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).
Visit franklintempleton.com for fund updates and documents, or to find helpful financial planning tools. |
Not FDIC Insured | | | May Lose Value | | | No Bank Guarantee |
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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.
2 |
Semiannual Report |
franklintempleton.com |
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, |
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.
6 |
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 |
franklintempleton.com |
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.
10 |
Semiannual Report |
franklintempleton.com |
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 Value 9/30/23 |
Expenses 4/1/23–9/30/231,2,3 |
Ending Value 9/30/23 |
Expenses 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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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
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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.
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FRANKLIN U.S. CORE DIVIDEND TILT INDEX ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
Beginning Account Value 4/1/23 |
Ending Account Value 9/30/23 |
Expenses Paid During |
Ending Account Value 9/30/23 |
Expenses 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 |
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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 |
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.
franklintempleton.com |
Semiannual Report |
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.
22 |
Semiannual Report |
franklintempleton.com |
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.
24 |
Semiannual Report |
franklintempleton.com |
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 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.
26 |
Semiannual Report |
franklintempleton.com |
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.
franklintempleton.com |
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
28 |
Semiannual Report |
franklintempleton.com |
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 |
franklintempleton.com |
FRANKLIN U.S. SMALL CAP MULTIFACTOR INDEX ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
Beginning Account |
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.
franklintempleton.com |
Semiannual Report |
31 |
FRANKLIN TEMPLETON ETF TRUST
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., |
Machinery | 9,000 | 4,895 | |||||||||||
b |
ZTO Express Cayman, Inc. |
Air Freight & Logistics | 250 | 6,081 | ||||||||||
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3,055,757 | ||||||||||||||
|
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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 | 300,840 | |||||||||||
Samsung Fire & Marine Insurance Co. Ltd. |
Insurance | 170 | 32,818 | |||||||||||
Samsung Securities Co. Ltd. |
Capital Markets | 340 | 9,260 | |||||||||||
SD Biosensor, Inc. |
Health Care Equipment & Supplies | 280 | 2,359 | |||||||||||
Shinhan Financial Group Co. Ltd. |
Banks | 2,685 | 70,836 | |||||||||||
SK Hynix, Inc. |
Semiconductors & Semiconductor Equipment | 220 | 18,700 | |||||||||||
SK Telecom Co. Ltd. |
Wireless Telecommunication Services | 575 | 22,158 |
franklintempleton.com |
Semiannual Report |
41 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
Industry |
Shares |
Value |
||||||||||||
Common Stocks (continued) | ||||||||||||||
South Korea (continued) |
||||||||||||||
S-Oil Corp. |
Oil, Gas & Consumable Fuels | 25 | $ | 1,467 | ||||||||||
SSANGYONG C&E Co. Ltd. |
Construction Materials | 570 | 2,319 | |||||||||||
Woori Financial Group, Inc. |
Banks | 3,600 | 32,708 | |||||||||||
|
|
|||||||||||||
1,007,312 | ||||||||||||||
|
|
|||||||||||||
Taiwan 18.5% | ||||||||||||||
Acer, Inc., Class H |
Technology Hardware, Storage & Peripherals | 15,000 | 16,868 | |||||||||||
ASE Technology Holding Co. Ltd., Class A |
Semiconductors & Semiconductor Equipment | 18,000 | 61,059 | |||||||||||
Asia Cement Corp. |
Construction Materials | 15,000 | 18,471 | |||||||||||
Asustek Computer, Inc. |
Technology Hardware, Storage & Peripherals | 3,850 | 43,771 | |||||||||||
AUO Corp., Class H |
Electronic Equipment, Instruments & Components | 40,200 | 20,423 | |||||||||||
Catcher Technology Co. Ltd. |
Technology Hardware, Storage & Peripherals | 3,170 | 17,922 | |||||||||||
Chicony Electronics Co. Ltd. |
Technology Hardware, Storage & Peripherals | 3,340 | 11,951 | |||||||||||
China Steel Corp., Class A |
Metals & Mining | 35,000 | 27,377 | |||||||||||
Chunghwa Telecom Co. Ltd. |
Diversified Telecommunication Services | 19,000 | 68,276 | |||||||||||
Compal Electronics, Inc., Class H |
Technology Hardware, Storage & Peripherals | 23,000 | 21,874 | |||||||||||
CTBC Financial Holding Co. Ltd., Class A |
Banks | 85,000 | 64,513 | |||||||||||
Delta Electronics, Inc., Class A |
Electronic Equipment, Instruments & Components | 1,000 | 10,053 | |||||||||||
Evergreen Marine Corp. Taiwan Ltd. |
Marine Transportation | 5,500 | 19,764 | |||||||||||
Far Eastern New Century Corp. |
Industrial Conglomerates | 20,000 | 17,813 | |||||||||||
Far EasTone Telecommunications Co. Ltd. |
Wireless Telecommunication Services | 9,000 | 20,269 | |||||||||||
Feng TAY Enterprise Co. Ltd. |
Textiles, Apparel & Luxury Goods | 3,000 | 17,007 | |||||||||||
Formosa Plastics Corp. |
Chemicals | 23,000 | 56,858 | |||||||||||
Fubon Financial Holding Co. Ltd. |
Insurance | 925 | 1,739 | |||||||||||
Giant Manufacturing Co. Ltd. |
Leisure Products | 2,000 | 11,059 | |||||||||||
Globalwafers Co. Ltd. |
Semiconductors & Semiconductor Equipment | 1,200 | 16,858 | |||||||||||
Highwealth Construction Corp. |
Real Estate Management & Development | 8,800 | 10,754 | |||||||||||
Hon Hai Precision Industry Co. Ltd. |
Electronic Equipment, Instruments & Components | 39,000 | 125,649 | |||||||||||
a |
Innolux Corp. |
Electronic Equipment, Instruments & Components | 48,193 | 19,632 | ||||||||||
Kinsus Interconnect Technology Corp. |
Semiconductors & Semiconductor Equipment | 1,000 | 3,361 | |||||||||||
Lite-On Technology Corp. |
Technology Hardware, Storage & Peripherals | 11,700 | 44,037 | |||||||||||
Macronix International Co. Ltd. |
Semiconductors & Semiconductor Equipment | 10,000 | 9,805 | |||||||||||
MediaTek, Inc. |
Semiconductors & Semiconductor Equipment | 5,350 | 121,815 | |||||||||||
Merida Industry Co. Ltd. |
Leisure Products | 1,000 | 5,421 | |||||||||||
Micro-Star International Co. Ltd. |
Technology Hardware, Storage & Peripherals | 3,400 | 17,274 | |||||||||||
Nan Ya Plastics Corp. |
Chemicals | 30,040 | 61,977 | |||||||||||
Nan Ya Printed Circuit Board Corp. |
Electronic Equipment, Instruments & Components | 1,000 | 8,256 | |||||||||||
Nanya Technology Corp. |
Semiconductors & Semiconductor Equipment | 6,670 | 13,555 | |||||||||||
Nien Made Enterprise Co. Ltd. |
Household Durables | 950 | 9,123 | |||||||||||
Novatek Microelectronics Corp. |
Semiconductors & Semiconductor Equipment | 3,000 | 39,312 | |||||||||||
Pegatron Corp. |
Technology Hardware, Storage & Peripherals | 11,000 | 26,102 | |||||||||||
Phison Electronics Corp. |
Semiconductors & Semiconductor Equipment | 1,000 | 14,126 | |||||||||||
Powerchip Semiconductor Manufacturing Corp. |
Semiconductors & Semiconductor Equipment | 15,000 | 12,337 | |||||||||||
Powertech Technology, Inc. |
Semiconductors & Semiconductor Equipment | 4,000 | 12,577 | |||||||||||
Quanta Computer, Inc. |
Technology Hardware, Storage & Peripherals | 7,000 | 51,935 | |||||||||||
Radiant Opto-Electronics Corp. |
Semiconductors & Semiconductor Equipment | 2,000 | 7,621 | |||||||||||
Realtek Semiconductor Corp. |
Semiconductors & Semiconductor Equipment | 2,367 | 28,964 | |||||||||||
Simplo Technology Co. Ltd. |
Electronic Equipment, Instruments & Components | 1,000 | 10,378 | |||||||||||
Sino-American Silicon Products, Inc. |
Semiconductors & Semiconductor Equipment | 3,340 | 16,244 | |||||||||||
Synnex Technology International Corp. |
Electronic Equipment, Instruments & Components | 6,500 | 12,907 | |||||||||||
