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Franklin Emerging Market Core Dividend Tilt

Index ETF

Franklin International Core Dividend Tilt

Index ETF

Franklin U.S. Core Dividend Tilt Index ETF

Franklin U.S. Large Cap Multifactor Index ETF

Franklin U.S. Mid Cap Multifactor Index ETF

Franklin U.S. Small Cap Multifactor Index ETF


 

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

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

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


Contents        
Franklin Emerging Market Core Dividend Tilt Index ETF      2  
Franklin International Core Dividend Tilt Index ETF      7  
Franklin U.S. Core Dividend Tilt Index ETF      12  
Franklin U.S. Large Cap Multifactor Index ETF      17  
Franklin U.S. Mid Cap Multifactor Index ETF      22  
Franklin U.S. Small Cap Multifactor Index ETF      27  
Financial Highlights and Schedules of Investments      32  
Financial Statements      88  
Notes to Financial Statements      95  
Shareholder Information      109  

 

 

Visit franklintempleton.com for fund

updates and documents, or to find helpful

financial planning tools.

 

 

 

 

Not FDIC Insured   |   May Lose Value   |   No Bank Guarantee      

 

           
franklintempleton.com  

Semiannual Report

             1


Franklin Emerging Market Core Dividend Tilt Index ETF

    

 

This semiannual report for Franklin Emerging Market Core Dividend Tilt Index ETF covers the period ended September 30, 2023.

Fund Overview

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 -NR (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-NR (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*       
9/30/23       
      % of Total
Net Assets
 

Asia

     73.6%  

Latin America & Caribbean

     11.5%  

Middle East & Africa

     10.7%  

North America

     1.8%  

Europe

     1.7%  

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 -0.34% based on market price and +0.12% based on net asset value (NAV). The Underlying Index, the Morningstar® Emerging Markets Dividend Enhanced Select IndexSM -NR posted a cumulative total return of +1.75%.2 The Linked Morningstar® Emerging Markets Dividend Enhanced Select Index-NR, which measures the performance of the Underlying Index, posted a +1.74% cumulative total return.2 The Parent Index, the Morningstar® Emerging Markets Target Market Exposure Index-NR posted a cumulative total return of -1.98%.2 The Linked Morningstar® Emerging Markets Target Market Exposure Index-NR, which measures the performance of the Parent Index, posted a -1.97% 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 4.

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. Net Returns (NR) include income net of tax withholding when dividends are paid.

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 33.

 

           
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Semiannual Report

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FRANKLIN EMERGING MARKET CORE DIVIDEND TILT INDEX ETF

 

Top 10 Sectors/Industries  
9/30/23  
      % of Total
Net Assets
 

Banks

     22.0%  

Semiconductors & Semiconductor Equipment

     9.4%  

Oil, Gas & Consumable Fuels

     7.8%  

Technology Hardware, Storage & Peripherals

     5.8%  

Metals & Mining

     4.3%  

Insurance

     3.7%  

Chemicals

     3.7%  

IT Services

     3.6%  

Diversified Telecommunication Services

     3.0%  

Interactive Media & Services

     2.8%  

 

Top 10 Holdings  
9/30/23  

Company

Sector/Industry, Country

   % of Total
Net Assets
 

Taiwan Semiconductor Manufacturing Co. Ltd.

Semiconductors & Semiconductor Equipment, Taiwan

     4.7%  

Samsung Electronics Co. Ltd.

Technology Hardware, Storage & Peripherals,
South Korea

     2.9%  

Tencent Holdings Ltd.

Interactive Media & Services, China

     2.6%  

Petroleo Brasileiro SA, 9.792%, pfd.

Oil, Gas & Consumable Fuels, Brazil

     1.5%  

Infosys Ltd.

IT Services, India

     1.4%  

Alibaba Group Holding Ltd., Class A

Broadline Retail, China

     1.4%  

China Construction Bank Corp., Class H

Banks, China

     1.4%  

Vale SA

Metals & Mining, Brazil

     1.2%  

Hon Hai Precision Industry Co. Ltd.

Electronic Equipment, Instruments & Components, Taiwan

     1.1%  

MediaTek, Inc.

Semiconductors & Semiconductor Equipment, Taiwan

     1.1%  

CFA® is a trademark owned by CFA Institute.

 

Top 10 Countries  
9/30/23  
      % of Total
Net Assets
 

China

     26.5%  

Taiwan

     18.5%  

India

     11.7%  

South Korea

     9.1%  

Brazil

     6.0%  

South Africa

     4.5%  

Saudi Arabia

     3.9%  

Indonesia

     3.4%  

Malaysia

     3.1%  

Hong Kong

     2.0%  

As of September 30, 2023, 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 September 30, 2023, 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

 

           
franklintempleton.com  

Semiannual Report

             3


FRANKLIN EMERGING MARKET CORE DIVIDEND TILT INDEX ETF

    

 

Performance Summary as of September 30, 2023

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

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. Market Price returns typically are based upon the official closing price of the ETF’s shares. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (6/3/16), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.

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

Performance as of 9/30/231,2

     Cumulative Total Return3        Average Annual Total Return3  
      Based on
NAV4
    

Based on

market price5

    

Based on

NAV4

     Based on
market price5
 

6-Month

     +0.12%        -0.34%        +0.12%        -0.34%  

1-Year

     +17.65%        +18.34%        +17.65%        +18.34%  

3-Year

     +5.16%        +4.19%        +1.69%        +1.38%  

5-Year

     -3.22%        -3.27%        -0.65%        -0.66%  

Since Inception (6/1/16)

     +20.66%        +19.82%        +2.59%        +2.50%  

 

Distribution Rate6   

30-Day 

Standardized Yield7

 

9.40%

     5.51%    

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

See page 5 for Performance Summary footnotes.

 

           
4             

Semiannual Report

  franklintempleton.com


FRANKLIN EMERGING MARKET CORE DIVIDEND TILT INDEX ETF

PERFORMANCE SUMMARY

    

 

Distributions (4/1/23–9/30/23)

 

Net Investment
Income

$0.876808

Total Annual Operating Expenses8

 

  0.19%

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

All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. To the extent the portfolio invests in a concentration of certain securities, regions or industries, it is subject to increased volatility. Dividends may fluctuate and are not guaranteed, and a company may reduce or eliminate its dividend at any time. 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. Small- and mid-cap stocks involve greater risks and volatility than large-cap stocks. These and other risks are discussed in the Fund’s prospectus.

To the extent that the Fund has exposure to Russian investments or investments in countries affected by the invasion, the Fund’s ability to price, buy, sell, receive or deliver such investments may be impaired. The Fund could determine at any time that certain of the most affected securities have zero value. In addition, any exposure that the Fund may have to counterparties in Russia or in countries affected by the invasion could negatively impact the Fund’s portfolio. The extent and duration of Russia’s military actions and the repercussions of such actions (including any retaliatory actions or countermeasures that may be taken by those subject to sanctions) are impossible to predict, but could result in significant market disruptions, including in the oil and natural gas markets, and may negatively affect global supply chains, inflation and global growth. These and any related events could significantly impact the Fund’s performance and the value of an investment in the Fund, even beyond any direct exposure the Fund may have to Russian issuers or issuers in other countries affected by the invasion.

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

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

2. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.

3. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.

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

5. Assumes reinvestment of distributions based on market price.

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

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

8. Management fees have been restated to reflect current fiscal year fees as a result of a decrease in the Fund’s contractual management fee rate effective August 1, 2022. If the management fees were not restated to reflect such decrease in fees, the amounts shown above would be greater. Consequently, the Fund’s total annual Fund operating expenses differ from the ratio of expenses to average net assets shown in the Financial Highlights.

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

 

           
franklintempleton.com  

Semiannual Report

             5


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

   

Ending

Account

    Expenses
Paid During
Period
   

Ending

Account

    Expenses
Paid During
Period
    Net Annualized  
Value 4/1/23     Value 9/30/23     4/1/23–9/30/231,2     Value 9/30/23     4/1/23–9/30/231     Expense Ratio  
  $1,000.00       $1,001.20       $0.95       $1,024.05       $0.96       0.19

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

2. Reflects expenses after fee waivers and expense reimbursements.

 

           
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Semiannual Report

  franklintempleton.com


Franklin International Core Dividend Tilt Index ETF

 

 

This semiannual report for Franklin International Core Dividend Tilt Index ETF covers the period ended September 30, 2023.

Fund Overview

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 -NR (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-NR (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*       
9/30/23       
      % of Total
Net Assets
 

Europe

     60.9%  

Asia

     26.0%  

Australia & New Zealand

     10.9%  

North America

     0.8%  

Middle East & Africa

     0.7%  

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 -0.88% based on market price and -0.17% based on net asset value (NAV). The Underlying Index, the Morningstar® Developed Markets ex-North America Dividend Enhanced Select IndexSM-NR, posted a cumulative total return of +1.16%.2 The Linked Morningstar® Developed Markets ex-North America Dividend Enhanced Select Index-NR, which measures the performance of the Underlying Index, posted a +1.15% cumulative total return.2 The Parent Index, the Morningstar® Developed Markets ex-North America Target Market Exposure Index-NR posted a cumulative total return of -0.91%.2 The Linked Morningstar® Developed Markets ex-North America Target Market Exposure Index-NR, which measures the performance of the Parent Index, posted a -0.91% 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 9.

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® Developed Markets ex-North America Dividend Enhanced Select IndexSM is a systematic, rules-based proprietary index that is maintained and calculated by Morningstar, Inc.

2. Source: FactSet. Net Returns (NR) include income net of tax withholding when dividends are paid.

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 47.

