | 300 | 13,712 | |||||||||||
Ono Pharmaceutical Co. Ltd. |
Pharmaceuticals | 1,850 | 43,213 | |||||||||||
Open House Co. Ltd. |
Household Durables | 100 | 3,382 | |||||||||||
Oracle Corp. Japan |
Software | 70 | 3,724 |
franklintempleton.com |
Semiannual Report |
53 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
ORIX Corp. |
Diversified Financial Services | 4,200 | $ | 58,860 | ||||||||||
ORIX JREIT Inc. |
Equity Real Estate Investment Trusts (REITs | ) | 14 | 17,894 | ||||||||||
Otsuka Corp. |
IT Services | 600 | 18,757 | |||||||||||
Otsuka Holdings Co. Ltd. |
Pharmaceuticals | 900 | 28,503 | |||||||||||
Panasonic Corp. |
Household Durables | 2,800 | 19,625 | |||||||||||
Recruit Holdings Co. Ltd. |
Professional Services | 4,200 | 120,738 | |||||||||||
b |
Renesas Electronics Corp. |
Semiconductors & Semiconductor Equipment | 500 | 4,152 | ||||||||||
Rohm Co. Ltd. |
Semiconductors & Semiconductor Equipment | 700 | 45,749 | |||||||||||
Santen Pharmaceutical Co. Ltd. |
Pharmaceuticals | 3,200 | 21,555 | |||||||||||
SBI Holdings Inc. |
Capital Markets | 1,900 | 34,077 | |||||||||||
Sega Sammy Holdings Inc. |
Leisure Products | 1,400 | 19,045 | |||||||||||
Seiko Epson Corp. |
Technology Hardware, Storage & Peripherals | 1,400 | 19,054 | |||||||||||
Sekisui House Ltd. |
Household Durables | 2,300 | 38,152 | |||||||||||
Seven & i Holdings Co. Ltd. |
Food & Staples Retailing | 1,800 | 72,201 | |||||||||||
SG Holdings Co. Ltd. |
Air Freight & Logistics | 720 | 9,849 | |||||||||||
Sharp Corp. |
Household Durables | 1,400 | 8,347 | |||||||||||
Shimadzu Corp. |
Electronic Equipment, Instruments & Components | 100 | 2,622 | |||||||||||
SHIMANO Inc. |
Leisure Products | 183 | 28,750 | |||||||||||
Shin-Etsu Chemical Co. Ltd. |
Chemicals | 840 | 83,161 | |||||||||||
Shionogi & Co. Ltd. |
Pharmaceuticals | 383 | 18,493 | |||||||||||
Shiseido Co. Ltd. |
Personal Products | 1,200 | 41,916 | |||||||||||
Showa Denko K.K. |
Chemicals | 450 | 6,386 | |||||||||||
Softbank Corp. |
Wireless Telecommunication Services | 21,000 | 209,862 | |||||||||||
SoftBank Group Corp. |
Wireless Telecommunication Services | 1,800 | 60,935 | |||||||||||
Sompo Holdings Inc. |
Insurance | 150 | 5,971 | |||||||||||
Sony Corp. |
Household Durables | 2,600 | 166,801 | |||||||||||
Square Enix Holdings Co. Ltd. |
Entertainment | 500 | 21,521 | |||||||||||
Subaru Corp. |
Automobiles | 2,800 | 41,919 | |||||||||||
Sumco Corp. |
Semiconductors & Semiconductor Equipment | 2,400 | 27,989 | |||||||||||
Sumitomo Chemical Co. Ltd. |
Chemicals | 11,200 | 38,457 | |||||||||||
Sumitomo Corp. |
Trading Companies & Distributors | 8,600 | 107,095 | |||||||||||
Sumitomo Electric Industries Ltd. |
Auto Components | 1,400 | 14,160 | |||||||||||
Sumitomo Metal Mining Co. Ltd. |
Metals & Mining | 1,800 | 51,732 | |||||||||||
Sumitomo Mitsui Financial Group Inc. |
Banks | 9,046 | 251,484 | |||||||||||
Suzuki Motor Corp. |
Automobiles | 200 | 6,192 | |||||||||||
Sysmex Corp. |
Health Care Equipment & Supplies | 392 | 21,037 | |||||||||||
Taisei Corp. |
Construction & Engineering | 28 | 778 | |||||||||||
Takeda Pharmaceutical Co. Ltd. |
Pharmaceuticals | 10,200 | 265,456 | |||||||||||
TDK Corp. |
Electronic Equipment, Instruments & Components | 1,700 | 52,323 | |||||||||||
The Kansai Electric Power Co. Inc. |
Electric Utilities | 2,000 | 16,747 | |||||||||||
Tokio Marine Holdings Inc. |
Insurance | 3,552 | 62,944 | |||||||||||
Tokyo Century Corp. |
Diversified Financial Services | 300 | 9,555 | |||||||||||
Tokyo Electron Ltd. |
Semiconductors & Semiconductor Equipment | 756 | 186,460 | |||||||||||
Toray Industries Inc. |
Chemicals | 2,800 | 13,769 | |||||||||||
Toshiba Corp. |
Industrial Conglomerates | 800 | 28,453 | |||||||||||
Tosoh Corp. |
Chemicals | 2,203 | 24,504 | |||||||||||
Toyota Boshoku Corp. |
Auto Components | 500 | 6,121 | |||||||||||
Toyota Industries Corp. |
Auto Components | 800 | 38,026 | |||||||||||
Toyota Motor Corp. |
Automobiles | 29,030 | 376,250 | |||||||||||
Trend Micro Inc. |
Software | 570 | 30,795 | |||||||||||
United Urban Investment Corp. |
Equity Real Estate Investment Trusts (REITs | ) | 20 | 20,657 | ||||||||||
USS Co. Ltd. |
Specialty Retail | 1,400 | 21,637 | |||||||||||
Yamaha Motor Co. Ltd. |
Automobiles | 2,200 | 41,144 | |||||||||||
YASKAWA Electric Corp. |
Machinery | 1,500 | 43,162 | |||||||||||
Z Holdings Corp. |
Interactive Media & Services | 11,200 | 29,419 | |||||||||||
Zozo Inc. |
Internet & Direct Marketing Retail | 480 | 9,597 | |||||||||||
|
|
|||||||||||||
7,549,480 | ||||||||||||||
|
|
54 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Luxembourg 0.1% | ||||||||||||||
Eurofins Scientific SE |
Life Sciences Tools & Services | 224 | $ | 13,412 | ||||||||||
RTL Group SA |
Media | 280 | 8,926 | |||||||||||
|
|
|||||||||||||
22,338 | ||||||||||||||
|
|
|||||||||||||
Mexico 0.0%† | ||||||||||||||
Fresnillo PLC |
Metals & Mining | 938 | 8,054 | |||||||||||
|
|
|||||||||||||
Netherlands 4.6% | ||||||||||||||
a,b |
Adyen NV, 144A |
IT Services | 112 | 142,835 | ||||||||||
b |
Argenx SE |
Biotechnology | 69 | 24,909 | ||||||||||
b |
Argenx SE |
Biotechnology | 7 | 2,527 | ||||||||||
b |
Argenx SE |
Biotechnology | 22 | 7,942 | ||||||||||
ASM International NV |
Semiconductors & Semiconductor Equipment | 238 | 54,501 | |||||||||||
ASML Holding NV |
Semiconductors & Semiconductor Equipment | 1,148 | 487,643 | |||||||||||
ING Groep NV |
Banks | 19,586 | 169,962 | |||||||||||
Koninklijke Ahold Delhaize NV |
Food & Staples Retailing | 798 | 20,431 | |||||||||||
Koninklijke DSM NV |
Chemicals | 14 | 1,611 | |||||||||||
Koninklijke KPN NV |
Diversified Telecommunication Services | 25,438 | 69,079 | |||||||||||
Koninklijke Philips NV |
Health Care Equipment & Supplies | 2,758 | 43,230 | |||||||||||
NN Group NV |
Insurance | 1,694 | 66,331 | |||||||||||
Prosus NV |
Internet & Direct Marketing Retail | 2,212 | 116,952 | |||||||||||
Shell PLC |
Oil, Gas & Consumable Fuels | 9,296 | 233,122 | |||||||||||
|
|
|||||||||||||
1,441,075 | ||||||||||||||
|
|
|||||||||||||
New Zealand 0.4% | ||||||||||||||
Contact Energy Ltd. |
Electric Utilities | 5,516 | 23,338 | |||||||||||
Fisher & Paykel Healthcare Corp. Ltd. |
Health Care Equipment & Supplies | 1,834 | 19,192 | |||||||||||
Fletcher Building Ltd. |
Building Products | 5,992 | 16,405 | |||||||||||
Mercury NZ Ltd. |
Electric Utilities | 3,500 | 11,285 | |||||||||||
Meridian Energy Ltd. |
Independent Power Producers & Energy Traders | 8,610 | 23,377 | |||||||||||
Spark New Zealand Ltd. |
Diversified Telecommunication Services | 13,720 | 38,804 | |||||||||||
|
|
|||||||||||||
132,401 | ||||||||||||||
|
|
|||||||||||||
Norway 1.2% | ||||||||||||||
b |
Adevinta ASA, B |
Interactive Media & Services | 1,134 | 6,764 | ||||||||||
Aker ASA |
Diversified Financial Services | 168 | 10,884 | |||||||||||
Aker BP ASA |
Oil, Gas & Consumable Fuels | 812 | 23,293 | |||||||||||
DNB Bank ASA |
Banks | 6,762 | 107,258 | |||||||||||
Equinor ASA |
Oil, Gas & Consumable Fuels | 196 | 6,441 | |||||||||||
Gjensidige Forsikring ASA |
Insurance | 1,274 | 21,862 | |||||||||||
Norsk Hydro ASA |
Metals & Mining | 3,724 | 20,108 | |||||||||||
Orkla ASA |
Food Products | 4,270 | 31,034 | |||||||||||
Salmar ASA |
Food Products | 420 | 14,153 | |||||||||||
Schibsted ASA, A |
Media | 70 | 949 | |||||||||||
Schibsted ASA, B |
Media | 126 | 1,586 | |||||||||||
Storebrand ASA |
Insurance | 3,570 | 24,721 | |||||||||||
Telenor ASA |
Diversified Telecommunication Services | 4,858 | 44,428 | |||||||||||
TOMRA Systems ASA |
Commercial Services & Supplies | 1,246 | 21,997 | |||||||||||
Yara International ASA |
Chemicals | 1,204 | 42,350 | |||||||||||
|
|
|||||||||||||
377,828 | ||||||||||||||
|
|
|||||||||||||
Poland 0.3% | ||||||||||||||
Bank Pekao SA |
Banks | 1,274 | 15,658 | |||||||||||
LPP SA |
Textiles, Apparel & Luxury Goods | 9 | 14,204 | |||||||||||
Polski Koncern Naftowy Orlen SA |
Oil, Gas & Consumable Fuels | 2,352 | 25,496 | |||||||||||
Powszechna Kasa Oszczednosci Bank Polski SA |
Banks | 6,342 | 28,044 | |||||||||||
Powszechny Zaklad Ubezpieczen SA |
Insurance | 4,578 | 21,467 | |||||||||||
|
|
|||||||||||||
104,869 | ||||||||||||||
|
|
franklintempleton.com |
Semiannual Report |
55 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Portugal 0.3% | ||||||||||||||
EDP – Energias de Portugal SA |
Electric Utilities | 14,518 | $ | 63,148 | ||||||||||
Galp Energia SGPS SA, B |
Oil, Gas & Consumable Fuels | 3,402 | 32,741 | |||||||||||
|
|
|||||||||||||
95,889 | ||||||||||||||
|
|
|||||||||||||
Singapore 1.0% | ||||||||||||||
Ascendas REIT, A |
Equity Real Estate Investment Trusts (REITs | ) | 23,800 | 44,618 | ||||||||||
DBS Group Holdings Ltd., A |
Banks | 2,800 | 65,156 | |||||||||||
Mapletree Commercial Trust |
Equity Real Estate Investment Trusts (REITs | ) | 15,400 | 18,460 | ||||||||||
Olam Group Ltd. |
Food & Staples Retailing | 8,400 | 7,669 | |||||||||||
Oversea-Chinese Banking Corp. Ltd. |
Banks | 7,500 | 61,833 | |||||||||||
Singapore Exchange Ltd. |
Capital Markets | 4,468 | 29,457 | |||||||||||
Singapore Technologies Engineering Ltd. |
Aerospace & Defense | 9,800 | 24,450 | |||||||||||
United Overseas Bank Ltd. |
Banks | 2,000 | 36,462 | |||||||||||
Venture Corp. Ltd. |
Electronic Equipment, Instruments & Components | 1,938 | 22,191 | |||||||||||
|
|
|||||||||||||
310,296 | ||||||||||||||
|
|
|||||||||||||
Spain 2.0% | ||||||||||||||
ACS Actividades de Construccion y Servicios SA |
Construction & Engineering | 1,806 | 40,923 | |||||||||||
Banco Bilbao Vizcaya Argentaria SA |
Banks | 10,976 | 49,682 | |||||||||||
a |
Cellnex Telecom SA, 144A |
Diversified Telecommunication Services | 364 | 11,336 | ||||||||||
Corporacion Mapfre SA |
Insurance | 7,378 | 11,492 | |||||||||||
Enagas SA |
Gas Utilities | 1,904 | 29,545 | |||||||||||
Endesa SA |
Electric Utilities | 2,240 | 33,838 | |||||||||||
Iberdrola SA |
Electric Utilities | 16,968 | 159,279 | |||||||||||
Industria de Diseno Textil SA |
Specialty Retail | 2,184 | 45,530 | |||||||||||
Naturgy Energy Group SA |
Gas Utilities | 2,436 | 56,630 | |||||||||||
Red Electrica Corp. SA |
Electric Utilities | 3,164 | 48,695 | |||||||||||
Repsol SA |
Oil, Gas & Consumable Fuels | 3,276 | 37,886 | |||||||||||
Telefonica SA |
Diversified Telecommunication Services | 26,166 | 86,539 | |||||||||||
|
|
|||||||||||||
611,375 | ||||||||||||||
|
|
|||||||||||||
Sweden 2.5% | ||||||||||||||
Assa Abloy AB, B |
Building Products | 742 | 14,021 | |||||||||||
Atlas Copco AB, A |
Machinery | 3,612 | 34,110 | |||||||||||
Atlas Copco AB, B |
Machinery | 2,212 | 18,589 | |||||||||||
Axfood AB |
Food & Staples Retailing | 756 | 17,365 | |||||||||||
Castellum AB |
Real Estate Management & Development | 406 | 4,579 | |||||||||||
Electrolux AB, B |
Household Durables | 2,114 | 22,139 | |||||||||||
b |
Embracer Group AB |
Entertainment | 3,808 | 22,802 | ||||||||||
EQT AB |
Capital Markets | 1,946 | 38,420 | |||||||||||
Ericsson, B |
Communications Equipment | 4,858 | 28,669 | |||||||||||
Essity AB, B |
Household Products | 602 | 11,978 | |||||||||||
a,c |
Evolution Gaming Group AB, 144A, Reg S |
Hotels, Restaurants & Leisure | 826 | 66,005 | ||||||||||
Hennes & Mauritz AB, B |
Specialty Retail | 5,544 | 51,686 | |||||||||||
Husqvarna AB, B |
Household Durables | 3,346 | 18,724 | |||||||||||
Intrum AB |
Commercial Services & Supplies | 574 | 7,275 | |||||||||||
Investor AB, A |
Diversified Financial Services | 84 | 1,298 | |||||||||||
Investor AB, B |
Diversified Financial Services | 560 | 8,254 | |||||||||||
Lifco AB, B |
Industrial Conglomerates | 1,512 | 21,282 | |||||||||||
Nibe Industrier AB, B |
Building Products | 2,324 | 20,963 | |||||||||||
Nordnet AB publ |
Capital Markets | 1,134 | 12,937 | |||||||||||
Orron Energy AB |
Oil, Gas & Consumable Fuels | 910 | 1,638 | |||||||||||
Samhallsbyggnadsbolaget i Norden AB |
Real Estate Management & Development | 8,848 | 9,699 | |||||||||||
Samhallsbyggnadsbolaget i Norden AB, D |
Real Estate Management & Development | 1,232 | 1,857 | |||||||||||
Securitas AB, B |
Commercial Services & Supplies | 2,857 | 19,978 | |||||||||||
a,b |
Sinch AB, 144A |
Software | 1,162 | 1,576 | ||||||||||
Skandinaviska Enskilda Banken AB, A |
Banks | 2,212 | 21,288 |
56 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Sweden (continued) | ||||||||||||||
SKF AB, B |
Machinery | 462 | $ | 6,255 | ||||||||||
SSAB AB, A |
Metals & Mining | 1,624 | 7,236 | |||||||||||
SSAB AB, B |
Metals & Mining | 4,900 | 21,123 | |||||||||||
Svenska Handelsbanken AB, A |
Banks | 5,782 | 47,736 | |||||||||||
Swedbank AB, A |
Banks | 4,494 | 59,468 | |||||||||||
Swedish Match AB |
Tobacco | 2,436 | 24,146 | |||||||||||
Tele2 AB, B |
Wireless Telecommunication Services | 4,354 | 37,665 | |||||||||||
Telia Co. AB |
Diversified Telecommunication Services | 19,460 | 56,166 | |||||||||||
Vitrolife AB |
Biotechnology | 532 | 7,622 | |||||||||||
Volvo AB, A |
Machinery | 224 | 3,326 | |||||||||||
Volvo AB, B |
Machinery | 1,666 | 23,732 | |||||||||||
|
|
|||||||||||||
771,607 | ||||||||||||||
|
|
|||||||||||||
Switzerland 10.5% | ||||||||||||||
ABB Ltd. |
Electrical Equipment | 3,346 | 87,708 | |||||||||||
Alcon Inc. |
Health Care Equipment & Supplies | 84 | 4,962 | |||||||||||
Baloise Holding AG |
Insurance | 168 | 21,626 | |||||||||||
Cie Financiere Richemont SA |
Textiles, Apparel & Luxury Goods | 1,722 | 164,948 | |||||||||||
Geberit AG |
Building Products | 70 | 30,404 | |||||||||||
Givaudan AG |
Chemicals | 15 | 45,766 | |||||||||||
Holcim Ltd., B |
Construction Materials | 3,402 | 141,645 | |||||||||||
Julius Baer Group Ltd. |
Capital Markets | 1,078 | 47,643 | |||||||||||
Kuehne + Nagel International AG |
Marine | 322 | 66,085 | |||||||||||
Lonza Group AG |
Life Sciences Tools & Services | 210 | 103,757 | |||||||||||
Nestle SA |
Food Products | 6,860 | 746,323 | |||||||||||
Novartis AG |
Pharmaceuticals | 7,910 | 607,003 | |||||||||||
Partners Group Holding AG |
Capital Markets | 98 | 80,112 | |||||||||||
Roche Holding AG, Bearer |
Pharmaceuticals | 56 | 22,064 | |||||||||||
Roche Holding AG, Non-Voting |
Pharmaceuticals | 1,414 | 464,677 | |||||||||||
Schindler Holding AG, PC |
Machinery | 14 | 2,200 | |||||||||||
SGS SA |
Professional Services | 29 | 62,611 | |||||||||||
Sika AG |
Chemicals | 42 | 8,564 | |||||||||||
STMicroelectronics NV |
Semiconductors & Semiconductor Equipment | 1,498 | 47,320 | |||||||||||
Straumann Holding AG |
Health Care Equipment & Supplies | 42 | 3,919 | |||||||||||
Swiss Life Holding AG |
Insurance | 98 | 43,661 | |||||||||||
Swiss Re AG |
Insurance | 1,960 | 145,688 | |||||||||||
Swisscom AG |
Diversified Telecommunication Services | 196 | 92,300 | |||||||||||
Temenos AG |
Software | 168 | 11,511 | |||||||||||
The Swatch Group AG |
Textiles, Apparel & Luxury Goods | 28 | 6,387 | |||||||||||
Zurich Insurance Group AG |
Insurance | 560 | 224,740 | |||||||||||
|
|
|||||||||||||
3,283,624 | ||||||||||||||
|
|
|||||||||||||
United Kingdom 12.7% | ||||||||||||||
3i Group PLC |
Capital Markets | 2,884 | 35,188 | |||||||||||
Abrdn PLC |
Capital Markets | 15,736 | 24,434 | |||||||||||
Admiral Group PLC |
Insurance | 1,932 | 41,290 | |||||||||||
Anglo American PLC |
Metals & Mining | 4,662 | 142,361 | |||||||||||
Ashtead Group PLC |
Trading Companies & Distributors | 364 | 16,603 | |||||||||||
AstraZeneca PLC |
Pharmaceuticals | 3,976 | 441,355 | |||||||||||
AVEVA Group PLC |
Software | 686 | 24,061 | |||||||||||
Aviva PLC |
Insurance | 20,104 | 87,120 | |||||||||||
B&M European Value Retail SA |
Multiline Retail | 6,706 | 22,914 | |||||||||||
BAE Systems PLC |
Aerospace & Defense | 7,952 | 70,109 | |||||||||||
Barratt Developments PLC |
Household Durables | 7,840 | 29,949 | |||||||||||
BP PLC |
Oil, Gas & Consumable Fuels | 25,802 | 124,745 | |||||||||||
British American Tobacco PLC |
Tobacco | 9,660 | 347,928 | |||||||||||
Burberry Group PLC |
Textiles, Apparel & Luxury Goods | 854 | 17,236 | |||||||||||
CK Hutchison Holdings Ltd., A |
Real Estate Management & Development | 7,500 | 41,465 |
franklintempleton.com |
Semiannual Report |
57 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
United Kingdom (continued) | ||||||||||||||
Coca-Cola Europacific Partners PLC |
Beverages | 98 | $ | 4,177 | ||||||||||
a |
ConvaTec Group PLC, 144A |
Health Care Equipment & Supplies | 3,248 | 7,454 | ||||||||||
b |
Darktrace PLC |
Software | 2,618 | 8,624 | ||||||||||
Diageo PLC |
Beverages | 3,864 | 163,801 | |||||||||||
Direct Line Insurance Group PLC |
Insurance | 9,912 | 20,525 | |||||||||||
Ferguson PLC |
Trading Companies & Distributors | 518 | 54,378 | |||||||||||
GSK PLC |
Pharmaceuticals | 18,438 | 268,764 | |||||||||||
Hargreaves Lansdown PLC |
Capital Markets | 966 | 9,351 | |||||||||||
HSBC Holdings PLC |
Banks | 41,496 | 216,463 | |||||||||||
Imperial Brands PLC |
Tobacco | 6,804 | 140,893 | |||||||||||
Intermediate Capital Group PLC |
Capital Markets | 2,366 | 25,957 | |||||||||||
J Sainsbury PLC |
Food & Staples Retailing | 13,258 | 25,796 | |||||||||||
Kingfisher PLC |
Specialty Retail | 5,908 | 14,536 | |||||||||||
Land Securities Group PLC |
Equity Real Estate Investment Trusts (REITs | ) | 5,502 | 32,048 | ||||||||||
Legal & General Group PLC |
Insurance | 43,190 | 104,381 | |||||||||||
London Stock Exchange Group PLC |
Capital Markets | 602 | 51,261 | |||||||||||
M&G PLC |
Diversified Financial Services | 18,424 | 34,254 | |||||||||||
Mondi PLC |
Paper & Forest Products | 3,066 | 47,711 | |||||||||||
National Grid PLC |
Multi-Utilities | 16,352 | 169,942 | |||||||||||
Next PLC |
Multiline Retail | 182 | 9,754 | |||||||||||
b |
Ocado Group PLC |
Food & Staples Retailing | 812 | 4,283 | ||||||||||
Persimmon PLC |
Household Durables | 2,310 | 31,911 | |||||||||||
Phoenix Group Holdings PLC |
Insurance | 6,328 | 37,213 | |||||||||||
Reckitt Benckiser Group PLC |
Household Products | 1,680 | 112,073 | |||||||||||
RELX PLC |
Professional Services | 3,416 | 83,968 | |||||||||||
Royal Mail PLC |
Air Freight & Logistics | 6,202 | 12,770 | |||||||||||
Schroders PLC |
Capital Markets | 1,152 | 5,006 | |||||||||||
Severn Trent PLC |
Water Utilities | 1,778 | 46,742 | |||||||||||
Smith & Nephew PLC |
Health Care Equipment & Supplies | 630 | 7,388 | |||||||||||
SSE PLC |
Electric Utilities | 5,796 | 98,830 | |||||||||||
St. James’s Place Capital PLC |
Capital Markets | 3,906 | 45,172 | |||||||||||
Taylor Wimpey PLC |
Household Durables | 27,034 | 26,647 | |||||||||||
Tesco PLC |
Food & Staples Retailing | 9,114 | 21,040 | |||||||||||
The Sage Group PLC |
Software | 1,372 | 10,678 | |||||||||||
Unilever PLC |
Personal Products | 7,154 | 316,965 | |||||||||||
United Utilities Group PLC |
Water Utilities | 4,914 | 48,755 | |||||||||||
Vodafone Group PLC |
Wireless Telecommunication Services | 170,240 | 192,167 | |||||||||||
b |
Wise PLC, A |
IT Services | 392 | 2,891 | ||||||||||
|
|
|||||||||||||
3,981,327 | ||||||||||||||
|
|
|||||||||||||
United States 0.6% | ||||||||||||||
Stellantis NV |
Automobiles | 16,590 | 199,449 | |||||||||||
|
|
|||||||||||||
Total
Common Stocks |
30,982,383 | |||||||||||||
|
|
|||||||||||||
Preferred Stocks 0.4% | ||||||||||||||
Germany 0.4% | ||||||||||||||
d |
Bayerische Motoren Werke AG, 8.700%, pfd. |
Automobiles | 378 | 24,774 | ||||||||||
d |
Porsche Automobil Holding SE, 4.402%, pfd. |
Automobiles | 448 | 25,525 | ||||||||||
d |
Sartorius AG, 0.353%, pfd. |
Health Care Equipment & Supplies | 98 | 34,284 | ||||||||||
d |
Volkswagen AG, 5.981%, pfd. |
Automobiles | 322 | 39,872 | ||||||||||
|
|
|||||||||||||
Total Preferred Stocks (Cost $141,598) |
124,455 | |||||||||||||
|
|
58 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin International Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Right 0.0%† | ||||||||||||||
Sweden 0.0%† | ||||||||||||||
b |
Securitas AB, rts., 10/11/2022 |
Commercial Services & Supplies | 8,008 | $ | 3,341 | |||||||||
|
|
|||||||||||||
Total Rights (Cost $3,331) |
3,341 | |||||||||||||
|
|
|||||||||||||
Total Investments (Cost $34,163,045) 99.3% |
31,110,179 | |||||||||||||
Other Assets, less Liabilities 0.7% |
233,045 | |||||||||||||
|
|
|||||||||||||
Net Assets 100.0% |
$ | 31,343,224 | ||||||||||||
|
|
†Rounds to less than 0.1% of net assets.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2022, the value of was $454,429, representing 1.5% of net assets.
bNon-income producing.
cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2022, the value of was $169,251, representing 0.5% of net assets.
dVariable rate security. The rate shown represents the yield at period end.