Taiwan Fertilizer Co. Ltd. |
Chemicals | 4,000 | 7,299 | |||||||||||
Taiwan Mobile Co. Ltd. |
Wireless Telecommunication Services | 10,000 | 29,306 | |||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd. |
Semiconductors & Semiconductor Equipment | 33,800 | 547,619 | |||||||||||
Tripod Technology Corp. |
Electronic Equipment, Instruments & Components | 2,000 | 11,927 | |||||||||||
Unimicron Technology Corp. |
Electronic Equipment, Instruments & Components | 7,000 | 37,623 | |||||||||||
Uni-President Enterprises Corp. |
Food Products | 25,000 | 54,290 | |||||||||||
United Microelectronics Corp. |
Semiconductors & Semiconductor Equipment | 60,000 | 84,014 | |||||||||||
Vanguard International Semiconductor Corp. |
Semiconductors & Semiconductor Equipment | 5,000 | 10,533 |
42 |
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) | ||||||||||||||
Taiwan (continued) |
||||||||||||||
Voltronic Power Technology Corp. |
Electrical Equipment | 350 | $ | 17,185 | ||||||||||
Walsin Lihwa Corp. |
Electrical Equipment | 14,000 | 15,960 | |||||||||||
Wan Hai Lines Ltd. |
Marine Transportation | 7,200 | 10,773 | |||||||||||
Win Semiconductors Corp. |
Semiconductors & Semiconductor Equipment | 2,000 | 7,992 | |||||||||||
Wistron Corp. |
Technology Hardware, Storage & Peripherals | 5,000 | 15,722 | |||||||||||
Wiwynn Corp. |
Technology Hardware, Storage & Peripherals | 500 | 23,156 | |||||||||||
WPG Holdings Ltd. |
Electronic Equipment, Instruments & Components | 8,000 | 15,018 | |||||||||||
Yang Ming Marine Transport Corp. |
Marine Transportation | 9,000 | 12,672 | |||||||||||
Yuanta Financial Holding Co. Ltd. |
Financial Services | 1,057 | 820 | |||||||||||
Zhen Ding Technology Holding Ltd. |
Electronic Equipment, Instruments & Components | 3,000 | 9,145 | |||||||||||
|
|
|||||||||||||
2,138,141 | ||||||||||||||
|
|
|||||||||||||
Thailand 1.7% | ||||||||||||||
Advanced Info Service PCL, NVDR |
Wireless Telecommunication Services | 5,500 | 34,439 | |||||||||||
Banpu PCL, Class A, NVDR |
Oil, Gas & Consumable Fuels | 19,000 | 4,174 | |||||||||||
BTS Group Holdings PCL, Class A, NVDR |
Ground Transportation | 38,500 | 7,930 | |||||||||||
Charoen Pokphand Foods PCL, Class A, NVDR |
Food Products | 17,500 | 9,949 | |||||||||||
Electricity Generating PCL, Class A, NVDR |
Independent Power Producers & Energy Traders | 1,500 | 4,985 | |||||||||||
Indorama Ventures PCL, NVDR |
Chemicals | 11,000 | 7,855 | |||||||||||
Intouch Holdings PCL, NVDR |
Wireless Telecommunication Services | 6,000 | 12,152 | |||||||||||
JMT Network Services PCL, NVDR |
Consumer Finance | 4,000 | 5,245 | |||||||||||
Land & Houses PCL, NVDR |
Real Estate Management & Development | 17,000 | 3,642 | |||||||||||
Osotspa PCL, NVDR |
Beverages | 8,400 | 5,767 | |||||||||||
PTT Exploration & Production PCL, NVDR |
Oil, Gas & Consumable Fuels | 7,000 | 32,873 | |||||||||||
PTT PCL, NVDR |
Oil, Gas & Consumable Fuels | 45,500 | 41,861 | |||||||||||
Ratch Group PCL, NVDR |
Independent Power Producers & Energy Traders | 2,000 | 1,730 | |||||||||||
Ratch Group PCL |
Independent Power Producers & Energy Traders | 1,000 | 865 | |||||||||||
Srisawad Corp. PCL, NVDR |
Consumer Finance | 4,000 | 4,696 | |||||||||||
Thai Oil PCL, NVDR |
Oil, Gas & Consumable Fuels | 5,000 | 6,934 | |||||||||||
Thai Union Group PCL, NVDR |
Food Products | 13,000 | 5,177 | |||||||||||
Tisco Financial Group PCL, NVDR |
Banks | 2,500 | 6,780 | |||||||||||
|
|
|||||||||||||
197,054 | ||||||||||||||
|
|
|||||||||||||
Turkey 0.7% | ||||||||||||||
Akbank TAS |
Banks | 14,280 | 17,429 | |||||||||||
Haci Omer Sabanci Holding AS |
Banks | 2,740 | 5,967 | |||||||||||
Turkiye Garanti Bankasi AS |
Banks | 2,915 | 5,662 | |||||||||||
Turkiye Is Bankasi AS, Class C |
Banks | 15,980 | 15,003 | |||||||||||
Turkiye Petrol Rafinerileri AS |
Oil, Gas & Consumable Fuels | 4,800 | 27,839 | |||||||||||
Yapi ve Kredi Bankasi AS |
Banks | 13,805 | 9,296 | |||||||||||
|
|
|||||||||||||
81,196 | ||||||||||||||
|
|
|||||||||||||
United Arab Emirates 1.3% | ||||||||||||||
Abu Dhabi Islamic Bank PJSC |
Banks | 8,105 | 24,846 | |||||||||||
Abu Dhabi National Oil Co. for Distribution PJSC |
Specialty Retail | 15,585 | 15,912 | |||||||||||
Dubai Islamic Bank PJSC |
Banks | 15,180 | 24,177 | |||||||||||
Emaar Development PJSC |
Real Estate Management & Development | 4,190 | 7,985 | |||||||||||
Emirates Telecommunications Group Co. PJSC |
Diversified Telecommunication Services | 10,375 | 57,735 | |||||||||||
First Abu Dhabi Bank PJSC |
Banks | 3,945 | 14,607 | |||||||||||
|
|
|||||||||||||
145,262 | ||||||||||||||
|
|
|||||||||||||
United States 0.2% | ||||||||||||||
JBS SA |
Food Products | 3,500 | 12,622 | |||||||||||
Parade Technologies Ltd. |
Semiconductors & Semiconductor Equipment | 375 | 11,431 | |||||||||||
|
|
|||||||||||||
24,053 | ||||||||||||||
|
|
|||||||||||||
Total
Common Stocks |
11,111,351 | |||||||||||||
|
|
franklintempleton.com |
Semiannual Report |
43 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Preferred Stocks 3.1% | ||||||||||||||
Brazil 2.2% |
||||||||||||||
f |
Banco Bradesco SA, 5.993%, pfd. |
Banks | 26,000 | $ | 74,283 | |||||||||
f |
Cia Energetica de Minas Gerais, 7.703%, pfd. |
Electric Utilities | 8,000 | 19,835 | ||||||||||
f |
Gerdau SA, 12.607%, pfd. |
Metals & Mining | 5,875 | 28,323 | ||||||||||
f |
Itau Unibanco Holding SA, 4.671%, pfd. |
Banks | 8,000 | 43,491 | ||||||||||
f |
Petroleo Brasileiro SA, 9.792%, pfd. |
Oil, Gas & Consumable Fuels | 12,500 | 86,510 | ||||||||||
|
|
|||||||||||||
252,442 | ||||||||||||||
|
|
|||||||||||||
Chile 0.4% | ||||||||||||||
f |
Sociedad Quimica y Minera de Chile SA, Class B, 0.017%, pfd. |
Electrical Equipment | 760 | 44,963 | ||||||||||
|
|
|||||||||||||
Colombia 0.1% | ||||||||||||||
f |
Bancolombia SA, 12.674%, pfd. |
Banks | 2,555 | 17,101 | ||||||||||
|
|
|||||||||||||
Russia 0.0%† | ||||||||||||||
a,d |
Surgutneftegas PJSC, pfd. |
Oil, Gas & Consumable Fuels | 162,582 | — | ||||||||||
|
|
|||||||||||||
South Korea 0.4% | ||||||||||||||
f |
Hyundai Motor Co., 1.416%, pfd. |
Automobiles | 55 | 4,316 | ||||||||||
f |
Hyundai Motor Co., 1.427%, pfd. |
Automobiles | 40 | 3,116 | ||||||||||
f |
Samsung Electronics Co. Ltd., 1.989%, pfd. |
Technology Hardware, Storage & Peripherals | 940 | 37,965 | ||||||||||
f |
Samsung Fire & Marine Insurance Co. Ltd., 7.3%, pfd. |
Insurance | 15 | 2,102 | ||||||||||
|
|
|||||||||||||
47,499 | ||||||||||||||
|
|
|||||||||||||
Total
Preferred Stocks |
362,005 | |||||||||||||
|
|
|||||||||||||
Right 0.0%† |
||||||||||||||
Chile 0.0%† | ||||||||||||||
a |
Banco de Credito e Inversiones SA |
Banks | 53 | 44 | ||||||||||
|
|
|||||||||||||
Total Rights (Cost $0) |
44 | |||||||||||||
|
|
|||||||||||||
Total Investments (Cost $13,022,633) 99.3% |
11,473,400 | |||||||||||||
Other Assets, less Liabilities 0.7% |
82,909 | |||||||||||||
|
|
|||||||||||||
Net Assets 100.0% |
$ | 11,556,309 | ||||||||||||
|
|
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bVariable interest entity (VIE). See the Fund’s statement of additional information and/or notes to financial statements regarding investments made through a VIE structure. At September 30, 2023, the aggregate value of these securities was $662,903, representing 5.7% of net assets.
cSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2023, the value of was $279,818, representing 2.4% of net assets.
dFair valued using significant unobservable inputs. See Note 8 regarding fair value measurements.
eSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At September 30, 2023, the value of was $0, representing 0.0% of net assets.
fVariable rate security. The rate shown represents the yield at period end.
44 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Franklin Emerging Market Core Dividend Tilt Index ETF (continued)
At September 30, 2023, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts |
Notional Amount* |
Expiration Date |
Value/Unrealized Appreciation (Depreciation) |
|||||||||||||||
Equity Contracts | ||||||||||||||||||||
MSCI Emerging Markets Index |
Long | 2 | $ | 95,550 | 12/15/23 | $(1,664 | ) |
*As of period end.
See Note 7 regarding other derivative information.
See Abbreviations on page 108.