 

           
franklintempleton.com  

Semiannual Report

             7


FRANKLIN INTERNATIONAL CORE DIVIDEND TILT INDEX ETF

    

 

Top 10 Sectors/Industries  
9/30/23  
      % of Total
Net Assets
 

Banks

     12.9%  

Pharmaceuticals

     10.6%  

Insurance

     5.8%  

Metals & Mining

     5.6%  

Automobiles

     4.7%  

Semiconductors & Semiconductor Equipment

     4.2%  

Oil, Gas & Consumable Fuels

     3.9%  

Diversified Telecommunication Services

     2.7%  

Electric Utilities

     2.7%  

Textiles, Apparel & Luxury Goods

     2.6%  

 

Top 10 Holdings       
9/30/23       
Company
Sector/Industry, Country
   % of Total
Net Assets
 
Novartis AG
Pharmaceuticals, Switzerland
     2.0%  
Nestle SA
Food Products, Switzerland
     2.0%  
Novo Nordisk AS, Class B
Pharmaceuticals, Denmark
     1.8%  
ASML Holding NV
Semiconductors & Semiconductor Equipment, Netherlands
     1.7%  
BHP Group Ltd.
Metals & Mining, Australia
     1.5%  
AstraZeneca PLC
Pharmaceuticals, United Kingdom
     1.4%  
LVMH Moet Hennessy Louis Vuitton SE
Textiles, Apparel & Luxury Goods, France
     1.4%  
Roche Holding AG
Pharmaceuticals, Switzerland
     1.4%  
Toyota Motor Corp.
Automobiles, Japan
     1.3%  
HSBC Holdings PLC
Banks, United Kingdom
     1.1%  
Top 10 Countries  
9/30/23  
      % of Total
Net Assets
 

Japan

     21.0%  

United Kingdom

     13.0%  

Australia

     11.4%  

Switzerland

     9.7%  

France

     9.3%  

Germany

     8.1%  

Netherlands

     4.6%  

Italy

     4.0%  

Hong Kong

     2.7%  

Sweden

     2.6%  

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

 

           
8             

Semiannual Report

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FRANKLIN INTERNATIONAL CORE DIVIDEND TILT INDEX ETF

    

 

Performance Summary as of September 30, 2023

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

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. Market Price returns typically are based upon the official closing price of the ETF’s shares. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (6/3/16), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.

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

Performance as of 9/30/231,2

 

     Cumulative Total Return3      Average Annual Total Return3  
      Based on
NAV4
     Based on
market price5
     Based on
NAV4
     Based on
market price5
 

6-Month

     -0.17%        -0.88%        -0.17%        -0.88%  

1-Year

     +27.82%        +28.13%        +27.82%        +28.13%  

3-Year

     +36.49%        +35.36%        +10.93%        +10.62%  

5-Year

     +41.31%        +41.55%        +7.16%        +7.20%  

Since Inception (6/1/16)

     +68.78%        +68.45%        +7.40%        +7.37%  

 

Distribution Rate6     

30-Day

Standardized Yield

 

7 

1.08%

     4.07%  

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

 

 

See page 10 for Performance Summary footnotes.

 

           
franklintempleton.com  

Semiannual Report

             9


FRANKLIN INTERNATIONAL CORE DIVIDEND TILT INDEX ETF

PERFORMANCE SUMMARY

    

 

Distributions (4/1/23–9/30/23)

Net Investment

Income

$0.617473

Total Annual Operating Expenses8

 

  0.09%

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

All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. To the extent the portfolio invests in a concentration of certain securities, regions or industries, it is subject to increased volatility. Dividends may fluctuate and are not guaranteed, and a company may reduce or eliminate its dividend at any time. 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. Small- and mid-cap stocks involve greater risks and volatility than large-cap stocks. These and other risks are discussed in the Fund’s prospectus.

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

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

2. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.

3. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.

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

5. Assumes reinvestment of distributions based on market price.

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

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

8. 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 4/1/23
   

Ending
Account

Value 9/30/23

   

Expenses
Paid During
Period

4/1/23–9/30/231,2,3

   

Ending
Account

Value 9/30/23

   

Expenses
Paid During
Period

4/1/23–9/30/231,3

    Net Annualized
Expense Ratio3
 
  $1,000.00       $998.30       $0.55       $1,024.45       $0.56       0.11

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

2. Reflects expenses after fee waivers and expense reimbursements.

3. Included in the expense ratio are “Other fees” described in Note 1 under Income and Deferred Taxes which are not annualized. Without these expenses, the expense ratio would have been 0.09% and the actual and hypothetical expenses paid during the period would have been $0.45 and $0.46, respectively.

 

           
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Semiannual Report

             11


Franklin U.S. Core Dividend Tilt Index ETF

    

 

This semiannual report for Franklin U.S. Core Dividend Tilt Index ETF covers the period ended September 30, 2023.

Fund Overview

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*  
9/30/23       
      % of Total
Net Assets
 

North America

     99.1%  

Europe

     0.4%  

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 +3.80% based on market price and +3.77% based on net asset value (NAV). The Underlying Index, the

 

Morningstar® US Dividend Enhanced Select IndexSM, posted a cumulative total return of +4.56%.2 The Linked Morningstar® US Dividend Enhanced Select Index, which measures the performance of the Underlying Index, posted a +4.56% cumulative total return.2 The Parent Index, the Morningstar® US Target Market Exposure Index posted a cumulative total return of +5.49%.2 The Linked Morningstar® US Target Market Exposure Index, which measures by the performance of the Parent Index, posted a +5.49% 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 14.

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

 

Top 10 Sectors/Industries  
9/30/23       
      % of Total
Net Assets
 

Semiconductors & Semiconductor Equipment

     10.6%  

Software

     9.5%  

Technology Hardware, Storage & Peripherals

     7.5%  

Pharmaceuticals

     5.6%  

Oil, Gas & Consumable Fuels

     5.3%  

Interactive Media & Services

     4.7%  

Banks

     4.7%  

Capital Markets

     4.4%  

Broadline Retail

     3.3%  

Electric Utilities

     3.2%  

 

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.

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 59.

 

 

           
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FRANKLIN U.S. CORE DIVIDEND TILT INDEX ETF

    

 

Top 10 Holdings  
9/30/23  

Company

Sector/Industry

   % of Total
Net Assets
 
Apple, Inc.
Information Technology
     6.9%  
Microsoft Corp.
Information Technology
     6.3%  
NVIDIA Corp.
Information Technology
     3.1%  
Amazon.com, Inc.
Consumer Discretionary
     2.9%  
Alphabet, Inc., Class A
Communication Services
     1.7%  
Tesla, Inc.
Consumer Discretionary
     1.6%  
Exxon Mobil Corp.
Energy
     1.6%  
Meta Platforms, Inc., Class A
Communication Services
     1.6%  
Johnson & Johnson
Health Care
     1.5%  
Broadcom, Inc.
Information Technology
     1.5%  

As of September 30, 2023, 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 September 30, 2023, 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

 

           
franklintempleton.com  

Semiannual Report

             13


FRANKLIN U.S. CORE DIVIDEND TILT INDEX ETF

    

 

Performance Summary as of September 30, 2023

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

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. Market Price returns typically are based upon the official closing price of the ETF’s shares. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (6/3/16), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.

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

Performance as of 9/30/231,2

 

     Cumulative Total Return3      Average Annual Total Return3  
     

Based on

NAV4

    

Based on

market price5

    

Based on

NAV4

    

Based on

market price5

 

6-Month

     +3.77%        +3.80%        +3.77%        +3.80%  

1-Year

     +19.42%        +19.39%        +19.42%        +19.39%  

3-Year

     +29.49%        +29.28%        +9.00%        +8.94%  

5-Year

     +37.07%        +37.36%        +6.51%        +6.55%  

Since Inception (6/1/16)

     +63.86%        +63.77%        +6.97%        +6.96%  

 

Distribution Rate6     

30-Day

Standardized Yield

 

7 

2.47%

     2.47%  

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

See page 15 for Performance Summary footnotes.

 

           
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FRANKLIN U.S. CORE DIVIDEND TILT INDEX ETF

PERFORMANCE SUMMARY

    

 

Distributions (4/1/23–9/30/23)

Net Investment

Income

$0.441228

Total Annual Operating Expenses8

 

  0.06%

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

All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. To the extent the portfolio invests in a concentration of certain securities, regions or industries, it is subject to increased volatility. Dividends may fluctuate and are not guaranteed, and a company may reduce or eliminate its dividend at any time. 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. Small- and mid-cap stocks involve greater risks and volatility than large-cap stocks. These and other risks are discussed in the Fund’s prospectus.

To the extent that the Fund has exposure to Russian investments or investments in countries affected by the invasion, the Fund’s ability to price, buy, sell, receive or deliver such investments may be impaired. The Fund could determine at any time that certain of the most affected securities have zero value. In addition, any exposure that the Fund may have to counterparties in Russia or in countries affected by the invasion could negatively impact the Fund’s portfolio. The extent and duration of Russia’s military actions and the repercussions of such actions (including any retaliatory actions or countermeasures that may be taken by those subject to sanctions) are impossible to predict, but could result in significant market disruptions, including in the oil and natural gas markets, and may negatively affect global supply chains, inflation and global growth. These and any related events could significantly impact the Fund’s performance and the value of an investment in the Fund, even beyond any direct exposure the Fund may have to Russian issuers or issuers in other countries affected by the invasion.

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

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

2. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.

3. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.