At September 30, 2022, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts |
Notional Amount* |
Expiration Date |
Value/Unrealized Appreciation (Depreciation) |
|||||||||||||||
Equity Contracts | ||||||||||||||||||||
MSCI EAFE |
Long | 3 | $ | 249,090 | 12/16/22 | $ | (921 | ) |
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 110.
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
59 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Core Dividend Tilt Index ETFa
Six Months Ended (unaudited) |
Year Ended March 31, | |||||||||||||||||||||||
2022 | 2021 | 2020 | 2019 | 2018 | ||||||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||||||
Net asset value, beginning of period |
$ | 36.29 | $ | 33.29 | $ | 23.32 | $ | 28.20 | $ | 28.22 | $ | 27.31 | ||||||||||||
|
|
|||||||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec |
0.45 | 1.03 | 0.92 | 1.04 | 0.95 | 0.86 | ||||||||||||||||||
Net realized and unrealized gains (losses) |
(7.72 | ) | 2.98 | 9.95 | (4.90 | ) | (0.02 | ) | 1.03 | |||||||||||||||
|
|
|||||||||||||||||||||||
Total from investment operations |
(7.27 | ) | 4.01 | 10.87 | (3.86 | ) | 0.93 | 1.89 | ||||||||||||||||
|
|
|||||||||||||||||||||||
Less distributions from net investment income |
(0.52 | ) | (1.01 | ) | (0.90 | ) | (1.02 | ) | (0.95 | ) | (0.98 | ) | ||||||||||||
|
|
|||||||||||||||||||||||
Net asset value, end of period |
$ | 28.50 | $ | 36.29 | $ | 33.29 | $ | 23.32 | $ | 28.20 | $ | 28.22 | ||||||||||||
|
|
|||||||||||||||||||||||
Total returnd |
(20.14)% | 12.14% | 47.20% | (14.34)% | 3.51% | 6.91% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.30% | 0.45% | 0.45% | 0.45% | 0.45% | 0.75% | f | |||||||||||||||||
Expenses net of waiver and payments by affiliates |
0.30% | 0.45% | 0.45% | 0.45% | 0.45% | 0.45% | f | |||||||||||||||||
Net investment income |
2.71% | 2.92% | 3.21% | 3.60% | 3.43% | 3.05% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) |
$41,324 | $30,851 | $26,632 | $18,653 | $16,920 | $16,933 | ||||||||||||||||||
Portfolio turnover rateg |
110.97% | h | 28.73% | h | 42.38% | h | 19.79% | h | 25.75% | 43.32% |
aEffective August 1, 2022, Formerly, Franklin LibertyQ Global Dividend ETF was renamed Franklin U.S. Core Dividend Tilt Index ETF.
bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
eRatios are annualized for periods less than one year.
fEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
gPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
hPortfolio turnover rate excluding cash creations was as follows: | 110.97% | 27.86% | 42.38% | 19.79% |
60 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin U.S. Core Dividend Tilt Index ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 99.7% | ||||||||||||||
Brazil 0.2% | ||||||||||||||
a |
MercadoLibre Inc. |
Internet & Direct Marketing Retail | 116 | $ | 96,023 | |||||||||
|
|
|||||||||||||
China 0.3% | ||||||||||||||
NXP Semiconductors NV |
Semiconductors & Semiconductor Equipment | 667 | 98,389 | |||||||||||
|
|
|||||||||||||
Ireland 0.1% | ||||||||||||||
Seagate Technology Holdings PLC |
Technology Hardware, Storage & Peripherals | 783 | 41,679 | |||||||||||
|
|
|||||||||||||
Peru 0.0%† | ||||||||||||||
Southern Copper Corp. |
Metals & Mining | 348 | 15,604 | |||||||||||
|
|
|||||||||||||
Russia 0.0%† | ||||||||||||||
b |
Polymetal International PLC |
Metals & Mining | 4,860 | — | ||||||||||
b |
Tatneft PAO |
Oil, Gas & Consumable Fuels | 15,990 | — | ||||||||||
|
|
|||||||||||||
— | ||||||||||||||
|
|
|||||||||||||
United Kingdom 0.2% | ||||||||||||||
a |
Linde PLC |
Chemicals | 319 | 85,999 | ||||||||||
|
|
|||||||||||||
United States 98.9% | ||||||||||||||
3M Co. |
Industrial Conglomerates | 2,349 | 259,564 | |||||||||||
Abbott Laboratories |
Health Care Equipment & Supplies | 3,161 | 305,858 | |||||||||||
AbbVie Inc. |
Biotechnology | 3,886 | 521,540 | |||||||||||
Accenture PLC, A |
IT Services | 725 | 186,542 | |||||||||||
a |
Adobe Inc. |
Software | 464 | 127,693 | ||||||||||
Advance Auto Parts Inc. |
Specialty Retail | 29 | 4,534 | |||||||||||
a |
Advanced Micro Devices Inc. |
Semiconductors & Semiconductor Equipment | 2,552 | 161,695 | ||||||||||
AES Corp. |
Independent Power Producers & Energy Traders | 2,494 | 56,364 | |||||||||||
Agilent Technologies Inc. |
Life Sciences Tools & Services | 87 | 10,575 | |||||||||||
a |
agilon health Inc. |
Health Care Providers & Services | 174 | 4,075 | ||||||||||
Air Products and Chemicals Inc. |
Chemicals | 841 | 195,726 | |||||||||||
a |
Airbnb Inc., A |
Hotels, Restaurants & Leisure | 493 | 51,785 | ||||||||||
Albemarle Corp. |
Chemicals | 29 | 7,669 | |||||||||||
Alexandria Real Estate Equities Inc. |
Equity Real Estate Investment Trusts (REITs | ) | 580 | 81,310 | ||||||||||
a |
Align Technology Inc. |
Health Care Equipment & Supplies | 29 | 6,006 | ||||||||||
Alliant Energy Corp. |
Electric Utilities | 406 | 21,514 | |||||||||||
Ally Financial Inc. |
Consumer Finance | 1,276 | 35,511 | |||||||||||
a |
Alnylam Pharmaceuticals Inc. |
Biotechnology | 58 | 11,609 | ||||||||||
a |
Alphabet Inc., A |
Interactive Media & Services | 6,148 | 588,056 | ||||||||||
a |
Alphabet Inc., C |
Interactive Media & Services | 5,626 | 540,940 | ||||||||||
Altria Group Inc. |
Tobacco | 7,163 | 289,242 | |||||||||||
a |
Amazon.com Inc. |
Internet & Direct Marketing Retail | 11,542 | 1,304,246 | ||||||||||
a |
AMC Entertainment Holdings Inc., A |
Entertainment | 551 | 3,840 | ||||||||||
Amcor PLC |
Containers & Packaging | 5,887 | 63,168 | |||||||||||
American Electric Power Co. Inc. |
Electric Utilities | 1,044 | 90,254 | |||||||||||
American Tower Corp. |
Equity Real Estate Investment Trusts (REITs | ) | 522 | 112,073 | ||||||||||
AmerisourceBergen Corp. |
Health Care Providers & Services | 174 | 23,547 | |||||||||||
Amgen Inc. |
Biotechnology | 841 | 189,561 | |||||||||||
Analog Devices Inc. |
Semiconductors & Semiconductor Equipment | 2,059 | 286,901 | |||||||||||
Annaly Capital Management Inc. |
Mortgage Real Estate Investment Trusts (REITs | ) | 1,559 | 26,748 | ||||||||||
Apollo Global Management Inc. |
Diversified Financial Services | 1,450 | 67,425 | |||||||||||
Apple Inc. |
Technology Hardware, Storage & Peripherals | 21,083 | 2,913,671 | |||||||||||
Applied Materials Inc. |
Semiconductors & Semiconductor Equipment | 1,392 | 114,047 | |||||||||||
a |
AppLovin Corp., A |
Software | 145 | 2,826 | ||||||||||
AT&T Inc. |
Diversified Telecommunication Services | 23,664 | 363,006 | |||||||||||
a |
Autodesk Inc. |
Software | 203 | 37,920 | ||||||||||
Automatic Data Processing Inc. |
IT Services | 116 | 26,238 | |||||||||||
AvalonBay Communities Inc. |
Equity Real Estate Investment Trusts (REITs | ) | 522 | 96,147 | ||||||||||
Avangrid Inc. |
Electric Utilities | 290 | 12,093 | |||||||||||
Baker Hughes Co. |
Energy Equipment & Services | 638 | 13,372 | |||||||||||
Bank of America Corp. |
Banks | 5,974 | 180,415 |
franklintempleton.com |
Semiannual Report |
61 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
United States (continued) | ||||||||||||||
Bank of New York Mellon Corp. |
Capital Markets | 1,392 | $ | 53,620 | ||||||||||
Bath & Body Works Inc. |
Specialty Retail | 435 | 14,181 | |||||||||||
Baxter International Inc. |
Health Care Equipment & Supplies | 522 | 28,115 | |||||||||||
Becton Dickinson and Co. |
Health Care Equipment & Supplies | 116 | 25,848 | |||||||||||
Best Buy Co. Inc. |
Specialty Retail | 754 | 47,758 | |||||||||||
a |
Bill.com Holdings Inc. |
Software | 174 | 23,032 | ||||||||||
BlackRock Inc. |
Capital Markets | 361 | 198,651 | |||||||||||
Blackstone Inc. |
Capital Markets | 2,697 | 225,739 | |||||||||||
a |
Block Inc. |
IT Services | 899 | 49,436 | ||||||||||
a |
Booking Holdings Inc. |
Hotels, Restaurants & Leisure | 7 | 11,502 | ||||||||||
Boston Properties Inc. |
Equity Real Estate Investment Trusts (REITs | ) | 522 | 39,134 | ||||||||||
Bristol-Myers Squibb Co. |
Pharmaceuticals | 5,423 | 385,521 | |||||||||||
Broadcom Inc. |
Semiconductors & Semiconductor Equipment | 986 | 437,794 | |||||||||||
Broadridge Financial Solutions Inc. |
IT Services | 464 | 66,964 | |||||||||||
Camden Property Trust |
Equity Real Estate Investment Trusts (REITs | ) | 377 | 45,033 | ||||||||||
Campbell Soup Co. |
Food Products | 870 | 40,994 | |||||||||||
Cardinal Health Inc. |
Health Care Providers & Services | 1,073 | 71,548 | |||||||||||
Carlyle Group Inc. |
Capital Markets | 580 | 14,987 | |||||||||||
Caterpillar Inc. |
Machinery | 754 | 123,716 | |||||||||||
Chevron Corp. |
Oil, Gas & Consumable Fuels | 3,016 | 433,309 | |||||||||||
Cincinnati Financial Corp. |
Insurance | 406 | 36,365 | |||||||||||
Cisco Systems Inc. |
Communications Equipment | 9,483 | 379,320 | |||||||||||
Citigroup Inc. |
Banks | 6,612 | 275,522 | |||||||||||
Citizens Financial Group Inc. |
Banks | 1,885 | 64,769 | |||||||||||
Clorox Co. |
Household Products | 493 | 63,296 | |||||||||||
a |
Cloudflare Inc., A |
Software | 609 | 33,684 | ||||||||||
CMS Energy Corp. |
Multi-Utilities | 174 | 10,134 | |||||||||||
Coca-Cola Co. |
Beverages | 8,845 | 495,497 | |||||||||||
Cognex Corp. |
Electronic Equipment, Instruments & Components | 435 | 18,031 | |||||||||||
a |
Coinbase Global Inc., A |
Capital Markets | 58 | 3,740 | ||||||||||
Colgate-Palmolive Co. |
Household Products | 696 | 48,894 | |||||||||||
Comcast Corp., A |
Media | 7,105 | 208,390 | |||||||||||
Comerica Inc. |
Banks | 493 | 35,052 | |||||||||||
Conagra Brands Inc. |
Food Products | 1,856 | 60,561 | |||||||||||
Consolidated Edison Inc. |
Multi-Utilities | 1,276 | 109,430 | |||||||||||
Corning Inc. |
Electronic Equipment, Instruments & Components | 3,074 | 89,207 | |||||||||||
Costco Wholesale Corp. |
Food & Staples Retailing | 174 | 82,175 | |||||||||||
Coterra Energy Inc., A |
Oil, Gas & Consumable Fuels | 1,914 | 49,994 | |||||||||||
a |
Crowdstrike Holdings Inc., A |
Software | 406 | 66,913 | ||||||||||
Crown Castle Inc. |
Equity Real Estate Investment Trusts (REITs | ) | 1,682 | 243,133 | ||||||||||
Cummins Inc. |
Machinery | 435 | 88,527 | |||||||||||
CVS Health Corp. |
Health Care Providers & Services | 2,465 | 235,087 | |||||||||||
Danaher Corp. |
Life Sciences Tools & Services | 435 | 112,356 | |||||||||||
Darden Restaurants Inc. |
Hotels, Restaurants & Leisure | 464 | 58,612 | |||||||||||
a |
Datadog Inc., A |
Software | 493 | 43,769 | ||||||||||
Deere & Co. |
Machinery | 203 | 67,780 | |||||||||||
Devon Energy Corp. |
Oil, Gas & Consumable Fuels | 2,494 | 149,964 | |||||||||||
Digital Realty Trust Inc. |
Equity Real Estate Investment Trusts (REITs | ) | 1,131 | 112,173 | ||||||||||
Discover Financial Services |
Consumer Finance | 348 | 31,640 | |||||||||||
a |
DocuSign Inc. |
Software | 406 | 21,709 | ||||||||||
Dominion Energy Inc. |
Multi-Utilities | 2,494 | 172,360 | |||||||||||
a |
DoorDash Inc., A |
Internet & Direct Marketing Retail | 493 | 24,379 | ||||||||||
Dow Inc. |
Chemicals | 2,987 | 131,219 | |||||||||||
Duke Energy Corp. |
Electric Utilities | 2,871 | 267,060 | |||||||||||
Duke Realty Corp. |
Equity Real Estate Investment Trusts (REITs | ) | 696 | 33,547 | ||||||||||
a |
Dynatrace Inc. |
Software | 551 | 19,180 | ||||||||||
Eastman Chemical Co. |
Chemicals | 522 | 37,088 | |||||||||||
Eaton Corp. PLC |
Electrical Equipment | 957 | 127,626 |
62 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
United States (continued) | ||||||||||||||
eBay Inc. |
Internet & Direct Marketing Retail | 1,653 | $ | 60,847 | ||||||||||
Edison International |
Electric Utilities | 1,479 | 83,682 | |||||||||||
Eli Lilly & Co. |
Pharmaceuticals | 1,189 | 384,463 | |||||||||||
Emerson Electric Co. |
Electrical Equipment | 928 | 67,948 | |||||||||||
a |
Enphase Energy Inc. |
Semiconductors & Semiconductor Equipment | 261 | 72,420 | ||||||||||
Entegris Inc. |
Semiconductors & Semiconductor Equipment | 232 | 19,261 | |||||||||||
Entergy Corp. |
Electric Utilities | 783 | 78,793 | |||||||||||
a |
EPAM Systems Inc. |
IT Services | 87 | 31,511 | ||||||||||
Equinix Inc. |
Equity Real Estate Investment Trusts (REITs | ) | 154 | 87,601 | ||||||||||
Equity Residential |
Equity Real Estate Investment Trusts (REITs | ) | 1,305 | 87,722 | ||||||||||
Essex Property Trust Inc. |
Equity Real Estate Investment Trusts (REITs | ) | 261 | 63,222 | ||||||||||
Estee Lauder Cos Inc., A |
Personal Products | 174 | 37,567 | |||||||||||
a |
Etsy Inc. |
Internet & Direct Marketing Retail | 203 | 20,326 | ||||||||||
Evergy Inc. |
Electric Utilities | 899 | 53,401 | |||||||||||
Eversource Energy |
Electric Utilities | 609 | 47,478 | |||||||||||
a |
Exact Sciences Corp. |
Biotechnology | 232 | 7,538 | ||||||||||
Exelon Corp. |
Electric Utilities | 725 | 27,159 | |||||||||||
Extra Space Storage Inc. |
Equity Real Estate Investment Trusts (REITs | ) | 522 | 90,155 | ||||||||||
Exxon Mobil Corp. |
Oil, Gas & Consumable Fuels | 7,598 | 663,381 | |||||||||||
Fastenal Co. |
Trading Companies & Distributors | 2,233 | 102,807 | |||||||||||
Federal Realty Investment Trust |
Equity Real Estate Investment Trusts (REITs | ) | 290 | 26,135 | ||||||||||
Fidelity National Financial Inc. |
Insurance | 1,073 | 38,843 | |||||||||||
Fidelity National Information Services Inc. |
IT Services | 58 | 4,383 | |||||||||||
Fifth Third Bancorp |
Banks | 2,639 | 84,342 | |||||||||||
FirstEnergy Corp. |
Electric Utilities | 2,175 | 80,475 | |||||||||||
Ford Motor Co. |
Automobiles | 9,164 | 102,637 | |||||||||||
a |
Fortinet Inc. |
Software | 435 | 21,372 | ||||||||||
Franklin Resources Inc. |
Capital Markets | 1,102 | 23,715 | |||||||||||
Freeport-McMoRan Inc. |
Metals & Mining | 406 | 11,096 | |||||||||||
Garmin Ltd. |
Household Durables | 609 | 48,909 | |||||||||||
General Dynamics Corp. |
Aerospace & Defense | 116 | 24,612 | |||||||||||
General Mills Inc. |
Food Products | 435 | 33,325 | |||||||||||
Genuine Parts Co. |
Distributors | 377 | 56,294 | |||||||||||
Gilead Sciences Inc. |
Biotechnology | 4,843 | 298,765 | |||||||||||
Goldman Sachs Group Inc. |
Capital Markets | 13 | 3,810 | |||||||||||
Hasbro Inc. |
Leisure Products | 522 | 35,193 | |||||||||||
Healthpeak Properties Inc. |
Equity Real Estate Investment Trusts (REITs | ) | 2,146 | 49,186 | ||||||||||
Hewlett Packard Enterprise Co. |
Technology Hardware, Storage & Peripherals | 5,133 | 61,493 | |||||||||||
Honeywell International Inc. |
Industrial Conglomerates | 377 | 62,948 | |||||||||||
HP Inc. |
Technology Hardware, Storage & Peripherals | 2,581 | 64,319 | |||||||||||
Hubbell Inc., B |
Electrical Equipment | 174 | 38,802 | |||||||||||
a |
HubSpot Inc. |
Software | 116 | 31,334 | ||||||||||
Huntington Bancshares Inc. |
Banks | 5,365 | 70,711 | |||||||||||
Illinois Tool Works Inc. |
Machinery | 783 | 141,449 | |||||||||||
a |
Illumina Inc. |
Life Sciences Tools & Services | 174 | 33,197 | ||||||||||
a |
Insulet Corp. |
Health Care Equipment & Supplies | 87 | 19,958 | ||||||||||
Intel Corp. |
Semiconductors & Semiconductor Equipment | 13,108 | 337,793 | |||||||||||
International Business Machines Corp. |
IT Services | 2,987 | 354,885 | |||||||||||
International Flavors & Fragrances Inc. |
Chemicals | 986 | 89,558 | |||||||||||
International Paper Co. |
Containers & Packaging | 1,479 | 46,884 | |||||||||||
Interpublic Group of Cos Inc. |
Media | 1,566 | 40,090 | |||||||||||
Intuit Inc. |
Software | 377 | 146,020 | |||||||||||
a |
Intuitive Surgical Inc. |
Health Care Equipment & Supplies | 87 | 16,307 | ||||||||||
Invesco Ltd. |
Capital Markets | 1,247 | 17,084 | |||||||||||
Iron Mountain Inc. |
Equity Real Estate Investment Trusts (REITs | ) | 1,131 | 49,730 | ||||||||||
Jefferies Financial Group Inc. |
Capital Markets | 725 | 21,388 | |||||||||||
Johnson & Johnson |
Pharmaceuticals | 4,698 | 767,465 | |||||||||||
JPMorgan Chase & Co. |
Banks | 4,263 | 445,483 |
franklintempleton.com |
Semiannual Report |
63 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
United States (continued) | ||||||||||||||
Juniper Networks Inc. |
Communications Equipment | 1,276 | $ | 33,329 | ||||||||||
Kellogg Co. |
Food Products | 1,015 | 70,705 | |||||||||||
KeyCorp. |
Banks | 3,538 | 56,679 | |||||||||||
Kimberly-Clark Corp. |
Household Products | 1,363 | 153,392 | |||||||||||
Kimco Realty Corp. |
Equity Real Estate Investment Trusts (REITs | ) | 2,378 | 43,779 | ||||||||||
Kinder Morgan Inc. |
Oil, Gas & Consumable Fuels | 7,830 | 130,291 | |||||||||||
KKR & Co. Inc. |
Capital Markets | 580 | 24,940 | |||||||||||
KLA Corp. |
Semiconductors & Semiconductor Equipment | 493 | 149,197 | |||||||||||
Kraft Heinz Co. |
Food Products | 2,900 | 96,715 | |||||||||||
Lam Research Corp. |
Semiconductors & Semiconductor Equipment | 319 | 116,754 | |||||||||||
Lear Corp. |
Auto Components | 232 | 27,768 | |||||||||||
Lincoln National Corp. |
Insurance | 609 | 26,741 | |||||||||||
Lockheed Martin Corp. |
Aerospace & Defense | 319 | 123,227 | |||||||||||
Lowe’s Cos Inc. |
Specialty Retail | 435 | 81,697 | |||||||||||
Lumen Technologies Inc. |
Diversified Telecommunication Services | 3,828 | 27,868 | |||||||||||
LyondellBasell Industries NV, A |
Chemicals | 1,044 | 78,592 | |||||||||||
M&T Bank Corp. |
Banks | 493 | 86,926 | |||||||||||
MarketAxess Holdings Inc. |
Capital Markets | 87 | 19,357 | |||||||||||
Marvell Technology Inc. |
Semiconductors & Semiconductor Equipment | 1,450 | 62,219 | |||||||||||
Mastercard Inc., A |
IT Services | 783 | 222,638 | |||||||||||
a |
Match Group Inc. |
Interactive Media & Services | 174 | 8,309 | ||||||||||
Medtronic PLC |
Health Care Equipment & Supplies | 2,871 | 231,833 | |||||||||||
Merck & Co. Inc. |
Pharmaceuticals | 5,916 | 509,486 | |||||||||||
a |
Meta Platforms Inc., A |
Interactive Media & Services | 2,929 | 397,407 | ||||||||||
MetLife Inc. |
Insurance | 2,175 | 132,196 | |||||||||||
Microchip Technology Inc. |
Semiconductors & Semiconductor Equipment | 2,204 | 134,510 | |||||||||||
Micron Technology Inc. |
Semiconductors & Semiconductor Equipment | 1,044 | 52,304 | |||||||||||
Microsoft Corp. |
Software | 10,411 | 2,424,722 | |||||||||||
Mid-America Apartment Communities Inc. |
Equity Real Estate Investment Trusts (REITs | ) | 435 | 67,455 | ||||||||||
a |
Moderna Inc. |
Biotechnology | 174 | 20,576 | ||||||||||
Mondelez International Inc., A |
Food Products | 58 | 3,180 | |||||||||||
a |
MongoDB Inc. |
IT Services | 203 | 40,308 | ||||||||||
Monolithic Power Systems Inc. |
Semiconductors & Semiconductor Equipment | 174 | 63,232 | |||||||||||
Morgan Stanley |
Capital Markets | 3,132 | 247,459 | |||||||||||
MSCI Inc. |
Capital Markets | 261 | 110,087 | |||||||||||
NetApp Inc. |
Technology Hardware, Storage & Peripherals | 899 | 55,603 | |||||||||||
a |
Netflix Inc. |
Entertainment | 609 | 143,383 | ||||||||||
Newell Brands Inc. |
Household Durables | 1,479 | 20,543 | |||||||||||
Newmont Corp. |
Metals & Mining | 2,755 | 115,793 | |||||||||||
NextEra Energy Inc. |
Electric Utilities | 1,015 | 79,586 | |||||||||||
NIKE Inc., B |
Textiles, Apparel & Luxury Goods | 1,276 | 106,061 | |||||||||||
NiSource Inc. |
Multi-Utilities | 1,421 | 35,795 | |||||||||||
Northern Trust Corp. |
Capital Markets | 783 | 66,993 | |||||||||||
NortonLifeLock Inc. |
Software | 638 | 12,849 | |||||||||||
NRG Energy Inc. |
Electric Utilities | 928 | 35,515 | |||||||||||
NVIDIA Corp. |
Semiconductors & Semiconductor Equipment | 3,799 | 461,161 | |||||||||||
a |
Okta Inc. |
IT Services | 290 | 16,492 | ||||||||||
Omnicom Group Inc. |
Media | 812 | 51,229 | |||||||||||
a |
ON Semiconductor Corp. |
Semiconductors & Semiconductor Equipment | 580 | 36,151 | ||||||||||
ONEOK Inc. |
Oil, Gas & Consumable Fuels | 1,769 | 90,644 | |||||||||||
Oracle Corp. |
Software | 2,291 | 139,911 | |||||||||||
Packaging Corp. of America |
Containers & Packaging | 348 | 39,077 | |||||||||||
a |
Palantir Technologies Inc., A |
Software | 4,814 | 39,138 | ||||||||||
a |
Palo Alto Networks Inc. |
Software | 207 | 33,905 | ||||||||||
Paychex Inc. |
IT Services | 1,189 | 133,418 | |||||||||||
a |
PayPal Holdings Inc. |
IT Services | 1,392 | 119,809 | ||||||||||
PepsiCo Inc. |
Beverages | 3,103 | 506,596 | |||||||||||
PerkinElmer Inc. |
Life Sciences Tools & Services | 145 | 17,448 |
64 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
United States (continued) | ||||||||||||||
Pfizer Inc. |
Pharmaceuticals | 10,353 | $ | 453,047 | ||||||||||
Philip Morris International Inc. |
Tobacco | 4,466 | 370,723 | |||||||||||
Phillips 66 |
Oil, Gas & Consumable Fuels | 1,595 | 128,748 | |||||||||||
Pinnacle West Capital Corp. |
Electric Utilities | 435 | 28,062 | |||||||||||
a |
Pinterest Inc., A |
Interactive Media & Services | 1,769 | 41,218 | ||||||||||
Pioneer Natural Resources Co. |
Oil, Gas & Consumable Fuels | 957 | 207,219 | |||||||||||
a |
Plug Power Inc. |
Electrical Equipment | 1,189 | 24,981 | ||||||||||
PNC Financial Services Group Inc. |
Banks | 1,595 | 238,325 | |||||||||||
PPG Industries Inc. |
Chemicals | 551 | 60,990 | |||||||||||
PPL Corp. |
Electric Utilities | 2,900 | 73,515 | |||||||||||
Principal Financial Group Inc. |
Insurance | 899 | 64,863 | |||||||||||
Prologis Inc. |
Equity Real Estate Investment Trusts (REITs | ) | 609 | 61,874 | ||||||||||
Prudential Financial Inc. |
Insurance | 1,479 | 126,869 | |||||||||||
Public Service Enterprise Group Inc. |
Multi-Utilities | 1,827 | 102,732 | |||||||||||
Public Storage |
Equity Real Estate Investment Trusts (REITs | ) | 435 | 127,372 | ||||||||||
QUALCOMM Inc. |
Semiconductors & Semiconductor Equipment | 2,668 | 301,431 | |||||||||||
Raytheon Technologies Corp. |
Aerospace & Defense | 1,682 | 137,689 | |||||||||||
Realty Income Corp. |
Equity Real Estate Investment Trusts (REITs | ) | 2,465 | 143,463 | ||||||||||
Regency Centers Corp. |
Equity Real Estate Investment Trusts (REITs | ) | 609 | 32,795 | ||||||||||
Regions Financial Corp. |
Banks | 3,596 | 72,172 | |||||||||||
ResMed Inc. |
Health Care Equipment & Supplies | 87 | 18,992 | |||||||||||
Rockwell Automation Inc. |
Electrical Equipment | 319 | 68,620 | |||||||||||
a |
Roku Inc. |
Entertainment | 319 | 17,992 | ||||||||||
Ross Stores Inc. |
Specialty Retail | 203 | 17,107 | |||||||||||
S&P Global Inc. |