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
45 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin International Core Dividend Tilt Index ETF
Six Months Ended (unaudited) |
Year Ended March 31, | |||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||||||
Net asset value, beginning of period |
$28.63 | $28.65 | $26.52 | $22.55 | $24.70 | $24.25 | ||||||||||||||||||
Income from investment operationsa: |
||||||||||||||||||||||||
Net investment incomeb |
0.63 | 1.21 | 1.00 | 0.73 | 0.89 | 0.93 | ||||||||||||||||||
Net realized and unrealized gains (losses) |
(0.66) | 0.43 | 1.93 | 5.27 | (2.61) | 0.79 | ||||||||||||||||||
Total from investment operations |
(0.03) | 1.64 | 2.93 | 6.00 | (1.72) | 1.72 | ||||||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(0.62) | (1.19) | (0.80) | (0.91) | (0.19) | (0.30) | ||||||||||||||||||
Net realized gains |
— | (0.47) | — | (1.12) | (0.24) | (0.97) | ||||||||||||||||||
Total distributions |
(0.62) | (1.66) | (0.80) | (2.03) | (0.43) | (1.27) | ||||||||||||||||||
Net asset value, end of period |
$27.98 | $28.63 | $28.65 | $26.52 | $22.55 | $24.70 | ||||||||||||||||||
Total returnc |
(0.17)% | 6.56% | 11.13% | 27.54% | (7.12)% | 7.53% | ||||||||||||||||||
Ratios to average net assetsd | ||||||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.11% | e | 0.12% | 0.40% | 0.40% | 0.40% | 0.40% | |||||||||||||||||
Expenses net of waiver and payments by affiliates |
0.11% | e | 0.12% | 0.40% | 0.40% | 0.40% | 0.40% | |||||||||||||||||
Net investment income |
4.38% | 4.49% | 3.54% | 2.97% | 3.44% | 3.75% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) |
$456,123 | $240,459 | $17,192 | $13,260 | $9,021 | $7,410 | ||||||||||||||||||
Portfolio turnover ratef |
11.42%g | 49.07%g | 30.20%g | 42.33%g | 26.82%g | 39.24% |
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.
eExpense ratios are including non-recurring European Union tax reclaim contingent fees that were incurred by the Fund during the period. Without these fees, the gross and net expense ratios would have been 0.09% and 0.09%, respectively, for the period ended September 30, 2023
fPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
gPortfolio turnover rate excluding cash creations was as follows: | 11.10% | 49.07% | 30.20% | 41.62% | 26.82% | — |
46 |
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 International Core Dividend Tilt Index ETF
Industry | Shares | Value | ||||||||||||
Common Stocks 98.6% |
||||||||||||||
Australia 11.4% |
||||||||||||||
Ampol Ltd. |
Oil, Gas & Consumable Fuels | 21,679 | $ | 472,917 | ||||||||||
ANZ Group Holdings Ltd. |
Banks | 144,092 | 2,386,302 | |||||||||||
APA Group |
Gas Utilities | 118,175 | 633,042 | |||||||||||
ASX Ltd. |
Capital Markets | 18,093 | 667,003 | |||||||||||
Atlas Arteria Ltd. |
Transportation Infrastructure | 113,981 | 406,805 | |||||||||||
Aurizon Holdings Ltd. |
Ground Transportation | 166,914 | 375,965 | |||||||||||
Bendigo & Adelaide Bank Ltd. |
Banks | 53,099 | 306,032 | |||||||||||
BHP Group Ltd. |
Metals & Mining | 236,676 | 6,759,217 | |||||||||||
Coles Group Ltd. |
Consumer Staples Distribution & Retail | 98,941 | 993,607 | |||||||||||
Commonwealth Bank of Australia |
Banks | 51,345 | 3,312,812 | |||||||||||
CSL Ltd. |
Biotechnology | 9,617 | 1,556,668 | |||||||||||
Dexus |
Office REITs | 97,745 | 460,518 | |||||||||||
Endeavour Group Ltd. |
Consumer Staples Distribution & Retail | 125,986 | 428,511 | |||||||||||
Fortescue Metals Group Ltd. |
Metals & Mining | 162,022 | 2,187,583 | |||||||||||
Glencore PLC |
Metals & Mining | 732,685 | 4,202,214 | |||||||||||
Goodman Group |
Industrial REITs | 4,727 | 65,440 | |||||||||||
GPT Group |
Diversified REITs | 172,454 | 434,077 | |||||||||||
Incitec Pivot Ltd. |
Chemicals | 168,705 | 341,890 | |||||||||||
Macquarie Group Ltd. |
Capital Markets | 12,714 | 1,376,328 | |||||||||||
Medibank Pvt Ltd. |
Insurance | 250,454 | 556,052 | |||||||||||
Mirvac Group |
Diversified REITs | 123,906 | 170,334 | |||||||||||
National Australia Bank Ltd. |
Banks | 110,514 | 2,073,439 | |||||||||||
Northern Star Resources Ltd. |
Metals & Mining | 15,895 | 107,305 | |||||||||||
Origin Energy Ltd. |
Electric Utilities | 60,372 | 342,105 | |||||||||||
REA Group Ltd. |
Interactive Media & Services | 489 | 48,703 | |||||||||||
Rio Tinto Ltd. |
Metals & Mining | 29,177 | 2,138,241 | |||||||||||
Rio Tinto PLC |
Metals & Mining | 64,548 | 4,076,286 | |||||||||||
Scentre Group |
Retail REITs | 475,797 | 755,415 | |||||||||||
SEEK Ltd. |
Interactive Media & Services | 17,604 | 250,751 | |||||||||||
Sonic Healthcare Ltd. |
Health Care Providers & Services | 19,447 | 374,023 | |||||||||||
South32 Ltd. |
Metals & Mining | 414,672 | 907,263 | |||||||||||
Stockland |
Diversified REITs | 225,424 | 570,315 | |||||||||||
Telstra Group Ltd. |
Diversified Telecommunication Services | 188,754 | 469,014 | |||||||||||
TPG Telecom Ltd. |
Diversified Telecommunication Services | 38,468 | 135,557 | |||||||||||
Transurban Group |
Transportation Infrastructure | 276,611 | 2,265,479 | |||||||||||
Treasury Wine Estates Ltd. |
Beverages | 14,273 | 113,581 | |||||||||||
Vicinity Ltd. |
Retail REITs | 357,503 | 391,091 | |||||||||||
Wesfarmers Ltd. |
Broadline Retail | 65,526 | 2,235,474 | |||||||||||
Westpac Banking Corp. |
Banks | 157,610 | 2,151,409 | |||||||||||
WiseTech Global Ltd. |
Software | 15,485 | 650,111 | |||||||||||
Woodside Energy Group Ltd. |
Oil, Gas & Consumable Fuels | 149,797 | 3,527,815 | |||||||||||
Woolworths Group Ltd. |
Consumer Staples Distribution & Retail | 19,234 | 463,276 | |||||||||||
|
|
|||||||||||||
52,139,970 | ||||||||||||||
|
|
|||||||||||||
Austria 0.3% | ||||||||||||||
ANDRITZ AG |
Machinery | 4,727 | 239,325 | |||||||||||
a |
BAWAG Group AG |
Banks | 7,335 | 337,508 | ||||||||||
Erste Group Bank AG |
Banks | 8,115 | 281,982 | |||||||||||
OMV AG |
Oil, Gas & Consumable Fuels | 9,780 | 469,269 | |||||||||||
Strabag SE |
Construction & Engineering | 1,211 | 47,952 | |||||||||||
Verbund AG |
Electric Utilities | 2,197 | 179,224 | |||||||||||
|
|
|||||||||||||
1,555,260 | ||||||||||||||
|
|
|||||||||||||
Belgium 0.6% | ||||||||||||||
Ageas SA |
Insurance | 15,974 | 660,094 | |||||||||||
Etablissements Franz Colruyt NV |
Consumer Staples Distribution & Retail | 1,690 | 73,289 | |||||||||||
KBC Group NV |
Banks | 29,992 | 1,877,933 |
franklintempleton.com |
Semiannual Report |
47 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Core Dividend Tilt Index ETF (continued)
Industry | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Belgium (continued) |
||||||||||||||
Solvay SA |
Chemicals | 489 | $ | 54,284 | ||||||||||
|
|
|||||||||||||
2,665,600 | ||||||||||||||
|
|
|||||||||||||
China 0.0%† | ||||||||||||||
a,b |
Wuxi Biologics Cayman, Inc. |
Life Sciences Tools & Services | 36,033 | 210,028 | ||||||||||
|
|
|||||||||||||
Denmark 2.4% | ||||||||||||||
AP Moller - Maersk AS, Class A |
Marine Transportation | 272 | 483,894 | |||||||||||
AP Moller - Maersk AS, Class B |
Marine Transportation | 484 | 875,133 | |||||||||||
Coloplast AS, Class B |
Health Care Equipment & Supplies | 6,031 | 640,160 | |||||||||||
Novo Nordisk AS, Class B |
Pharmaceuticals | 90,791 | 8,300,251 | |||||||||||
a |
Orsted AS |
Electric Utilities | 1,557 | 85,132 | ||||||||||
Pandora AS |
Textiles, Apparel & Luxury Goods | 652 | 67,725 | |||||||||||
Tryg AS |
Insurance | 17,930 | 329,289 | |||||||||||
|
|
|||||||||||||
10,781,584 | ||||||||||||||
|
|
|||||||||||||
Finland 1.6% | ||||||||||||||
Elisa Oyj |
Diversified Telecommunication Services | 13,529 | 628,673 | |||||||||||
Kesko Oyj, Class A |
Consumer Staples Distribution & Retail | 8,868 | 162,430 | |||||||||||
Kesko Oyj, Class B |
Consumer Staples Distribution & Retail | 23,635 | 424,650 | |||||||||||
Kone Oyj, Class B |
Machinery | 33,089 | 1,398,517 | |||||||||||
Metso Oyj |
Machinery | 20,461 | 215,634 | |||||||||||