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

5. Assumes reinvestment of distributions based on market price.

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

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

8. Management fees have been restated to reflect current fiscal year fees as a result of a decrease in the Fund’s contractual management fee rate effective August 1, 2022. If the management fees were not restated to reflect such decrease in fees, the amounts shown above would be greater. Consequently, the Fund’s total annual Fund operating expenses differ from the ratio of expenses to average net assets shown in the Financial Highlights.

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

 

           
franklintempleton.com  

Semiannual Report

             15


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 4/1/23
    Ending
Account
Value 9/30/23
   

Expenses

Paid During
Period
4/1/23–9/30/231,2

    Ending
Account
Value 9/30/23
   

Expenses
Paid During
Period

4/1/23–9/30/231

    Net Annualized
Expense Ratio
 
  $1,000.00       $1,037.70       $0.31       $1,024.70       $0.30       0.06

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

2. Reflects expenses after fee waivers and expense reimbursements.

 

           
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Franklin U.S. Large Cap Multifactor Index ETF

    

 

This semiannual report for Franklin U.S. Large Cap Multifactor Index ETF covers the period ended September 30, 2023.

Fund Overview

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). 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.1

Performance Overview

During the six-month period, the Fund posted cumulative total returns of +4.91% based on market price and +4.87% based on net asset value (NAV). In comparison, the LibertyQ U.S. Large Cap Equity Index posted a +4.98% cumulative total return for the same period, while the Russell 1000® Index posted a +5.16% cumulative total return.2

You can find more of the Fund’s performance data in the Performance Summary beginning on page 19.

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

Top 10 Sectors/Industries  
9/30/23       
      % of Total
Net Assets
 

Information Technology

     33.0%  

Health Care

     17.2%  

Consumer Discretionary

     12.1%  

Financials

     8.4%  

Communication Services

     8.4%  

Industrials

     8.4%  

Consumer Staples

     4.0%  

Energy

     3.7%  

Real Estate

     1.8%  

Materials

     1.6%  

 

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 66.

 

           
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Semiannual Report

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FRANKLIN U.S. LARGE CAP MULTIFACTOR INDEX ETF

 

Top 10 Holdings  
9/30/23       

Company

Sector/Industry

   % of Total
Net Assets
 

Apple, Inc.

Information Technology

     7.3%  

Microsoft Corp.

Information Technology

     6.6%  

Amazon.com, Inc.

Consumer Discretionary

     2.2%  

NVIDIA Corp.

Information Technology

     2.1%  

Alphabet, Inc., Class A

Communication Services

     2.1%  

Johnson & Johnson

Health Care

     1.9%  

Alphabet, Inc., Class C

Communication Services

     1.8%  

Mastercard, Inc., Class A

Financials

     1.8%  

Eli Lilly & Co.

Health Care

     1.8%  

Broadcom, Inc.

Information Technology

     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

            

 

           
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FRANKLIN U.S. LARGE CAP MULTIFACTOR INDEX ETF

    

 

Performance Summary as of September 30, 2023

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

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. Market Price returns typically are based upon the official closing price of the ETF’s shares. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (4/28/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.

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

Performance as of 9/30/231,2

 

     Cumulative Total Return3      Average Annual Total Return3  
     

Based on

NAV4

    

Based on

market price5

    

Based

on NAV4

    

Based on

market price5

 

6-Month

     +4.87%        +4.91%        +4.87%        +4.91%  

1-Year

     +19.91%        +19.90%        +19.91%        +19.90%  

3-Year

     +31.52%        +31.31%        +9.56%        +9.50%  

5-Year

     +51.80%        +51.76%        +8.71%        +8.70%  

Since Inception (4/26/17)

     +91.25%        +91.37%        +10.61%        +10.62%  

 

Distribution Rate6     

30-Day

Standardized Yield

 

7 

1.44%

     1.55%  

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 20 for Performance Summary footnotes.

 

           
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Semiannual Report

             19


FRANKLIN U.S. LARGE CAP MULTIFACTOR INDEX ETF

PERFORMANCE SUMMARY

    

 

Distributions (4/1/23–9/30/23)

Net Investment

Income

 

$0.349283

Total Annual Operating Expenses8

 

  0.15%

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

All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. To the extent the portfolio invests in a concentration of certain securities, regions or industries, it is subject to increased volatility. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transaction costs, expenses and other factors. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance. These and other risks are discussed in the Fund’s prospectus.

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

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

2. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.

3. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.

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

5. Assumes reinvestment of distributions based on market price.

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

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

8. 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     Hypothetical        
      (actual return after expenses)     (5% annual return before expenses)        
Beginning
Account
Value 4/1/23
    Ending
Account
Value 9/30/23
   

Expenses

Paid During

Period

4/1/23–9/30/231,2

    Ending
Account
Value 9/30/23
   

Expenses

Paid During

Period
4/1/23–9/30/231

    Net Annualized
Expense Ratio
 
  $1,000.00       $1,048.70       $0.77       $1,024.25       $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 183/366 to reflect the one-half year period.

2. Reflects expenses after fee waivers and expense reimbursements.

 

           
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             21


Franklin U.S. Mid Cap Multifactor Index ETF

    

 

This semiannual report for Franklin U.S. Mid Cap Multifactor Index ETF covers the period ended September 30, 2023.

Fund Overview

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). 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.1

Performance Overview

During the six-month period, the Fund posted cumulative total returns of -0.07% based on market price and -0.16% based on net asset value (NAV). In comparison, the LibertyQ U.S. Mid Cap Equity Index posted a -0.01% cumulative total return for the same period, while the Russell Midcap® Index posted a -0.14% 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 24.

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       
9/30/23       
      % of Total
Net Assets
 

Industrials

     22.1%  

Consumer Discretionary

     16.0%  

Information Technology

     12.8%  

Financials

     11.6%  

Health Care

     9.0%  

Materials

     8.0%  

Energy

     7.2%  

Consumer Staples

     5.3%  

Real Estate

     4.1%  

Utilities

     1.9%  

 

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 72.

 

           
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FRANKLIN U.S. MID CAP MULTIFACTOR INDEX ETF

    

 

Top 10 Holdings       
9/30/23       
Company
Sector/Industry
   % of Total
Net Assets
 
Old Dominion Freight Line, Inc.
Industrials
     1.3%  
Phillips 66
Energy
     1.3%  
Trane Technologies PLC
Industrials
     1.2%  
Nucor Corp.
Materials
     1.1%  
CDW Corp.
Information Technology
     1.1%  
LyondellBasell Industries NV, Class A
Materials
     1.1%  
Paychex, Inc.
Industrials
     1.1%  
Fair Isaac Corp.
Information Technology
     1.0%  
WW Grainger, Inc.
Industrials
     1.0%  
Diamondback Energy, Inc.
Energy
     1.0%  

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

 

           
franklintempleton.com  

Semiannual Report

             23


FRANKLIN U.S. MID CAP MULTIFACTOR INDEX ETF

    

 

Performance Summary as of September 30, 2023

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

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. Market Price returns typically are based upon the official closing price of the ETF’s shares. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (4/28/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.

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

Performance as of 9/30/231,2

 

     Cumulative Total Return3      Average Annual Total Return3  
      Based on
NAV4
     Based on
market price5
    

Based on

NAV4

     Based on
market price5
 

6-Month

     -0.16%        -0.07%        -0.16%        -0.07%  

1-Year

     +16.33%        +16.27%        +16.33%        +16.27%  

3-Year

     +35.09%        +34.81%        +10.55%        +10.47%  

5-Year

     +51.17%        +51.08%        +8.62%        +8.60%  

Since Inception (4/26/17)

     +83.47%        +83.46%        +9.90%        +9.90%  

 

Distribution Rate6     

30-Day

Standardized Yield


7 

1.27%

     1.81%  

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

 

See page 25 for Performance Summary footnotes.

 

           
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FRANKLIN U.S. MID CAP MULTIFACTOR INDEX ETF

PERFORMANCE SUMMARY

    

 

Distributions (4/1/23–9/30/23)

Net Investment

Income

$0.274214

Total Annual Operating Expenses8

 

  0.30%

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

All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. Small- and mid-cap stocks involve greater risks and volatility than large-cap stocks. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transaction costs, expenses and other factors. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance. These and other risks are discussed in the Fund’s prospectus.

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

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

2. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund,excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.

3. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.

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

5. Assumes reinvestment of distributions based on market price.

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

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

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

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

 

           
franklintempleton.com  

Semiannual Report

             25


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     Hypothetical        
      (actual return after expenses)     (5% annual return before expenses)        
Beginning
Account
Value 4/1/23
    Ending
Account
Value 9/30/23
    Expenses
Paid During
Period
4/1/23–9/30/231,2
    Ending
Account
Value 9/30/23
   

Expenses
Paid During
Period

4/1/23–9/30/231

    Net Annualized
Expense Ratio
 
  $1,000.00       $998.40       $1.50       $1,023.50       $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 183/366 to reflect the one-half year period.

2. Reflects expenses after fee waivers and expense reimbursements.

 

           
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Franklin U.S. Small Cap Multifactor Index ETF

    

 

This semiannual report for Franklin U.S. Small Cap Multifactor Index ETF covers the period ended September 30, 2023.

Fund Overview

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). 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.1

Performance Overview

During the six-month period, the Fund posted cumulative total returns of +1.26% based on market price and +1.23% based on net asset value (NAV). In comparison, the LibertyQ U.S. Small Cap Equity Index posted a +1.44% cumulative total return for the same period, while the Russell 2000® Index posted a -0.19% cumulative total return.2

You can find more of the Fund’s performance data in the Performance Summary beginning on page 29.