Capital Markets | 145 | 44,276 | |||||||||||
a |
Salesforce Inc. |
Software | 957 | 137,655 | ||||||||||
a |
ServiceNow Inc. |
Software | 261 | 98,556 | ||||||||||
Sherwin-Williams Co. |
Chemicals | 58 | 11,876 | |||||||||||
Simon Property Group Inc. |
Real Estate Investment Trusts (REITs | ) | 1,305 | 117,124 | ||||||||||
Skyworks Solutions Inc. |
Semiconductors & Semiconductor Equipment | 638 | 54,402 | |||||||||||
a |
Snap Inc., A |
Interactive Media & Services | 1,537 | 15,093 | ||||||||||
Snap-on Inc. |
Machinery | 203 | 40,874 | |||||||||||
a |
Snowflake Inc., A |
IT Services | 493 | 83,790 | ||||||||||
a |
SolarEdge Technologies Inc. |
Semiconductors & Semiconductor Equipment | 58 | 13,425 | ||||||||||
Southern Co. |
Electric Utilities | 4,060 | 276,080 | |||||||||||
a |
Splunk Inc. |
Software | 58 | 4,362 | ||||||||||
Stanley Black & Decker Inc. |
Machinery | 609 | 45,803 | |||||||||||
Starbucks Corp. |
Hotels, Restaurants & Leisure | 2,871 | 241,910 | |||||||||||
State Street Corp. |
Capital Markets | 1,392 | 84,648 | |||||||||||
Synchrony Financial |
Consumer Finance | 1,334 | 37,605 | |||||||||||
Sysco Corp. |
Food & Staples Retailing | 406 | 28,708 | |||||||||||
T Rowe Price Group Inc. |
Capital Markets | 899 | 94,404 | |||||||||||
Tapestry Inc. |
Textiles, Apparel & Luxury Goods | 1,015 | 28,856 | |||||||||||
Target Corp. |
Multiline Retail | 667 | 98,976 | |||||||||||
Teradyne Inc. |
Semiconductors & Semiconductor Equipment | 203 | 15,255 | |||||||||||
a |
Tesla Inc. |
Automobiles | 3,306 | 876,916 | ||||||||||
Texas Instruments Inc. |
Semiconductors & Semiconductor Equipment | 2,552 | 394,999 | |||||||||||
The Home Depot Inc. |
Specialty Retail | 1,450 | 400,113 | |||||||||||
The J.M. Smucker Co. |
Food Products | 174 | 23,909 | |||||||||||
The Procter & Gamble Co. |
Household Products | 3,393 | 428,366 | |||||||||||
The Progressive Corp. |
Insurance | 377 | 43,811 | |||||||||||
The TJX Cos Inc. |
Specialty Retail | 435 | 27,022 | |||||||||||
Thermo Fisher Scientific Inc. |
Life Sciences Tools & Services | 319 | 161,794 | |||||||||||
a |
T-Mobile US Inc. |
Wireless Telecommunication Services | 58 | 7,782 | ||||||||||
Tractor Supply Co. |
Specialty Retail | 203 | 37,734 | |||||||||||
a |
Trade Desk Inc., A |
Software | 870 | 51,983 | ||||||||||
Truist Financial Corp. |
Banks | 5,133 | 223,491 | |||||||||||
a |
Twilio Inc., A |
IT Services | 319 | 22,056 |
franklintempleton.com |
Semiannual Report |
65 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
United States (continued) | ||||||||||||||
a |
Twitter Inc. |
Interactive Media & Services | 638 | $ | 27,970 | |||||||||
a |
Uber Technologies Inc. |
Road & Rail | 1,769 | 46,879 | ||||||||||
UDR Inc. |
Equity Real Estate Investment Trusts (REITs | ) | 1,131 | 47,174 | ||||||||||
UGI Corp. |
Gas Utilities | 841 | 27,190 | |||||||||||
a |
UiPath Inc., A |
Software | 1,305 | 16,456 | ||||||||||
Union Pacific Corp. |
Road & Rail | 638 | 124,295 | |||||||||||
United Parcel Service Inc., B |
Air Freight & Logistics | 1,624 | 262,341 | |||||||||||
UnitedHealth Group Inc. |
Health Care Providers & Services | 1,044 | 527,262 | |||||||||||
a |
Unity Software Inc. |
Software | 696 | 22,175 | ||||||||||
US Bancorp |
Banks | 5,191 | 209,301 | |||||||||||
Vail Resorts Inc. |
Hotels, Restaurants & Leisure | 145 | 31,268 | |||||||||||
Valero Energy Corp. |
Oil, Gas & Consumable Fuels | 493 | 52,677 | |||||||||||
a |
Veeva Systems Inc., A |
Health Care Technology | 58 | 9,563 | ||||||||||
Ventas Inc. |
Equity Real Estate Investment Trusts (REITs | ) | 1,566 | 62,906 | ||||||||||
Verizon Communications Inc. |
Diversified Telecommunication Services | 11,194 | 425,036 | |||||||||||
VF Corp. |
Textiles, Apparel & Luxury Goods | 1,247 | 37,298 | |||||||||||
ViacomCBS Inc., B |
Media | 2,523 | 48,038 | |||||||||||
Viatris Inc. |
Pharmaceuticals | 4,727 | 40,274 | |||||||||||
VICI Properties Inc. |
Equity Real Estate Investment Trusts (REITs | ) | 3,770 | 112,534 | ||||||||||
Visa Inc., A |
IT Services | 1,479 | 262,744 | |||||||||||
Vistra Corp. |
Independent Power Producers & Energy Traders | 1,682 | 35,322 | |||||||||||
Vornado Realty Trust |
Equity Real Estate Investment Trusts (REITs | ) | 580 | 13,433 | ||||||||||
Walgreens Boots Alliance Inc. |
Food & Staples Retailing | 2,784 | 87,418 | |||||||||||
Walmart Inc. |
Food & Staples Retailing | 1,015 | 131,645 | |||||||||||
a |
Walt Disney Co. |
Media | 667 | 62,918 | ||||||||||
Watsco Inc. |
Trading Companies & Distributors | 116 | 29,865 | |||||||||||
WEC Energy Group Inc. |
Multi-Utilities | 464 | 41,496 | |||||||||||
Wells Fargo & Co. |
Banks | 3,654 | 146,964 | |||||||||||
Welltower Inc. |
Equity Real Estate Investment Trusts (REITs | ) | 1,740 | 111,917 | ||||||||||
Weyerhaeuser Co. |
Equity Real Estate Investment Trusts (REITs | ) | 3,016 | 86,137 | ||||||||||
Whirlpool Corp. |
Household Durables | 232 | 31,276 | |||||||||||
Williams Companies Inc. |
Oil, Gas & Consumable Fuels | 5,133 | 146,958 | |||||||||||
a |
Workday Inc., A |
Software | 174 | 26,486 | ||||||||||
WP Carey Inc. |
Equity Real Estate Investment Trusts (REITs | ) | 725 | 50,605 | ||||||||||
a |
Zillow Group Inc., C |
Real Estate Management & Development | 203 | 5,808 | ||||||||||
Zions Bancorp NA |
Banks | 435 | 22,124 | |||||||||||
a |
Zoom Video Communications Inc., A |
Software | 319 | 23,475 | ||||||||||
a |
ZoomInfo Technologies Inc., A |
Interactive Media & Services | 319 | 13,290 | ||||||||||
a |
Zscaler Inc. |
Software | 203 | 33,367 | ||||||||||
|
|
|||||||||||||
40,848,959 | ||||||||||||||
|
|
|||||||||||||
Total
Investments |
41,186,653 | |||||||||||||
Other Assets, less Liabilities 0.3% |
137,800 | |||||||||||||
|
|
|||||||||||||
Net Assets 100.0% |
$ | 41,324,453 | ||||||||||||
|
|
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.
66 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Franklin U.S. Core Dividend Tilt Index ETF (continued)
At September 30, 2022, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type |
Number of Contracts |
Notional Amount* |
Expiration Date |
Value/Unrealized Appreciation (Depreciation) |
|||||||||||||||
Equity Contracts | ||||||||||||||||||||
S&P 500 E-Mini |
Long | 6 | $ | 108,045 | 12/16/22 | $ | (10,481 | ) |
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 110.
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
67 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Large Cap Multifactor Index ETFa
Six Months Ended September 30, 2022 (unaudited) |
Year Ended March 31, | |||||||||||||||||||||||
2022 | 2021 | 2020 | 2019 | 2018b | ||||||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||||||
Net asset value, beginning of period |
$ | 44.86 | $ | 40.04 | $ | 27.61 | $ | 31.41 | $ | 28.51 | $ | 25.44 | ||||||||||||
|
|
|||||||||||||||||||||||
Income from investment operationsc: | ||||||||||||||||||||||||
Net investment incomed |
0.42 | 0.77 | 0.72 | 0.76 | 0.66 | 0.53 | ||||||||||||||||||
Net realized and unrealized gains (losses) |
(8.30 | ) | 4.89 | 12.49 | (3.89 | ) | 2.71 | 2.98 | ||||||||||||||||
|
|
|||||||||||||||||||||||
Total from investment operations |
(7.88 | ) | 5.66 | 13.21 | (3.13 | ) | 3.37 | 3.51 | ||||||||||||||||
|
|
|||||||||||||||||||||||
Less distributions from net investment income |
(0.40 | ) | (0.84 | ) | (0.78 | ) | (0.67 | ) | (0.47 | ) | (0.44 | ) | ||||||||||||
|
|
|||||||||||||||||||||||
Net asset value, end of period |
$ | 36.58 | $ | 44.86 | $ | 40.04 | $ | 27.61 | $ | 31.41 | $ | 28.51 | ||||||||||||
|
|
|||||||||||||||||||||||
Total returne |
(17.61)% | 14.19% | 48.22% | (10.27)% | 11.97% | 13.84% | ||||||||||||||||||
Ratios to average net assetsf | ||||||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.15% | 0.15% | 0.15% | 0.18% | 0.25% | 0.32% | g | |||||||||||||||||
Expenses net of waiver and payments by affiliates |
0.15% | 0.15% | 0.15% | 0.18% | 0.25% | 0.25% | g | |||||||||||||||||
Net investment income |
2.05% | 1.77% | 2.06% | 2.32% | 2.20% | 2.10% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) |
$863,305 | $966,737 | $1,353,407 | $1,311,583 | $1,008,255 | $108,326 | ||||||||||||||||||
Portfolio turnover rateh |
28.49% | i | 68.37% | i | 25.05% | i | 19.44% | i | 18.04% | 20.80% |
aEffective August 1, 2022, Formerly, Franklin LibertyQ U.S. Equity ETF was renamed Franklin U.S. Large Cap Multifactor Index ETF.
bFor the period April 26, 2017 (commencement of operations) to March 31, 2018.
cThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
dBased on average daily shares outstanding.
eTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
fRatios are annualized for periods less than one year.
gEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
hPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
i Portfolio turnover rate excluding cash creations was as follows: | 28.49% | 68.37% | 25.05% | 19.44% |
68 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin U.S. Large Cap Multifactor Index ETF
Shares | Value | |||||||||
Common Stocks 99.8% | ||||||||||
Communication Services 5.2% | ||||||||||
a |
Alphabet Inc., A |
140,184 | $ | 13,408,600 | ||||||
AT&T Inc. |
569,704 | 8,739,259 | ||||||||
Lumen Technologies Inc. |
115,640 | 841,859 | ||||||||
a |
Meta Platforms Inc., A |
47,672 | 6,468,137 | |||||||
Nexstar Media Group Inc. |
5,192 | 866,285 | ||||||||
Omnicom Group Inc. |
19,352 | 1,220,918 | ||||||||
Verizon Communications Inc. |
322,848 | 12,258,539 | ||||||||
World Wrestling Entertainment Inc., A |
13,688 | 960,487 | ||||||||
|
|
|||||||||
44,764,084 | ||||||||||
|
|
|||||||||
Consumer Discretionary 11.6% | ||||||||||
a |
Amazon.com Inc. |
151,512 | 17,120,856 | |||||||
a |
AutoNation Inc. |
7,552 | 769,322 | |||||||
a |
AutoZone Inc. |
2,360 | 5,054,955 | |||||||
Choice Hotels International Inc. |
8,024 | 878,788 | ||||||||
D.R. Horton Inc. |
28,792 | 1,939,141 | ||||||||
Dick’s Sporting Goods Inc. |
9,912 | 1,037,192 | ||||||||
Dollar General Corp. |
12,744 | 3,056,776 | ||||||||
a |
Dollar Tree Inc. |
20,768 | 2,826,525 | |||||||
Genuine Parts Co. |
14,632 | 2,184,850 | ||||||||
a |
Grand Canyon Education Inc. |
11,328 | 931,728 | |||||||
H&R Block Inc. |
27,376 | 1,164,575 | ||||||||
Kohl’s Corp. |
33,040 | 830,956 | ||||||||
Lennar Corp., A |
23,128 | 1,724,192 | ||||||||
Lithia Motors Inc. |
3,304 | 708,873 | ||||||||
LKQ Corp. |
17,464 | 823,428 | ||||||||
Lowe’s Cos Inc. |
60,888 | 11,435,375 | ||||||||
Macy’s Inc. |
54,280 | 850,568 | ||||||||
a |
Mattel Inc. |
42,480 | 804,571 | |||||||
McDonald’s Corp. |
54,752 | 12,633,477 | ||||||||
a |
NVR Inc. |
250 | 996,770 | |||||||
a |
O’Reilly Automotive Inc. |
7,080 | 4,979,718 | |||||||
Penske Automotive Group Inc. |
8,024 | 789,802 | ||||||||
PulteGroup Inc. |
24,072 | 902,700 | ||||||||
Service Corp. International/US |
16,520 | 953,865 | ||||||||
Tapestry Inc. |
28,792 | 818,557 | ||||||||
Tempur Sealy International Inc. |
36,344 | 877,344 | ||||||||
a |
Tesla Inc. |
61,764 | 16,382,901 | |||||||
Toll Brothers Inc. |
21,240 | 892,080 | ||||||||
a |
Ulta Beauty Inc. |
4,076 | 1,635,250 | |||||||
Williams-Sonoma Inc. |
8,496 | 1,001,254 | ||||||||
Yum! Brands Inc. |
26,904 | 2,860,971 | ||||||||
|
|
|||||||||
99,867,360 | ||||||||||
|
|
|||||||||
Consumer Staples 5.9% | ||||||||||
Altria Group Inc. |
201,072 | 8,119,287 | ||||||||
Archer-Daniels-Midland Co. |
60,888 | 4,898,440 | ||||||||
a |
BJ’s Wholesale Club Holdings Inc. |
12,744 | 927,891 | |||||||
Bunge Ltd. |
12,744 | 1,052,272 | ||||||||
Costco Wholesale Corp. |
28,466 | 13,443,638 | ||||||||
General Mills Inc. |
57,112 | 4,375,350 | ||||||||
Philip Morris International Inc. |
134,048 | 11,127,325 | ||||||||
The Hershey Co. |
14,160 | 3,121,855 | ||||||||
Tyson Foods Inc., A |
26,432 | 1,742,662 | ||||||||
Walgreens Boots Alliance Inc. |
63,248 | 1,985,987 | ||||||||
|
|
|||||||||
50,794,707 | ||||||||||
|
|
franklintempleton.com |
Semiannual Report |
69 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Large Cap Multifactor Index ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Energy 7.8% | ||||||||||
a |
Antero Resources Corp. |
23,600 | $ | 720,508 | ||||||
Chevron Corp. |
106,672 | 15,325,566 | ||||||||
ConocoPhillips |
115,168 | 11,786,293 | ||||||||
Coterra Energy Inc., A |
80,240 | 2,095,869 | ||||||||
Devon Energy Corp. |
66,552 | 4,001,772 | ||||||||
EOG Resources Inc. |
54,752 | 6,117,441 | ||||||||
Exxon Mobil Corp. |
148,680 | 12,981,251 | ||||||||
HF Sinclair Corp. |
17,936 | 965,674 | ||||||||
Marathon Oil Corp. |
36,816 | 831,305 | ||||||||
Marathon Petroleum Corp. |
24,544 | 2,437,955 | ||||||||
Ovintiv Inc. |
17,464 | 803,344 | ||||||||
PDC Energy Inc. |
13,688 | 791,030 | ||||||||
Pioneer Natural Resources Co. |
23,128 | 5,007,906 | ||||||||
Valero Energy Corp. |
30,208 | 3,227,725 | ||||||||
|
|
|||||||||
67,093,639 | ||||||||||
|
|
|||||||||
Financials 4.3% | ||||||||||
American International Group Inc. |
55,696 | 2,644,446 | ||||||||
Arthur J Gallagher & Co. |
10,384 | 1,777,948 | ||||||||
Assured Guaranty Ltd. |
18,408 | 891,868 | ||||||||
Axis Capital Holdings Ltd. |
17,936 | 881,554 | ||||||||
a |
Berkshire Hathaway Inc., B |
33,984 | 9,074,408 | |||||||
a |
Brighthouse Financial Inc. |
19,824 | 860,758 | |||||||
Capital One Financial Corp. |
35,400 | 3,262,818 | ||||||||
a |
Credit Acceptance Corp. |
1,692 | 741,096 | |||||||
Erie Indemnity Co., A |
4,248 | 944,373 | ||||||||
FactSet Research Systems Inc. |
2,162 | 865,038 | ||||||||
First Horizon Corp. |
50,976 | 1,167,350 | ||||||||
Lazard Ltd., A |
25,960 | 826,307 | ||||||||
LPL Financial Holdings Inc. |
4,248 | 928,103 | ||||||||
MGIC Investment Corp. |
65,608 | 841,095 | ||||||||
Principal Financial Group Inc. |
12,744 | 919,480 | ||||||||
Rithm Capital Corp. |
99,592 | 729,013 | ||||||||
Starwood Property Trust Inc. |
41,064 | 748,186 | ||||||||
Synchrony Financial |
49,088 | 1,383,791 | ||||||||
The Progressive Corp. |
43,896 | 5,101,154 | ||||||||
Unum Group |
30,208 | 1,172,070 | ||||||||
W R Berkley Corp. |
18,408 | 1,188,789 | ||||||||
|
|
|||||||||
36,949,645 | ||||||||||
|
|
|||||||||
Health Care 20.2% | ||||||||||
AbbVie Inc. |
111,864 | 15,013,267 | ||||||||
Amgen Inc. |
51,448 | 11,596,379 | ||||||||
Becton Dickinson and Co. |
25,488 | 5,679,491 | ||||||||
Bristol-Myers Squibb Co. |
188,328 | 13,388,238 | ||||||||
Cardinal Health Inc. |
26,904 | 1,793,959 | ||||||||
a |
Centene Corp. |
55,696 | 4,333,706 | |||||||
Chemed Corp. |
1,922 | 839,068 | ||||||||
Cigna Corp. |
32,568 | 9,036,643 | ||||||||
Elevance Health Inc. |
25,430 | 11,551,323 | ||||||||
Eli Lilly & Co. |
51,448 | 16,635,711 | ||||||||
HCA Healthcare Inc. |
19,824 | 3,643,453 | ||||||||
a |
Hologic Inc. |
17,936 | 1,157,231 | |||||||
Humana Inc. |
6,136 | 2,977,126 | ||||||||
Johnson & Johnson |
74,104 | 12,105,629 | ||||||||
Merck & Co. Inc. |
169,920 | 14,633,510 | ||||||||
a |
Molina Healthcare Inc. |
5,192 | 1,712,529 | |||||||
Organon & Co. |
33,040 | 773,136 |
70 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Large Cap Multifactor Index ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Health Care (continued) | ||||||||||
Pfizer Inc. |
342,200 | $ | 14,974,672 | |||||||
Premier Inc., A |
26,904 | 913,122 | ||||||||
Quest Diagnostics Inc. |
11,328 | 1,389,832 | ||||||||
a |
Regeneron Pharmaceuticals Inc. |
10,384 | 7,153,226 | |||||||
a |
United Therapeutics Corp. |
5,192 | 1,087,101 | |||||||
UnitedHealth Group Inc. |
28,320 | 14,302,733 | ||||||||
a |
Vertex Pharmaceuticals Inc. |
28,320 | 8,199,773 | |||||||
|
|
|||||||||
174,890,858 | ||||||||||
|
|
|||||||||
Industrials 7.5% | ||||||||||
Allison Transmission Holdings Inc. |
25,488 | 860,475 | ||||||||
a |
Avis Budget Group Inc. |
5,664 | 840,877 | |||||||
a |
Builders FirstSource Inc. |
18,880 | 1,112,410 | |||||||
C.H. Robinson Worldwide Inc. |
12,272 | 1,181,916 | ||||||||
Carlisle Companies Inc. |
5,664 | 1,588,242 | ||||||||
Crane Holdings Co. |
9,912 | 867,697 | ||||||||
Cummins Inc. |
6,608 | 1,344,794 | ||||||||
Curtiss-Wright Corp. |
6,136 | 853,886 | ||||||||
a |
FTI Consulting Inc. |
5,664 | 938,581 | |||||||
General Dynamics Corp. |
25,016 | 5,307,645 | ||||||||
Hubbell Inc., B |
4,720 | 1,052,560 | ||||||||
Huntington Ingalls Industries Inc. |
4,720 | 1,045,480 | ||||||||
Knight-Swift Transportation Holdings Inc. |
19,352 | 946,893 | ||||||||
Leidos Holdings Inc. |
13,216 | 1,156,004 | ||||||||
Lockheed Martin Corp. |
27,335 | 10,559,237 | ||||||||
MSC Industrial Direct Co. Inc., A |
11,800 | 859,158 | ||||||||
Nielsen Holdings PLC |
33,512 | 928,953 | ||||||||
Northrop Grumman Corp. |
16,614 | 7,813,897 | ||||||||
Owens Corning |
11,800 | 927,598 | ||||||||
PACCAR Inc. |
32,096 | 2,686,114 | ||||||||
Quanta Services Inc. |
7,080 | 901,921 | ||||||||
Republic Services Inc. |
10,384 | 1,412,639 | ||||||||
Rollins Inc. |
26,904 | 933,031 | ||||||||
Ryder System Inc. |
12,272 | 926,413 | ||||||||
Schneider National Inc., B |
41,064 | 833,599 | ||||||||
Snap-on Inc. |
4,248 | 855,335 | ||||||||
United Parcel Service Inc., B |
65,136 | 10,522,069 | ||||||||
W.W. Grainger Inc. |
4,755 | 2,326,098 | ||||||||
Waste Management Inc. |
21,712 | 3,478,480 | ||||||||
|
|
|||||||||
65,062,002 | ||||||||||
|
|
|||||||||
Information Technology 31.8% | ||||||||||
a |
Alphabet Inc., C |
126,496 | 12,162,590 | |||||||
Amdocs Ltd. |
15,104 | 1,200,013 | ||||||||
Amphenol Corp., A |
51,920 | 3,476,563 | ||||||||
Apple Inc. |
446,040 | 61,642,728 | ||||||||
Applied Materials Inc. |
78,352 | 6,419,379 | ||||||||
a |
Arista Networks Inc. |
25,488 | 2,877,340 | |||||||
a |
Arrow Electronics Inc. |
8,968 | 826,760 | |||||||
Automatic Data Processing Inc. |
21,712 | 4,911,037 | ||||||||
Avnet Inc. |
20,768 | 750,140 | ||||||||
Booz Allen Hamilton Holding Corp. |
9,912 | 915,373 | ||||||||
Broadcom Inc. |
28,090 | 12,472,241 | ||||||||
a |
CACI International Inc., A |
3,304 | 862,542 | |||||||
a |
Cadence Design Systems Inc. |
22,184 | 3,625,531 | |||||||
a |
Cirrus Logic Inc. |
12,272 | 844,314 | |||||||
Cisco Systems Inc. |
307,272 | 12,290,880 | ||||||||
Corning Inc. |
70,800 | 2,054,616 |
franklintempleton.com |
Semiannual Report |
71 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Large Cap Multifactor Index ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Information Technology (continued) | ||||||||||
Dell Technologies Inc., C |
29,264 | $ | 999,951 | |||||||
a |
Fortinet Inc. |
60,888 | 2,991,428 | |||||||
a |
Gartner Inc. |
4,248 | 1,175,379 | |||||||
Hewlett Packard Enterprise Co. |
143,488 | 1,718,986 | ||||||||
HP Inc. |
123,664 | 3,081,707 | ||||||||
Intel Corp. |
367,216 | 9,463,156 | ||||||||
International Business Machines Corp. |
92,984 | 11,047,429 | ||||||||
Jabil Inc. |
16,048 | 926,130 | ||||||||
Jack Henry & Associates Inc. |
6,608 | 1,204,440 | ||||||||
KLA Corp. |
15,104 | 4,570,924 | ||||||||
Lam Research Corp. |
12,544 | 4,591,104 | ||||||||
a |
Manhattan Associates Inc. |
6,608 | 879,062 | |||||||
Mastercard Inc., A |
49,560 | 14,091,890 | ||||||||
Microsoft Corp. |
194,464 | 45,290,666 | ||||||||
Motorola Solutions Inc. |
8,024 | 1,797,135 | ||||||||
National Instruments Corp. |
23,600 | 890,664 | ||||||||
NetApp Inc. |
21,240 | 1,313,694 | ||||||||
a |
ON Semiconductor Corp. |
46,256 | 2,883,137 | |||||||
a |
Palo Alto Networks Inc. |
26,236 | 4,297,195 | |||||||
Paychex Inc. |
32,096 | 3,601,492 | ||||||||
a |
Pure Storage Inc., A |
32,568 | 891,386 | |||||||
QUALCOMM Inc. |
96,760 | 10,931,945 | ||||||||
Science Applications International Corp. |
10,384 | 918,257 | ||||||||
Switch Inc., A |
27,376 | 922,298 | ||||||||
a |
Synopsys Inc. |
11,800 | 3,605,018 | |||||||
Texas Instruments Inc. |
78,352 | 12,127,323 | ||||||||
Western Union Co. |
65,136 | 879,336 | ||||||||
|
|
|||||||||
274,423,179 | ||||||||||
|
|
|||||||||
Materials 1.8% | ||||||||||
CF Industries Holdings Inc. |
21,240 | 2,044,350 | ||||||||
a |
Cleveland-Cliffs Inc. |
55,224 | 743,867 | |||||||
Graphic Packaging Holding Co. |
43,424 | 857,190 | ||||||||
Louisiana-Pacific Corp. |
17,464 | 893,982 | ||||||||
LyondellBasell Industries NV, A |
25,016 | 1,883,204 | ||||||||
Mosaic Co. |
36,344 | 1,756,506 | ||||||||
Nucor Corp. |
26,904 | 2,878,459 | ||||||||
Packaging Corp. of America |
8,968 | 1,007,017 | ||||||||
Reliance Steel & Aluminum Co. |
6,136 | 1,070,180 | ||||||||
Sonoco Products Co. |
15,104 | 856,850 | ||||||||
Steel Dynamics Inc. |
19,352 | 1,373,024 | ||||||||
United States Steel Corp. |
39,648 | 718,422 | ||||||||
|
|
|||||||||
16,083,051 | ||||||||||
|
|
|||||||||
Real Estate 2.6% | ||||||||||
EPR Properties |
21,712 | 778,592 | ||||||||
Extra Space Storage Inc. |
12,744 | 2,201,016 | ||||||||
Gaming and Leisure Properties Inc. |
25,488 | 1,127,589 | ||||||||
Kimco Realty Corp. |
59,000 | 1,086,190 | ||||||||
Life Storage Inc. |
8,968 | 993,296 | ||||||||
Medical Properties Trust Inc. |
64,192 | 761,317 | ||||||||
National Retail Properties Inc. |
22,656 | 903,068 | ||||||||
Omega Healthcare Investors Inc. |
33,512 | 988,269 | ||||||||
Public Storage |
16,048 | 4,699,015 | ||||||||
Realty Income Corp. |
47,672 | 2,774,511 | ||||||||
SL Green Realty Corp. |
21,240 | 852,998 | ||||||||
STORE Capital Corp. |
34,928 | 1,094,294 | ||||||||
VICI Properties Inc. |
94,400 | 2,817,840 |
72 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Large Cap Multifactor Index ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Real Estate (continued) | ||||||||||
WP Carey Inc. |
20,296 | $ | 1,416,661 | |||||||
|
|
|||||||||
22,494,656 | ||||||||||
|
|
|||||||||
Utilities 1.1% | ||||||||||
Consolidated Edison Inc. |
34,456 | 2,954,946 | ||||||||
National Fuel Gas Co. |
13,216 | 813,445 | ||||||||
NRG Energy Inc. |
28,792 | 1,101,870 | ||||||||
OGE Energy Corp. |
24,072 | 877,665 | ||||||||
Southern Co. |
53,336 | 3,626,848 | ||||||||
|
|
|||||||||
9,374,774 | ||||||||||
|
|
|||||||||
Total Common Stocks (Cost $950,184,166) |
861,797,955 | |||||||||
|
|
|||||||||
Total Investments (Cost $950,184,166) 99.8% |
861,797,955 | |||||||||
Other Assets, less Liabilities 0.2% |
1,506,917 | |||||||||
|
|
|||||||||
Net Assets 100.0% |
$ | 863,304,872 | ||||||||
|
|
aNon-income producing.