Neste Oyj |
Oil, Gas & Consumable Fuels | 4,735 | 161,073 | |||||||||||
Nordea Bank Abp |
Banks | 281,990 | 3,117,822 | |||||||||||
Orion Oyj, Class A |
Pharmaceuticals | 2,119 | 83,346 | |||||||||||
Orion Oyj, Class B |
Pharmaceuticals | 9,291 | 366,127 | |||||||||||
Sampo Oyj, Class A |
Insurance | 7,172 | 311,176 | |||||||||||
Stora Enso Oyj, Class A |
Paper & Forest Products | 2,282 | 30,442 | |||||||||||
Stora Enso Oyj, Class R |
Paper & Forest Products | 26,080 | 328,309 | |||||||||||
Wartsila Oyj Abp |
Machinery | 16,789 | 191,174 | |||||||||||
|
|
|||||||||||||
7,419,373 | ||||||||||||||
|
|
|||||||||||||
France 9.3% | ||||||||||||||
Air Liquide SA |
Chemicals | 2,608 | 441,353 | |||||||||||
a |
Amundi SA |
Capital Markets | 5,580 | 315,182 | ||||||||||
AXA SA |
Insurance | 69,601 | 2,076,586 | |||||||||||
BNP Paribas SA |
Banks | 66,830 | 4,275,801 | |||||||||||
Bouygues SA |
Construction & Engineering | 18,582 | 651,986 | |||||||||||
Capgemini SE |
IT Services | 2,282 | 400,584 | |||||||||||
Cie Generale des Etablissements Michelin SCA |
Automobile Components | 6,031 | 185,621 | |||||||||||
Credit Agricole SA |
Banks | 125,479 | 1,553,293 | |||||||||||
Danone SA |
Food Products | 21,027 | 1,163,430 | |||||||||||
Dassault Systemes SE |
Software | 17,930 | 670,019 | |||||||||||
Engie SA |
Multi-Utilities | 166,586 | 2,562,699 | |||||||||||
EssilorLuxottica SA |
Health Care Equipment & Supplies | 5,868 | 1,026,097 | |||||||||||
Gecina SA |
Office REITs | 4,890 | 500,903 | |||||||||||
Hermes International SCA |
Textiles, Apparel & Luxury Goods | 609 | 1,115,338 | |||||||||||
Kering SA |
Textiles, Apparel & Luxury Goods | 2,028 | 927,352 | |||||||||||
Legrand SA |
Electrical Equipment | 2,771 | 256,120 | |||||||||||
L’Oreal SA |
Personal Care Products | 2,934 | 1,221,426 | |||||||||||
LVMH Moet Hennessy Louis Vuitton SE |
Textiles, Apparel & Luxury Goods | 8,183 | 6,206,712 | |||||||||||
Orange SA |
Diversified Telecommunication Services | 160,555 | 1,846,065 | |||||||||||
Pernod Ricard SA |
Beverages | 3,042 | 508,390 | |||||||||||
Sanofi |
Pharmaceuticals | 45,314 | 4,868,625 | |||||||||||
Sartorius Stedim Biotech |
Life Sciences Tools & Services | 374 | 89,490 | |||||||||||
Schneider Electric SE |
Electrical Equipment | 16,789 | 2,790,375 | |||||||||||
Societe Generale SA |
Banks | 44,825 | 1,093,680 | |||||||||||
Teleperformance SE |
Professional Services | 1,730 | 218,698 | |||||||||||
TotalEnergies SE |
Oil, Gas & Consumable Fuels | 55,909 | 3,688,357 |
48 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Core Dividend Tilt Index ETF (continued)
Industry |
Shares |
Value |
||||||||||||
Common Stocks (continued) | ||||||||||||||
France (continued) |
||||||||||||||
Veolia Environnement SA |
Multi-Utilities | 13,698 | $ | 397,811 | ||||||||||
Vinci SA |
Construction & Engineering | 14,018 | 1,558,660 | |||||||||||
|
|
|||||||||||||
42,610,653 | ||||||||||||||
|
|
|||||||||||||
Germany 7.4% | ||||||||||||||
adidas AG |
Textiles, Apparel & Luxury Goods | 1,141 | 201,283 | |||||||||||
Allianz SE |
Insurance | 21,027 | 5,024,610 | |||||||||||
BASF SE |
Chemicals | 75,632 | 3,439,238 | |||||||||||
Bayer AG |
Pharmaceuticals | 27,058 | 1,302,036 | |||||||||||
Bayerische Motoren Werke AG |
Automobiles | 28,851 | 2,944,023 | |||||||||||
a,b |
Delivery Hero SE |
Hotels, Restaurants & Leisure | 2,282 | 65,645 | ||||||||||
Deutsche Boerse AG |
Capital Markets | 3,260 | 565,015 | |||||||||||
Deutsche Post AG |
Air Freight & Logistics | 55,637 | 2,269,930 | |||||||||||
Deutsche Telekom AG |
Diversified Telecommunication Services | 83,293 | 1,752,089 | |||||||||||
E.ON SE |
Multi-Utilities | 177,507 | 2,104,878 | |||||||||||
Evonik Industries AG |
Chemicals | 18,093 | 331,877 | |||||||||||
Infineon Technologies AG |
Semiconductors & Semiconductor Equipment | 42,380 | 1,406,893 | |||||||||||
Mercedes-Benz Group AG |
Automobiles | 56,724 | 3,957,125 | |||||||||||
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen |
Insurance | 1,141 | 445,885 | |||||||||||
SAP SE |
Software | 29,014 | 3,772,855 | |||||||||||
Siemens AG |
Industrial Conglomerates | 23,472 | 3,371,284 | |||||||||||
Telefonica Deutschland Holding AG |
Diversified Telecommunication Services | 86,969 | 156,073 | |||||||||||
Vonovia SE |
Real Estate Management & Development | 25,265 | 610,152 | |||||||||||
|
|
|||||||||||||
33,720,891 | ||||||||||||||
|
|
|||||||||||||
Hong Kong 2.7% | ||||||||||||||
AIA Group Ltd. |
Insurance | 155,400 | 1,266,915 | |||||||||||
CK Asset Holdings Ltd. |
Real Estate Management & Development | 52,100 | 274,408 | |||||||||||
CK Infrastructure Holdings Ltd., Class A |
Electric Utilities | 54,400 | 257,349 | |||||||||||
CLP Holdings Ltd. |
Electric Utilities | 151,300 | 1,119,510 | |||||||||||
Hang Lung Properties Ltd. |
Real Estate Management & Development | 163,000 | 223,109 | |||||||||||
Hang Seng Bank Ltd. |
Banks | 32,600 | 405,635 | |||||||||||
Henderson Land Development Co. Ltd. |
Real Estate Management & Development | 114,500 | 301,899 | |||||||||||
HK Electric Investments & HK Electric Investments Ltd. |
Electric Utilities | 220,578 | 126,457 | |||||||||||
HKT Trust & HKT Ltd. |
Diversified Telecommunication Services | 320,762 | 335,021 | |||||||||||
Hong Kong & China Gas Co. Ltd. |
Gas Utilities | 974,000 | 679,027 | |||||||||||
Hong Kong Exchanges & Clearing Ltd. |
Capital Markets | 19,900 | 743,469 | |||||||||||
Jardine Matheson Holdings Ltd. |
Industrial Conglomerates | 21,090 | 978,998 | |||||||||||
Link REIT |
Retail REITs | 228,200 | 1,118,877 | |||||||||||
MTR Corp. Ltd. |
Ground Transportation | 60,000 | 237,492 | |||||||||||
New World Development Co. Ltd. |
Real Estate Management & Development | 123,000 | 239,346 | |||||||||||
Power Assets Holdings Ltd. |
Electric Utilities | 120,000 | 580,706 | |||||||||||
Sino Land Co. Ltd. |
Real Estate Management & Development | 286,100 | 322,563 | |||||||||||
Sun Hung Kai Properties Ltd. |
Real Estate Management & Development | 131,640 | 1,408,535 | |||||||||||
Swire Pacific Ltd., Class A |
Real Estate Management & Development | 27,500 | 185,572 | |||||||||||
Swire Pacific Ltd., Class B |
Real Estate Management & Development | 50,000 | 54,649 | |||||||||||
Swire Properties Ltd. |
Real Estate Management & Development | 97,800 | 204,045 | |||||||||||
Techtronic Industries Co. Ltd. |
Machinery | 65,600 | 636,580 | |||||||||||
a |
WH Group Ltd. |
Food Products | 652,000 | 342,157 | ||||||||||
Wharf Real Estate Investment Co. Ltd. |
Real Estate Management & Development | 49,694 | 191,940 | |||||||||||
|
|
|||||||||||||
12,234,259 | ||||||||||||||
|
|
|||||||||||||
Ireland 0.2% | ||||||||||||||
DCC PLC |
Industrial Conglomerates | 692 | 38,929 | |||||||||||
Experian PLC |
Professional Services | 4,564 | 149,904 |
franklintempleton.com |
Semiannual Report |
49 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Core Dividend Tilt Index ETF (continued)
Industry |
Shares |
Value |
||||||||||||
Common Stocks (continued) | ||||||||||||||
Ireland (continued) |
||||||||||||||
Smurfit Kappa Group PLC |
Containers & Packaging | 19,560 | $ | 653,581 | ||||||||||
|
|
|||||||||||||
842,414 | ||||||||||||||
|
|
|||||||||||||
Isle Of Man 0.0%† | ||||||||||||||
Entain PLC |
Hotels, Restaurants & Leisure | 7,137 | 81,257 | |||||||||||
|
|
|||||||||||||
Israel 0.7% | ||||||||||||||
Bank Hapoalim BM |
Banks | 110,840 | 986,700 | |||||||||||
Bank Leumi Le-Israel BM |
Banks | 73,563 | 608,871 | |||||||||||
Bezeq The Israeli Telecommunication Corp. Ltd. |
Diversified Telecommunication Services | 189,118 | 266,762 | |||||||||||
ICL Group Ltd. |
Chemicals | 64,548 | 357,244 | |||||||||||
Israel Discount Bank Ltd., Class A |
Banks | 50,530 | 273,289 | |||||||||||
Mizrahi Tefahot Bank Ltd. |
Banks | 13,366 | 484,855 | |||||||||||
b |
Nice Ltd. |
Software | 978 | 165,723 | ||||||||||
|
|
|||||||||||||
3,143,444 | ||||||||||||||