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

 

Top 10 Sectors/Industries       
9/30/23       
      % of Total
Net Assets
 

Industrials

     23.7%  

Consumer Discretionary

     16.4%  

Information Technology

     13.5%  

Financials

     9.2%  

Health Care

     8.5%  

Consumer Staples

     7.6%  

Utilities

     5.5%  

Energy

     5.1%  

Real Estate

     4.0%  

Materials

     3.6%  

 

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 78.

 

           
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Semiannual Report

             27


FRANKLIN U.S. SMALL CAP MULTIFACTOR INDEX ETF

    

 

Top 10 Holdings       
9/30/23       

Company

Sector/Industry

   % of Total
Net Assets
 
Applied Industrial Technologies, Inc.
Industrials
     1.1%  
SPS Commerce, Inc.
Information Technology
     1.0%  
Qualys, Inc.
Information Technology
     1.0%  
Simpson Manufacturing Co., Inc.
Industrials
     1.0%  
Chord Energy Corp.
Energy
     1.0%  
UFP Industries, Inc.
Industrials
     0.9%  
Atkore, Inc.
Industrials
     0.9%  
Comfort Systems USA, Inc.
Industrials
     0.9%  
Novanta, Inc.
Information Technology
     0.8%  
Commercial Metals Co.
Materials
     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

 

           
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FRANKLIN U.S. SMALL CAP MULTIFACTOR INDEX ETF

    

 

Performance Summary as of September 30, 2023

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

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. Market Price returns typically are based upon the official closing price of the ETF’s shares. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (4/28/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.

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

Performance as of 9/30/231,2

 

     Cumulative Total Return3      Average Annual Total Return3  
     

Based on

NAV4

    

Based on

market price5

    

Based on

NAV4

    

Based on

market price5

 

6-Month

     +1.23%        +1.26%        +1.23%        +1.26%  

1-Year

     +16.47%        +16.43%        +16.47%        +16.43%  

3-Year

     +38.49%        +38.65%        +11.46%        +11.51%  

5-Year

     +22.25%        +22.65%        +4.10%        +4.17%  

Since Inception (4/26/17)

     +47.17%        +47.17%        +6.19%        +6.19%  

 

Distribution Rate6     

30-Day

Standardized Yield

 

7 

1.02%

     1.52%  

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 30 for Performance Summary footnotes.

 

           
franklintempleton.com  

Semiannual Report

             29


FRANKLIN U.S. SMALL CAP MULTIFACTOR INDEX ETF

PERFORMANCE SUMMARY

    

 

Distributions (4/1/23–9/30/23)

Net Investment
Income

$0.209743

Total Annual Operating Expenses8

 

  0.35%

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

All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. Small- and mid-cap stocks involve greater risks and volatility than large-cap stocks. There can be no assurance that the Fund’s multi-factor stock selection process will enhance performance. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Performance of the Fund may vary significantly from the performance of an index, as a result of transaction costs, expenses and other factors. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance. These and other risks are discussed in the Fund’s prospectus.

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

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

2. Effective December 1, 2017, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.

3. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.

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

5. Assumes reinvestment of distributions based on market price.

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

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

8. 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.

 

           
30             

Semiannual Report

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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
    Ending
Account
   

Expenses

Paid During

Period

    Ending
Account
    Expenses
Paid During
Period
    Net Annualized  
Value 4/1/23     Value 9/30/23     4/1/23–9/30/231,2     Value 9/30/23     4/1/23–9/30/231     Expense Ratio  
  $1,000.00       $1,012.30       $1.76       $1,023.25       $1.77       0.35

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

2. Reflects expenses after fee waivers and expense reimbursements.

 

           
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Semiannual Report

             31


FRANKLIN TEMPLETON ETF TRUST

    

 

Financial Highlights

 

Franklin Emerging Market Core Dividend Tilt Index ETF

 

   

Six Months Ended

September 30, 2023

    Year Ended March 31,  
     (unaudited)     2023     2022     2021     2020     2019  
Per share operating performance
(for a share outstanding throughout the period)
           

Net asset value, beginning of period

    $23.88       $28.33       $30.78       $22.20       $29.70       $33.41  
Income from investment operationsa:            

Net investment incomeb

    0.78       1.39       1.32       0.84       1.24       1.14  

Net realized and unrealized gains (losses)

    (0.67     (4.42     (2.55     8.55       (6.96     (3.76

Total from investment operations

    0.11       (3.03     (1.23     9.39       (5.72     (2.62
Less distributions from net investment income     (0.88     (1.42     (1.22     (0.81     (1.78     (1.09

Net asset value, end of period

    $23.11       $23.88       $28.33       $30.78       $22.20       $29.70  

Total returnc

    0.12%       (10.36)%       (4.21)%       42.57%       (20.55)%       (7.70)%  
Ratios to average net assetsd            

Expenses before waiver and payments by affiliates

    0.19%       0.29%       0.45%       0.45%       0.49%       0.55%  

Expenses net of waiver and payments by affiliates

    0.19%       0.29%       0.45%       0.45%       0.49%       0.55%  

Net investment income

    6.52%       5.83%       4.28%       3.15%       4.26%       3.75%  
Supplemental data            

Net assets, end of period (000’s)

    $11,556       $11,939       $17,000       $24,627       $57,711       $344,484  

Portfolio turnover ratee

    24.95% f      110.78% f      34.27% f      40.22% f      44.11% f      52.42%  

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

bBased on average daily shares outstanding.

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

dRatios are annualized for periods less than one year.

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

 

fPortfolio turnover rate excluding cash creations was as follows:     24.95%       110.78%       34.27%       36.91%       41.78%                   —  

 

           
32             

Semiannual Report    |   The accompanying notes are an integral part of these financial statements.

  franklintempleton.com


FRANKLIN TEMPLETON ETF TRUST

    

 

Schedule of Investments, September 30, 2023 (unaudited)

 

Franklin Emerging Market Core Dividend Tilt Index ETF

 

           Industry        Shares        Value  
              
  Common Stocks 96.2%             
    Brazil 3.8%                         
 

Alupar Investimento SA, UNIT

     Electric Utilities          740        $          4,252  
 

Ambev SA

     Beverages          23,000          60,243  
 

Atacadao SA

     Consumer Staples Distribution & Retail          500          889  
 

Banco Bradesco SA

     Banks          7,500          18,970  
 

BB Seguridade Participacoes SA

     Insurance          3,500          21,824  
 

Cia Energetica de Minas Gerais

     Electric Utilities          1,500          5,724  
 

Cia Siderurgica Nacional SA

     Metals & Mining          3,000          7,277  
 

CPFL Energia SA

     Electric Utilities          1,000          6,715  
 

Klabin SA

     Containers & Packaging          4,500          21,407  
 

Lojas Renner SA

     Specialty Retail          4,500          12,048  
 

Neoenergia SA

     Electric Utilities          1,000          3,678  
 

Petroleo Brasileiro SA

     Oil, Gas & Consumable Fuels          10,000          75,701  
 

Telefonica Brasil SA

     Diversified Telecommunication Services          2,000          17,254  
 

TIM SA

     Wireless Telecommunication Services          4,500          13,387  
 

Transmissora Alianca de Energia Eletrica SA

     Electric Utilities          1,000          6,905  
 

Vale SA

     Metals & Mining          10,500          141,771  
 

Vibra Energia SA

     Specialty Retail          5,500          20,790  
              

 

 

 
                 438,835  
              

 

 

 
    Chile 0.9%                         
 

AntarChile SA

     Industrial Conglomerates          630          5,148  
 

Banco de Chile

     Banks          245,340          24,851  
 

Banco de Credito e Inversiones SA

     Banks          361          9,196  
 

Banco Santander Chile

     Banks          341,570          15,734  
 

Cencosud SA

     Consumer Staples Distribution & Retail          7,115          13,420  
 

Cencosud Shopping SA

     Real Estate Management & Development          2,740          4,141  
 

Cia Sud Americana de Vapores SA

     Marine Transportation          89,250          5,325  
 

Empresas CMPC SA

     Paper & Forest Products          6,160          11,281  
 

Empresas Copec SA

     Oil, Gas & Consumable Fuels          2,005          14,139  
 

Quinenco SA

     Industrial Conglomerates          1,665          4,902  
              

 

 

 
                 108,137  
              

 

 

 
    China 26.5%                         
 

37 Interactive Entertainment Network Technology Group Co. Ltd., Class A

     Entertainment          1,000          2,978  
 

Agricultural Bank of China Ltd., Class A

     Banks          67,500          33,353  
 

Agricultural Bank of China Ltd., Class H

     Banks          160,000          59,654  
a,b  

Alibaba Group Holding Ltd., Class A

     Broadline Retail          14,200          155,202  
 

Anhui Conch Cement Co. Ltd., Class A

     Construction Materials          1,500          5,359  
 

Anhui Conch Cement Co. Ltd., Class H

     Construction Materials          6,670          17,757  
 

ANTA Sports Products Ltd., Class A

     Textiles, Apparel & Luxury Goods          1,040          11,706  
 

Avary Holding Shenzhen Co. Ltd., Class A

     Electronic Equipment, Instruments & Components          1,000          2,795  
 

AviChina Industry & Technology Co. Ltd., Class H

     Aerospace & Defense          5,000          2,375  
 

Bank of Beijing Co. Ltd., Class A

     Banks          9,000          5,719  
 

Bank of Changsha Co. Ltd., Class A

     Banks          2,000          2,248  
 

Bank of Chengdu Co. Ltd., Class A

     Banks          1,500          2,833  
 

Bank of China Ltd., Class A

     Banks          23,500          12,160  
 

Bank of China Ltd., Class H

     Banks          285,000          99,708  
 

Bank of Communications Co. Ltd., Class A

     Banks          17,000          13,440  
 

Bank of Communications Co. Ltd., Class H

     Banks          110,000          66,574  
 

Bank of Hangzhou Co. Ltd., Class A

     Banks          2,500          3,829  
 

Bank of Jiangsu Co. Ltd., Class A

     Banks          7,000          6,898  
 

Bank of Nanjing Co. Ltd., Class A

     Banks          4,000          4,420  
 

Bank of Shanghai Co. Ltd., Class A

     Banks          6,000          5,081  
 

Bank of Suzhou Co. Ltd., Class A

     Banks          2,000          1,891  
 

Baoshan Iron & Steel Co. Ltd., Class A

     Metals & Mining          9,000          7,523  

 

           
franklintempleton.com  

Semiannual Report

             33


FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENTS

    

 

Franklin Emerging Market Core Dividend Tilt Index ETF (continued)

 

           Industry       

Shares

      

Value

 
                              
  Common Stocks (continued)             
 

China (continued)

            
 

Beijing Enterprises Holdings Ltd., Class H

     Gas Utilities          2,500        $          8,619  
c  

Blue Moon Group Holdings Ltd.