At September 30, 2022, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts |
Notional Amount* |
Expiration Date |
Value/Unrealized Appreciation (Depreciation) |
|||||||||||||||
Index Contracts | ||||||||||||||||||||
S&P 500 E-Mini |
Long | 6 | $ | 1,080,450 | 12/16/22 | $ | (86,762 | ) |
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 110.
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
73 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Mid Cap Multifactor Index ETFa
Six Months Ended September 30, 2022 (unaudited) |
Year Ended March 31, | |||||||||||||||||||||||
2022 | 2021 | 2020 | 2019 | 2018b | ||||||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||||||
Net asset value, beginning of period |
$ | 44.90 | $ | 40.84 | $ | 24.94 | $ | 30.32 | $ | 27.70 | $ | 25.51 | ||||||||||||
|
|
|||||||||||||||||||||||
Income from investment operationsc: | ||||||||||||||||||||||||
Net investment incomed |
0.35 | 0.54 | 0.45 | 0.50 | 0.47 | 0.38 | ||||||||||||||||||
Net realized and unrealized gains (losses) |
(7.54 | ) | 4.03 | 15.86 | (5.41 | ) | 2.53 | 2.18 | ||||||||||||||||
|
|
|||||||||||||||||||||||
Total from investment operations |
(7.19 | ) | 4.57 | 16.31 | (4.91 | ) | 3.00 | 2.56 | ||||||||||||||||
|
|
|||||||||||||||||||||||
Less distributions from net investment income |
(0.28 | ) | (0.51 | ) | (0.41 | ) | (0.47 | ) | (0.38 | ) | (0.37 | ) | ||||||||||||
|
|
|||||||||||||||||||||||
Net asset value, end of period |
$ | 37.43 | $ | 44.90 | $ | 40.84 | $ | 24.94 | $ | 30.32 | $ | 27.70 | ||||||||||||
|
|
|||||||||||||||||||||||
Total returne |
(16.04)% | 11.18% | 65.69% | (16.50)% | 10.92% | 10.09% | ||||||||||||||||||
Ratios to average net assetsf |
| |||||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.30% | 0.30% | 0.30% | 0.30% | 0.30% | 0.99% | g | |||||||||||||||||
Expenses net of waiver and payments by affiliates |
0.30% | 0.30% | 0.30% | 0.30% | 0.30% | 0.30% | g | |||||||||||||||||
Net investment income |
1.67% | 1.21% | 1.30% | 1.60% | 1.65% | 1.58% | ||||||||||||||||||
Supplemental data |
| |||||||||||||||||||||||
Net assets, end of period (000’s) |
$65,503 | $62,855 | $36,759 | $13,718 | $10,612 | $2,770 | ||||||||||||||||||
Portfolio turnover rateh |
15.58% | i | 22.76% | i | 25.02% | i | 24.20% | i | 23.49% | 36.21% |
aEffective August 1, 2022, Formerly, Franklin LibertyQ U.S. Mid Cap Equity ETF was renamed Franklin U.S. Mid Cap Multifactor Index ETF.
bFor the period April 26, 2017 (commencement of operations) to March 31, 2018.
cThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
dBased on average daily shares outstanding.
eTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
fRatios are annualized for periods less than one year.
gEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
hPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
iPortfolio turnover rate excluding cash creations was as follows: | 15.58% | 22.76% | 25.02% | 24.20% |
74 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin U.S. Mid Cap Multifactor Index ETF
Shares | Value | |||||||||
Common Stocks 100.7% | ||||||||||
Communication Services 2.5% | ||||||||||
Electronic Arts Inc. |
4,095 | $ | 473,832 | |||||||
Lumen Technologies Inc. |
34,650 | 252,252 | ||||||||
Omnicom Group Inc. |
7,525 | 474,752 | ||||||||
a,b |
Playtika Holding Corp. |
3,150 | 29,579 | |||||||
ViacomCBS Inc., B |
15,540 | 295,882 | ||||||||
World Wrestling Entertainment Inc., A |
1,505 | 105,606 | ||||||||
|
|
|||||||||
1,631,903 | ||||||||||
|
|
|||||||||
Consumer Discretionary 16.3% | ||||||||||
Advance Auto Parts Inc. |
2,030 | 317,370 | ||||||||
a |
AutoNation Inc. |
1,260 | 128,356 | |||||||
a |
AutoZone Inc. |
365 | 781,804 | |||||||
Bath & Body Works Inc. |
7,560 | 246,456 | ||||||||
Best Buy Co. Inc. |
8,155 | 516,538 | ||||||||
Brunswick Corp. |
1,995 | 130,573 | ||||||||
Carter’s Inc. |
1,540 | 100,916 | ||||||||
Choice Hotels International Inc. |
490 | 53,665 | ||||||||
Columbia Sportswear Co. |
1,085 | 73,021 | ||||||||
D.R. Horton Inc. |
4,830 | 325,300 | ||||||||
Dick’s Sporting Goods Inc. |
2,310 | 241,718 | ||||||||
a |
Dollar Tree Inc. |
4,690 | 638,309 | |||||||
Gap Inc. |
2,975 | 24,425 | ||||||||
Garmin Ltd. |
5,005 | 401,952 | ||||||||
Genuine Parts Co. |
4,655 | 695,085 | ||||||||
H&R Block Inc. |
7,280 | 309,691 | ||||||||
Hanesbrands Inc. |
13,055 | 90,863 | ||||||||
Hasbro Inc. |
4,095 | 276,085 | ||||||||
Kohl’s Corp. |
2,100 | 52,815 | ||||||||
a |
Leslie’s Inc. |
3,745 | 55,089 | |||||||
LKQ Corp. |
7,420 | 349,853 | ||||||||
Macy’s Inc. |
5,075 | 79,525 | ||||||||
a |
Mattel Inc. |
10,080 | 190,915 | |||||||
Newell Brands Inc. |
10,185 | 141,470 | ||||||||
Nordstrom Inc. |
1,820 | 30,449 | ||||||||
a |
Ollie’s Bargain Outlet Holdings Inc. |
1,855 | 95,718 | |||||||
a |
O’Reilly Automotive Inc. |
1,179 | 829,250 | |||||||
Penske Automotive Group Inc. |
1,050 | 103,351 | ||||||||
Polaris Inc. |
1,855 | 177,431 | ||||||||
Pool Corp. |
1,462 | 465,223 | ||||||||
PulteGroup Inc. |
3,500 | 131,250 | ||||||||
Ralph Lauren Corp. |
735 | 62,424 | ||||||||
a |
Skechers USA Inc., A |
1,960 | 62,171 | |||||||
Tapestry Inc. |
9,275 | 263,688 | ||||||||
Tempur Sealy International Inc. |
7,175 | 173,204 | ||||||||
Thor Industries Inc. |
805 | 56,334 | ||||||||
Tractor Supply Co. |
3,990 | 741,661 | ||||||||
a |
Ulta Beauty Inc. |
805 | 322,958 | |||||||
VF Corp. |
5,145 | 153,887 | ||||||||
a |
Victoria’s Secret & Co. |
2,975 | 86,632 | |||||||
Whirlpool Corp. |
1,925 | 259,509 | ||||||||
Williams-Sonoma Inc. |
3,010 | 354,728 | ||||||||
a |
YETI Holdings Inc. |
2,205 | 62,887 | |||||||
|
|
|||||||||
10,654,549 | ||||||||||
|
|
|||||||||
Consumer Staples 8.1% | ||||||||||
Albertsons Cos Inc. |
5,565 | 138,346 | ||||||||
a |
BJ’s Wholesale Club Holdings Inc. |
2,275 | 165,643 | |||||||
Bunge Ltd. |
3,710 | 306,335 |
franklintempleton.com |
Semiannual Report |
75 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Mid Cap Multifactor Index ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Consumer Staples (continued) | ||||||||||
Campbell Soup Co. |
6,405 | $ | 301,804 | |||||||
Casey’s General Stores Inc. |
910 | 184,293 | ||||||||
Church & Dwight Co. Inc. |
8,260 | 590,094 | ||||||||
Clorox Co. |
4,480 | 575,187 | ||||||||
Flowers Foods Inc. |
7,840 | 193,570 | ||||||||
Kellogg Co. |
8,925 | 621,716 | ||||||||
The Hershey Co. |
3,535 | 779,361 | ||||||||
The J.M. Smucker Co. |
3,850 | 529,029 | ||||||||
The Kroger Co. |
14,035 | 614,031 | ||||||||
Tyson Foods Inc., A |
4,165 | 274,598 | ||||||||
|
|
|||||||||
5,274,007 | ||||||||||
|
|
|||||||||
Energy 1.5% | ||||||||||
Antero Midstream Corp. |
10,010 | 91,892 | ||||||||
Chesapeake Energy Corp. |
1,925 | 181,354 | ||||||||
Ovintiv Inc. |
4,235 | 194,810 | ||||||||
PDC Energy Inc. |
1,435 | 82,928 | ||||||||
Range Resources Corp. |
3,745 | 94,599 | ||||||||
a |
Southwestern Energy Co. |
16,765 | 102,602 | |||||||
Texas Pacific Land Corp. |
147 | 261,253 | ||||||||
|
|
|||||||||
1,009,438 | ||||||||||
|
|
|||||||||
Financials 9.3% | ||||||||||
Affiliated Managers Group Inc. |
1,470 | 164,419 | ||||||||
Allstate Corp. |
4,515 | 562,253 | ||||||||
Ally Financial Inc. |
11,270 | 313,644 | ||||||||
Assured Guaranty Ltd. |
980 | 47,481 | ||||||||
Brown & Brown Inc. |
8,225 | 497,448 | ||||||||
Cincinnati Financial Corp. |
5,845 | 523,537 | ||||||||
CNA Financial Corp. |
910 | 33,579 | ||||||||
a |
Credit Acceptance Corp. |
287 | 125,706 | |||||||
Discover Financial Services |
6,615 | 601,436 | ||||||||
Erie Indemnity Co., A |
805 | 178,960 | ||||||||
Evercore Inc., A |
1,295 | 106,514 | ||||||||
Everest Re Group Ltd. |
595 | 156,152 | ||||||||
FactSet Research Systems Inc. |
1,540 | 616,169 | ||||||||
First American Financial Corp. |
3,710 | 171,031 | ||||||||
Globe Life Inc. |
3,115 | 310,565 | ||||||||
Hanover Insurance Group Inc. |
1,120 | 143,517 | ||||||||
Janus Henderson Group PLC |
4,060 | 82,459 | ||||||||
MGIC Investment Corp. |
5,075 | 65,061 | ||||||||
Prosperity Bancshares Inc. |
2,870 | 191,372 | ||||||||
Regions Financial Corp. |
13,930 | 279,575 | ||||||||
Reinsurance Group of America Inc. |
1,015 | 127,697 | ||||||||
SEI Investments Co. |
4,340 | 212,877 | ||||||||
Synchrony Financial |
17,255 | 486,418 | ||||||||
Unum Group |
3,010 | 116,788 | ||||||||
|
|
|||||||||
6,114,658 | ||||||||||
|
|
|||||||||
Health Care 9.5% | ||||||||||
a |
ABIOMED Inc. |
1,330 | 326,728 | |||||||
a |
Acadia Healthcare Co. Inc. |
1,365 | 106,716 | |||||||
Chemed Corp. |
453 | 197,762 | ||||||||
Encompass Health Corp. |
4,060 | 183,634 | ||||||||
a |
Enhabit Inc. |
2,030 | 28,501 | |||||||
a |
Hologic Inc. |
6,545 | 422,283 | |||||||
a |
IDEXX Laboratories Inc. |
1,925 | 627,165 | |||||||
a |
Incyte Corp. |
5,145 | 342,863 |
76 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Mid Cap Multifactor Index ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Health Care (continued) | ||||||||||
a |
Maravai LifeSciences Holdings Inc., A |
1,645 | $ | 41,997 | ||||||
a |
Masimo Corp. |
1,575 | 222,327 | |||||||
a |
Mettler-Toledo International Inc. |
579 | 627,705 | |||||||
a |
Neurocrine Biosciences Inc. |
2,870 | 304,823 | |||||||
Organon & Co. |
6,510 | 152,334 | ||||||||
a |
Quidel Corp. |
1,540 | 110,079 | |||||||
ResMed Inc. |
3,675 | 802,253 | ||||||||
Royalty Pharma PLC |
9,695 | 389,545 | ||||||||
a |
Tenet Healthcare Corp. |
1,645 | 84,849 | |||||||
a |
United Therapeutics Corp. |
1,330 | 278,475 | |||||||
Universal Health Services Inc., B |
2,485 | 219,127 | ||||||||
Viatris Inc. |
18,725 | 159,537 | ||||||||
a |
Waters Corp. |
2,275 | 613,181 | |||||||
|
|
|||||||||
6,241,884 | ||||||||||
|
|
|||||||||
Industrials 17.7% | ||||||||||
A O Smith Corp. |
3,570 | 173,431 | ||||||||
Allegion PLC |
3,220 | 288,770 | ||||||||
Allison Transmission Holdings Inc. |
3,570 | 120,523 | ||||||||
a |
Builders FirstSource Inc. |
4,410 | 259,837 | |||||||
C.H. Robinson Worldwide Inc. |
4,620 | 444,952 | ||||||||
Carrier Global Corp. |
19,040 | 677,062 | ||||||||
Cintas Corp. |
1,890 | 733,679 | ||||||||
Curtiss-Wright Corp. |
1,120 | 155,859 | ||||||||
Donaldson Co. Inc. |
4,235 | 207,557 | ||||||||
Dover Corp. |
5,005 | 583,483 | ||||||||
Esab Corp. |
770 | 25,687 | ||||||||
Expeditors International of Washington Inc. |
6,055 | 534,717 | ||||||||
Fastenal Co. |
13,895 | 639,726 | ||||||||
Fortune Brands Home & Security Inc. |
3,640 | 195,432 | ||||||||
Graco Inc. |
5,845 | 350,408 | ||||||||
Landstar System Inc. |
1,295 | 186,959 | ||||||||
Lennox International Inc. |
1,155 | 257,184 | ||||||||
Lincoln Electric Holdings Inc. |
2,030 | 255,212 | ||||||||
ManpowerGroup Inc. |
1,890 | 122,264 | ||||||||
Masco Corp. |
3,395 | 158,513 | ||||||||
MSC Industrial Direct Co. Inc., A |
1,750 | 127,417 | ||||||||
Nordson Corp. |
1,820 | 386,331 | ||||||||
Old Dominion Freight Line Inc. |
2,905 | 722,677 | ||||||||
Otis Worldwide Corp. |
10,080 | 643,104 | ||||||||
Robert Half International Inc. |
3,990 | 305,235 | ||||||||
Rollins Inc. |
9,135 | 316,802 | ||||||||
Ryder System Inc. |
1,365 | 103,044 | ||||||||
Schneider National Inc., B |
2,135 | 43,340 | ||||||||
Snap-on Inc. |
2,100 | 422,835 | ||||||||
Toro Co. |
3,290 | 284,519 | ||||||||
Trane Technologies PLC |
5,425 | 785,594 | ||||||||
W.W. Grainger Inc. |
1,540 | 753,353 | ||||||||
Watsco Inc. |
1,295 | 333,411 | ||||||||
|
|
|||||||||
11,598,917 | ||||||||||
|
|
|||||||||
Information Technology 20.0% | ||||||||||
a |
Akamai Technologies Inc. |
4,375 | 351,400 | |||||||
Amdocs Ltd. |
4,550 | 361,498 | ||||||||
a |
Arista Networks Inc. |
7,350 | 829,741 | |||||||
a |
Aspen Technology Inc. |
1,050 | 250,110 | |||||||
Booz Allen Hamilton Holding Corp. |
5,915 | 546,250 | ||||||||
a |
Cadence Design Systems Inc. |
4,865 | 795,087 |
franklintempleton.com |
Semiannual Report |
77 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Mid Cap Multifactor Index ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Information Technology (continued) | ||||||||||
CDW Corp. |
4,410 | $ | 688,313 | |||||||
Citrix Systems Inc. |
4,865 | 505,473 | ||||||||
Dolby Laboratories Inc., A |
1,855 | 120,853 | ||||||||
a |
F5 Networks Inc. |
2,100 | 303,933 | |||||||
a |
Fair Isaac Corp. |
875 | 360,509 | |||||||
a |
Fortinet Inc. |
12,740 | 625,916 | |||||||
a |
Gartner Inc. |
1,820 | 503,576 | |||||||
Hewlett Packard Enterprise Co. |
34,895 | 418,042 | ||||||||
HP Inc. |
19,320 | 481,454 | ||||||||
Juniper Networks Inc. |
10,465 | 273,346 | ||||||||
a |
Manhattan Associates Inc. |
2,030 | 270,051 | |||||||
Monolithic Power Systems Inc. |
1,435 | 521,479 | ||||||||
Motorola Solutions Inc. |
3,395 | 760,378 | ||||||||
National Instruments Corp. |
4,305 | 162,471 | ||||||||
NetApp Inc. |
8,995 | 556,341 | ||||||||
NortonLifeLock Inc. |
14,035 | 282,665 | ||||||||
Paychex Inc. |
6,020 | 675,504 | ||||||||
a |
Paycom Software Inc. |
1,470 | 485,085 | |||||||
a |
Synopsys Inc. |
2,345 | 716,421 | |||||||
Teradyne Inc. |
4,795 | 360,344 | ||||||||
a |
VeriSign Inc. |
3,290 | 571,473 | |||||||
Vontier Corp. |
5,425 | 90,652 | ||||||||
Western Union Co. |
16,625 | 224,438 | ||||||||
|
|
|||||||||
13,092,803 | ||||||||||
|
|
|||||||||
Materials 6.3% | ||||||||||
Avery Dennison Corp. |
2,940 | 478,338 | ||||||||
CF Industries Holdings Inc. |
3,290 | 316,663 | ||||||||
Chemours Co. |
2,205 | 54,353 | ||||||||
a |
Cleveland-Cliffs Inc. |
11,305 | 152,278 | |||||||
Huntsman Corp. |
2,905 | 71,289 | ||||||||
International Paper Co. |
9,800 | 310,660 | ||||||||
Louisiana-Pacific Corp. |
2,835 | 145,124 | ||||||||
LyondellBasell Industries NV, A |
6,475 | 487,438 | ||||||||
Nucor Corp. |
5,670 | 606,633 | ||||||||
Packaging Corp. of America |
1,330 | 149,346 | ||||||||
Reliance Steel & Aluminum Co. |
2,135 | 372,365 | ||||||||
RPM International Inc. |
3,955 | 329,491 | ||||||||
Sealed Air Corp. |
3,745 | 166,690 | ||||||||
Sonoco Products Co. |
2,940 | 166,786 | ||||||||
Steel Dynamics Inc. |
4,795 | 340,205 | ||||||||
|
|
|||||||||
4,147,659 | ||||||||||
|
|
|||||||||
Real Estate 3.9% | ||||||||||
AvalonBay Communities Inc. |
3,605 | 664,005 | ||||||||
Camden Property Trust |
3,115 | 372,087 | ||||||||
Extra Space Storage Inc. |
3,920 | 677,023 | ||||||||
First Industrial Realty Trust Inc. |
3,885 | 174,087 | ||||||||
Healthcare Realty Trust Inc. |
5,950 | 124,058 | ||||||||
Highwoods Properties Inc. |
3,570 | 96,247 | ||||||||
National Retail Properties Inc. |
6,020 | 239,957 | ||||||||
STORE Capital Corp. |
7,455 | 233,565 | ||||||||
|
|
|||||||||
2,581,029 | ||||||||||
|
|
|||||||||
Utilities 5.6% | ||||||||||
Ameren Corp. |
7,875 | 634,331 | ||||||||
American Water Works Co. Inc. |
4,970 | 646,895 | ||||||||
Consolidated Edison Inc. |
7,560 | 648,346 |
78 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Mid Cap Multifactor Index ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Utilities (continued) | ||||||||||
FirstEnergy Corp. |
16,485 | $ | 609,945 | |||||||
National Fuel Gas Co. |
2,450 | 150,797 | ||||||||
NRG Energy Inc. |
6,265 | 239,762 | ||||||||
PPL Corp. |
24,010 | 608,653 | ||||||||
UGI Corp. |
3,045 | 98,445 | ||||||||
|
|
|||||||||
3,637,174 | ||||||||||
|
|
|||||||||
Total Common Stocks (Cost $72,198,299) |
65,984,021 | |||||||||
|
|
|||||||||
Total
Investments before Short Term Investments |
65,984,021 | |||||||||
|
|
|||||||||
Short-Term Investments 0.1% | ||||||||||
Investments from Cash Collateral Received for Loaned Securities 0.1% |
||||||||||
Money Market Funds 0.1% | ||||||||||
c,d |
Institutional Fiduciary Trust Portfolio, 2.45% |
$ | 23,000 | 23,000 | ||||||
|
|
|||||||||
Total Short-Term Investments (Cost $23,000) |
23,000 | |||||||||
|
|
|||||||||
Total Investments (Cost $72,221,299) 100.8% |
66,007,021 | |||||||||
Other Assets, less Liabilities (0.8)% |
(504,421 | ) | ||||||||
|
|
|||||||||
Net Assets 100.0% |
$ | 65,502,600 | ||||||||
|
|
aNon-income producing.
bA portion or all of the security is on loan at September 30, 2022.
cThe rate shown is the annualized seven-day effective yield at period end.
dSee Note 3(c) regarding investments in affiliated management investment companies.
See Abbreviations on page 110.