|
|
|||||||||||||
Italy 4.0% | ||||||||||||||
A2A SpA |
Multi-Utilities | 138,670 | 247,533 | |||||||||||
Assicurazioni Generali SpA |
Insurance | 102,201 | 2,095,396 | |||||||||||
Banca Mediolanum SpA |
Financial Services | 19,447 | 166,816 | |||||||||||
Banco BPM SpA |
Banks | 133,986 | 643,325 | |||||||||||
Enel SpA |
Electric Utilities | 573,271 | 3,532,453 | |||||||||||
Eni SpA |
Oil, Gas & Consumable Fuels | 143,766 | 2,322,150 | |||||||||||
FinecoBank Banca Fineco SpA |
Banks | 36,023 | 439,175 | |||||||||||
Hera SpA |
Multi-Utilities | 71,273 | 195,442 | |||||||||||
a |
Infrastrutture Wireless Italiane SpA |
Diversified Telecommunication Services | 31,296 | 373,262 | ||||||||||
Intesa Sanpaolo SpA |
Banks | 1,380,773 | 3,567,020 | |||||||||||
Mediobanca Banca di Credito Finanziario SpA |
Banks | 56,313 | 747,056 | |||||||||||
Moncler SpA |
Textiles, Apparel & Luxury Goods | 7,308 | 426,173 | |||||||||||
a |
Poste Italiane SpA |
Insurance | 41,601 | 439,041 | ||||||||||
Recordati Industria Chimica e Farmaceutica SpA |
Pharmaceuticals | 8,453 | 400,137 | |||||||||||
Snam SpA |
Gas Utilities | 179,300 | 844,571 | |||||||||||
Terna – Rete Elettrica Nazionale |
Electric Utilities | 121,109 | 913,982 | |||||||||||
UniCredit SpA |
Banks | 38,468 | 925,748 | |||||||||||
UnipolSai Assicurazioni SpA |
Insurance | 41,128 | 99,542 | |||||||||||
|
|
|||||||||||||
18,378,822 | ||||||||||||||
|
|
|||||||||||||
Japan 21.0% | ||||||||||||||
ABC-Mart, Inc. |
Specialty Retail | 6,564 | 118,238 | |||||||||||
Advance Residence Investment Corp. |
Residential REITs | 44 | 99,956 | |||||||||||
Advantest Corp. |
Semiconductors & Semiconductor Equipment | 52,800 | 1,479,355 | |||||||||||
AGC, Inc. |
Building Products | 11,400 | 400,614 | |||||||||||
Aisin Corp. |
Automobile Components | 15,400 | 583,079 | |||||||||||
Ajinomoto Co., Inc. |
Food Products | 5,200 | 200,856 | |||||||||||
Asahi Kasei Corp. |
Chemicals | 24,600 | 154,944 | |||||||||||
Astellas Pharma, Inc. |
Pharmaceuticals | 64,200 | 892,282 | |||||||||||
Bridgestone Corp. |
Automobile Components | 30,940 | 1,208,573 | |||||||||||
Brother Industries Ltd. |
Technology Hardware, Storage & Peripherals | 2,700 | 43,578 | |||||||||||
Canon, Inc. |
Technology Hardware, Storage & Peripherals | 58,492 | 1,413,059 | |||||||||||
Capcom Co. Ltd. |
Entertainment | 7,002 | 252,677 | |||||||||||
Chugai Pharmaceutical Co. Ltd. |
Pharmaceuticals | 19,330 | 598,974 | |||||||||||
CyberAgent, Inc. |
Media | 36,100 | 195,057 | |||||||||||
Daifuku Co. Ltd. |
Machinery | 2,980 | 56,505 | |||||||||||
Daiichi Sankyo Co. Ltd. |
Pharmaceuticals | 48,900 | 1,345,508 | |||||||||||
Daikin Industries Ltd. |
Building Products | 4,481 | 704,919 | |||||||||||
Daito Trust Construction Co. Ltd. |
Real Estate Management & Development | 5,767 | 608,680 | |||||||||||
Daiwa House REIT Investment Corp. |
Diversified REITs | 139 | 245,724 | |||||||||||
Denso Corp. |
Automobile Components | 74,000 | 1,190,645 |
50 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Core Dividend Tilt Index ETF (continued)
Industry |
Shares |
Value |
||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
Dentsu Group, Inc. |
Media | 19,400 | $ | 572,022 | ||||||||||
Disco Corp. |
Semiconductors & Semiconductor Equipment | 8,034 | 1,484,857 | |||||||||||
East Japan Railway Co. |
Ground Transportation | 1,010 | 57,903 | |||||||||||
Eisai Co. Ltd. |
Pharmaceuticals | 9,743 | 542,174 | |||||||||||
FANUC Corp. |
Machinery | 14,440 | 376,712 | |||||||||||
Fast Retailing Co. Ltd. |
Specialty Retail | 1,110 | 242,419 | |||||||||||
Fuji Electric Co. Ltd. |
Electrical Equipment | 2,300 | 103,976 | |||||||||||
FUJIFILM Holdings Corp. |
Technology Hardware, Storage & Peripherals | 2,080 | 120,681 | |||||||||||
Fujitsu Ltd. |
IT Services | 880 | 103,790 | |||||||||||
GLP J-Reit |
Industrial REITs | 402 | 360,177 | |||||||||||
GMO Payment Gateway, Inc. |
Financial Services | 3,800 | 208,227 | |||||||||||
Hamamatsu Photonics KK |
Electronic Equipment, Instruments & Components | 12,100 | 510,758 | |||||||||||
Haseko Corp. |
Household Durables | 18,800 | 240,252 | |||||||||||
Hirose Electric Co. Ltd. |
Electronic Equipment, Instruments & Components | 2,700 | 313,379 | |||||||||||
Hitachi Construction Machinery Co. Ltd. |
Machinery | 7,700 | 234,573 | |||||||||||
Hitachi Ltd. |
Industrial Conglomerates | 6,612 | 410,965 | |||||||||||
Honda Motor Co. Ltd. |
Automobiles | 30,900 | 348,292 | |||||||||||
Hoya Corp. |
Health Care Equipment & Supplies | 7,790 | 800,012 | |||||||||||
Hulic Co. Ltd. |
Real Estate Management & Development | 48,472 | 435,590 | |||||||||||
Ibiden Co. Ltd. |
Electronic Equipment, Instruments & Components | 11,600 | 619,081 | |||||||||||
Iida Group Holdings Co. Ltd. |
Household Durables | 14,200 | 236,611 | |||||||||||
Isuzu Motors Ltd. |
Automobiles | 52,400 | 660,333 | |||||||||||
ITOCHU Corp. |
Trading Companies & Distributors | 13,600 | 492,690 | |||||||||||
Japan Metropolitan Fund Invest |
Retail REITs | 652 | 423,816 | |||||||||||
Japan Post Bank Co. Ltd. |
Banks | 76,203 | 664,367 | |||||||||||
Japan Post Holdings Co. Ltd. |
Insurance | 27,100 | 217,472 | |||||||||||
Japan Real Estate Investment Corp. |
Office REITs | 58 | 226,597 | |||||||||||
Japan Tobacco, Inc. |
Tobacco | 95,800 | 2,208,424 | |||||||||||
Kajima Corp. |
Construction & Engineering | 13,530 | 220,642 | |||||||||||
Kao Corp. |
Personal Care Products | 11,628 | 432,548 | |||||||||||
KDDI Corp. |
Wireless Telecommunication Services | 41,330 | 1,267,666 | |||||||||||
Keyence Corp. |
Electronic Equipment, Instruments & Components | 5,445 | 2,025,113 | |||||||||||
Kirin Holdings Co. Ltd. |
Beverages | 72,700 | 1,019,676 | |||||||||||
Koei Tecmo Holdings Co. Ltd. |
Entertainment | 10,396 | 148,076 | |||||||||||
Komatsu Ltd. |
Machinery | 57,600 | 1,560,575 | |||||||||||
Kubota Corp. |
Machinery | 7,000 | 103,388 | |||||||||||
Kyocera Corp. |
Electronic Equipment, Instruments & Components | 8,000 | 406,741 | |||||||||||
Kyowa Kirin Co. Ltd. |
Pharmaceuticals | 8,500 | 148,326 | |||||||||||
Kyushu Railway Co. |
Ground Transportation | 12,700 | 270,553 | |||||||||||
Lasertec Corp. |
Semiconductors & Semiconductor Equipment | 6,154 | 959,649 | |||||||||||
Lawson, Inc. |
Consumer Staples Distribution & Retail | 4,125 | 189,961 | |||||||||||
Lixil Corp. |
Building Products | 24,800 | 289,423 | |||||||||||
M3, Inc. |
Health Care Technology | 17,700 | 322,152 | |||||||||||
Marubeni Corp. |
Trading Companies & Distributors | 51,400 | 803,249 | |||||||||||
Mazda Motor Corp. |
Automobiles | 31,100 | 353,568 | |||||||||||
MINEBEA MITSUMI, Inc. |
Machinery | 10,500 | 171,793 | |||||||||||
Mitsubishi Chemical Group Corp. |
Chemicals | 17,300 | 109,289 | |||||||||||
Mitsubishi Corp. |
Trading Companies & Distributors | 27,600 | 1,318,364 | |||||||||||
Mitsubishi Electric Corp. |
Electrical Equipment | 45,900 | 568,732 | |||||||||||
Mitsubishi HC Capital, Inc. |
Financial Services | 65,200 | 435,176 | |||||||||||
Mitsubishi UFJ Financial Group, Inc. |
Banks | 244,500 | 2,078,393 | |||||||||||
Mitsui & Co. Ltd. |
Trading Companies & Distributors | 8,900 | 323,436 | |||||||||||
Mitsui OSK Lines Ltd. |
Marine Transportation | 30,500 | 840,040 | |||||||||||
Mizuho Financial Group, Inc. |
Banks | 101,200 | 1,723,231 | |||||||||||
MonotaRO Co. Ltd. |
Trading Companies & Distributors | 12,740 | 136,642 | |||||||||||
MS&AD Insurance Group Holdings, Inc. |
Insurance | 8,920 | 328,466 | |||||||||||
Murata Manufacturing Co. Ltd. |
Electronic Equipment, Instruments & Components | 70,170 | 1,285,608 |
franklintempleton.com |
Semiannual Report |
51 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Core Dividend Tilt Index ETF (continued)
Industry |
Shares |
Value |
||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
NGK Insulators Ltd. |
Machinery | 22,400 | $ | 297,516 | ||||||||||
NIDEC Corp. |