     Household Products          10,000          3,320  
 

BOC Hong Kong Holdings Ltd.

     Banks          17,500          47,929  
 

C&D International Investment Group Ltd.

     Real Estate Management & Development          4,000          9,735  
 

China CITIC Bank Corp. Ltd., Class H

     Banks          50,000          23,238  
 

China Coal Energy Co. Ltd., Class A

     Oil, Gas & Consumable Fuels          2,000          2,399  
 

China Coal Energy Co. Ltd., Class H

     Oil, Gas & Consumable Fuels          10,000          7,840  
 

China Conch Venture Holdings Ltd.

     Construction & Engineering          7,500          6,397  
 

China Construction Bank Corp., Class A

     Banks          2,000          1,729  
 

China Construction Bank Corp., Class H

     Banks          275,000          155,200  
 

China Everbright Bank Co. Ltd., Class A

     Banks          20,500          8,638  
 

China Everbright Bank Co. Ltd., Class H

     Banks          15,000          4,501  
c  

China Feihe Ltd.

     Food Products          15,000          8,849  
 

China Hongqiao Group Ltd.

     Metals & Mining          10,000          9,793  
 

China Jushi Co. Ltd., Class A

     Construction Materials          1,500          2,779  
 

China Lesso Group Holdings Ltd.

     Building Products          5,000          2,662  
 

China Life Insurance Co. Ltd., Class H

     Insurance          38,000          59,194  
 

China Medical System Holdings Ltd.

     Pharmaceuticals          5,000          7,572  
 

China Merchants Bank Co. Ltd., Class A

     Banks          7,500          33,940  
 

China Merchants Bank Co. Ltd., Class H

     Banks          14,500          60,541  
 

China Merchants Energy Shipping Co. Ltd., Class A

     Oil, Gas & Consumable Fuels          2,500          2,206  
 

China Merchants Expressway Network & Technology Holdings Co. Ltd., Class A

     Transportation Infrastructure          1,500          1,987  
 

China Merchants Port Holdings Co. Ltd.

     Transportation Infrastructure          6,670          8,304  
 

China Minsheng Banking Corp. Ltd., Class A

     Banks          15,500          8,169  
 

China Minsheng Banking Corp. Ltd., Class H

     Banks          35,000          11,977  
 

China National Building Material Co. Ltd., Class H

     Construction Materials          23,000          12,070  
 

China Overseas Land & Investment Ltd., Class A

     Real Estate Management & Development          20,000          41,472  
 

China Pacific Insurance Group Co. Ltd., Class A

     Insurance          2,500          9,810  
 

China Pacific Insurance Group Co. Ltd., Class H

     Insurance          11,000          27,529  
 

China Petroleum & Chemical Corp., Class A

     Oil, Gas & Consumable Fuels          14,000          11,664  
 

China Petroleum & Chemical Corp., Class H

     Oil, Gas & Consumable Fuels          130,000          71,043  
 

China Resources Cement Holdings Ltd.

     Construction Materials          10,000          2,566  
 

China Resources Power Holdings Co. Ltd.

     Independent Power Producers & Energy Traders          10,000          19,076  
 

China Shenhua Energy Co. Ltd., Class A

     Oil, Gas & Consumable Fuels          3,500          14,988  
 

China Shenhua Energy Co. Ltd., Class H

     Oil, Gas & Consumable Fuels          17,500          56,755  
 

China Taiping Insurance Holdings Co. Ltd.

     Insurance          7,000          6,972  
c  

China Tower Corp. Ltd., Class H

     Diversified Telecommunication Services          250,000          23,941  
 

China Vanke Co. Ltd., Class A

     Real Estate Management & Development          4,000          7,181  
 

China Vanke Co. Ltd., Class H

     Real Estate Management & Development          10,500          11,584  
 

China Yangtze Power Co. Ltd., Class A

     Independent Power Producers & Energy Traders          10,500          32,052  
 

China Zheshang Bank Co. Ltd., Class A

     Banks          9,000          3,162  
 

China Zheshang Bank Co. Ltd., Class H

     Banks          10,000          2,618  
 

Chongqing Brewery Co. Ltd., Class A

     Beverages          200          2,340  
 

Chongqing Rural Commercial Bank Co. Ltd., Class A

     Banks          4,000          2,196  
 

Chongqing Rural Commercial Bank Co. Ltd., Class H

     Banks          10,000          3,690  
 

Chow Tai Fook Jewellery Group Ltd., Class A

     Specialty Retail          12,000          18,080  
 

CITIC Ltd., Class B

     Industrial Conglomerates          35,000          32,176  
 

Citic Pacific Special Steel Group Co. Ltd., Class A

     Metals & Mining          1,500          3,049  
 

COSCO SHIPPING Development Co. Ltd., Class A

     Trading Companies & Distributors          4,500          1,470  

 

           
34             

Semiannual Report

  franklintempleton.com


FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENTS

    

 

Franklin Emerging Market Core Dividend Tilt Index ETF (continued)

 

           Industry       

Shares

      

Value

 
                              
  Common Stocks (continued)             
 

China (continued)

            
 

COSCO SHIPPING Development Co. Ltd., Class H

     Trading Companies & Distributors          20,000        $          2,171  
 

COSCO SHIPPING Holdings Co. Ltd., Class H

     Marine Transportation          17,500          17,943  
 

Country Garden Services Holdings Co. Ltd.

     Real Estate Management & Development          3,700          3,817  
 

CSPC Pharmaceutical Group Ltd.

     Pharmaceuticals          46,000          33,714  
 

Daqin Railway Co. Ltd., Class A

     Ground Transportation          6,500          6,504  
 

Do-Fluoride New Materials Co. Ltd., Class A

     Chemicals          500          1,102  
 

Easyhome New Retail Group Co. Ltd., Class A

     Broadline Retail          3,000          1,507  
 

ENN Energy Holdings Ltd.

     Gas Utilities          4,000          33,198  
 

Focus Media Information Technology Co. Ltd., Class A

     Media          6,000          5,888  
 

Foxconn Industrial Internet Co. Ltd., Class A

     Electronic Equipment, Instruments & Components          7,500          20,279  
 

Fuyao Glass Industry Group Co. Ltd., Class A

     Automobile Components          1,000          5,067  
c  

Fuyao Glass Industry Group Co. Ltd., Class H

     Automobile Components          3,200          14,668  
 

GCL Technology Holdings Ltd.

     Semiconductors & Semiconductor Equipment          105,000          19,574  
 

Gree Electric Appliances, Inc. of Zhuhai, Class A

     Household Durables          2,500          12,456  
a  

Guangdong HEC Technology Holding Co. Ltd., Class A

     Metals & Mining          1,500          1,367  
 

Guanghui Energy Co. Ltd., Class A

     Oil, Gas & Consumable Fuels          3,000          3,146  
 

Guangxi Guiguan Electric Power Co. Ltd., Class A

     Independent Power Producers & Energy Traders          1,500          1,153  
 

Guangzhou Yuexiu Capital Holdings Group Co. Ltd., Class A

     Capital Markets          1,000          918  
 

Guosen Securities Co. Ltd., Class A

     Capital Markets          4,000          5,056  
 

Guotai Junan Securities Co. Ltd., Class A

     Capital Markets          3,000          5,987  
 

c Guotai Junan Securities Co. Ltd., Class H

     Capital Markets          5,000          5,586  
 

Haitian International Holdings Ltd.

     Machinery          2,000          4,239  
 

Henan Shenhuo Coal & Power Co. Ltd., Class A

     Metals & Mining          1,000          2,344  
 

Henan Shuanghui Investment & Development Co. Ltd., Class A

     Food Products          1,500          5,433  
 

Hengan International Group Co. Ltd.