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
79 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Small Cap Multifactor Index ETFa
Six Months Ended September 30, 2022 (unaudited) |
Year Ended March 31, | |||||||||||||||||||||||
2022 | 2021 | 2020 | 2019 | 2018b | ||||||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||||||
Net asset value, beginning of period |
$ | 36.16 | $ | 36.53 | $ | 20.48 | $ | 27.66 | $ | 26.66 | $ | 25.36 | ||||||||||||
|
|
|||||||||||||||||||||||
Income from investment operationsc: | ||||||||||||||||||||||||
Net investment incomed |
0.27 | 0.38 | 0.28 | 0.39 | 0.47 | 0.33 | ||||||||||||||||||
Net realized and unrealized gains (losses) |
(6.32 | ) | (0.36 | ) | 16.15 | (7.15 | ) | 0.87 | 1.27 | |||||||||||||||
|
|
|||||||||||||||||||||||
Total from investment operations |
(6.05 | ) | 0.02 | 16.43 | (6.76 | ) | 1.34 | 1.60 | ||||||||||||||||
|
|
|||||||||||||||||||||||
Less distributions from net investment income | (0.20 | ) | (0.39 | ) | (0.38 | ) | (0.42 | ) | (0.34 | ) | (0.30 | ) | ||||||||||||
|
|
|||||||||||||||||||||||
Net asset value, end of period |
$ | 29.91 | $ | 36.16 | $ | 36.53 | $ | 20.48 | $ | 27.66 | $ | 26.66 | ||||||||||||
|
|
|||||||||||||||||||||||
Total returne |
(16.74)% | 0.02% | 80.74% | (24.83)% | 5.05% | 6.34% | ||||||||||||||||||
Ratios to average net assetsf | ||||||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.35% | 0.35% | 0.35% | 0.35% | 0.35% | 1.15% | g | |||||||||||||||||
Expenses net of waiver and payments by affiliates |
0.35% | 0.35% | 0.35% | 0.35% | 0.35% | 0.35% | g | |||||||||||||||||
Net investment income |
1.61% | 1.00% | 0.99% | 1.41% | 1.69% | 1.40% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) |
$13,458 | $16,273 | $14,613 | $13,310 | $17,979 | $2,666 | ||||||||||||||||||
Portfolio turnover rateh |
19.80% | i | 27.64% | i | 34.77% | i | 23.83% | i | 22.17% | 23.99% |
aEffective August 1, 2022, Formerly, Franklin LibertyQ U.S. Small Cap Equity ETF was renamed Franklin U.S. Small Cap Multifactor Index ETF.
bFor the period April 26, 2017 (commencement of operations) to March 31, 2018.
cThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
dBased on average daily shares outstanding.
eTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
fRatios are annualized for periods less than one year.
gEffective December 1, 2017, the Fund replaced the prior fee structure with a unified management fee. See Note 3(a).
hPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
iPortfolio turnover rate excluding cash creations was as follows: | 19.80% | 27.64% | 34.77% | 23.83% |
80 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2022 (unaudited)
Franklin U.S. Small Cap Multifactor Index ETF
Shares | Value | |||||||||
Common Stocks 100.1% | ||||||||||
Communication Services 2.9% | ||||||||||
a |
AMC Networks Inc., A |
738 | $ | 14,982 | ||||||
Cogent Communications Holdings Inc. |
999 | 52,108 | ||||||||
a |
IDT Corp., B |
378 | 9,386 | |||||||
John Wiley & Sons Inc., A |
945 | 35,494 | ||||||||
a |
Liberty Latin America Ltd., A |
900 | 5,571 | |||||||
a |
Liberty Latin America Ltd., C |
3,321 | 20,424 | |||||||
a |
Ooma Inc. |
288 | 3,542 | |||||||
Scholastic Corp. |
603 | 18,548 | ||||||||
Sinclair Broadcast Group Inc., A |
477 | 8,629 | ||||||||
TEGNA Inc. |
5,112 | 105,716 | ||||||||
Telephone and Data Systems Inc. |
2,313 | 32,151 | ||||||||
a |
Thryv Holdings Inc. |
342 | 7,808 | |||||||
a |
TrueCar Inc. |
2,304 | 3,479 | |||||||
a |
United States Cellular Corp. |
297 | 7,731 | |||||||
a |
Yelp Inc. |
1,809 | 61,343 | |||||||
|
|
|||||||||
386,912 | ||||||||||
|
|
|||||||||
Consumer Discretionary 18.9% | ||||||||||
a |
1-800- Flowers.com Inc., A |
765 | 4,965 | |||||||
a |
Abercrombie & Fitch Co., A |
1,530 | 23,791 | |||||||
Academy Sports & Outdoors Inc. |
1,620 | 68,332 | ||||||||
Acushnet Holdings Corp. |
927 | 40,315 | ||||||||
American Eagle Outfitters Inc. |
3,654 | 35,553 | ||||||||
a |
American Public Education Inc. |
414 | 3,784 | |||||||
a |
America’s Car-Mart Inc. |
153 | 9,336 | |||||||
a |
Asbury Automotive Group Inc. |
513 | 77,514 | |||||||
b |
Big 5 Sporting Goods Corp. |
450 | 4,833 | |||||||
Big Lots Inc. |
990 | 15,454 | ||||||||
Bloomin’ Brands Inc. |
2,421 | 44,377 | ||||||||
Buckle Inc. |
954 | 30,204 | ||||||||
Build-A-Bear Workshop Inc. |
189 | 2,519 | ||||||||
Caleres Inc. |
459 | 11,117 | ||||||||
Camping World Holdings Inc., A |
693 | 17,547 | ||||||||
a |
CarParts.com Inc. |
909 | 4,699 | |||||||
Cato Corp., A |
306 | 2,919 | ||||||||
a |
Century Casinos Inc. |
396 | 2,598 | |||||||
Cheesecake Factory Inc. |
1,323 | 38,737 | ||||||||
a |
Children’s Place Inc. |
162 | 5,004 | |||||||
a |
Chuy’s Holdings Inc. |
243 | 5,633 | |||||||
a |
Citi Trends Inc. |
243 | 3,769 | |||||||
a |
Container Store Group Inc. |
801 | 3,925 | |||||||
Cracker Barrel Old Country Store Inc. |
702 | 64,991 | ||||||||
a |
Destination XL Group Inc. |
657 | 3,561 | |||||||
Dillard’s Inc., A |
144 | 39,277 | ||||||||
a |
Dorman Products Inc. |
558 | 45,823 | |||||||
a |
Duluth Holdings Inc., B |
270 | 1,901 | |||||||
Ethan Allen Interiors Inc. |
693 | 14,650 | ||||||||
Foot Locker Inc. |
999 | 31,099 | ||||||||
a |
Fossil Group Inc. |
540 | 1,847 | |||||||
Franchise Group Inc. |
567 | 13,778 | ||||||||
a |
Frontdoor Inc. |
945 | 19,269 | |||||||
a |
Funko Inc., A |
567 | 11,465 | |||||||
a |
Genesco Inc. |
333 | 13,094 | |||||||
a |
G-III Apparel Group Ltd. |
504 | 7,535 | |||||||
a |
GoPro Inc., A |
2,088 | 10,294 | |||||||
a |
Green Brick Partners Inc. |
549 | 11,738 | |||||||
Group 1 Automotive Inc. |
396 | 56,576 | ||||||||
Guess? Inc. |
387 | 5,677 |
franklintempleton.com |
Semiannual Report |
81 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Small Cap Multifactor Index ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Consumer Discretionary (continued) | ||||||||||
Haverty Furniture Companies Inc. |
513 | $ | 12,774 | |||||||
a |
Helen of Troy Ltd. |
549 | 52,946 | |||||||
Hibbett Inc. |
378 | 18,828 | ||||||||
Installed Building Products Inc. |
504 | 40,819 | ||||||||
Jack in Box Inc. |
234 | 17,332 | ||||||||
JOANN Inc. |
243 | 1,609 | ||||||||
Johnson Outdoors Inc., A |
144 | 7,389 | ||||||||
Kontoor Brands Inc. |
1,485 | 49,911 | ||||||||
La-Z-Boy Inc. |
1,080 | 24,376 | ||||||||
LCI Industries |
567 | 57,528 | ||||||||
a |
LGI Homes Inc. |
459 | 37,349 | |||||||
Lifetime Brands Inc. |
297 | 2,011 | ||||||||
a |
Liquidity Services Inc. |
585 | 9,512 | |||||||
a |
LL Flooring Holdings Inc. |
612 | 4,241 | |||||||
a |
Malibu Boats Inc., A |
432 | 20,732 | |||||||
Marine Products Corp. |
208 | 1,760 | ||||||||
a |
MarineMax Inc. |
486 | 14,478 | |||||||
a |
MasterCraft Boat Holdings Inc. |
315 | 5,938 | |||||||
MDC Holdings Inc. |
684 | 18,755 | ||||||||
a |
Monarch Casino & Resort Inc. |
162 | 9,095 | |||||||
Monro Inc. |
720 | 31,291 | ||||||||
Movado Group Inc. |
450 | 12,681 | ||||||||
Murphy USA Inc. |
603 | 165,771 | ||||||||
a |
National Vision Holdings Inc. |
1,728 | 56,419 | |||||||
a |
ODP Corp. |
1,044 | 36,697 | |||||||
a |
ONE Group Hospitality Inc. |
387 | 2,570 | |||||||
a |
OneWater Marine Inc., A |
252 | 7,588 | |||||||
Oxford Industries Inc. |
432 | 38,785 | ||||||||
Papa John’s International Inc. |
738 | 51,667 | ||||||||
Patrick Industries Inc. |
252 | 11,048 | ||||||||
a |
Perdoceo Education Corp. |
1,710 | 17,613 | |||||||
PetMed Express Inc. |
522 | 10,189 | ||||||||
a |
Portillo’s Inc., A |
378 | 7,443 | |||||||
Rent-A-Center Inc. |
1,629 | 28,524 | ||||||||
a |
Revolve Group Inc. |
837 | 18,154 | |||||||
Rocky Brands Inc. |
171 | 3,430 | ||||||||
a |
Sally Beauty Holdings Inc. |
2,844 | 35,834 | |||||||
Shoe Carnival Inc. |
459 | 9,841 | ||||||||
Shutterstock Inc. |
603 | 30,252 | ||||||||
Signet Jewelers Ltd. |
1,152 | 65,883 | ||||||||
a |
Sleep Number Corp. |
549 | 18,562 | |||||||
Smith & Wesson Brands Inc. |
1,233 | 12,786 | ||||||||
Sonic Automotive Inc., A |
567 | 24,551 | ||||||||
a |
Sonos Inc. |
2,736 | 38,030 | |||||||
a |
Sportsman’s Warehouse Holdings Inc. |
1,287 | 10,682 | |||||||
Standard Motor Products Inc. |
549 | 17,842 | ||||||||
Steven Madden Ltd. |
1,989 | 53,047 | ||||||||
a |
Stitch Fix Inc., A |
1,827 | 7,217 | |||||||
Strategic Education Inc. |
567 | 34,819 | ||||||||
a |
Stride Inc. |
927 | 38,962 | |||||||
Sturm Ruger & Co. Inc. |
486 | 24,684 | ||||||||
Superior Group of Companies Inc. |
288 | 2,557 | ||||||||
Texas Roadhouse Inc. |
1,971 | 171,989 | ||||||||
a |
The Lovesac Co. |
279 | 5,686 | |||||||
Tile Shop Holdings Inc. |
468 | 1,647 | ||||||||
Tilly’s Inc., A |
486 | 3,363 | ||||||||
a |
Torrid Holdings Inc. |
180 | 751 | |||||||
a |
Tupperware Brands Corp. |
1,341 | 8,784 |
82 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Small Cap Multifactor Index ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Consumer Discretionary (continued) | ||||||||||
a |
Turtle Beach Corp. |
297 | $ | 2,026 | ||||||
a |
Universal Technical Institute Inc. |
405 | 2,203 | |||||||
a |
Vista Outdoor Inc. |
1,251 | 30,424 | |||||||
a |
Weber Inc., A |
360 | 2,365 | |||||||
Weyco Group Inc. |
81 | 1,648 | ||||||||
Wingstop Inc. |
711 | 89,174 | ||||||||
Winmark Corp. |
81 | 17,523 | ||||||||
Wolverine World Wide Inc. |
1,773 | 27,286 | ||||||||
a |
XPEL Inc. |
423 | 27,258 | |||||||
a |
Zumiez Inc. |
423 | 9,107 | |||||||
|
|
|||||||||
2,543,536 | ||||||||||
|
|
|||||||||
Consumer Staples 6.4% | ||||||||||
Alico Inc. |
72 | 2,033 | ||||||||
b |
B&G Foods Inc., A |
1,395 | 23,004 | |||||||
a |
BellRing Brands Inc. |
1,593 | 32,832 | |||||||
a |
Central Garden & Pet Co. |
225 | 8,109 | |||||||
a |
Central Garden & Pet Co., A |
945 | 32,281 | |||||||
Coca-Cola Consolidated Inc. |
126 | 51,878 | ||||||||
Edgewell Personal Care Co. |
855 | 31,977 | ||||||||
a |
elf Beauty Inc. |
531 | 19,976 | |||||||
Energizer Holdings Inc. |
1,161 | 29,188 | ||||||||
Ingles Markets Inc., A |
414 | 32,793 | ||||||||
Inter Parfums Inc. |
459 | 34,636 | ||||||||
John B Sanfilippo & Son Inc. |
234 | 17,721 | ||||||||
Lancaster Colony Corp. |
468 | 70,331 | ||||||||
Medifast Inc. |
342 | 37,059 | ||||||||
National Beverage Corp. |
657 | 25,321 | ||||||||
Natural Grocers by Vitamin Cottage Inc. |
248 | 2,676 | ||||||||
Nu Skin Enterprises Inc., A |
1,296 | 43,248 | ||||||||
PriceSmart Inc. |
558 | 32,135 | ||||||||
SpartanNash Co. |
1,044 | 30,297 | ||||||||
a |
Sprouts Farmers Market Inc. |
2,484 | 68,931 | |||||||
Tootsie Roll Industries Inc. |
351 | 11,681 | ||||||||
a |
United Natural Foods Inc. |
1,107 | 38,048 | |||||||
Universal Corp. |
630 | 29,005 | ||||||||
a |
USANA Health Sciences Inc. |
288 | 16,142 | |||||||
Vector Group Ltd. |
3,699 | 32,588 | ||||||||
Village Super Market Inc., A |
279 | 5,393 | ||||||||
WD-40 Co. |
414 | 72,756 | ||||||||
Weis Markets Inc. |
477 | 33,981 | ||||||||
|
|
|||||||||
866,020 | ||||||||||
|
|
|||||||||
Energy 2.3% | ||||||||||
Arch Resources Inc. |
189 | 22,415 | ||||||||
Brigham Minerals Inc., A |
567 | 13,988 | ||||||||
California Resources Corp. |
945 | 36,316 | ||||||||
Chord Energy Corp. |
486 | 66,470 | ||||||||
CONSOL Energy Inc. |
819 | 52,678 | ||||||||
a |
Laredo Petroleum Inc. |
189 | 11,879 | |||||||
Magnolia Oil & Gas Corp., A |
2,016 | 39,937 | ||||||||
a |
Peabody Energy Corp. |
1,341 | 33,283 | |||||||
SFL Corp. Ltd. |
2,106 | 19,186 | ||||||||
a |
SilverBow Resources Inc. |
144 | 3,871 | |||||||
Sitio Royalties Corp. |
144 | 3,184 | ||||||||
VAALCO Energy Inc. |
675 | 2,943 | ||||||||
|
|
|||||||||
306,150 | ||||||||||
|
|
franklintempleton.com |
Semiannual Report |
83 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Small Cap Multifactor Index ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Financials 10.9% | ||||||||||
1st Source Corp. |
387 | $ | 17,918 | |||||||
A-Mark Precious Metals Inc. |
342 | 9,709 | ||||||||
Arrow Financial Corp. |
324 | 9,338 | ||||||||
Associated Banc-Corp. |
3,168 | 63,613 | ||||||||
Banco Latinoamericano de Comercio Exterior SA, E |
738 | 9,638 | ||||||||
Blackstone Mortgage Trust Inc., A |
3,420 | 79,823 | ||||||||
Brookline Bancorp Inc. |
1,422 | 16,566 | ||||||||
Citizens & Northern Corp. |
297 | 7,181 | ||||||||
City Holding Co. |
288 | 25,543 | ||||||||
Community Trust Bancorp Inc. |
324 | 13,138 | ||||||||
Compass Diversified Holdings |
702 | 12,678 | ||||||||
a |
Consumer Portfolio Services Inc. |
153 | 1,112 | |||||||
CVB Financial Corp. |
2,034 | 51,501 | ||||||||
Donegal Group Inc., A |
405 | 5,463 | ||||||||
a |
Donnelley Financial Solutions Inc. |
621 | 22,958 | |||||||
Dynex Capital Inc. |
414 | 4,823 | ||||||||
Enact Holdings Inc. |
432 | 9,577 | ||||||||
Enterprise Bancorp Inc. |
207 | 6,191 | ||||||||
Essent Group Ltd. |
2,421 | 84,420 | ||||||||
a |
EZCORP Inc., A |
1,080 | 8,327 | |||||||
Farmers National Banc Corp. |
603 | 7,893 | ||||||||
Financial Institutions Inc. |
306 | 7,365 | ||||||||
First Business Financial Services Inc. |
90 | 2,908 | ||||||||
First Community Bankshares Inc. |
297 | 9,513 | ||||||||
First Merchants Corp. |
1,035 | 40,034 | ||||||||
First of Long Island Corp. |
477 | 8,224 | ||||||||
GCM Grosvenor Inc., A |
504 | 3,977 | ||||||||
a |
Genworth Financial Inc., A |
11,601 | 40,604 | |||||||
German American Bancorp Inc. |
585 | 20,890 | ||||||||
Guaranty Bancshares Inc. |
162 | 5,604 | ||||||||
Hanmi Financial Corp. |
594 | 14,066 | ||||||||
Hingham Institution For Savings |
27 | 6,780 | ||||||||
Hope Bancorp Inc. |
2,304 | 29,123 | ||||||||
Houlihan Lokey Inc. |
1,251 | 94,300 | ||||||||
Invesco Mortgage Capital Inc. |
576 | 6,394 | ||||||||
Investors Title Co. |
27 | 3,807 | ||||||||
Jackson Financial Inc., A |
882 | 24,476 | ||||||||
Kinsale Capital Group Inc. |
450 | 114,939 | ||||||||
Lakeland Bancorp Inc. |
1,188 | 19,020 | ||||||||
Macatawa Bank Corp. |
279 | 2,584 | ||||||||
Manning & Napier Inc. |
162 | 1,988 | ||||||||
Mercury General Corp. |
315 | 8,952 | ||||||||
a |
Mr Cooper Group Inc. |
810 | 32,805 | |||||||
National Western Life Group Inc., A |
72 | 12,298 | ||||||||
Navient Corp. |
1,395 | 20,493 | ||||||||
NBT Bancorp Inc. |
1,008 | 38,254 | ||||||||
a |
NerdWallet Inc., A |
333 | 2,954 | |||||||
Nexpoint Real Estate Finance Inc. |
81 | 1,213 | ||||||||
Northfield Bancorp Inc. |
1,207 | 17,272 | ||||||||
Northwest Bancshares Inc. |
2,763 | 37,328 | ||||||||
OceanFirst Financial Corp. |
738 | 13,756 | ||||||||
Parke Bancorp Inc. |
117 | 2,452 | ||||||||
Peoples Bancorp Inc. |
638 | 18,457 | ||||||||
Peoples Financial Services Corp. |
90 | 4,216 | ||||||||
RLI Corp. |
891 | 91,221 | ||||||||
Safety Insurance Group Inc. |
306 | 24,957 | ||||||||
Silvercrest Asset Management Group Inc., A |
108 | 1,766 |
84 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Small Cap Multifactor Index ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Financials (continued) | ||||||||||
Southern Missouri Bancorp Inc. |
189 | $ | 9,645 | |||||||
Stewart Information Services Corp. |
567 | 24,744 | ||||||||
Tompkins Financial Corp. |
360 | 26,143 | ||||||||
TPG RE Finance Trust Inc. |
1,440 | 10,080 | ||||||||
TriCo Bancshares |
351 | 15,672 | ||||||||
TrustCo Bank Corp. |
432 | 13,573 | ||||||||
UMB Financial Corp. |
801 | 67,516 | ||||||||
Victory Capital Holdings Inc., A |
234 | 5,455 | ||||||||
West BanCorp Inc. |
387 | 8,054 | ||||||||
Westamerica BanCorp. |
567 | 29,648 | ||||||||
a |
World Acceptance Corp. |
90 | 8,714 | |||||||
|
|
|||||||||
1,471,644 | ||||||||||
|
|
|||||||||
Health Care 9.5% | ||||||||||
a |
Alkermes PLC |
1,989 | 44,414 | |||||||
a |
AMN Healthcare Services Inc. |
1,215 | 128,741 | |||||||
a |
AtriCure Inc. |
999 | 39,061 | |||||||
Atrion Corp. |
31 | 17,515 | ||||||||
a |
Bioventus Inc., A |
513 | 3,591 | |||||||
a |
Cano Health Inc. |
2,079 | 18,025 | |||||||
a |
Cardiovascular Systems Inc. |
882 | 12,225 | |||||||
a |
Catalyst Pharmaceuticals Inc. |
2,340 | 30,022 | |||||||
a |
Community Health Systems Inc. |
3,096 | 6,656 | |||||||
a |
Computer Programs and Systems Inc. |
270 | 7,528 | |||||||
CONMED Corp. |
648 | 51,950 | ||||||||
a |
Convey Health Solutions Holdings Inc. |
279 | 2,932 | |||||||
a |
Corcept Therapeutics Inc. |
2,322 | 59,536 | |||||||
a |
CorVel Corp. |
198 | 27,409 | |||||||
a |
Cross Country Healthcare Inc. |
936 | 26,554 | |||||||
a |
Eagle Pharmaceuticals Inc. |
266 | 7,028 | |||||||
Embecta Corp. |
837 | 24,097 | ||||||||
a |
Emergent BioSolutions Inc. |
972 | 20,402 | |||||||
a |
Enanta Pharmaceuticals Inc. |
414 | 21,474 | |||||||
a |
Figs Inc., A |
1,755 | 14,479 | |||||||
a |
Fulgent Genetics Inc. |
423 | 16,125 | |||||||
a |
Hanger Inc. |
1,107 | 20,723 | |||||||
a |
Inari Medical Inc. |
756 | 54,916 | |||||||
a |
Innoviva Inc. |
1,539 | 17,868 | |||||||
a |
Intercept Pharmaceuticals Inc. |
306 | 4,269 | |||||||
iRadimed Corp. |
162 | 4,870 | ||||||||
a |
Ironwood Pharmaceuticals Inc. |
3,393 | 35,151 | |||||||
a |
Joint Corp. |
333 | 5,231 | |||||||
LeMaitre Vascular Inc. |
432 | 21,894 | ||||||||
a |
LHC Group Inc. |
648 | 106,052 | |||||||
a |
MEDNAX Inc. |
2,025 | 33,433 | |||||||
a |
Meridian Bioscience Inc. |
1,098 | 34,620 | |||||||
a |
Merit Medical Systems Inc. |
1,143 | 64,591 | |||||||
a |
MiMedx Group Inc. |
1,746 | 5,011 | |||||||
National HealthCare Corp. |
342 | 21,662 | ||||||||
National Research Corp. |
342 | 13,612 | ||||||||
a |
Neogen Corp. |
2,466 | 34,450 | |||||||
a |
NextGen Healthcare Inc. |
621 | 10,992 | |||||||
a |
Organogenesis Holdings Inc. |
1,143 | 3,703 | |||||||
a |
Orthofix Medical Inc. |
432 | 8,256 | |||||||
Patterson Companies Inc. |
2,151 | 51,667 | ||||||||
Phibro Animal Health Corp., A |
594 | 7,894 | ||||||||
a |
Prestige Consumer Healthcare Inc. |
1,179 | 58,750 | |||||||
SIGA Technologies Inc. |
1,089 | 11,217 |
franklintempleton.com |
Semiannual Report |
85 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Small Cap Multifactor Index ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Health Care (continued) | ||||||||||
Simulations Plus Inc. |
324 | $ | 15,727 | |||||||
a |
Surmodics Inc. |
306 | 9,302 | |||||||
a |
Tactile Systems Technology Inc. |
486 | 3,786 | |||||||
a |
Treace Medical Concepts Inc. |
486 | 10,726 | |||||||
a |
Vanda Pharmaceuticals Inc. |
720 | 7,114 | |||||||
a |
Vir Biotechnology Inc. |
873 | 16,831 | |||||||
Zynex Inc. |
486 | 4,408 | ||||||||
|
|
|||||||||
1,278,490 | ||||||||||
|
|
|||||||||
Industrials 21.4% | ||||||||||
ABM Industries Inc. |
1,422 | 54,363 | ||||||||
ACCO Brands Corp. |
2,124 | 10,408 | ||||||||
a |
Air Transport Services Group Inc. |
1,224 | 29,486 | |||||||
Alamo Group Inc. |
198 | 24,209 | ||||||||
Allied Motion Technologies Inc. |
306 | 8,758 | ||||||||
Applied Industrial Technologies Inc. |
981 | 100,827 | ||||||||
a |
Atkore Inc. |
792 | 61,625 | |||||||
a |
Atlas Air Worldwide Holdings Inc. |
603 | 57,629 | |||||||
a |
Atlas Technical Consultants Inc. |
252 | 1,676 | |||||||
Barrett Business Services Inc. |
81 | 6,318 | ||||||||
a |
BlueLinx Holdings Inc. |
180 | 11,178 | |||||||
Boise Cascade Co. |
963 | 57,260 | ||||||||
Brady Corp., A |
1,341 | 55,960 | ||||||||
Brink’s Co. |
594 | 28,773 | ||||||||
a |
Casella Waste Systems Inc., A |
1,008 | 77,001 | |||||||
a |
Cimpress PLC |
387 | 9,474 | |||||||
Comfort Systems USA Inc. |
702 | 68,326 | ||||||||
CompX International Inc. |
40 | 650 | ||||||||
Costamare Inc. |
1,242 | 11,116 | ||||||||
Covenant Logistics Group Inc. |
327 | 9,385 | ||||||||
CRA International Inc. |
153 | 13,577 | ||||||||
CSW Industrials Inc. |
297 | 35,581 | ||||||||
a |
Daseke Inc. |
657 | 3,554 | |||||||
Deluxe Corp. |
1,098 | 18,282 | ||||||||
a |
Distribution Solutions Group Inc. |
117 | 3,296 | |||||||
a |
DXP Enterprises Inc. |
315 | 7,459 | |||||||
Eagle Bulk Shipping Inc. |
180 | 7,772 | ||||||||
Encore Wire Corp. |
243 | 28,076 | ||||||||
Ennis Inc. |
630 | 12,682 | ||||||||
Exponent Inc. |
1,305 | 114,409 | ||||||||
Forward Air Corp. |
657 | 59,301 | ||||||||
a |
Franklin Covey Co. |
288 | 13,072 | |||||||
Franklin Electric Co. Inc. |
1,071 | 87,511 | ||||||||
Genco Shipping & Trading Ltd. |
450 | 5,638 | ||||||||
Global Industrial Co. |
369 | 9,900 | ||||||||
a |
GMS Inc. |
981 | 39,250 | |||||||
Gorman-Rupp Co. |
252 | 5,995 | ||||||||
Griffon Corp. |
891 | 26,302 | ||||||||
H&E Equipment Services Inc. |
684 | 19,385 | ||||||||
Healthcare Services Group Inc. |
1,710 | 20,674 | ||||||||
Heartland Express Inc. |
1,107 | 15,841 | ||||||||
Heidrick & Struggles International Inc. |
603 | 15,672 | ||||||||
a |
Heritage-Crystal Clean Inc. |
459 | 13,573 | |||||||
Hillenbrand Inc. |
1,539 | 56,512 | ||||||||
HNI Corp. |
1,143 | 30,301 | ||||||||
a |
Hudson Technologies Inc. |
504 | 3,704 | |||||||
a |
IBEX Holdings Ltd. |
108 | 2,006 | |||||||
ICF International Inc. |
441 | 48,078 |
86 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Small Cap Multifactor Index ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Industrials (continued) | ||||||||||
Insperity Inc. |
846 | $ | 86,368 | |||||||
Interface Inc. |
1,206 | 10,842 | ||||||||
Kadant Inc. |
270 | 45,039 | ||||||||
a |
Karat Packaging Inc. |
99 | 1,583 | |||||||
Kelly Services Inc., A |
846 | 11,497 | ||||||||
Kforce Inc. |
612 | 35,894 | ||||||||
Kimball International Inc., B |
963 | 6,057 | ||||||||
Korn Ferry |
1,566 | 73,524 | ||||||||
a |
Legalzoom.com Inc. |
1,287 | 11,030 | |||||||
Luxfer Holdings PLC |
612 | 8,874 | ||||||||
Marten Transport Ltd. |
1,377 | 26,383 | ||||||||
Matson Inc. |
909 | 55,922 | ||||||||
Matthews International Corp., A |
522 | 11,698 | ||||||||
McGrath RentCorp |
549 | 46,039 | ||||||||
Miller Industries Inc. |
252 | 5,365 | ||||||||
MillerKnoll Inc. |
1,818 | 28,361 | ||||||||
Mueller Industries Inc. |
990 | 58,846 | ||||||||
Mueller Water Products Inc., A |
2,970 | 30,502 | ||||||||
National Presto Industries Inc. |
117 | 7,611 | ||||||||
NL Industries Inc. |
207 | 1,600 | ||||||||
a |
NV5 Global Inc. |
261 | 32,317 | |||||||
Omega Flex Inc. |
90 | 8,336 | ||||||||
a |
PAM Transportation Services Inc. |
189 | 5,851 | |||||||
Pitney Bowes Inc. |
1,935 | 4,509 | ||||||||
Preformed Line Products Co. |
72 | 5,123 | ||||||||
a |
Radiant Logistics Inc. |
909 | 5,172 | |||||||
Resources Connection Inc. |
981 | 17,727 | ||||||||
Rush Enterprises Inc., B |
162 | 7,761 | ||||||||
Rush Enterprises Inc., A |
837 | 36,711 | ||||||||
Safe Bulkers Inc. |
765 | 1,890 | ||||||||
a |
Saia Inc. |
657 | 124,830 | |||||||
Simpson Manufacturing Co. Inc. |
1,071 | 83,966 | ||||||||
Standex International Corp. |
261 | 21,311 | ||||||||
Steelcase Inc., A |
2,043 | 13,320 | ||||||||
Tennant Co. |
477 | 26,979 | ||||||||
a |
Titan Machinery Inc. |
378 | 10,682 | |||||||
a |
Transcat Inc. |