Electrical Equipment | 16,900 | 784,948 | |||||||||||
Nintendo Co. Ltd. |
Entertainment | 61,791 | 2,579,715 | |||||||||||
Nippon Building Fund, Inc. |
Office REITs | 144 | 584,781 | |||||||||||
Nippon Paint Holdings Co. Ltd. |
Chemicals | 28,200 | 190,110 | |||||||||||
Nippon Prologis REIT, Inc. |
Industrial REITs | 54 | 101,034 | |||||||||||
Nippon Steel Corp. |
Metals & Mining | 60,400 | 1,418,676 | |||||||||||
Nippon Yusen KK |
Marine Transportation | 44,400 | 1,156,230 | |||||||||||
Niterra Co. Ltd. |
Automobile Components | 14,500 | 328,819 | |||||||||||
Nitto Denko Corp. |
Chemicals | 10,210 | 671,065 | |||||||||||
Nomura Holdings, Inc. |
Capital Markets | 122,100 | 490,200 | |||||||||||
Nomura Real Estate Master Fund, Inc. |
Diversified REITs | 206 | 231,090 | |||||||||||
Nomura Research Institute Ltd. |
IT Services | 15,680 | 409,062 | |||||||||||
Obayashi Corp. |
Construction & Engineering | 44,500 | 392,590 | |||||||||||
Obic Co. Ltd. |
IT Services | 580 | 88,171 | |||||||||||
Omron Corp. |
Electronic Equipment, Instruments & Components | 3,050 | 136,266 | |||||||||||
Ono Pharmaceutical Co. Ltd. |
Pharmaceuticals | 15,800 | 303,665 | |||||||||||
Oracle Corp. |
Software | 985 | 73,269 | |||||||||||
Oriental Land Co. Ltd. |
Hotels, Restaurants & Leisure | 15,320 | 503,976 | |||||||||||
ORIX Corp. |
Financial Services | 48,300 | 904,017 | |||||||||||
Orix JREIT, Inc. |
Office REITs | 213 | 256,071 | |||||||||||
Otsuka Corp. |
IT Services | 10,020 | 425,174 | |||||||||||
Panasonic Holdings Corp. |
Household Durables | 27,500 | 309,968 | |||||||||||
Recruit Holdings Co. Ltd. |
Professional Services | 27,000 | 833,929 | |||||||||||
Rohm Co. Ltd. |
Semiconductors & Semiconductor Equipment | 30,200 | 570,102 | |||||||||||
Santen Pharmaceutical Co. Ltd. |
Pharmaceuticals | 32,600 | 300,058 | |||||||||||
SBI Holdings, Inc. |
Capital Markets | 22,900 | 483,091 | |||||||||||
Sekisui Chemical Co. Ltd. |
Household Durables | 34,900 | 503,533 | |||||||||||
Sekisui House Ltd. |
Household Durables | 56,750 | 1,132,148 | |||||||||||
Seven & i Holdings Co. Ltd. |
Consumer Staples Distribution & Retail | 10,976 | 430,655 | |||||||||||
SG Holdings Co. Ltd. |
Air Freight & Logistics | 15,300 | 196,344 | |||||||||||
Shimadzu Corp. |
Electronic Equipment, Instruments & Components | 1,600 | 42,588 | |||||||||||
Shimano, Inc. |
Leisure Products | 1,944 | 262,696 | |||||||||||
Shin-Etsu Chemical Co. Ltd. |
Chemicals | 70,550 | 2,053,266 | |||||||||||
Shiseido Co. Ltd. |
Personal Care Products | 9,000 | 316,636 | |||||||||||
SoftBank Corp. |
Wireless Telecommunication Services | 238,300 | 2,699,589 | |||||||||||
SoftBank Group Corp. |
Wireless Telecommunication Services | 9,700 | 411,791 | |||||||||||
Sojitz Corp. |
Trading Companies & Distributors | 17,500 | 384,419 | |||||||||||
Sompo Holdings, Inc. |
Insurance | 890 | 38,367 | |||||||||||
Sony Group Corp. |
Household Durables | 24,400 | 2,001,380 | |||||||||||
Square Enix Holdings Co. Ltd. |
Entertainment | 4,600 | 157,983 | |||||||||||
Subaru Corp. |
Automobiles | 31,400 | 611,482 | |||||||||||
SUMCO Corp. |
Semiconductors & Semiconductor Equipment | 30,200 | 394,437 | |||||||||||
Sumitomo Chemical Co. Ltd. |
Chemicals | 139,500 | 380,476 | |||||||||||
Sumitomo Corp. |
Trading Companies & Distributors | 98,400 | 1,967,670 | |||||||||||
Sumitomo Electric Industries Ltd. |
Automobile Components | 11,400 | 137,625 | |||||||||||
Sumitomo Metal Mining Co. Ltd. |
Metals & Mining | 22,000 | 648,537 | |||||||||||
Sumitomo Mitsui Financial Group, Inc. |
Banks | 52,484 | 2,584,017 | |||||||||||
Suzuki Motor Corp. |
Automobiles | 1,800 | 72,567 | |||||||||||
Sysmex Corp. |
Health Care Equipment & Supplies | 5,126 | 245,024 | |||||||||||
Takeda Pharmaceutical Co. Ltd. |
Pharmaceuticals | 118,400 | 3,682,321 | |||||||||||
TDK Corp. |
Electronic Equipment, Instruments & Components | 23,160 | 860,129 | |||||||||||
Tokio Marine Holdings, Inc. |
Insurance | 36,811 | 854,750 | |||||||||||
Tokyo Century Corp. |
Financial Services | 3,440 | 137,531 | |||||||||||
Tokyo Electron Ltd. |
Semiconductors & Semiconductor Equipment | 29,039 | 3,977,599 | |||||||||||
Toray Industries, Inc. |
Chemicals | 18,300 | 95,409 | |||||||||||
Tosoh Corp. |
Chemicals | 26,700 | 343,177 |
52 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Core Dividend Tilt Index ETF (continued)
Industry |
Shares |
Value |
||||||||||||
Common Stocks (continued) | ||||||||||||||
Japan (continued) | ||||||||||||||
Toyota Industries Corp. |
Machinery | 8,000 | $ | 631,262 | ||||||||||
Toyota Motor Corp. |
Automobiles | 320,340 | 5,747,766 | |||||||||||
Toyota Tsusho Corp. |
Trading Companies & Distributors | 3,800 | 223,964 | |||||||||||
Trend Micro, Inc. |
Software | 1,490 | 56,595 | |||||||||||
United Urban Investment Corp. |
Diversified REITs | 267 | 278,585 | |||||||||||
USS Co. Ltd. |
Specialty Retail | 18,500 | 306,525 | |||||||||||
West Japan Railway Co. |
Ground Transportation | 4,100 | 169,935 | |||||||||||
Yamaha Motor Co. Ltd. |
Automobiles | 6,100 | 160,691 | |||||||||||
Yaskawa Electric Corp. |
Machinery | 8,604 | 311,064 | |||||||||||
Z Holdings Corp. |
Interactive Media & Services | 87,500 | 243,634 | |||||||||||
ZOZO, Inc. |
Specialty Retail | 9,970 | 183,232 | |||||||||||
|
|
|||||||||||||
95,610,841 | ||||||||||||||
|
|
|||||||||||||
Luxembourg 0.0%† | ||||||||||||||
Eurofins Scientific SE |
Life Sciences Tools & Services | 3,117 | 176,557 | |||||||||||
|
|
|||||||||||||
Netherlands 4.6% | ||||||||||||||
a,b |
Adyen NV |
Financial Services | 1,170 | 874,177 | ||||||||||
b |
Argenx SE |
Biotechnology | 584 | 284,794 | ||||||||||
b |
Argenx SE |
Biotechnology | 394 | 192,138 | ||||||||||
ASM International NV |
Semiconductors & Semiconductor Equipment | 2,119 | 891,788 | |||||||||||
ASML Holding NV |
Semiconductors & Semiconductor Equipment | 13,366 | 7,911,966 | |||||||||||
ING Groep NV |
Banks | 115,730 | 1,537,741 | |||||||||||
Koninklijke Ahold Delhaize NV |
Consumer Staples Distribution & Retail | 9,560 | 288,669 | |||||||||||
Koninklijke KPN NV |
Diversified Telecommunication Services | 281,501 | 929,584 | |||||||||||
Koninklijke Philips NV |
Health Care Equipment & Supplies | 80,833 | 1,623,147 | |||||||||||
NN Group NV |
Insurance | 26,406 | 851,022 | |||||||||||
Prosus NV |
Broadline Retail | 33,904 | 1,002,212 | |||||||||||
Randstad NV |
Professional Services | 11,573 | 641,808 | |||||||||||
Shell PLC |
Oil, Gas & Consumable Fuels | 114,263 | 3,634,423 | |||||||||||
Universal Music Group NV |
Entertainment | 13,692 | 358,496 | |||||||||||
|
|
|||||||||||||
21,021,965 | ||||||||||||||
|
|
|||||||||||||
New Zealand 0.4% | ||||||||||||||
Contact Energy Ltd. |
Electric Utilities | 68,949 | 333,081 | |||||||||||
Fisher & Paykel Healthcare Corp. Ltd. |
Health Care Equipment & Supplies | 32,469 | 421,004 | |||||||||||
Mercury NZ Ltd. |
Electric Utilities | 55,923 | 204,968 | |||||||||||
Meridian Energy Ltd. |
Independent Power Producers & Energy Traders | 103,835 | 320,681 | |||||||||||
Spark New Zealand Ltd. |
Diversified Telecommunication Services | 167,564 | 484,275 | |||||||||||
|
|
|||||||||||||
1,764,009 | ||||||||||||||
|
|
|||||||||||||
Norway 1.2% | ||||||||||||||
Aker ASA, Class A |
Industrial Conglomerates | 1,956 | 121,229 | |||||||||||
Aker BP ASA |
Oil, Gas & Consumable Fuels | 26,379 | 733,793 | |||||||||||
a,b |
AutoStore Holdings Ltd. |
Machinery | 59,495 | 84,623 | ||||||||||
DNB Bank ASA |
Banks | 75,632 | 1,532,421 | |||||||||||
Gjensidige Forsikring ASA |
Insurance | 16,463 | 243,676 | |||||||||||
Norsk Hydro ASA |
Metals & Mining | 118,990 | 751,456 | |||||||||||
Orkla ASA |
Food Products | 67,319 | 505,991 | |||||||||||
Salmar ASA |
Food Products | 5,705 | 291,339 | |||||||||||
Telenor ASA |
Diversified Telecommunication Services | 58,028 | 662,579 | |||||||||||
Yara International ASA |
Chemicals | 13,692 | 521,515 | |||||||||||
|
|