     Personal Care Products          3,750          11,946  
 

HLA Group Corp. Ltd., Class A

     Specialty Retail          2,000          2,108  
 

Hoyuan Green Energy Co. Ltd., Class A

     Semiconductors & Semiconductor Equipment          500          2,874  
 

Huadian Power International Corp. Ltd., Class A

     Independent Power Producers & Energy Traders          4,000          2,827  
 

Huadian Power International Corp. Ltd., Class H

     Independent Power Producers & Energy Traders          10,000          4,137  
 

Huaibei Mining Holdings Co. Ltd., Class A

     Metals & Mining          1,000          1,915  
 

Huaxia Bank Co. Ltd., Class A

     Banks          7,500          5,888  
 

Huaxin Cement Co. Ltd., Class A

     Construction Materials          500          1,027  
 

Huaxin Cement Co. Ltd., Class H

     Construction Materials          1,000          1,025  
 

Huayu Automotive Systems Co. Ltd., Class A

     Automobile Components          1,000          2,576  
 

Hubei Jumpcan Pharmaceutical Co. Ltd., Class A

     Pharmaceuticals          500          1,876  
 

Hubei Xingfa Chemicals Group Co. Ltd., Class A

     Chemicals          500          1,357  
 

Hunan Valin Steel Co. Ltd., Class A

     Metals & Mining          2,500          2,052  
 

Industrial & Commercial Bank of China Ltd., Class A

     Banks          27,500          17,665  
 

Industrial & Commercial Bank of China Ltd., Class H

     Banks          225,000          108,308  
 

Industrial Bank Co. Ltd., Class A

     Banks          8,500          19,005  
 

Industrial Securities Co. Ltd., Class A

     Capital Markets          4,000          3,525  
 

Inner Mongolia ERDOS Resources Co. Ltd., Class A

     Metals & Mining          700          880  
 

Inner Mongolia ERDOS Resources Co. Ltd., Class B

     Metals & Mining          2,800          2,248  
 

Inner Mongolia Junzheng Energy & Chemical Industry Group Co. Ltd., Class A

     Chemicals          3,500          1,965  
 

Inner Mongolia MengDian HuaNeng Thermal Power Corp. Ltd., Class A

     Independent Power Producers & Energy Traders          3,500          1,691  

 

           
franklintempleton.com  

Semiannual Report

             35


FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENTS

    

 

Franklin Emerging Market Core Dividend Tilt Index ETF (continued)

 

           Industry       

Shares

      

Value

 
                              
  Common Stocks (continued)             
 

China (continued)

            
 

Inner Mongolia Yili Industrial Group Co. Ltd., Class A

     Food Products          2,500        $          9,103  
 

Jason Furniture Hangzhou Co. Ltd., Class A

     Household Durables          500          2,779  
b  

JD.com, Inc., Class A

     Broadline Retail          3,500          51,437  
 

Jiangsu Expressway Co. Ltd., Class A

     Transportation Infrastructure          500          713  
 

Jiangsu Expressway Co. Ltd., Class H

     Transportation Infrastructure          6,000          5,416  
 

Jointown Pharmaceutical Group Co. Ltd., Class A

     Health Care Providers & Services          1,000          1,486  
 

Kingboard Holdings Ltd.

     Electronic Equipment, Instruments & Components          3,340          7,497  
 

LB Group Co. Ltd., Class A

     Chemicals          1,000          2,521  
 

Lenovo Group Ltd.

     Technology Hardware, Storage & Peripherals          42,000          43,277  
 

Li Ning Co. Ltd.

     Textiles, Apparel & Luxury Goods          3,000          12,622  
 

Livzon Pharmaceutical Group, Inc., Class A

     Pharmaceuticals          500          2,535  
 

Livzon Pharmaceutical Group, Inc., Class H

     Pharmaceuticals          1,000          3,275  
b,c  

Longfor Group Holdings Ltd.

     Real Estate Management & Development          7,420          13,340  
a,b,c  

Meituan, Class B

     Hotels, Restaurants & Leisure          3,840          56,189  
 

Minth Group Ltd.

     Automobile Components          3,340          8,593  
b  

NetEase, Inc.

     Entertainment          3,717          75,699  
 

New China Life Insurance Co. Ltd., Class A

     Insurance          500          2,528  
 

New China Life Insurance Co. Ltd., Class H

     Insurance          1,500          3,616  
 

People’s Insurance Co. Group of China Ltd., Class H

     Insurance          45,000          16,146  
 

PetroChina Co. Ltd., Class H

     Oil, Gas & Consumable Fuels          106,000          79,853  
 

PICC Property & Casualty Co. Ltd., Class H

     Insurance          36,000          46,242  
 

Ping An Insurance Group Co. of China Ltd., Class A

     Insurance          2,500          16,573  
 

Ping An Insurance Group Co. of China Ltd., Class H

     Insurance          18,700          107,088  
 

Poly Developments & Holdings Group Co. Ltd., Class A

     Real Estate Management & Development          5,000          8,743  
 

Postal Savings Bank of China Co. Ltd., Class A

     Banks          16,000          10,915  
c  

Postal Savings Bank of China Co. Ltd., Class H

     Banks          40,000          20,225  
 

Qingdao Port International Co. Ltd., Class A

     Transportation Infrastructure          1,500          1,309  
c  

Qingdao Port International Co. Ltd., Class H

     Transportation Infrastructure          5,000          2,464  
 

Shaanxi Coal Industry Co. Ltd., Class A

     Oil, Gas & Consumable Fuels          4,000          10,135  
 

Shandong Hi-speed Co. Ltd., Class A

     Transportation Infrastructure          1,000          983  
 

Shanghai Baosight Software Co. Ltd., Class A

     Software          500          3,101  
 

Shanghai Baosight Software Co. Ltd., Class B

     Software          1,500          3,158  
 

Shanghai Pharmaceuticals Holding Co. Ltd., Class A

     Health Care Providers & Services          1,500          3,722  
 

Shanghai Pharmaceuticals Holding Co. Ltd., Class H

     Health Care Providers & Services          4,500          7,021  
 

Shanghai Pudong Development Bank Co. Ltd., Class A

     Banks          12,000          11,694  
 

Shanghai Yuyuan Tourist Mart Group Co. Ltd., Class A

     Specialty Retail          1,000          1,021  
 

Shanxi Coking Coal Energy Group Co. Ltd., Class A

     Oil, Gas & Consumable Fuels          2,000          2,762  
 

Shanxi Lu’an Environmental Energy Development Co. Ltd., Class A

     Oil, Gas & Consumable Fuels          1,000          2,606  
 

Shengyi Technology Co. Ltd., Class A

     Electronic Equipment, Instruments & Components          1,000          2,108  
 

Shenzhou International Group Holdings Ltd.

     Textiles, Apparel & Luxury Goods          4,000          38,305  
 

Sichuan Chuantou Energy Co. Ltd., Class A

     Independent Power Producers & Energy Traders          2,000          4,063  
 

Sichuan Road & Bridge Group Co. Ltd., Class A

     Construction & Engineering          2,800          3,332  
 

Sinoma Science & Technology Co. Ltd., Class A

     Chemicals          500          1,411  
 

Sinopharm Group Co. Ltd., Class H

     Health Care Providers & Services          8,000          23,187  
 

Sinotrans Ltd., Class H

     Air Freight & Logistics          5,000          1,826  

 

           
36             

Semiannual Report

  franklintempleton.com


FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENTS

    

 

Franklin Emerging Market Core Dividend Tilt Index ETF (continued)

 

           Industry       

Shares

      

Value

 
              
 

Common Stocks (continued)

            
 

China (continued)

            
c  

Smoore International Holdings Ltd.

     Tobacco          10,000        $          9,078  
 

Sun Art Retail Group Ltd.

     Consumer Staples Distribution & Retail          10,000          2,120  
 

TBEA Co. Ltd., Class A

     Electrical Equipment          2,500          5,085  
b  

Tencent Holdings Ltd.

     Interactive Media & Services          7,800          304,955  
 

Tianqi Lithium Corp., Class A

     Chemicals          500          3,770  
 

Tianshan Aluminum Group Co. Ltd., Class A

     Metals & Mining          1,500          1,349  
 

Tonghua Dongbao Pharmaceutical Co. Ltd., Class A

     Pharmaceuticals          1,000          1,473  
 

Tongwei Co. Ltd., Class A

     Semiconductors & Semiconductor Equipment          2,000          8,856  
c  

Topsports International Holdings Ltd.

     Specialty Retail          15,000          11,396  
 

Uni-President China Holdings Ltd.

     Food Products          5,000          3,511  
 

Universal Scientific Industrial Shanghai Co. Ltd., Class A

     Electronic Equipment, Instruments & Components          1,000          2,003  
 

Want Want China Holdings Ltd.

     Food Products          25,000          16,312  
 

Western Superconducting Technologies Co. Ltd., Class A

     Metals & Mining          287          1,803  
 

XCMG Construction Machinery Co. Ltd., Class A

     Machinery          4,500          3,934  
 

Xiamen C & D, Inc., Class A

     Trading Companies & Distributors          1,500          2,042  
 

Xinyi Solar Holdings Ltd.

     Semiconductors & Semiconductor Equipment          25,000          18,706  
c  

Yadea Group Holdings Ltd.

     Automobiles          6,000          11,139  
 

Yankuang Energy Group Co. Ltd., Class A

     Oil, Gas & Consumable Fuels          1,500          4,169  
 

Yankuang Energy Group Co. Ltd., Class H

     Oil, Gas & Consumable Fuels          10,000          18,897  
 

Youngor Group Co. Ltd., Class A

     Real Estate Management & Development          2,000          1,952  
 

Yuexiu Property Co. Ltd.

     Real Estate Management & Development          10,000          11,530  
 

Yutong Bus Co. Ltd., Class A

     Machinery          1,000          1,816  
 

Zhejiang NHU Co. Ltd., Class A

     Pharmaceuticals          1,500          3,344  
 

Zhejiang Supor Co. Ltd., Class A

     Household Durables          500          3,327  
 

Zhongsheng Group Holdings Ltd.

     Specialty Retail          2,500          7,039  
 

Zhuzhou Kibing Group Co. Ltd., Class A

     Building Products          1,500          1,688  
 

Zoomlion Heavy Industry Science & Technology Co. Ltd., Class A

     Machinery          2,500          2,351  
 

Zoomlion Heavy Industry Science & Technology Co. Ltd.,
Class H

     Machinery          9,000          4,895  
b  

ZTO Express Cayman, Inc.