153 | 11,581 | |||||||
Triton International Ltd. |
1,413 | 77,333 | ||||||||
a |
TrueBlue Inc. |
612 | 11,677 | |||||||
UFP Industries Inc. |
1,377 | 99,364 | ||||||||
UniFirst Corp. |
315 | 52,992 | ||||||||
Universal Logistics Holdings Inc. |
198 | 6,281 | ||||||||
a |
Vectrus Inc. |
234 | 8,284 | |||||||
a |
Veritiv Corp. |
306 | 29,918 | |||||||
Watts Water Technologies Inc., A |
729 | 91,657 | ||||||||
Werner Enterprises Inc. |
1,953 | 73,433 | ||||||||
Zurn Water Solutions Corp. |
1,899 | 46,525 | ||||||||
|
|
|||||||||
2,880,390 | ||||||||||
|
|
|||||||||
Information Technology 11.8% | ||||||||||
A10 Networks Inc. |
1,872 | 24,841 | ||||||||
ADTRAN Holdings Inc. |
864 | 16,917 | ||||||||
American Software Inc., A |
711 | 10,893 | ||||||||
a |
Appfolio Inc., A |
405 | 42,412 | |||||||
a |
Aviat Networks Inc. |
216 | 5,914 | |||||||
a |
Avid Technology Inc. |
855 | 19,887 | |||||||
Badger Meter Inc. |
693 | 64,026 | ||||||||
a |
BigCommerce Holdings Inc. |
999 | 14,785 |
franklintempleton.com |
Semiannual Report |
87 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Small Cap Multifactor Index ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Information Technology (continued) | ||||||||||
a |
Blackbaud Inc. |
900 | $ | 39,654 | ||||||
a |
Brightcove Inc. |
846 | 5,330 | |||||||
a |
Calix Inc. |
1,197 | 73,185 | |||||||
a |
Cambium Networks Corp. |
243 | 4,112 | |||||||
a |
ChannelAdvisor Corp. |
720 | 16,315 | |||||||
a |
Clearfield Inc. |
261 | 27,311 | |||||||
a |
CommVault Systems Inc. |
1,107 | 58,715 | |||||||
a |
Consensus Cloud Solutions Inc. |
405 | 19,157 | |||||||
CSG Systems International Inc. |
846 | 44,736 | ||||||||
a |
CyberOptics Corp. |
81 | 4,356 | |||||||
a |
eGain Corp. |
414 | 3,043 | |||||||
a |
Enfusion Inc., A |
315 | 3,887 | |||||||
a |
Envestnet Inc. |
1,008 | 44,755 | |||||||
a |
ePlus Inc. |
603 | 25,049 | |||||||
EVERTEC Inc. |
1,269 | 39,783 | ||||||||
a |
ExlService Holdings Inc. |
522 | 76,922 | |||||||
a |
Extreme Networks Inc. |
2,223 | 29,055 | |||||||
a |
FARO Technologies Inc. |
315 | 8,644 | |||||||
Hackett Group Inc. |
648 | 11,483 | ||||||||
Information Services Group Inc. |
387 | 1,842 | ||||||||
a |
Insight Enterprises Inc. |
720 | 59,335 | |||||||
a |
International Money Express Inc. |
792 | 18,050 | |||||||
Kulicke & Soffa Industries Inc. |
1,413 | 54,443 | ||||||||
Methode Electronics Inc. |
810 | 30,092 | ||||||||
a |
Napco Security Technologies Inc. |
693 | 20,152 | |||||||
a |
NETGEAR Inc. |
504 | 10,100 | |||||||
a |
NetScout Systems Inc. |
1,350 | 42,282 | |||||||
a |
Novanta Inc. |
882 | 102,003 | |||||||
a |
OneSpan Inc. |
729 | 6,277 | |||||||
a |
OSI Systems Inc. |
351 | 25,293 | |||||||
PC Connection Inc. |
234 | 10,551 | ||||||||
Power Integrations Inc. |
1,404 | 90,305 | ||||||||
Progress Software Corp. |
1,107 | 47,103 | ||||||||
a |
Qualys Inc. |
1,017 | 141,760 | |||||||
a |
Remitly Global Inc. |
1,062 | 11,809 | |||||||
a |
Rimini Street Inc. |
1,170 | 5,452 | |||||||
a |
SPS Commerce Inc. |
909 | 112,925 | |||||||
a |
Squarespace Inc., A |
405 | 8,651 | |||||||
Vishay Intertechnology Inc. |
2,871 | 51,075 | ||||||||
a |
Vishay Precision Group Inc. |
126 | 3,728 | |||||||
a |
WM Technology Inc. |
810 | 1,304 | |||||||
|
|
|||||||||
1,589,699 | ||||||||||
|
|
|||||||||
Materials 3.6% | ||||||||||
Balchem Corp. |
621 | 75,501 | ||||||||
Commercial Metals Co. |
2,358 | 83,662 | ||||||||
Compass Minerals International Inc. |
657 | 25,314 | ||||||||
Greif Inc., B |
144 | 8,755 | ||||||||
Greif Inc., A |
666 | 39,674 | ||||||||
Innospec Inc. |
279 | 23,902 | ||||||||
Kronos Worldwide Inc. |
477 | 4,455 | ||||||||
Myers Industries Inc. |
900 | 14,823 | ||||||||
Olympic Steel Inc. |
180 | 4,106 | ||||||||
Ramaco Resources Inc. |
261 | 2,401 | ||||||||
Ryerson Holding Corp. |
306 | 7,876 | ||||||||
Schnitzer Steel Industries Inc., A |
477 | 13,575 | ||||||||
Schweitzer-Mauduit International Inc. |
720 | 15,898 | ||||||||
Sensient Technologies Corp. |
972 | 67,399 |
88 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Small Cap Multifactor Index ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Materials (continued) | ||||||||||
Stepan Co. |
441 | $ | 41,309 | |||||||
SunCoke Energy Inc. |
1,584 | 9,203 | ||||||||
Tredegar Corp. |
558 | 5,268 | ||||||||
Valhi Inc. |
27 | 679 | ||||||||
Warrior Met Coal Inc. |
621 | 17,661 | ||||||||
Worthington Industries Inc. |
630 | 24,028 | ||||||||
|
|
|||||||||
485,489 | ||||||||||
|
|
|||||||||
Real Estate 4.5% | ||||||||||
American Assets Trust Inc. |
1,035 | 26,620 | ||||||||
Brandywine Realty Trust |
3,438 | 23,207 | ||||||||
Broadstone Net Lease Inc. |
3,276 | 50,876 | ||||||||
CareTrust REIT Inc. |
2,025 | 36,673 | ||||||||
City Office REIT Inc. |
522 | 5,204 | ||||||||
Community Healthcare Trust Inc. |
459 | 15,032 | ||||||||
Corporate Office Properties Trust |
2,367 | 54,985 | ||||||||
Douglas Elliman Inc. |
1,890 | 7,749 | ||||||||
Four Corners Property Trust Inc. |
909 | 21,989 | ||||||||
Franklin Street Properties Corp. |
2,511 | 6,604 | ||||||||
a |
GEO Group Inc. |
2,466 | 18,988 | |||||||
LTC Properties Inc. |
495 | 18,538 | ||||||||
LXP Industrial Trust |
6,741 | 61,748 | ||||||||
Marcus & Millichap Inc. |
576 | 18,881 | ||||||||
Necessity Retail REIT Inc. |
2,358 | 13,865 | ||||||||
Physicians Realty Trust |
4,905 | 73,771 | ||||||||
PotlatchDeltic Corp. |
1,323 | 54,296 | ||||||||
RE/MAX Holdings Inc., A |
522 | 9,871 | ||||||||
RMR Group Inc., A |
351 | 8,315 | ||||||||
Tanger Factory Outlet Centers Inc. |
2,277 | 31,149 | ||||||||
Urstadt Biddle Properties Inc., A |
369 | 5,723 | ||||||||
Washington Real Estate Investment Trust |
1,701 | 29,870 | ||||||||
Whitestone REIT |
1,152 | 9,746 | ||||||||
|
|
|||||||||
603,700 | ||||||||||
|
|
|||||||||
Utilities 7.9% | ||||||||||
American States Water Co. |
972 | 75,767 | ||||||||
Artesian Resources Corp., A |
198 | 9,528 | ||||||||
Avista Corp. |
1,863 | 69,024 | ||||||||
Black Hills Corp. |
1,530 | 103,627 | ||||||||
Brookfield Infrastructure Corp., A |
1,089 | 44,322 | ||||||||
California Water Service Group |
1,359 | 71,606 | ||||||||
Clearway Energy Inc., A |
747 | 21,738 | ||||||||
Clearway Energy Inc., C |
1,737 | 55,323 | ||||||||
Global Water Resources Inc. |
278 | 3,261 | ||||||||
MGE Energy Inc. |
909 | 59,658 | ||||||||
Northwest Natural Holding Co. |
693 | 30,062 | ||||||||
NorthWestern Corp. |
1,233 | 60,762 | ||||||||
ONE Gas Inc. |
621 | 43,712 | ||||||||
Otter Tail Corp. |
819 | 50,385 | ||||||||
PNM Resources Inc. |
2,115 | 96,719 | ||||||||
SJW Group |
612 | 35,251 | ||||||||
South Jersey Industries Inc. |
1,368 | 45,719 | ||||||||
a |
Southwest Gas Holdings Inc. |
1,665 | 116,134 | |||||||
Spire Inc. |
594 | 37,024 | ||||||||
Unitil Corp. |
369 | 17,140 | ||||||||
Via Renewables Inc. |
324 | 2,239 |
franklintempleton.com |
Semiannual Report |
89 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS (UNAUDITED)
Franklin U.S. Small Cap Multifactor Index ETF (continued)
Shares | Value | |||||||||
Common Stocks (continued) | ||||||||||
Utilities (continued) | ||||||||||
York Water Co. |
297 | $ | 11,414 | |||||||
|
|
|||||||||
1,060,415 | ||||||||||
|
|
|||||||||
Total Common Stocks (Cost $14,907,237) |
13,472,445 | |||||||||
|
|
|||||||||
Total
Investments before Short Term Investments |
13,472,445 | |||||||||
|
|
|||||||||
Short-Term Investments 0.2% | ||||||||||
Investments from Cash Collateral Received for Loaned Securities 0.2% |
||||||||||
Money Market Funds 0.2% | ||||||||||
c,d |
Institutional Fiduciary Trust Portfolio, 2.45% |
$ | 20,560 | 20,560 | ||||||
|
|
|||||||||
Total Short-Term Investments (Cost $20,560) |
20,560 | |||||||||
|
|
|||||||||
Total Investments (Cost $14,927,797) 100.3% |
13,493,005 | |||||||||
Other Assets, less Liabilities (0.3)% |
(35,143 | ) | ||||||||
|
|
|||||||||
Net Assets 100.0% |
$ | 13,457,862 | ||||||||
|
|
aNon-income producing.
bA portion or all of the security is on loan at September 30, 2022. See Note 1(d).
cThe rate shown is the annualized seven-day effective yield at period end.
dSee Note 3(c) regarding investments in affiliated management investment companies.
See Abbreviations on page 110.
90 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Statements of Assets and Liabilities
September 30, 2022 (unaudited)
Franklin Emerging Market Core Dividend Tilt Index ETF |
Franklin International Core Dividend Tilt Index ETF |
Franklin U.S. Core Dividend Tilt Index ETF |
||||||||||
Assets: |
||||||||||||
Investments in securities: |
||||||||||||
Cost – Unaffiliated issuers |
$ | 15,608,816 | $ | 34,163,045 | $ | 46,849,813 | ||||||
Value – Unaffiliated issuers |
$ | 12,352,391 | $ | 31,110,179 | $ | 41,186,653 | ||||||
Cash |
— | — | 40,223 | |||||||||
Foreign currency, at value (cost $81,908, $83,597 and $2,879, respectively) |
80,099 | 83,102 | 2,875 | |||||||||
Receivables: |
||||||||||||
Dividends |
83,033 | 143,497 | 92,474 | |||||||||
Investment securities sold |
1,827 | — | — | |||||||||
Deposits with brokers for: |
||||||||||||
Futures contracts |
3,893 | 29,056 | 6,000 | |||||||||
|
|
|||||||||||
Total assets |
12,521,243 | 31,365,834 | 41,328,225 | |||||||||
|
|
|||||||||||
Liabilities: |
||||||||||||
Payables: |
||||||||||||
Management fees |
2,132 | 1,960 | 2,214 | |||||||||
Variation margin on futures contracts |
315 | 3,043 | 1,558 | |||||||||
Funds advanced by custodian |
75,498 | 17,607 | — | |||||||||
Deferred tax |
15,991 | — | — | |||||||||
|
|
|||||||||||
Total liabilities |
93,936 | 22,610 | 3,772 | |||||||||
|
|
|||||||||||
Net assets, at value |
$ | 12,427,307 | $ | 31,343,224 | $ | 41,324,453 | ||||||
|
|
|||||||||||
Net assets consist of: |
||||||||||||
Paid-in capital |
$ | 46,176,534 | $ | 34,912,266 | $ | 46,687,723 | ||||||
Total distributable earnings (loss) |
(33,749,227 | ) | (3,569,042 | ) | (5,363,270 | ) | ||||||
|
|
|||||||||||
Net assets, at value |
$ | 12,427,307 | $ | 31,343,224 | $ | 41,324,453 | ||||||
|
|
|||||||||||
Shares outstanding |
600,000 | 1,400,000 | 1,450,000 | |||||||||
|
|
|||||||||||
Net asset value per share |
$ | 20.71 | $ | 22.39 | $ | 28.50 | ||||||
|
|
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
91 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
September 30, 2022 (unaudited)
Franklin U.S. Large Cap Multifactor Index ETF |
Franklin U.S. Mid Cap Multifactor Index ETF |
Franklin U.S. Small Cap Multifactor Index ETF |
||||||||||
Assets: |
||||||||||||
Investments in securities: |
||||||||||||
Cost – Unaffiliated issuers |
$ | 950,184,166 | $ | 72,198,299 | $ | 14,907,237 | ||||||
Cost – Non-controlled affiliates (Note 3c) |
— | 23,000 | 20,560 | |||||||||
Value – Unaffiliated issuers+ |
$ | 861,797,955 | $ | 65,984,021 | $ | 13,472,445 | ||||||
Value – Non-controlled affiliates (Note 3c) |
— | 23,000 | 20,560 | |||||||||
Cash |
625,160 | — | 9,136 | |||||||||
Receivables: |
||||||||||||
Capital shares sold |
1,854,244 | — | — | |||||||||
Dividends |
1,084,157 | 84,111 | 13,114 | |||||||||
Investment securities sold |
978,803 | — | — | |||||||||
Deposits with brokers for: |
||||||||||||
Futures contracts |
60,000 | — | — | |||||||||
|
|
|||||||||||
Total assets |
866,400,319 | 66,091,132 | 13,515,255 | |||||||||
|
|
|||||||||||
Liabilities: |
||||||||||||
Payables: |
||||||||||||
Investment securities purchased |
2,966,035 | 491,195 | 32,701 | |||||||||
Management fees |
113,568 | 17,754 | 4,132 | |||||||||
Variation margin on futures contracts |
15,844 | — | — | |||||||||
Funds advanced by custodian |
— | 56,583 | — | |||||||||
Payable upon return of securities loaned |
— | 23,000 | 20,560 | |||||||||
|
|
|||||||||||
Total liabilities |
3,095,447 | 588,532 | 57,393 | |||||||||
|
|
|||||||||||
Net assets, at value |
$ | 863,304,872 | $ | 65,502,600 | $ | 13,457,862 | ||||||
|
|
|||||||||||
Net assets consist of: |
||||||||||||
Paid-in capital |
$ | 1,012,075,004 | $ | 71,450,377 | $ | 16,676,552 | ||||||
Total distributable earnings (loss) |
(148,770,132 | ) | (5,947,777 | ) | (3,218,690 | ) | ||||||
|
|
|||||||||||
Net assets, at value |
$ | 863,304,872 | $ | 65,502,600 | $ | 13,457,862 | ||||||
|
|
|||||||||||
Shares outstanding |
23,600,000 | 1,750,000 | 450,000 | |||||||||
|
|
|||||||||||
Net asset value per share |
36.58 | 37.43 | 29.91 | |||||||||
|
|
|||||||||||
+Includes securities loaned |
— | 22,264 | 20,151 |
92 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations
for the period ended September 30, 2022 (unaudited)
Franklin Emerging Market Core Dividend Tilt Index ETF |
Franklin International Core Dividend Tilt Index ETF |
Franklin U.S. Core Dividend Tilt Index ETF |
Franklin U.S. Large Cap Multifactor Index ETF |
|||||||||||||
Investment income: |
||||||||||||||||
Dividends: (net of foreign taxes)a |
||||||||||||||||
Unaffiliated issuers |
$ | 639,320 | $ | 528,431 | $ | 541,243 | $ | 10,648,222 | ||||||||
Interest: |
||||||||||||||||
Unaffiliated issuers |
— | 138 | 70 | 1,903 | ||||||||||||
Interest from securities loaned (Note 1d): |
||||||||||||||||
Unaffiliated issuers (net of fees and rebates) |
— | — | 7 | 203 | ||||||||||||
|
|
|||||||||||||||
Total investment income |
639,320 | 528,569 | 541,320 | 10,650,328 | ||||||||||||
|
|
|||||||||||||||
Expenses: |
||||||||||||||||
Management fees (Note 3a) |
27,578 | 29,237 | 53,731 | 727,020 | ||||||||||||
Other |
55 | — | 54 | — | ||||||||||||
|
|
|||||||||||||||
Total expenses |
27,633 | 29,237 | 53,785 | 727,020 | ||||||||||||
Expenses waived/paid by affiliates (Note 3c) |
(1 | ) | — | — | (161 | ) | ||||||||||
|
|
|||||||||||||||
Net expenses |
27,632 | 29,237 | 53,785 | 726,859 | ||||||||||||
|
|
|||||||||||||||
Net investment income |
611,688 | 499,332 | 487,535 | 9,923,469 | ||||||||||||
|
|
|||||||||||||||
Realized and unrealized gains (losses): |
||||||||||||||||
Net realized gain (loss) from: |
||||||||||||||||
Investments: |
||||||||||||||||
Unaffiliated issuers |
(686,245 | ) | (1,240,416 | ) | 292,277 | (34,008,522 | ) | |||||||||
In-kind redemptions |
— | — | 594,999 | 25,292,624 | ||||||||||||
Foreign currency transactions |
(13,202 | ) | (17,934 | ) | (20,188 | ) | — | |||||||||
Forward exchange contracts |
— | 1,681,625 | — | — | ||||||||||||
Futures contracts |
(13,452 | ) | (3,714 | ) | (20,209 | ) | (221,299 | ) | ||||||||
|
|
|||||||||||||||
Net realized gain (loss) |
(712,899 | ) | 419,561 | 846,879 | (8,937,197 | ) | ||||||||||
|
|
|||||||||||||||
Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||
Investments: |
||||||||||||||||
Unaffiliated issuers |
(3,926,545 | ) | (5,028,365 | ) | (10,182,095 | ) | (179,000,776 | ) | ||||||||
Translation of other assets and liabilities denominated in foreign currencies |
(5,137 | ) | (3,412 | ) | (3,065 | ) | — | |||||||||
Futures contracts |
(12,630 | ) | (7,989 | ) | (20,514 | ) | (157,353 | ) | ||||||||
Forward exchange contracts |
— | (252,393 | ) | — | — | |||||||||||
Change in deferred taxes on unrealized appreciation |
66,146 | — | — | — | ||||||||||||
|
|
|||||||||||||||
Net change in unrealized appreciation (depreciation) |
(3,878,166 | ) | (5,292,159 | ) | (10,205,674 | ) | (179,158,129 | ) | ||||||||
|
|
|||||||||||||||
Net realized and unrealized gain (loss) |
(4,591,065 | ) | (4,872,598 | ) | (9,358,795 | ) | (188,095,326 | ) | ||||||||
|
|
|||||||||||||||
Net increase (decrease) in net assets resulting from operations |
$ | (3,979,377 | ) | $ | (4,373,266 | ) | $ | (8,871,260 | ) | $ | (178,171,857 | ) | ||||
|
|
aForeign taxes withheld on dividends |
$ | 77,233 | $ | 39,016 | $ | 24,173 | $ | — | ||||||||
|
|
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
93 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the period ended September 30, 2022 (unaudited)
Franklin U.S. Mid Cap Multifactor Index ETF |
Franklin U.S. Small Cap Multifactor Index ETF |
|||||||
Investment income: |
||||||||
Dividends: (net of foreign taxes)a |
||||||||
Unaffiliated issuers |
$ | 623,456 | $ | 146,737 | ||||
Interest: |
||||||||
Unaffiliated issuers |
54 | 19 | ||||||
Interest from securities loaned (Note 1d): |
||||||||
Unaffiliated issuers (net of fees and rebates) |
40 | 731 | ||||||
Non-Controlled affiliates (Note 3c) |
75 | 16 | ||||||
|
|
|||||||
Total investment income |
623,625 | 147,503 | ||||||
|
|
|||||||
Expenses: |
||||||||
Management fees (Note 3a) |
95,071 | 26,294 | ||||||
|
|
|||||||
Total expenses |
95,071 | 26,294 | ||||||
Expenses waived/paid by affiliates (Note 3c) |
(54 | ) | (93 | ) | ||||
|
|
|||||||
Net expenses |
95,017 | 26,201 | ||||||
|
|
|||||||
Net investment income |
528,608 | 121,302 | ||||||
|
|
|||||||
Realized and unrealized gains (losses): |
||||||||
Net realized gain (loss) from: |
||||||||
Investments: |
||||||||
Unaffiliated issuers |
(1,009,426 | ) | (228,712 | ) | ||||
In-kind redemptions |
1,898,367 | — | ||||||
Futures contracts |
536 | (888 | ) | |||||
|
|
|||||||
Net realized gain (loss) |
889,477 | (229,600 | ) | |||||
|
|
|||||||
Net change in unrealized appreciation (depreciation) on: |
||||||||
Investments: |
||||||||
Unaffiliated issuers |
(13,667,893 | ) | (2,614,674 | ) | ||||
|
|
|||||||
Net change in unrealized appreciation (depreciation) |
(13,667,893 | ) | (2,614,674 | ) | ||||
|
|
|||||||
Net realized and unrealized gain (loss) |
(12,778,416 | ) | (2,844,274 | ) | ||||
|
|
|||||||
Net increase (decrease) in net assets resulting from operations |
$ | (12,249,808 | ) | $ | (2,722,972 | ) | ||
|
|
aForeign taxes withheld on dividends |
$ | — | $ | 58 | ||||
|
|
94 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
Franklin Emerging Market Core Dividend Tilt Index ETF |
Franklin International Core Dividend Tilt Index ETF |
|||||||||||||||
Six Months Ended September 30, 2022 (unaudited) |
Year Ended March 31, 2022 |
Six Months Ended September 30, 2022 (unaudited) |
Year Ended March 31, 2022 |
|||||||||||||
Increase (decrease) in net assets: |
||||||||||||||||
Operations: |
||||||||||||||||
Net investment income |
$ | 611,688 | $ | 1,014,437 | $ | 499,332 | $ | 582,345 | ||||||||
Net realized gain (loss) |
(712,899 | ) | 1,714,886 | 419,561 | 1,193,763 | |||||||||||
Net change in unrealized appreciation (depreciation) |
(3,878,166 | ) | (3,586,587 | ) | (5,292,159 | ) | (117,448 | ) | ||||||||
|
|
|||||||||||||||
Net increase (decrease) in net assets resulting from operations |
(3,979,377 | ) | (857,264 | ) | (4,373,266 | ) | 1,658,660 | |||||||||
|
|
|||||||||||||||
Distributions to shareholders (Note 1f) |
(592,824 | ) | (972,933 | ) | (1,264,669 | ) | (478,088 | ) | ||||||||
|
|
|||||||||||||||
Capital share transactions: (Note 2) |
— | (5,797,086 | ) | 19,788,861 | 2,752,200 | |||||||||||
|
|
|||||||||||||||
Net increase (decrease) in net assets |
(4,572,201 | ) | (7,627,283 | ) | 14,150,926 | 3,932,772 | ||||||||||
Net assets: |
||||||||||||||||
Beginning of period |
16,999,508 | 24,626,791 | 17,192,298 | 13,259,526 | ||||||||||||
|
|
|||||||||||||||
End of period |
$ | 12,427,307 | $ | 16,999,508 | $ | 31,343,224 | $ | 17,192,298 | ||||||||
|
|
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
95 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin U.S. Core Dividend Tilt Index ETF |
Franklin U.S. Large Cap Multifactor Index ETF |
|||||||||||||||
Six Months Ended September 30, 2022 (unaudited) |
Year Ended March 31, 2022 |
Six Months Ended September 30, 2022 (unaudited) |
Year Ended March 31, 2022 |
|||||||||||||
Increase (decrease) in net assets: |
||||||||||||||||
Operations: |
||||||||||||||||
Net investment income |
$ | 487,535 | $ | 821,951 | $ | 9,923,469 | $ | 20,074,191 | ||||||||
Net realized gain (loss) |
846,879 | 1,429,154 | (8,937,197 | ) | 253,820,136 | |||||||||||
Net change in unrealized appreciation (depreciation) |
(10,205,674 | ) | 1,240,892 | (179,158,129 | ) | (111,334,022 | ) | |||||||||
|
|
|||||||||||||||
Net increase (decrease) in net assets resulting from operations |
(8,871,260 | ) | 3,491,997 | (178,171,857 | ) | 162,560,305 | ||||||||||
|
|
|||||||||||||||
Distributions to shareholders (Note 1f) |
(641,156 | ) | (803,985 | ) | (9,509,273 | ) | (21,142,944 | ) | ||||||||
|
|
|||||||||||||||
Capital share transactions: (Note 2) |
19,986,168 | 1,530,803 | 84,248,614 | (528,086,490 | ) | |||||||||||
|
|
|||||||||||||||
Net increase (decrease) in net assets |
10,473,752 | 4,218,815 | (103,432,516 | ) | (386,669,129 | ) | ||||||||||
Net assets: |
||||||||||||||||
Beginning of period |
30,850,701 | 26,631,886 | 966,737,388 | 1,353,406,517 | ||||||||||||
|
|
|||||||||||||||
End of period |
$ | 41,324,453 | $ | 30,850,701 | $ | 863,304,872 | $ | 966,737,388 | ||||||||
|
|
96 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin U.S. Mid Cap Multifactor Index ETF |
Franklin U.S. Small Cap Multifactor Index ETF |
|||||||||||||||
Six Months Ended September 30, 2022 (unaudited) |
Year Ended March 31, 2022 |
Six Months Ended September 30, 2022 (unaudited) |
Year Ended March 31, 2022 |
|||||||||||||
Increase (decrease) in net assets: |
||||||||||||||||
Operations: |
||||||||||||||||
Net investment income |
$ | 528,608 | $ | 606,903 | $ | 121,302 | $ | 179,992 | ||||||||
Net realized gain (loss) |
889,477 | 4,303,133 | (229,600 | ) | 1,212,551 | |||||||||||
Net change in unrealized appreciation (depreciation) |
(13,667,893 | ) | (533,996 | ) | (2,614,674 | ) | (1,328,181 | ) | ||||||||
|
|
|||||||||||||||
Net increase (decrease) in net assets resulting from operations |
(12,249,808 | ) | 4,376,040 | (2,722,972 | ) | 64,362 | ||||||||||
|
|
|||||||||||||||
Distributions to shareholders (Note 1f) |
(468,303 | ) | (586,728 | ) | (92,056 | ) | (184,173 | ) | ||||||||
|
|
|||||||||||||||
Capital share transactions: (Note 2) |
15,365,531 | 22,306,734 | — | 1,779,654 | ||||||||||||
|
|
|||||||||||||||
Net increase (decrease) in net assets |
2,647,420 | 26,096,046 | (2,815,028 | ) | 1,659,843 | |||||||||||
Net assets: |
||||||||||||||||
Beginning of period |
62,855,180 | 36,759,134 | 16,272,890 | 14,613,047 | ||||||||||||
|
|
|||||||||||||||
End of period |
$ | 65,502,600 | $ | 62,855,180 | $ | 13,457,862 | $ | 16,272,890 | ||||||||
|
|
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
97 |
FRANKLIN TEMPLETON ETF TRUST
Notes to Financial Statements (unaudited)
1. Organization and Significant Accounting Policies
Franklin Templeton ETF Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of forty-five separate funds, seven of which are included in this report (Funds) and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Each of the Funds are an exchange traded fund (ETF) and seek to provide the investment results that closely correspond, before fees and expenses, to the performance of Fund corresponding underlying index.