|||||||||||||
5,448,622 | ||||||||||||||
|
|
|||||||||||||
Poland 0.4% | ||||||||||||||
LPP SA |
Textiles, Apparel & Luxury Goods | 30 | 89,346 | |||||||||||
ORLEN SA |
Oil, Gas & Consumable Fuels | 52,649 | 708,009 | |||||||||||
b |
Powszechna Kasa Oszczednosci Bank Polski SA |
Banks | 75,306 | 598,991 |
franklintempleton.com |
Semiannual Report |
53 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Core Dividend Tilt Index ETF (continued)
Industry |
Shares |
Value |
||||||||||||
Common Stocks (continued) | ||||||||||||||
Poland (continued) | ||||||||||||||
Powszechny Zaklad Ubezpieczen SA |
Insurance | 50,204 | $ | 475,811 | ||||||||||
|
|
|||||||||||||
1,872,157 | ||||||||||||||
|
|
|||||||||||||
Portugal 0.2% | ||||||||||||||
EDP – Energias de Portugal SA |
Electric Utilities | 203,424 | 847,717 | |||||||||||
Galp Energia SGPS SA, Class B |
Oil, Gas & Consumable Fuels | 5,868 | 87,227 | |||||||||||
|
|
|||||||||||||
934,944 | ||||||||||||||
|
|
|||||||||||||
Singapore 2.1% | ||||||||||||||
CapitaLand Integrated Commercial Trust, Class A |
Retail REITs | 457,800 | 620,507 | |||||||||||
DBS Group Holdings Ltd., Class A |
Banks | 60,600 | 1,493,578 | |||||||||||
Keppel Corp. Ltd. |
Industrial Conglomerates | 127,900 | 637,204 | |||||||||||
Mapletree Pan Asia Commercial Trust |
Retail REITs | 203,400 | 213,101 | |||||||||||
Olam Group Ltd. |
Consumer Staples Distribution & Retail | 103,800 | 79,852 | |||||||||||
Oversea-Chinese Banking Corp. Ltd. |
Banks | 356,600 | 3,346,799 | |||||||||||
Singapore Airlines Ltd. |
Passenger Airlines | 114,100 | 540,029 | |||||||||||
Singapore Exchange Ltd. |
Capital Markets | 48,900 | 349,311 | |||||||||||
Singapore Technologies Engineering Ltd. |
Aerospace & Defense | 129,000 | 369,544 | |||||||||||
United Overseas Bank Ltd. |
Banks | 75,900 | 1,584,841 | |||||||||||
Venture Corp. Ltd. |
Electronic Equipment, Instruments & Components | 25,988 | 235,528 | |||||||||||
|
|
|||||||||||||
9,470,294 | ||||||||||||||
|
|
|||||||||||||
Spain 1.6% | ||||||||||||||
ACS Actividades de Construccion y Servicios SA |
Construction & Engineering | 19,234 | 693,801 | |||||||||||
Banco Bilbao Vizcaya Argentaria SA |
Banks | 183,316 | 1,496,402 | |||||||||||
CaixaBank SA |
Banks | 95,029 | 380,917 | |||||||||||
Endesa SA |
Electric Utilities | 28,199 | 575,469 | |||||||||||
Iberdrola SA |
Electric Utilities | 62,266 | 698,466 | |||||||||||
Industria de Diseno Textil SA |
Specialty Retail | 8,802 | 328,872 | |||||||||||
Naturgy Energy Group SA |
Gas Utilities | 16,463 | 449,002 | |||||||||||
Redeia Corp. SA |
Electric Utilities | 38,142 | 601,502 | |||||||||||
Telefonica SA |
Diversified Telecommunication Services | 509,049 | 2,084,680 | |||||||||||
|
|
|||||||||||||
7,309,111 | ||||||||||||||
|
|
|||||||||||||
Sweden 2.6% | ||||||||||||||
Assa Abloy AB, Class B |
Building Products | 8,622 | 189,039 | |||||||||||
Atlas Copco AB, Class A |
Machinery | 16,137 | 218,716 | |||||||||||
Atlas Copco AB, Class B |
Machinery | 9,943 | 117,330 | |||||||||||
Axfood AB |
Consumer Staples Distribution & Retail | 8,802 | 202,870 | |||||||||||
Boliden AB |
Metals & Mining | 22,820 | 660,495 | |||||||||||
b |
Electrolux AB, Class B |
Household Durables | 21,516 | 223,890 | ||||||||||
EQT AB |
Capital Markets | 9,780 | 195,254 | |||||||||||
Essity AB, Class B |
Household Products | 7,481 | 162,439 | |||||||||||
a |
Evolution AB |
Hotels, Restaurants & Leisure | 9,617 | 979,386 | ||||||||||
H & M Hennes & Mauritz AB, Class B |
Specialty Retail | 60,473 | 865,331 | |||||||||||
Husqvarna AB, Class B |
Machinery | 40,424 | 311,584 | |||||||||||
Nibe Industrier AB, Class B |
Building Products | 14,996 | 99,107 | |||||||||||
Nordnet AB publ |
Capital Markets | 13,855 | 184,152 | |||||||||||
Skandinaviska Enskilda Banken AB, Class A |
Banks | 60,310 | 725,272 | |||||||||||
Skanska AB, Class B |
Construction & Engineering | 26,732 | 442,901 | |||||||||||
SKF AB, Class B |
Machinery | 4,401 | 73,788 | |||||||||||
SSAB AB, Class A |
Metals & Mining | 18,771 | 106,604 | |||||||||||
SSAB AB, Class B |
Metals & Mining | 59,658 | 330,024 | |||||||||||
Svenska Handelsbanken AB, Class A |
Banks | 116,056 | 1,042,177 | |||||||||||
Svenska Handelsbanken AB, Class B |
Banks | 2,608 | 27,702 | |||||||||||
Swedbank AB, Class A |
Banks | 51,671 | 957,399 |
54 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Core Dividend Tilt Index ETF (continued)
Industry |
Shares |
Value |
||||||||||||
Common Stocks (continued) | ||||||||||||||
Sweden (continued) | ||||||||||||||
Tele2 AB, Class B |
Wireless Telecommunication Services | 48,900 | $ | 376,645 | ||||||||||
Telefonaktiebolaget LM Ericsson, Class B |
Communications Equipment | 111,166 | 545,690 | |||||||||||
Telia Co. AB |
Diversified Telecommunication Services | 209,129 | 434,458 | |||||||||||
Volvo AB, Class A |
Machinery | 11,247 | 235,412 | |||||||||||
Volvo AB, Class B |
Machinery | 92,910 | 1,929,318 | |||||||||||
|
|
|||||||||||||
11,636,983 | ||||||||||||||
|
|
|||||||||||||
Switzerland 9.7% | ||||||||||||||
ABB Ltd. |
Electrical Equipment | 30,481 | 1,092,891 | |||||||||||
Baloise Holding AG |
Insurance | 1,956 | 284,163 | |||||||||||
Cie Financiere Richemont SA, Class A |
Textiles, Apparel & Luxury Goods | 19,397 | 2,374,797 | |||||||||||
EMS-Chemie Holding AG |
Chemicals | 203 | 138,248 | |||||||||||
Geberit AG |
Building Products | 815 | 408,925 | |||||||||||
Givaudan SA |
Chemicals | 234 | 765,846 | |||||||||||
Julius Baer Group Ltd. |
Capital Markets | 12,877 | 828,531 | |||||||||||
Kuehne & Nagel International AG |
Marine Transportation | 5,053 | 1,441,663 | |||||||||||
Lonza Group AG |
Life Sciences Tools & Services | 1,630 | 758,338 | |||||||||||
Nestle SA |
Food Products | 79,218 | 8,983,467 | |||||||||||
Novartis AG |
Pharmaceuticals | 90,791 | 9,316,300 | |||||||||||
Partners Group Holding AG |
Capital Markets | 1,880 | 2,125,995 | |||||||||||
Roche Holding AG |
Pharmaceuticals | 22,005 | 6,024,434 | |||||||||||
Roche Holding AG |
Pharmaceuticals | 845 | 248,844 | |||||||||||
Schindler Holding AG, PC |
Machinery | 326 | 65,214 | |||||||||||
SGS SA |
Professional Services | 12,877 | 1,084,157 | |||||||||||
Sika AG |
Chemicals | 2,119 | 539,942 | |||||||||||
STMicroelectronics NV |
Semiconductors & Semiconductor Equipment | 4,075 | 176,826 | |||||||||||
Swatch Group AG |
Textiles, Apparel & Luxury Goods | 173 | 44,517 | |||||||||||
Swiss Life Holding AG |
Insurance | 1,058 | 661,076 | |||||||||||
Swiss Re AG |
Insurance | 24,939 | 2,571,323 | |||||||||||
Swisscom AG |
Diversified Telecommunication Services | 2,282 | 1,357,526 | |||||||||||
Zurich Insurance Group AG |
Insurance | 6,683 | 3,069,008 | |||||||||||
|
|
|||||||||||||
44,362,031 | ||||||||||||||
|
|
|||||||||||||
United Kingdom 13.0% | ||||||||||||||
3i Group PLC |
Capital Markets | 13,203 | 334,062 | |||||||||||
abrdn PLC |
Capital Markets | 187,776 | 356,963 | |||||||||||
Admiral Group PLC |
Insurance | 19,071 | 553,297 | |||||||||||
Anglo American PLC |
Metals & Mining | 47,519 | 1,313,974 | |||||||||||
Ashtead Group PLC |
Trading Companies & Distributors | 4,056 | 247,626 | |||||||||||
AstraZeneca PLC |
Pharmaceuticals | 46,944 | 6,361,167 | |||||||||||
Aviva PLC |
Insurance | 252,976 | 1,203,585 | |||||||||||
B&M European Value Retail SA |
Broadline Retail | 76,098 | 544,656 | |||||||||||
BAE Systems PLC |
Aerospace & Defense | 61,940 | 754,345 | |||||||||||
Barratt Developments PLC |
Household Durables | 92,503 | 498,022 | |||||||||||
BP PLC |
Oil, Gas & Consumable Fuels | 282,968 | 1,835,331 | |||||||||||
British American Tobacco PLC |
Tobacco | 138,550 | 4,357,891 | |||||||||||
British Land Co. PLC |
Diversified REITs | 85,568 | 330,970 | |||||||||||
BT Group PLC |
Diversified Telecommunication Services | 309,863 | 441,363 | |||||||||||
Burberry Group PLC |
Textiles, Apparel & Luxury Goods | 11,120 | 259,031 | |||||||||||