     Air Freight & Logistics          250          6,081  
              

 

 

 
                 3,055,757  
              

 

 

 
    Colombia 0.4%                         
 

Banco de Bogota SA

     Banks          535          3,332  
 

Bancolombia SA

     Banks          1,440          10,966  
 

Ecopetrol SA

     Oil, Gas & Consumable Fuels          25,450          14,876  
 

Grupo Energia Bogota SA ESP

     Gas Utilities          12,035          5,197  
 

Interconexion Electrica SA ESP

     Electric Utilities          2,520          9,293  
              

 

 

 
                 43,664  
              

 

 

 
    Czech Republic 0.4%                         
 

CEZ AS

     Electric Utilities          895          38,128  
 

Komercni Banka AS

     Banks          345          10,078  
              

 

 

 
                 48,206  
              

 

 

 
    Greece 0.4%                         
 

Hellenic Telecommunications Organization SA

     Diversified Telecommunication Services          1,060          15,510  
 

Helleniq Energy Holdings SA

     Oil, Gas & Consumable Fuels          320          2,510  
 

Motor Oil Hellas Corinth Refineries SA

     Oil, Gas & Consumable Fuels          360          9,125  
 

OPAP SA

     Hotels, Restaurants & Leisure          970          16,288  
              

 

 

 
                 43,433  
              

 

 

 

 

           
franklintempleton.com  

Semiannual Report

             37


FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENTS

    

 

Franklin Emerging Market Core Dividend Tilt Index ETF (continued)

 

           Industry       

Shares

      

Value

 
              
  Common Stocks (continued)             
    Hong Kong 2.0%                         
 

Beijing Enterprises Water Group Ltd., Class A

     Water Utilities          20,000        $          4,367  
 

Bosideng International Holdings Ltd., Class A

     Textiles, Apparel & Luxury Goods          20,000          8,606  
 

China Everbright Environment Group Ltd., Class B

     Commercial Services & Supplies          20,000          6,895  
 

China Gas Holdings Ltd., Class A

     Gas Utilities          16,000          15,097  
 

China Power International Development Ltd., Class H

     Independent Power Producers & Energy Traders          25,000          9,098  
 

China Resources Gas Group Ltd., Class A

     Gas Utilities          5,000          14,652  
 

China Resources Land Ltd., Class H

     Real Estate Management & Development          14,000          55,772  
 

Far East Horizon Ltd.

     Financial Services          10,000          7,201  
 

Geely Automobile Holdings Ltd.

     Automobiles          25,000          29,495  
 

Guangdong Investment Ltd.

     Water Utilities          15,000          11,453  
 

Kingboard Laminates Holdings Ltd.

     Electronic Equipment, Instruments & Components          5,000          3,537  
 

Kunlun Energy Co. Ltd.

     Gas Utilities          20,000          17,237  
 

Orient Overseas International Ltd.

     Marine Transportation          750          10,007  
 

Sino Biopharmaceutical Ltd.

     Pharmaceuticals          55,000          19,874  
 

Xinyi Glass Holdings Ltd.

     Building Products          15,000          19,421  
              

 

 

 
                 232,712  
              

 

 

 
    Hungary 0.3%                         
 

MOL Hungarian Oil & Gas PLC

     Oil, Gas & Consumable Fuels          2,750          20,949  
 

Richter Gedeon Nyrt

     Pharmaceuticals          680          16,528  
              

 

 

 
                 37,477  
              

 

 

 
    India 11.7%                         
 

Bajaj Auto Ltd.

     Automobiles          355          21,647  
 

Bajaj Holdings & Investment Ltd.

     Financial Services          145          12,412  
 

Bank of Baroda

     Banks          5,250          13,526  
 

Bosch Ltd.

     Automobile Components          45          10,307  
 

Britannia Industries Ltd.

     Food Products          615          33,602  
 

Canara Bank

     Banks          1,815          8,224  
 

Coal India Ltd.

     Oil, Gas & Consumable Fuels          9,355          33,256  
 

Colgate-Palmolive India Ltd.

     Personal Care Products          705          17,027  
 

Dr Reddy’s Laboratories Ltd.

     Pharmaceuticals          140          9,419  
 

Embassy Office Parks REIT

     Office REITs          3,235          11,711  
 

GAIL India Ltd.

     Gas Utilities          12,915          19,347  
 

HCL Technologies Ltd.

     IT Services          5,240          77,917  
c  

HDFC Asset Management Co. Ltd.

     Capital Markets          445          14,187  
 

HDFC Bank Ltd.

     Banks          6,280          115,426  
 

Hero MotoCorp Ltd.

     Automobiles          665          24,483  
a  

Hindustan Petroleum Corp. Ltd.

     Oil, Gas & Consumable Fuels          3,310          10,162  
 

Hindustan Unilever Ltd.

     Personal Care Products          2,980          88,480  
 

Indian Oil Corp. Ltd.

     Oil, Gas & Consumable Fuels          19,700          21,576  
 

Indraprastha Gas Ltd.

     Gas Utilities          1,870          10,243  
 

Info Edge India Ltd.

     Interactive Media & Services          380          19,061  
 

Infosys Ltd.

     IT Services          9,520          164,563  
 

ITC Ltd.

     Tobacco          15,635          83,672  
c  

LTIMindtree Ltd.

     IT Services          325          20,390  
 

Mphasis Ltd.

     IT Services          430          12,306  
 

Muthoot Finance Ltd.

     Consumer Finance          150          2,261  
 

NMDC Ltd.

     Metals & Mining          5,225          9,309  
 

NTPC Ltd.

     Independent Power Producers & Energy Traders          23,845          70,509  
 

Oil & Natural Gas Corp. Ltd.

     Oil, Gas & Consumable Fuels          19,895          45,963  
 

Oracle Financial Services Software Ltd.

     Software          130          6,435  
 

Power Finance Corp. Ltd.

     Financial Services          6,060          18,383  
a  

Power Finance Corp. Ltd.

     Financial Services          1,515          4,596  
 

Power Grid Corp. of India Ltd.

     Electric Utilities          23,057          55,461  
 

REC Ltd.

     Financial Services          6,370          22,046  

 

           
38             

Semiannual Report

  franklintempleton.com


FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENTS

    

 

Franklin Emerging Market Core Dividend Tilt Index ETF (continued)

 

           Industry       

Shares

      

Value

 
              
  Common Stocks (continued)             
 

India (continued)

            
 

Reliance Industries Ltd.

     Oil, Gas & Consumable Fuels          200        $          5,648  
 

Steel Authority of India Ltd.

     Metals & Mining          6,935          7,838  
 

Tata Consultancy Services Ltd.

     IT Services          2,085          88,596  
 

Tata Consumer Products Ltd.

     Food Products          745          7,867  
 

Tata Steel Ltd.

     Metals & Mining          40,045          62,159  
 

Tech Mahindra Ltd.

     IT Services          3,175          46,753  
 

Vedanta Ltd.

     Metals & Mining          5,760          15,437  
a  

Zomato Ltd.

     Hotels, Restaurants & Leisure          24,560          30,019  
              

 

 

 
                 1,352,224  
              

 

 

 
    Indonesia 3.4%                         
 

Adaro Energy Indonesia Tbk PT, Class B

     Oil, Gas & Consumable Fuels          71,500          13,185  
 

Astra International Tbk PT, Class H

     Industrial Conglomerates          107,000          43,098  
 

Bank Mandiri Persero Tbk PT, Class A

     Banks          223,500          87,130  
 

Bank Rakyat Indonesia Persero Tbk PT, Class A

     Banks          292,000          98,719  
 

Bayan Resources Tbk PT

     Oil, Gas & Consumable Fuels          40,500          49,462  
 

Bukit Asam Tbk PT, Class A

     Oil, Gas & Consumable Fuels          20,000          3,623  
 

Gudang Garam Tbk PT

     Tobacco          2,500          3,979  
 

Indofood Sukses Makmur Tbk PT

     Food Products          23,000          9,859  
 

Semen Indonesia Persero Tbk PT

     Construction Materials          18,000          7,483  
 

Telkom Indonesia Persero Tbk PT, Class B

     Diversified Telecommunication Services          236,000          57,263  
 

Unilever Indonesia Tbk PT

     Household Products          31,000          7,502  
 

United Tractors Tbk PT

     Oil, Gas & Consumable Fuels          7,500          13,709  
              

 

 

 
                 395,012  
              

 

 

 
    Kuwait 1.1%                         
 

Gulf Bank KSCP

     Banks          11,275          9,595  
 

Mobile Telecommunications Co. KSCP

     Wireless Telecommunication Services          11,145          17,562  
 

National Bank of Kuwait SAKP

     Banks          33,500          98,208  
              

 

 

 
                 125,365  
              

 

 