Effective 08/01/2022, the following name changes occurred:
Old name
* |
Franklin LibertyQ U.S. Small Cap Equity ETF |
* |
Franklin LibertyQ U.S. Mid Cap Equity ETF |
* |
Franklin LibertyQ U.S. Equity ETF |
* |
Franklin LibertyQ International Equity Hedged ETF |
* |
Franklin LibertyQ Emerging Markets ETF |
* |
Franklin LibertyQ Global Dividend ETF |
New name
* |
Franklin U.S. Small Cap Multifactor Index ETF |
* |
Franklin U.S. Mid Cap Multifactor Index ETF |
* |
Franklin U.S. Large Cap Multifactor Index ETF |
* |
Franklin International Core Dividend Tilt Index ETF |
* |
Franklin Emerging Market Core Dividend Tilt Index ETF |
* |
Franklin U.S. Core Dividend Tilt Index ETF |
The following summarizes the Funds’ significant accounting policies.
a. Financial Instrument Valuation
The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Fund’s Board of
Trustees (the Board), the Board has designated the Fund’s investment manager as the valuation designee and has responsibility for oversight of valuation. The investment manager is assisted by the Fund’s administrator in performing this responsibility, including leading the cross-functional Valuation Committee (VC).
The Funds may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.
Equity securities, exchange trade funds and derivative financial instruments listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. London time on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.
Investments in open-end mutual funds are valued at the closing NAV.
Certain derivative financial instruments are centrally cleared or trade in the OTC market. The Funds’ pricing services use various techniques including industry standard option pricing models and proprietary discounted cash flow models to determine the fair value of those instruments. The Funds’ net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.
The Funds have procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Funds primarily employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any
98 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.
Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Funds’ business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Funds’ portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, an independent pricing service may be used to adjust the Fund’s portfolio securities to the latest indications of fair value at 4 p.m. Eastern time on September 30, 2022. At September 30, 2022, certain securities may have been fair valued using these procedures, in which case the securities were categorized as Level 2 inputs within the fair value hierarchy (referred to as “market level fair value”).
When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Funds’ NAV is not calculated, which could result in differences between the value of the Funds’ portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Funds for financial reporting purposes.
b. Foreign Currency Translation
Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Funds may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.
The Funds do not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statements of Operations.
Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.
c. Derivative Financial Instruments
Certain or all Funds invested in derivative financial instruments in order to manage risk or gain exposure to various other investments or markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown in the Statements of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statements of Operations.
Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties. Certain or all Funds attempt to reduce their exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of default, or early termination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty.
Termination events applicable to the Funds include failure of the Funds to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
c. Derivative Financial Instruments (continued)
gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. However, absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statements of Assets and Liabilities. Early termination by the counterparty may result in an immediate payment by the Funds of any net liability owed to that counterparty under the ISDA agreement.
Collateral requirements differ by type of derivative. Collateral terms are contract specific for OTC derivatives. For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the Fund or the applicable counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary depending on the counterparty and the type of agreement. Generally, collateral is determined at the close of Fund business each day and any additional collateral required due to changes in derivative values may be delivered by the Fund or the counterparty the next business day, or within a few business days. Collateral pledged and/or received by the Fund, if any, is held in segregated accounts with the Fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Funds’ investment objectives. To the extent that the amounts due to the Fund from its counterparties are not subject to collateralization or are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance.
Certain or all Funds entered into exchange traded futures contracts primarily to manage and/or gain exposure to equity price risk. A futures contract is an agreement between the Fund and a counterparty to buy or sell an asset at a specified price on a future date. Required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Statements of Assets and Liabilities.
Certain or all Funds entered into OTC forward exchange contracts primarily to manage and/or gain exposure to certain foreign currencies. A forward exchange contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency at a specific exchange rate on a future date.
See Note 8 regarding other derivative information.
d. Securities Lending
Certain or all Funds participate in an agency based securities lending program to earn additional income. The Fund receives cash collateral against the loaned securities in an amount equal to at least 102% of the fair value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the fair value of loaned securities, as determined at the close of Fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. The collateral is deposited into a joint cash account with other funds and is used to invest in a money market fund managed by Franklin Advisers, Inc., an affiliate of the Funds. These securities received as collateral are held in segregated accounts with the Funds’ custodian. The Fund cannot repledge or resell these securities received as collateral. As such, the non-cash collateral is excluded from the Statements of Assets and Liabilities. The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from securities loaned, net of fees paid to the securities lending agent and/or third-party vendor, is reported separately in the Statements of Operations. The Fund bears the market risk with respect to the collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. If the borrower defaults on its obligation to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower.
e. Income and Deferred Taxes
It is each Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. Each Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
The Funds may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which the Funds invest. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Funds invest. When a capital gain tax is determined to apply, certain or all Funds record an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Each Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of September 30, 2022, each Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.
f. Security Transactions, Investment Income, Expenses and Distributions
Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest Income and estimated expenses are accrued daily. Dividend income is recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Funds. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.
Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust. Certain Fund specific expenses are allocated directly to the Fund that incurred the expense. These expenses are paid by the Fund or by the investment manager, as applicable, according to the terms of the unified management fee agreement.
g. Accounting Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
h. Guarantees and Indemnifications
Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Funds, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.
2. Shares of Beneficial Interest
Shares of the Funds are issued and redeemed at their respective NAV only in aggregations of a specific number of shares or multiples thereof (Creation Units). Only certain large institutional investors (Authorized Participants) may engage in creation or redemption transactions directly with the Funds. Once created, shares of the Funds generally trade in the secondary market in amounts less than one Creation Unit. The market price of the Funds’ shares will be based on the price in the secondary market which may be at, above or below the most recent NAV. Creation Units may be issued and redeemed in exchange for a designated portfolio of securities and/or cash (which may include cash in lieu of certain securities).
Authorized Participants pay a standard transaction fee to the shareholder servicing agent when purchasing or redeeming Creation Units of the Funds regardless of the number of Creation Units that are being created or redeemed on the same day by the Authorized Participant. The standard transaction fee is imposed to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units and is not charged to or paid by the Funds.
In addition, for cash Creation Unit transactions, a variable fee for creation transactions and redemption transactions may be charged to the Authorized Participant to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades. Variable fees, if any, are included in capital share transactions in the Statements of Changes in Net Assets.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest (continued)
At September 30, 2022, there were an unlimited number of shares authorized (without par value). Transactions in the Funds’ shares were as follows:
Franklin Emerging Market Core Dividend Tilt Index ETF | ||||||||||||||||||||
Six Months Ended September 30, 2022 |
Year Ended March 31, 2022 |
|||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold |
— | $ | — | — | $ | 12,197 | ||||||||||||||
Shares redeemed |
— | — | (200,000 | ) | (5,809,283 | ) | ||||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) |
— | $ | — | (200,000 | ) | $ | (5,797,086 | ) | ||||||||||||
|
|
|||||||||||||||||||
Franklin International Core Dividend Tilt Index ETF | ||||||||||||||||||||
Six Months Ended September 30, 2022 |
Year Ended March 31, 2022 |
|||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold |
800,000 | $ | 19,788,861 | 100,000 | $ | 2,752,200 | ||||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) |
800,000 | $ | 19,788,861 | 100,000 | $ | 2,752,200 | ||||||||||||||
|
|
|||||||||||||||||||
Franklin U.S. Core Dividend Tilt Index ETF | ||||||||||||||||||||
Six Months Ended September 30, 2022 |
Year Ended March 31, 2022 |
|||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold |
650,000 | $ | 21,638,732 | 100,000 | $ | 3,403,231 | ||||||||||||||
Shares redeemed |
(50,000 | ) | (1,652,564 | ) | (50,000 | ) | (1,872,428 | ) | ||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) |
600,000 | $ | 19,986,168 | 50,000 | $ | 1,530,803 | ||||||||||||||
|
|
|||||||||||||||||||
Franklin U.S. Large Cap Multifactor Index ETF | ||||||||||||||||||||
Six Months Ended September 30, 2022 |
Year Ended March 31, 2022 |
|||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold |
5,850,000 | $ | 238,493,958 | 7,250,000 | $ | 315,466,656 | ||||||||||||||
Shares redeemed |
(3,800,000 | ) | (154,245,344 | ) | (19,500,000 | ) | (843,553,146 | ) | ||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) |
2,050,000 | $ | 84,248,614 | (12,250,000 | ) | $ | (528,086,490 | ) | ||||||||||||
|
|
|||||||||||||||||||
Franklin U.S. Mid Cap Multifactor Index ETF | ||||||||||||||||||||
Six Months Ended September 30, 2022 |
Year Ended March 31, 2022 |
|||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold |
550,000 | $ | 23,320,813 | 800,000 | $ | 35,769,669 | ||||||||||||||
Shares redeemed |
(200,000 | ) | (7,955,282 | ) | (300,000 | ) | (13,462,935 | ) | ||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) |
350,000 | $ | 15,365,531 | 500,000 | $ | 22,306,734 | ||||||||||||||
|
|
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Franklin U.S. Small Cap Multifactor Index ETF | ||||||||||||||||||||
Six Months Ended September 30, 2022 |
Year Ended March 31, 2022 |
|||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold |
— | $ | — | 150,000 | $ | 5,610,619 | ||||||||||||||
Shares redeemed |
— | — | (100,000 | ) | (3,830,965 | ) | ||||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) |
— | $ | — | 50,000 | $ | 1,779,654 | ||||||||||||||
|
|
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Funds are also officers and/or directors of the following subsidiaries:
Subsidiary | Affiliation | |
Franklin Advisers, Inc. (Advisers) |
Investment manager | |
Franklin Advisory Services, LLC (FASL) |
Investment manager | |
Franklin Templeton Services, LLC (FT Services) |
Administrative manager | |
Franklin Templeton Distributors, LLC (Distributors) |
Principal underwriter |
a. Management fees
The Funds pay a unified management fee to Advisers whereby Advisers has agreed to reimburse the Funds’ acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Funds, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding payments under the Funds’ Rule 12b-1 plan (if any), brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments), taxes, interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto), and other non-routine or extraordinary expenses. The fees are based on the average daily net assets of each of the Funds as follows:
Annualized Fee Rate | ||||
For the period August 1, 2022 to September 30, 2022 |
For the period April 1, 2022 to July 31, 2022 | |||
Franklin Emerging Market Core Dividend Tilt Index ETF |
0.19% |
0.45% | ||
Franklin International Core Dividend Tilt Index ETF |
0.09% |
0.40% | ||
Franklin U.S. Core Dividend Tilt Index ETF |
0.06% |
0.45% | ||
Franklin U.S. Large Cap Multifactor Index ETF |
0.15% |
0.15% | ||
Franklin U.S. Mid Cap Multifactor Index ETF |
0.30% |
0.30% | ||
Franklin U.S. Small Cap Multifactor Index ETF |
0.35% |
0.35% |
For the six months ended September 30, 2022, each Fund’s annualized effective investment management fee rate based on average daily net assets was as follows:
Annualized Fee Rate | ||
Franklin Emerging Market Core Dividend Tilt Index ETF |
0.19% | |
Franklin International Core Dividend Tilt Index ETF |
0.09% | |
Franklin U.S. Core Dividend Tilt Index ETF |
0.06% | |
Franklin U.S. Large Cap Multifactor Index ETF |
0.15% | |
Franklin U.S. Mid Cap Multifactor Index ETF |
0.30% | |
Franklin U.S. Small Cap Multifactor Index ETF |
0.35% |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates (continued)
b. Administrative Fees
Under an agreement with Advisers, FT Services provides administrative services to the Funds. The fee is paid by Advisers based on the Funds’ average daily net assets, and is not an additional expense of the Funds.
c. Investments in Affiliated Management Investment Companies
Certain or all Funds invest in one or more affiliated management investment companies. As defined in the 1940 Act, an investment is deemed to be a “Controlled Affiliate” of a fund when a fund owns, either directly or indirectly, 25% or more of the affiliated fund’s outstanding shares or has the power to exercise control over management or policies of such fund. The Funds do not invest for purposes of exercising a controlling influence over the management or policies. Management fees paid by the Funds are waived on assets invested in the affiliated management investment companies, as noted in the Statements of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended September 30, 2022, investments in affiliated management investment companies were as follows:
Value at Beginning of Period |
Purchases | Sales | Realized Gain (Loss) |
Net Change in (Depreciation) |
Value at End of Period |
Number of Shares Held at End of Period |
Investment Income |
|||||||||||||||||||||||||
Franklin U.S. Mid Cap Multifactor Index ETF |
|
|||||||||||||||||||||||||||||||
Non-Controlled Affiliates | Income from Securities loaned |
|||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 2.45% |
$ | 10,850 | $ | 1,354,473 | $ | (1,342,323 | ) | $ | — | $ | — | $ | 23,000 | 23,000 | $ | 75 | ||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Franklin U.S. Small Cap Multifactor Index ETF |
|
|||||||||||||||||||||||||||||||
Non-Controlled Affiliates | Income from Securities loaned |
|||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Institutional Fiduciary Trust Money Market Portfolio 2.45% |
$ | 113,498 | $ | 424,380 | $ | (517,318 | ) | $ | — | $ | — | $ | 20,560 | 20,560 | $ | 16 | ||||||||||||||||
|
|
d. Other Affiliated Transactions
At September 30, 2022, the shares of Franklin U.S. Large Cap Multifactor Index ETF were owned by the following entities:
Funds | Shares | Percentage of Outstanding Sharesa |
||||||
Franklin U.S. Large Cap Multifactor Index ETF | ||||||||
Franklin Moderate Allocation Fund |
2,316,917 | 9.8% | ||||||
Franklin Growth Allocation Fund |
2,873,526 | 12.2% | ||||||
Franklin 529 Portfolios |
4,811,642 | 20.4% | ||||||
|
|
|||||||
10,002,085 | 42.4% | |||||||
|
|
aInvestment activities of significant shareholders could have a material impact on the Funds.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
4. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains, if any. At March 31, 2022, the capital loss carryforwards were as follows:
Franklin Emerging Market Core Dividend Tilt Index ETF |
Franklin International Core Dividend Tilt Index ETF |
Franklin U.S. Core Dividend Tilt Index ETF |
Franklin U.S. Large Cap Multifactor Index ETF |
|||||||||||||
Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term |
$ | 12,605,720 | $ | 268,225 | $ | 417,975 | $ | 12,219,026 | ||||||||
Short term |
16,928,227 | 26,833 | 99,040 | 40,847,511 | ||||||||||||
|
|
|||||||||||||||
Total capital loss carryforwards |
$ | 29,533,947 | $ | 295,058 | $ | 517,015 | $ | 53,066,537 | ||||||||
|
|
|||||||||||||||
Franklin U.S. Mid Cap Multifactor Index ETF |
Franklin U.S. Small Cap Multifactor Index ETF |
|||||||||||||||
Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term |
$ | 315,556 | $ | 956,591 | ||||||||||||
Short term |
384,287 | 605,954 | ||||||||||||||
|
|
|||||||||||||||
Total capital loss carryforwards |
$ | 699,843 | $ | 1,562,545 | ||||||||||||
|
|
At September 30, 2022, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:
Franklin Emerging Market Core Dividend Tilt Index ETF |
Franklin International Core Dividend Tilt Index ETF |
Franklin U.S. Core Dividend Tilt Index ETF |
Franklin U.S. Large Cap Multifactor Index ETF |
|||||||||||||
Cost of investments |
$ | 15,608,816 | $ | 34,163,045 | $ | 46,849,813 | $ | 950,184,166 | ||||||||
|
|
|||||||||||||||
Unrealized appreciation |
$ | 515,736 | $ | 553,669 | $ | 424,414 | $ | 25,836,636 | ||||||||
Unrealized depreciation |
(3,772,161 | ) | (3,606,535 | ) | (6,087,574 | ) | (114,222,847 | ) | ||||||||
|
|
|||||||||||||||
Net unrealized appreciation (depreciation) |
$ | (3,256,425 | ) | $ | (3,052,866 | ) | $ | (5,663,160 | ) | $ | (88,386,211 | ) | ||||
|
|
|||||||||||||||
Franklin U.S. Mid Cap Multifactor Index ETF |
Franklin U.S. Small Cap Multifactor Index ETF |
|||||||||||||||
Cost of investments |
$ | 72,221,299 | $ | 14,927,797 | ||||||||||||
|
|
|||||||||||||||
Unrealized appreciation |
$ | 1,670,193 | $ | 1,215,250 | ||||||||||||
Unrealized depreciation |
(7,884,471 | ) | (2,650,042 | ) | ||||||||||||
|
|
|||||||||||||||
Net unrealized appreciation (depreciation) |
$ | (6,214,278 | ) | $ | (1,434,792 | ) | ||||||||||
|
|
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of passive foreign investment company shares and wash sales.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
5. Investment Transactions
Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the period ended September 30, 2022, were as follows:
Franklin Emerging Market Core Dividend Tilt Index ETF |
Franklin International Core Dividend Tilt Index ETF |
Franklin U.S. Core Dividend Tilt Index ETF |
Franklin U.S. Large Cap Multifactor Index ETF |
|||||||||||||
Purchases |
$ | 12,258,647 | $ | 21,499,564 | $ | 40,944,528 | $ | 269,715,651 | ||||||||
Sales |
$ | 12,274,668 | $ | 20,570,186 | $ | 39,783,651 | $ | 268,312,676 | ||||||||
Franklin U.S. Mid Cap Multifactor Index ETF |
Franklin U.S. Small Cap Multifactor Index ETF |
|||||||||||||||
Purchases |
$ | 10,736,433 | $ | 3,028,222 | ||||||||||||
Sales |
$ | 9,877,089 | $ | 2,955,607 |
In-kind transactions associated with creation and redemptions for the period ended September 30, 2022, were as follows:
Franklin Emerging Market Core Dividend Tilt Index ETF |
Franklin International Core Dividend Tilt Index ETF |
Franklin U.S. Core Dividend Tilt Index ETF |
Franklin U.S. Large Cap Multifactor Index ETF |
|||||||||||||
Cost of Securities Received |
$ | — | $ | 18,957,209 | $ | 20,397,845 | $ | 236,962,654 | ||||||||
Value of Securities Delivereda |
$ | — | $ | — | $ | 1,678,685 | $ | 153,434,712 | ||||||||
Franklin U.S. Mid Cap Multifactor Index ETF |
Franklin U.S. Small Cap Multifactor Index ETF |
|||||||||||||||
Cost of Securities Received |
$ | 23,263,208 | $ | — | ||||||||||||
Value of Securities Delivereda |
$ | 7,940,987 | $ | — |
aRealized gains and losses from in-kind redemptions, as shown on the Statement of Operations, are not recognized by the Funds for tax purposes.
At September 30, 2022, in connection with securities lending transactions, certain or all Funds loaned investments and received cash collateral as follows:
Franklin U.S. Mid Cap Multifactor Index ETF |
Franklin U.S. Small Cap Multifactor Index ETF |
|||||||
Securities lending transactionsa: | ||||||||
Equity Investmentsb |
$ | 23,000 | $ | 20,560 | ||||
|
|
aThe agreements can be terminated at any time.
bThe gross amount of recognized liability for such transactions is included in payable upon return of securities loaned in the Statements of Assets and Liabilities.
6. Concentration of Risk
Investing in foreign securities may include certain risks and considerations not typically associated with investing in U.S. securities, such as fluctuating currency values and changing local, regional and global economic, political and social conditions, which may result in greater market volatility. Political and financial uncertainty in many foreign regions may increase market volatility and the economic risk of investing in foreign securities. In addition, certain foreign securities may not be as liquid as U.S. securities.
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Russia’s military invasion of Ukraine in February 2022, the resulting responses by the United States and other countries, and the potential for wider conflict could increase volatility and uncertainty in the financial markets and adversely affect regional and global economies. The United States and other countries have imposed broad-ranging economic sanctions on Russia and certain Russian individuals, banking entities and corporations as a response to its invasion of Ukraine. The United States and other countries have also imposed economic sanctions on Belarus and may impose sanctions on other countries that support Russia’s military invasion. These sanctions, as well as any other economic consequences related to the invasion, such as additional sanctions, boycotts or changes in consumer or purchaser preferences or cyberattacks on governments, companies or individuals, may further decrease the value and liquidity of certain Russian securities and securities of issuers in other countries that are subject to economic sanctions related to the invasion. To the extent that the Funds have exposure to Russian investments or investments in countries affected by the invasion, the Fund’s ability to price, buy, sell, receive or deliver such investments was impaired. The Funds could determine at any time that certain of the most affected securities have little or no value. In addition, any exposure that the Funds may have to counterparties in Russia or in countries affected by the invasion could negatively impact the Funds’ portfolio. The extent and duration of Russia’s military actions and the repercussions of such actions (including any retaliatory actions or countermeasures that may be taken by those subject to sanctions) are impossible to predict, but could result in significant market disruptions, including in the oil and natural gas markets, and may negatively affect global supply chains, inflation and global growth. These and any related events could significantly impact the Funds’ performance and the value of an investment in the Funds’, even beyond any direct exposure the Funds may have to Russian issuers or issuers in other countries affected by the invasion.
7. Novel Coronavirus Pandemic
The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Funds, their ability to buy and sell fund investments at appropriate valuations and their ability to achieve their investment objectives.