 
    Malaysia 3.1%                         
 

AMMB Holdings Bhd

     Banks          12,000          9,456  
 

Axiata Group Bhd, Class A

     Wireless Telecommunication Services          24,500          12,993  
 

CIMB Group Holdings Bhd, Class A

     Banks          38,000          43,947  
 

Genting Malaysia Bhd

     Hotels, Restaurants & Leisure          15,000          7,987  
 

HAP Seng Consolidated Bhd

     Industrial Conglomerates          3,500          3,280  
 

IOI Corp. Bhd

     Food Products          17,000          14,410  
 

Kuala Lumpur Kepong Bhd

     Food Products          3,000          13,673  
 

Malayan Banking Bhd

     Banks          37,500          70,204  
 

Maxis Bhd

     Wireless Telecommunication Services          12,000          10,325  
 

MISC Bhd

     Marine Transportation          7,500          11,309  
 

Petronas Chemicals Group Bhd

     Chemicals          15,000          22,970  
 

Petronas Gas Bhd

     Gas Utilities          4,000          14,346  
 

Public Bank Bhd

     Banks          60,000          51,882  
 

RHB Bank Bhd

     Banks          20,000          23,130  
 

Sime Darby Bhd

     Industrial Conglomerates          18,500          8,708  
 

Sime Darby Plantation Bhd

     Food Products          4,000          3,646  
 

Tenaga Nasional Bhd

     Electric Utilities          15,300          32,554  
 

Westports Holdings Bhd

     Transportation Infrastructure          4,500          3,096  
              

 

 

 
                 357,916  
              

 

 

 
    Mexico 2.0%                         
 

Arca Continental SAB de CV

     Beverages          2,670          24,318  
 

Fibra Uno Administracion SA de CV

     Diversified REITs          15,845          26,487  
c  

GMexico Transportes SAB de CV, Class C

     Ground Transportation          2,850          6,673  
 

Grupo Financiero Banorte SAB de CV, Class O

     Banks          11,745          98,746  
 

Grupo Mexico SAB de CV, Class B

     Metals & Mining          7,580          35,980  

 

           
franklintempleton.com  

Semiannual Report

             39


FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENTS

    

 

Franklin Emerging Market Core Dividend Tilt Index ETF (continued)

 

           Industry       

Shares

      

Value

 
              
  Common Stocks (continued)             
 

Mexico (continued)

            
 

Kimberly-Clark de Mexico SAB de CV, Class A

     Household Products          8,165        $        16,303  
 

Orbia Advance Corp. SAB de CV

     Chemicals          5,015          10,449  
 

Promotora y Operadora de Infraestructura SAB de CV

     Transportation Infrastructure          1,025          9,188  
              

 

 

 
                 228,144  
              

 

 

 
    Peru 0.3%                         
 

Credicorp Ltd.

     Banks          250          31,993  
 

Intercorp Financial Services, Inc.

     Banks          170          3,828  
              

 

 

 
                 35,821  
              

 

 

 
    Philippines 0.4%                         
 

Aboitiz Power Corp., Class A

     Independent Power Producers & Energy Traders        9,000          5,329  
 

Globe Telecom, Inc.

     Wireless Telecommunication Services          175          5,546  
 

International Container Terminal Services, Inc.

     Transportation Infrastructure          4,300          15,748  
 

Manila Electric Co.

     Electric Utilities          1,600          10,408  
 

PLDT, Inc.

     Wireless Telecommunication Services          425          8,834  
              

 

 

 
                 45,865  
              

 

 

 
    Russia 0.0%                         
a,d  

Alrosa PJSC

     Metals & Mining          54,971           
a,d  

Gazprom PJSC

     Oil, Gas & Consumable Fuels          44,709           
a,d  

Inter RAO UES PJSC

     Electric Utilities          811,741           
a,d  

LUKOIL PJSC

     Oil, Gas & Consumable Fuels          2,268           
a,d  

MMC Norilsk Nickel PJSC

     Metals & Mining          693           
a,d  

Moscow Exchange MICEX-Rates PJSC

     Capital Markets          21,224           
a,d  

Novolipetsk Steel PJSC

     Metals & Mining          35,119           
a,d  

PhosAgro PJSC

     Chemicals          1,073           
a,d  

PhosAgro PJSC

     Chemicals          21           
a,d,e  

PhosAgro PJSC, GDR

     Chemicals          1           
a,d  

Polymetal International PLC

     Metals & Mining          7,294           
a,d  

Polyus PJSC

     Metals & Mining          756           
a,d  

Rosneft Oil Co. PJSC

     Oil, Gas & Consumable Fuels          20,055           
a,d  

Severstal PAO

     Metals & Mining          6,090           
a,d  

Surgutneftegas PJSC

     Oil, Gas & Consumable Fuels          132,846           
a,d  

Tatneft PJSC

     Oil, Gas & Consumable Fuels          29,792           
a,d  

United Co. RUSAL International PJSC

     Metals & Mining          24,749           
              

 

 

 
                  
              

 

 

 
    Saudi Arabia 3.9%                         
 

Advanced Petrochemical Co.

     Chemicals          700          7,484  
 

Banque Saudi Fransi

     Banks          3,230          31,435  
 

Jarir Marketing Co.

     Specialty Retail          3,060          11,831  
 

Riyad Bank

     Banks          3,850          28,487  
 

SABIC Agri-Nutrients Co.

     Chemicals          1,215          43,087  
 

Sahara International Petrochemical Co.

     Chemicals          1,865          18,797  
c  

Saudi Arabian Oil Co.

     Oil, Gas & Consumable Fuels          6,255          58,373  
 

Saudi Awwal Bank

     Banks          2,030          18,674  
 

Saudi Basic Industries Corp.

     Chemicals          4,030          88,649  
 

Saudi Industrial Investment Group

     Chemicals          2,045          12,955  
 

Saudi Investment Bank

     Banks          2,655          11,185  
 

Saudi National Bank

     Banks          3,190          27,898  
 

Saudi Telecom Co.

     Diversified Telecommunication Services          7,610          76,294  
 

Yanbu National Petrochemical Co.

     Chemicals          1,465          16,250  
              

 

 

 
                 451,399  
              

 

 

 

 

           
40             

Semiannual Report

  franklintempleton.com


FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENTS

    

 

Franklin Emerging Market Core Dividend Tilt Index ETF (continued)

 

           Industry       

Shares

      

Value

 
              
  Common Stocks (continued)             
 

South Africa 4.5%

            
 

Absa Group Ltd.

     Banks          4,640        $        43,059  
 

African Rainbow Minerals Ltd.

     Metals & Mining          550          4,966  
 

Anglo American Platinum Ltd.

     Metals & Mining          325          12,179  
 

Exxaro Resources Ltd.

     Oil, Gas & Consumable Fuels          1,290          11,804  
 

FirstRand Ltd.

     Financial Services          26,005          88,149  
 

Gold Fields Ltd.

     Metals & Mining          1,935          21,087  
 

Growthpoint Properties Ltd.

     Diversified REITs          17,695          9,909  
 

Impala Platinum Holdings Ltd.

     Metals & Mining          5,325          27,943  
 

Kumba Iron Ore Ltd.

     Metals & Mining          260          6,277  
 

Mr Price Group Ltd.

     Specialty Retail          1,445          10,658  
a  

MultiChoice Group

     Media          2,475          9,727  
 

Nedbank Group Ltd.

     Banks          2,665          28,621  
 

Old Mutual Ltd.

     Insurance          27,290          17,470  
 

Sanlam Ltd.

     Insurance          9,820          34,230  
 

Santam Ltd.

     Insurance          225          3,606  
 

Sasol Ltd.

     Chemicals          3,075          42,604  
 

Sibanye Stillwater Ltd.

     Metals & Mining          16,400          25,445  
 

Standard Bank Group Ltd.

     Banks          7,285          71,043  
 

Tiger Brands Ltd.

     Food Products          940          7,656  
 

Vodacom Group Ltd.

     Wireless Telecommunication Services          4,295          24,111  
 

Woolworths Holdings Ltd.

     Broadline Retail          4,950          17,822  
              

 

 

 
                 518,366  
              

 

 

 
    South Korea 8.7%                         
 

BNK Financial Group, Inc., Class H

     Banks          1,470          7,462  
 

Cheil Worldwide, Inc., Class A

     Media          410          6,092  
 

DB Insurance Co. Ltd., Class A

     Insurance          250          16,563  
 

Ecopro Co. Ltd.

     Chemicals          10          6,677  
 

GS Holdings Corp.

     Industrial Conglomerates          465          13,749  
 

Hana Financial Group, Inc.

     Banks          1,560          49,075  
 

Hanon Systems

     Automobile Components          875          6,108  
 

HD Hyundai Co. Ltd.

     Oil, Gas & Consumable Fuels          235          11,546  
 

HMM Co. Ltd.

     Marine Transportation          1,940          23,377  
 

Hyundai Marine & Fire Insurance Co. Ltd.

     Insurance          270          6,493  
 

Hyundai Motor Co.

     Automobiles          255          36,113  
 

Industrial Bank of Korea

     Banks          1,535          12,752  
 

KB Financial Group, Inc.

     Banks          2,045          83,806  
 

Kia Corp.

     Automobiles          1,465          88,373  
 

Korea Investment Holdings Co. Ltd.

     Capital Markets          220          8,657  
 

Korea Zinc Co. Ltd.

     Metals & Mining          70          26,249  
 

KT Corp.

     Diversified Telecommunication Services          745          18,302  
 

KT&G Corp.

     Tobacco          580          37,094  
 

Kumho Petrochemical Co. Ltd.

     Chemicals          90          8,944  
 

LG Chem Ltd.

     Chemicals          5          1,840  
 

LG Corp.

     Industrial Conglomerates          85          5,279  
 

LG Uplus Corp.

     Diversified Telecommunication Services          1,210          9,290  
 

Lotte Corp.

     Industrial Conglomerates          225          4,244  
 

NCSoft Corp.

     Entertainment          85          14,015  
 

NH Investment & Securities Co. Ltd., Class C

     Capital Markets          695          5,264  
 

S-1 Corp.

     Commercial Services & Supplies          90          3,775  
 

Samsung Card Co. Ltd.

     Consumer Finance          120          2,708  
 

Samsung Electronics Co. Ltd.

     Technology Hardware, Storage & Peripherals          5,935