8. Other Derivative Information
At September 30, 2022, the Funds’ investments in derivative contracts are reflected in the Statements of Assets and Liabilities as follows:
Asset Derivatives |
Liability Derivatives |
|||||||||||
Statements
of Assets and Liabilities Location |
Fair Value | Statements
of Assets and Liabilities Location |
Fair Value | |||||||||
Franklin Emerging Market Core Dividend Tilt Index ETF |
||||||||||||
Equity contracts |
Variation margin on futures contracts |
$ | — |
Variation margin on futures contracts |
$ | 9,794 | a | |||||
|
|
|
|
|||||||||
Franklin International Core Dividend Tilt Index ETF |
||||||||||||
Equity contracts |
Variation margin on futures contracts |
$ | — |
Variation margin on futures contracts |
$ | 921 | a | |||||
|
|
|
|
|||||||||
Franklin U.S. Core Dividend Tilt Index ETF |
||||||||||||
Equity contracts |
Variation margin on futures contracts |
$ | — |
Variation margin on futures contracts |
$ | 10,481 | a | |||||
|
|
|
|
|||||||||
Franklin U.S. Large Cap Multifactor Index ETF |
||||||||||||
Index contracts |
Variation margin on futures contracts |
$ | — |
Variation margin on futures contracts |
$ | 86,762 | a | |||||
|
|
|
|
aThis amount reflects the cumulative appreciation (depreciation) of future contracts as reported in the Schedule of Investments. Only the variation margin receivable/payable at year end is separately reported within the Statements of Assets and Liabilities. Prior variation margin movements were recorded to cash upon receipt or payment.
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
8. Other Derivative Information (continued)
For the period ended September 30, 2022, the effect of derivative contracts in the Funds’ Statements of Operations was as follows:
Derivative
Contracts Not Accounted for as Hedging Instruments |
Statements
of Operations Locations |
Net Realized Gain (Loss) for the Period |
Statements
of Operations Locations |
Net Change in Unrealized Appreciation (Depreciation) for the Period |
||||||||
Franklin Emerging Market Core Dividend Tilt Index ETF |
||||||||||||
Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
Equity contracts |
Futures contracts |
$ | (13,452 | ) |
Futures contracts |
$ | (12,630 | ) | ||||
|
|
|
|
|||||||||
Franklin International Core Dividend Tilt Index ETF |
||||||||||||
Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
Foreign exchange contracts |
Forward exchange contracts |
$ | 1,681,625 |
Forward exchange contracts |
$ | (252,393 | ) | |||||
Equity contracts |
Futures contracts |
(3,714 | ) |
Futures contracts |
(7,989 | ) | ||||||
|
|
|
|
|||||||||
Totals |
$ | 1,677,911 | $ | (260,382 | ) | |||||||
|
|
|
|
|||||||||
Franklin U.S. Core Dividend Tilt Index ETF |
||||||||||||
Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
Equity contracts |
Futures contracts |
$ | (20,209 | ) |
Futures contracts |
$ | (20,514 | ) | ||||
|
|
|
|
|||||||||
Franklin U.S. Large Cap Multifactor Index ETF |
||||||||||||
Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
Equity contracts |
Futures contracts |
$ | (221,299 | ) |
Futures contracts |
$ | (157,353 | ) | ||||
|
|
|
|
|||||||||
Franklin U.S. Mid Cap Multifactor Index ETF |
||||||||||||
Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
Equity contracts |
Futures contracts |
$ | 536 |
Futures contracts |
$ | — | ||||||
|
|
|
|
|||||||||
Franklin U.S. Small Cap Multifactor Index ETF |
||||||||||||
Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
Equity contracts |
Futures contracts |
$ | (888 | ) |
Futures contracts |
$ | — | |||||
|
|
|
|
For the period ended September 30, 2022, the average month end notional amount of futures contracts and average month end contract value for forward exchange contracts were as follows:
Franklin Emerging Market Core Dividend Tilt Index ETF |
Franklin International Core Dividend Tilt Index ETF |
Franklin U.S. Core |
Franklin U.S. Large Cap Multifactor Index ETF |
|||||||||||||
Futures contracts |
$ | 150,737 | $ | 139,168 | $ | 140,895 | $ | 1,173,220 | ||||||||
Forward exchange contracts |
$ | — | $ | 53,805,889 | $ | — | $ | — |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
9. Fair Value Measurements
The Funds follow a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Funds’ own market assumptions (unobservable inputs). These inputs are used in determining the value of the Funds’ financial instruments and are summarized in the following fair value hierarchy:
• |
Level 1 – quoted prices in active markets for identical financial instruments |
• |
Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.) |
• |
Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of financial instruments) |
The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.
A summary of inputs used as of September 30, 2022, in valuing the Funds’ assets and liabilities carried at fair value, is as follows:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Franklin Emerging Market Core Dividend Tilt Index ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Equity Investmentsb |
$ | 12,352,391 | $ | — | $ | —c | $ | 12,352,391 | ||||||||
|
|
|||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: |
||||||||||||||||
Futures Contracts |
$ | 9,794 | $ | — | $ | — | $ | 9,794 | ||||||||
|
|
|||||||||||||||
Franklin International Core Dividend Tilt Index ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Equity Investmentsb |
$ | 31,110,179 | $ | — | $ | — | $ | 31,110,179 | ||||||||
|
|
|||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: |
||||||||||||||||
Futures Contracts |
$ | 921 | $ | — | $ | — | $ | 921 | ||||||||
|
|
|||||||||||||||
Franklin U.S. Core Dividend Tilt Index ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Equity Investmentsb |
$ | 41,186,653 | $ | — | $ | —c | $ | 41,186,653 | ||||||||
|
|
|||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: |
||||||||||||||||
Futures Contracts |
$ | 10,481 | $ | — | $ | — | $ | 10,481 | ||||||||
|
|
|||||||||||||||
Franklin U.S. Large Cap Multifactor Index ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Equity Investmentsb |
$ | 861,797,955 | $ | — | $ | — | $ | 861,797,955 | ||||||||
|
|
|||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: |
||||||||||||||||
Futures Contracts |
$ | 86,762 | $ | — | $ | — | $ | 86,762 | ||||||||
|
|
|||||||||||||||
Franklin U.S. Mid Cap Multifactor Index ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Equity Investmentsb |
$ | 65,984,021 | $ | — | $ | — | $ | 65,984,021 | ||||||||
Short-Term Investments |
23,000 | — | — | 23,000 | ||||||||||||
|
|
|||||||||||||||
Total Investments in Securities |
$ | 66,007,021 | $ | — | $ | — | $ | 66,007,021 | ||||||||
|
|
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
9. Fair Value Measurements (continued)
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Franklin U.S. Small Cap Multifactor Index ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Equity Investmentsb |
$ | 13,472,445 | $ | — | $ | — | $ | 13,472,445 | ||||||||
Short-Term Investments |
20,560 | — | — | 20,560 | ||||||||||||
|
|
|||||||||||||||
Total Investments in Securities |
$ | 13,493,005 | $ | — | $ | — | $ | 13,493,005 | ||||||||
|
|
aFor detailed categories, see the accompanying Schedule of Investments.
bIncludes common and preferred stocks, warrants, as well as other equity investments.
cIncludes securities determined to have no value at September 30, 2022.
10. Subsequent Events
The Funds have evaluated subsequent events through the issuance of these Financial Statements and determined that no events have occurred that require disclosure.
Selected Portfolio | ||
ADR | American Depositary Receipt | |
GDR | Global Depositary Receipt | |
NVDR | Non-Voting Depositary Receipt | |
REIT | Real Estate Investment Trust |
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FRANKLIN TEMPLETON ETF TRUST
Board Approval of Investment Management Agreements
FRANKLIN TEMPLETON ETF TRUST
Franklin Emerging Market Core Dividend Tilt Index ETF
(formerly Franklin LibertyQ Emerging Markets ETF)
Franklin U.S. Core Dividend Tilt Index ETF
(formerly Franklin LibertyQ Global Dividend ETF)
Franklin International Core Dividend Tilt Index ETF (formerly Franklin LibertyQ International Equity Hedged ETF)
Franklin U.S. Large Cap Multifactor Index ETF (formerly Franklin LibertyQ U.S. Equity ETF)
Franklin U.S. Mid Cap Multifactor Index ETF (formerly Franklin LibertyQ U.S. Mid Cap Equity ETF)
Franklin U.S. Small Cap Multifactor Index ETF (formerly Franklin LibertyQ U.S. Small Cap Equity ETF)
(each a Fund)
At a meeting held on May 25, 2022 (Meeting), the Board of Trustees (Board) of Franklin Templeton ETF Trust (Trust), including a majority of the trustees who are not “interested persons” as defined in the Investment Company Act of 1940 (Independent Trustees), reviewed and approved the continuance of the investment management agreement between Franklin Advisory Services, LLC (Manager) and the Trust, on behalf of each Fund (each a Management Agreement) for an additional one-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the continuation of each Management Agreement. Although the Management Agreements for the Funds were considered at the same Board meeting, the Board considered the information provided to it about the Funds together and with respect to each Fund separately as the Board deemed appropriate.
In considering the continuation of each Management Agreement, the Board reviewed and considered information provided by the Manager at the Meeting and throughout the year at meetings of the Board and its committees. The Board also reviewed and considered information provided in response to a detailed set of requests for information submitted to the Manager by Independent Trustee counsel on behalf of the Independent Trustees in connection with the annual contract renewal process. In addition, prior to the Meeting, the Independent Trustees held a virtual contract renewal meeting at which the Independent Trustees conferred amongst themselves and Independent Trustee counsel about contract
renewal matters and, subsequently, requested additional information from management that the Independent Trustees reviewed and considered at the Meeting. The Board reviewed and considered all of the factors it deemed relevant in approving the continuance of each Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services provided by the Manager; (ii) the investment performance of each Fund, as well as each Fund’s tracking error against a specified benchmark index as of a recent period; (iii) the costs of the services provided and profits realized by the Manager and its affiliates from the relationship with each Fund; (iv) the extent to which economies of scale are realized as each Fund grows; and (v) whether fee levels reflect these economies of scale for the benefit of Fund investors.
In approving the continuance of each Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of each Management Agreement are fair and reasonable and that the continuance of such Management Agreement is in the best interests of the applicable Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.
Nature, Extent and Quality of Services
The Board reviewed and considered information regarding the nature, extent and quality of investment management services provided by the Manager and its affiliates to the Funds and their shareholders. This information included, among other things, the qualifications, background and experience of the senior management and investment personnel of the Manager; the structure of investment personnel compensation; oversight of third-party service providers; investment performance reports and related financial information for each Fund; reports on expenses; legal and compliance matters; risk controls; pricing and other services provided by the Manager and its affiliates; and management fees charged by the Manager and its affiliates to US funds and other accounts, including management’s explanation of differences among accounts where relevant. The Board acknowledged the ongoing integration of the Legg Mason family of funds into the Franklin Templeton (FT) family of funds, and developing strategies to address areas of heightened concern in the registered fund industry, including various regulatory initiatives and recent geopolitical concerns.
The Board also reviewed and considered the benefits provided to Fund shareholders of investing in a fund that is part of the FT family of funds. The Board noted the financial position of Franklin Resources, Inc. (FRI), the Manager’s parent,
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and its commitment to the registered fund business as evidenced by its continued introduction of new funds, reassessment of the fund offerings in response to the market environment and project initiatives and capital investments relating to the services provided to the Funds by the FT organization. The Board specifically noted FT’s commitment to being a global leader in stewardship and sustainability and the recent addition of a senior executive focused on environmental, social and governance and climate control initiatives.
Following consideration of such information, the Board was satisfied with the nature, extent and quality of services provided by the Manager and its affiliates to the Funds and their shareholders.
Fund Performance
The Board reviewed and considered the performance results of each Fund for various time periods ended February 28, 2022. The Board considered the performance returns for each Fund in comparison to the performance returns of registered funds deemed comparable to the Fund included in a universe (Performance Universe) selected by Broadridge Financial Solutions, Inc. (Broadridge), an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the registered funds included in a Performance Universe. The Board also reviewed and considered Fund performance reports provided and discussions that occurred with portfolio managers at Board meetings throughout the year. The Board noted its ongoing discussions with management about the performance of the Funds to date, particularly as compared to peers, the importance of performance to asset growth and growth of market share, and the performance of the Funds in periods of volatility. In addition, the Board acknowledged information provided regarding management’s strategy behind the overall product line up, the sources of asset growth, the nature of management’s research, potential use of innovative data and technology, and investments in marketing and distribution. Finally, the Board noted management’s high level of client engagement and the strength of its compliance program. A summary of each Fund’s performance results is below.
Franklin Emerging Market Core Dividend Tilt Index ETF and Franklin International Core Dividend Tilt Index ETF (The information and data included below for these two Funds is with respect to the Funds’ names, investment goals and strategies prior to the August 1, 2022 Fund Repositioning (as defined below)) – The Performance Universe for the Franklin Emerging Market Core Dividend Tilt Index ETF included the Fund and all retail and institutional emerging markets funds
and exchange-traded funds. The Performance Universe for the Franklin International Core Dividend Tilt Index ETF included the Fund and all retail and institutional international multi-cap growth funds and exchange-traded funds. The Funds commenced operations on June 1, 2016, and thus have been in operation for less than 10 years. The Board noted that the Funds’ annualized total returns for the one-year period were above the medians and in the first quintile (best) of their respective Performance Universes, but for the three- and five-year periods were below the medians of their respective Performance Universes. The Board further noted that, in light of the Funds’ use of a “passive” or indexing investment approach, management evaluates the Funds based on their tracking error against a specified benchmark. The Board also noted that for the one-year period ended February 28, 2022, the Franklin International Core Dividend Tilt Index ETF’s tracking error was within the tolerance anticipated for the Fund, but the Franklin Emerging Market Core Dividend Tilt Index ETF’s tracking error exceeded the tolerance anticipated for the Fund by 21.7 basis points due, in part, to fees and capital gain tax accrual from holding Indian equities. The Board further considered and approved for each Fund management’s proposal to change the Fund’s name, ticker, underlying index, investment universe, investment goal and investment strategies and make related changes, effective August 1, 2022 (Fund Repositioning). The Board noted management’s representation that each Fund would be repositioned as a dividend tilt/yield enhanced index-based ETF with the Franklin Emerging Market Core Dividend Tilt Index ETF investing in emerging market stocks and the Franklin International Core Dividend Tilt Index ETF investing in developed market (ex-North America) stocks. The Board concluded that the Funds’ performance was satisfactory.
Franklin U.S. Core Dividend Tilt Index ETF (The information and data included below for the Fund is with respect to the Fund’s name, investment goal and strategies prior to the August 1, 2022 Fund Repositioning – The Performance Universe for the Fund included the Fund and all retail and institutional global equity income funds and exchange-traded funds. The Fund commenced operations on June 1, 2016, and thus has been in operation for less than 10 years. The Board noted that the Fund’s annualized total return for the one-, three- and five-year periods was above the median of its Performance Universe. The Board further noted that, in light of the Fund’s use of a “passive” or indexing investment approach, management evaluates the Fund based on its tracking error against a specified benchmark. The Board noted that for the one-year period ended February 28, 2022, the Fund’s tracking error was within the tolerance anticipated
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for the Fund. The Board further considered and approved implementing the Fund Repositioning for the Fund, noting management’s representation that the Fund would be repositioned as a dividend tilt/yield enhanced index-based ETF investing in large- and mid-capitalization US stocks. The Board concluded that the Fund’s performance was satisfactory.
Franklin U.S. Large Cap Multifactor Index ETF and Franklin U.S. Mid Cap Multifactor Index ETF – The Performance Universe for the Franklin U.S. Large Cap Multifactor Index ETF included the Fund and all retail and institutional multi-cap core funds and exchange-traded funds. The Performance Universe for the Franklin U.S. Mid Cap Multifactor Index ETF included the Fund and all retail and institutional mid-cap growth funds and exchange-traded funds. The Funds commenced operations on April 26, 2017, and thus have been in operation for less than five years. The Board noted that the Funds’ annualized total returns for the one-year period were above the medians of their respective Performance Universes, but for the three-year period were below the medians of their respective Performance Universes. The Board further noted that, in light of the Funds’ use of a “passive” or indexing investment approach, management evaluates the Funds based on their tracking error against a specified benchmark. The Board noted that for the one-year period ended February 28, 2022, the Funds’ tracking errors were within the tolerance anticipated for the Funds. The Board concluded that the Funds’ performance was satisfactory.
Franklin U.S. Small Cap Multifactor Index ETF – The Performance Universe for the Fund included the Fund and all retail and institutional small-cap core funds and exchange-traded funds. The Fund commenced operations on April 26, 2017, and thus has been in operation for less than five years. The Board noted that the Fund’s annualized total return for the one- and three-year periods was below the median of its Performance Universe. The Board discussed the Fund’s performance with management and management explained that the quality and low volatility factors have heavily detracted from the Fund’s returns. The Board further noted that, in light of the Fund’s use of a “passive” or indexing investment approach, management evaluates the Fund based on its tracking error against a specified benchmark. The Board also noted that for the one-year period ended February 28, 2022, the Fund’s tracking error was within the tolerance anticipated for the Fund. The Board further noted that, although below the median of its Performance Universe, the Fund’s annualized total return for the one- and three-year periods was positive, exceeding 10.00% in the three-year period.
Based on the foregoing, the Board concluded that the Fund’s performance was acceptable.
Comparative Fees and Expenses
The Board reviewed and considered information regarding each Fund’s actual total expense ratio, noting that each Fund pays a Unified Fee (as defined below). The Board considered the actual total expense ratio and, separately, the contractual management fee rate, without the effect of fee waivers, if any (Management Rate) of each Fund in comparison to the median expense ratio and median Management Rate, respectively, of other exchange-traded funds deemed comparable to and with a similar expense structure to the Fund selected by Broadridge (Expense Group). Broadridge fee and expense data is based upon information taken from each fund’s most recent annual or semi-annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios and Management Rates generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Broadridge to be an appropriate measure of comparative fees and expenses. The Broadridge Management Rate includes administrative charges. The Board received a description of the methodology used by Broadridge to select the exchange-traded funds included in an Expense Group.
Franklin Emerging Market Core Dividend Tilt Index ETF and Franklin International Core Dividend Tilt Index ETF – The Expense Group for the Franklin Emerging Market Core Dividend Tilt Index ETF was comprised of strategic beta exchange-traded funds, which included the Fund and ten other emerging markets funds. The Expense Group for the Franklin International Core Dividend Tilt Index ETF was comprised of strategic beta exchange-traded funds, which included the Fund and six other international multi-cap growth funds. The Board noted that the Management Rates and actual total expense ratios for the Funds were equal to the medians of their respective Expense Groups. The Board further noted that the Funds have a unified management fee (Unified Fee) and that pursuant to the Unified Fee arrangement the Manager reimburses each Fund for all of its acquired fund fees and expenses (if any) and pays all of the ordinary operating expenses of each Fund, except for (i) the Fund’s Unified Fee, (ii) payments under the Fund’s Rule 12b-1 plan (if any), (iii) brokerage expenses, (iv) taxes, (v) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), (vi) litigation expenses (including litigation to which the Trust or the Fund
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may be a party and indemnification of the Trustees and officers with respect thereto), and (vii) other non-routine or extraordinary expenses (Unified Fee Arrangement). The Board also considered and approved management’s proposed reduction in the Franklin Emerging Market Core Dividend Tilt Index ETF’s Management Rate from 0.45% to 0.19% and proposed reduction in the Franklin International Core Dividend Tilt Index ETF’s Management Rate from 0.40% to 0.09% in connection with the Fund Repositioning. The Board concluded that the Management Rates charged to Funds are reasonable.
Franklin U.S. Core Dividend Tilt Index ETF, Franklin U.S. Large Cap Multifactor Index ETF and Franklin U.S. Mid Cap Multifactor Index ETF – The Expense Group for the Franklin U.S. Core Dividend Tilt Index ETF was comprised of strategic beta exchange-traded funds, which included the Fund and six other global equity income funds. The Expense Group for the Franklin U.S. Large Cap Multifactor Index ETF was comprised of strategic beta exchange-traded funds, which included the Fund and 13 other multi-cap core funds. The Expense Group for the Franklin U.S. Mid Cap Multifactor Index ETF was comprised of strategic beta exchange-traded funds, which included the Fund and five other mid-cap growth funds. The Board noted that the Management Rates and actual total expense ratios for Funds were below the medians of their respective Expense Groups. The Board further noted that the Funds have a Unified Fee and the terms of the Unified Fee Arrangement. The Board further considered and approved management’s proposed reduction in the Franklin U.S. Core Dividend Tilt Index ETF’s Management Rate from 0.45% to 0.06% in connection with the Fund Repositioning. The Board concluded that the Management Rates charged to the Funds are reasonable.
Franklin U.S. Small Cap Multifactor Index ETF – The Expense Group for the Fund was comprised of strategic beta exchange-traded funds, which included the Fund and 13 other small-cap core funds. The Board noted that the Management Rate for the Fund was below the median of its Expense Group, and that the actual total expense ratio for the Fund was equal to the median of its Expense Group. The Board further noted that the Fund has a Unified Fee and the terms of the Unified Fee Arrangement. The Board concluded that the Management Rate charged to the Fund is reasonable.
Profitability
The Board reviewed and considered information regarding the profits realized by the Manager and its affiliates in connection with the operation of each Fund. In this respect, the Board considered the Fund profitability analysis that addresses the
overall profitability of FT’s US fund business, as well as its profits in providing investment management and other services to each of the individual funds during the 12-month period ended September 30, 2021, being the most recent fiscal year-end for FRI. The Board noted that although management continually makes refinements to its methodologies used in calculating profitability in response to organizational and product-related changes, the overall methodology has remained consistent with that used in the Funds’ profitability report presentations from prior years. The Board also noted that PricewaterhouseCoopers LLP, auditor to FRI and certain FT funds, has been engaged to periodically review and assess the allocation methodologies to be used solely by the Funds’ Board with respect to the profitability analysis.
The Board noted management’s belief that costs incurred in establishing the infrastructure necessary for the type of fund operations conducted by the Manager and its affiliates may not be fully reflected in the expenses allocated to each Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. As part of this evaluation, the Board considered management’s outsourcing of certain operations, which effort has required considerable up-front expenditures but, over the long run, is expected to result in greater efficiencies. The Board also noted management’s expenditures in improving shareholder services provided to the Funds, as well as the need to implement systems and meet additional regulatory and compliance requirements resulting from recent US Securities and Exchange Commission and other regulatory requirements.
The Board also considered the extent to which the Manager and its affiliates might derive ancillary benefits from fund operations, including potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with service providers and counterparties. Based upon its consideration of all these factors, the Board concluded that the level of profits realized by the Manager and its affiliates from providing services to each Fund was not excessive in view of the nature, extent and quality of services provided to each Fund.
Economies of Scale
The Board reviewed and considered the extent to which the Manager may realize economies of scale, if any, as each Fund grows larger and whether each Fund’s management fee structure reflects any economies of scale for the benefit of shareholders. The Board considered that each Fund would likely experience benefits from the Unified Fee at the Fund’s projected asset levels because of the Manager’s contractual
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requirement to bear most of the Fund’s ordinary operating expenses. The Board noted that, under the Unified Fee, it is not anticipated that any of the Funds will generate significant, if any, profit for the Manager and/or its affiliates for some time. The Board also considered management’s view that any analyses of potential economies of scale in managing a particular fund are inherently limited in light of the joint and common costs and investments the Manager incurs across the FT family of funds as a whole. The Board also noted that, as of December 31, 2021, each Fund (except for the Franklin U.S. Large Cap Multifactor Index ETF) had net assets below $58 million. The Board also noted management’s representation that, while the Franklin U.S. Large Cap Multifactor Index ETF had net assets of approximately $1 billion as of December 31, 2021, none of the Funds experienced a profit for the fiscal year ended September 30, 2021. The Board recognized that there would not likely be any economies of scale for a Fund until the Fund’s assets grow.
Conclusion
Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved the continuation of each Management Agreement for an additional one-year period.
Liquidity Risk Management Program –In-Kind ETFs
Franklin International Core Dividend Tilt Index ETF
Franklin U.S. Large Cap Multifactor Index ETF
Franklin U.S. Mid Cap Multifactor Index ETF
Franklin U.S. Small Cap Multifactor Index ETF
Each of the Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. Each of the Funds is an exchange-traded fund (“ETF”) that is considered an “In-Kind ETF” under the Liquidity Rule, which means that the Fund satisfies requests for redemption through in-kind transfers of portfolio securities, positions, and other assets, except for a de minimis amount of cash, and publishes its portfolio holdings daily. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) prohibiting the
Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the SEC (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. As an In-Kind ETF, the Fund is not required to include in the LRMP policies and procedures relating to classification of portfolio holdings into four liquidity categories or establishing a highly liquid investment minimum (“HLIM”).
The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Legal, Investment Compliance, Investment Operations, Valuation Committee, Product Management and Global Product Strategy.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; its short and long-term cash flow projections; and its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit. Because the Funds are ETFs, the ILC also considers, as relevant, (1) the relationship between the Fund’s portfolio liquidity and the way in which, and the prices and spread at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants and (2) the effect of the composition of baskets on the overall liquidity of the Fund’s portfolio.
At meetings of the Funds’ Board of Trustees held in May 2022, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program for the year ended December 31, 2021. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP, including the Highly Liquid Investment Minimum (“HLIM”) where applicable, was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund.
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Liquidity Risk Management Program –Non-In-Kind ETFs
Franklin Emerging Market Core Dividend Tilt Index ETF
Franklin U.S. Core Dividend Tilt Index ETF
Each Fund has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP for the Franklin Templeton and Legg Mason Funds is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for Funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the Securities and Exchange Commission (“SEC”) (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
The Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) is the appointed Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for Franklin Templeton and Legg Mason products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Legal, Investment Compliance, Investment Operations, Valuation Committee, Product Management and Global Product Strategy.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable
stressed conditions; its short and long-term cash flow projections; and its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit. Classification of the Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value.
Each Fund primarily holds liquid assets that are defined under the Liquidity Rule as “Highly Liquid Investments,” and therefore is not required to establish an HLIM. Highly Liquid Investments are defined as cash and any investment reasonably expected to be convertible to cash in current market conditions in three business days or less without the conversion to cash significantly changing the market value of the investment.
At meetings of the Funds’ Board of Trustees held in May 2022, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program for the year ended December 31, 2021. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP, including the Highly Liquid Investment Minimum (“HLIM”) where applicable, was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund.
Proxy Voting Policies and Procedures
The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.
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Quarterly Schedule of Investments
The Trust files a complete schedule of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year as an exhibit to its report on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.
Premium/Discount Information
Information about the differences between the daily market price on the secondary market for the shares of each Fund and each Fund’s net asset value may be found on each Fund’s website at franklintempleton.com.
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Authorized for distribution only when accompanied or preceded by a summary prospectus and/or prospectus. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. A prospectus contains this and other information; please read it carefully before investing.
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