CK Hutchison Holdings Ltd., Class A |
Industrial Conglomerates | 239,500 | 1,281,313 | |||||||||||
a |
ConvaTec Group PLC |
Health Care Equipment & Supplies | 21,516 | 57,197 | ||||||||||
Diageo PLC |
Beverages | 34,882 | 1,291,732 | |||||||||||
DS Smith PLC |
Containers & Packaging | 126,977 | 444,953 | |||||||||||
GSK PLC |
Pharmaceuticals | 191,036 | 3,478,880 | |||||||||||
Hargreaves Lansdown PLC |
Capital Markets | 30,945 | 292,037 | |||||||||||
HSBC Holdings PLC |
Banks | 659,824 | 5,193,689 | |||||||||||
Imperial Brands PLC |
Tobacco | 87,368 | 1,777,638 | |||||||||||
Intermediate Capital Group PLC |
Capital Markets | 26,379 | 445,283 |
franklintempleton.com |
Semiannual Report |
55 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Core Dividend Tilt Index ETF (continued)
Industry |
Shares |
Value |
||||||||||||
Common Stocks (continued) | ||||||||||||||
United Kingdom (continued) | ||||||||||||||
ITV PLC |
Media | 318,339 | $ | 274,393 | ||||||||||
J Sainsbury PLC |
Consumer Staples Distribution & Retail | 159,740 | 492,886 | |||||||||||
Kingfisher PLC |
Specialty Retail | 140,870 | 383,939 | |||||||||||
Land Securities Group PLC |
Diversified REITs | 69,927 | 503,391 | |||||||||||
Legal & General Group PLC |
Insurance | 543,862 | 1,476,979 | |||||||||||
London Stock Exchange Group PLC |
Capital Markets | 4,564 | 458,682 | |||||||||||
M&G PLC |
Financial Services | 208,314 | 501,650 | |||||||||||
Mondi PLC |
Paper & Forest Products | 38,794 | 649,879 | |||||||||||
National Grid PLC |
Multi-Utilities | 299,105 | 3,577,711 | |||||||||||
NatWest Group PLC |
Banks | 457,541 | 1,316,270 | |||||||||||
Persimmon PLC |
Household Durables | 29,593 | 389,190 | |||||||||||
Phoenix Group Holdings PLC |
Insurance | 78,298 | 460,822 | |||||||||||
Reckitt Benckiser Group PLC |
Household Products | 20,701 | 1,463,947 | |||||||||||
RELX PLC |
Professional Services | 38,631 | 1,308,442 | |||||||||||
Rentokil Initial PLC |
Commercial Services & Supplies | 18,986 | 141,404 | |||||||||||
Sage Group PLC |
Software | 15,648 | 188,891 | |||||||||||
Schroders PLC |
Capital Markets | 83,782 | 416,403 | |||||||||||
Severn Trent PLC |
Water Utilities | 21,190 | 611,671 | |||||||||||
Smith & Nephew PLC |
Health Care Equipment & Supplies | 6,520 | 81,410 | |||||||||||
Spirax-Sarco Engineering PLC |
Machinery | 1,630 | 189,519 | |||||||||||
SSE PLC |
Electric Utilities | 93,562 | 1,838,573 | |||||||||||
St. James’s Place PLC |
Capital Markets | 51,019 | 518,221 | |||||||||||
Taylor Wimpey PLC |
Household Durables | 328,282 | 470,003 | |||||||||||
Tesco PLC |
Consumer Staples Distribution & Retail | 124,634 | 401,906 | |||||||||||
Unilever PLC |
Personal Care Products | 89,487 | 4,436,652 | |||||||||||
United Utilities Group PLC |
Water Utilities | 56,398 | 652,708 | |||||||||||
Vodafone Group PLC |
Wireless Telecommunication Services | 2,352,579 | 2,205,840 | |||||||||||
|
|
|||||||||||||
59,066,387 | ||||||||||||||
|
|
|||||||||||||
United States 1.2% | ||||||||||||||
Holcim AG, Class B |
Construction Materials | 26,080 | 1,675,757 | |||||||||||
Stellantis NV |
Automobiles | 191,362 | 3,689,428 | |||||||||||
|
|
|||||||||||||
5,365,185 | ||||||||||||||
|
|
|||||||||||||
Total
Common Stocks |
449,822,641 | |||||||||||||
|
|
|||||||||||||
Preferred Stocks 0.7% |
||||||||||||||
Germany 0.7% | ||||||||||||||
c |
Bayerische Motoren Werke AG, 9.649%, pfd. |
Automobiles | 5,542 | 518,108 | ||||||||||
c |
Porsche Automobil Holding SE, 5.488%, pfd. |
Automobiles | 4,075 | 201,267 | ||||||||||
c |
Sartorius AG, 0.447%, pfd. |
Life Sciences Tools & Services | 652 | 222,140 | ||||||||||
c |
Volkswagen AG, 25.537%, pfd. |
Automobiles | 17,441 | 2,011,649 | ||||||||||
|
|
|||||||||||||
Total
Preferred Stocks |
2,953,164 | |||||||||||||
|
|
|||||||||||||
Total Investments |
452,775,805 | |||||||||||||
Other Assets, less Liabilities 0.7% |
3,347,433 | |||||||||||||
|
|
|||||||||||||
Net Assets 100.0% |
$ | 456,123,238 | ||||||||||||
|
|
†Rounds to less than 0.1% of net assets.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2023, the value of was $4,163,338, representing 0.9% of net assets.
bNon-income producing.
cVariable rate security. The rate shown represents the yield at period end.
56 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Core Dividend Tilt Index ETF (continued)
At September 30, 2023, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts |
Notional Amount* |
Expiration Date |
Value/Unrealized Appreciation (Depreciation) |
|||||||||||||||
Equity Contracts | ||||||||||||||||||||
MSCI EAFE |
Long | 26 | $2,653,950 | 12/15/23 | $(59,614 | ) |
*As of period end.
See Note 7 regarding other derivative information.
See Abbreviations on page 108.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. |
Semiannual Report |
57 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Core Dividend Tilt Index ETF
Six Months Ended (unaudited) |
Year Ended March 31, | |||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||||||
Net asset value, beginning of period |
$32.29 | $36.29 | $33.29 | $23.32 | $28.20 | $28.22 | ||||||||||||||||||
Income from investment operationsa: | ||||||||||||||||||||||||
Net investment incomeb |
0.39 | 0.82 | 1.03 | 0.92 | 1.04 | 0.95 | ||||||||||||||||||
Net realized and unrealized gains (losses) |
0.84 | (3.82) | 2.98 | 9.95 | (4.90) | (0.02) | ||||||||||||||||||
Total from investment operations |
1.23 | (3.00) | 4.01 | 10.87 | (3.86) | 0.93 | ||||||||||||||||||
Less distributions from net investment income | (0.44) | (1.00) | (1.01) | (0.90) | (1.02) | (0.95) | ||||||||||||||||||
Net asset value, end of period |
$33.08 | $32.29 | $36.29 | $33.29 | $23.32 | $28.20 | ||||||||||||||||||
Total returnc |
3.77% | (8.09)% | 12.14% | 47.20% | (14.34)% | 3.51% | ||||||||||||||||||
Ratios to average net assetsd | ||||||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.06% | 0.19% | 0.45% | 0.45% | 0.45% | 0.45% | ||||||||||||||||||
Expenses net of waiver and payments by affiliates |
0.06% | 0.19% | 0.45% | 0.45% | 0.45% | 0.45% | ||||||||||||||||||
Net investment income |
2.33% | 2.58% | 2.92% | 3.21% | 3.60% | 3.43% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) |
$21,500 | $24,219 | $30,851 | $26,632 | $18,653 | $16,920 | ||||||||||||||||||
Portfolio turnover ratee |
9.19%f | 130.60%f | 28.73%f | 42.38%f | 19.79%f | 25.75% |
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
dRatios are annualized for periods less than one year.
ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
fPortfolio turnover rate excluding cash creations was as follows: | 9.19% | 130.60% | 27.86% | 42.38% | 19.79% | — |
58 |
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 U.S. Core Dividend Tilt Index ETF
Industry |
Shares |
Value |
||||||||||
Common Stocks 99.7% | ||||||||||||
Brazil 0.2% | ||||||||||||
a |
MercadoLibre, Inc. |
Broadline Retail | 32 | $ | 40,572 | |||||||
|
|
|||||||||||
Netherlands 0.4% | ||||||||||||
NXP Semiconductors NV |
Semiconductors & Semiconductor Equipment | 442 | 88,365 | |||||||||
|
|
|||||||||||
Russia 0.0%† | ||||||||||||
a,b |
Polymetal International PLC |
Metals & Mining | 4,860 | — | ||||||||
a,b |
Tatneft PJSC |
Oil, Gas & Consumable Fuels | 15,990 | — | ||||||||
|
|
|||||||||||
— | ||||||||||||
|
|
|||||||||||
United States 99.1% | ||||||||||||
3M Co. |
Industrial Conglomerates | 949 | 88,845 | |||||||||
Abbott Laboratories |
Health Care Equipment & Supplies | 1,495 | 144,791 | |||||||||
AbbVie, Inc. |
Biotechnology | 1,729 | 257,725 | |||||||||
Accenture PLC, Class A |
IT Services | 325 | 99,811 | |||||||||
a |
Adobe, Inc. |
Software | 182 | 92,802 | ||||||||
Advance Auto Parts, Inc. |
Specialty Retail | 104 | 5,817 | |||||||||
a |
Advanced Micro Devices, Inc. |
Semiconductors & Semiconductor Equipment | 962 | 98,913 | ||||||||
AES Corp. |
Independent Power Producers & Energy Traders | 1,209 | 18,377 | |||||||||
Air Products & Chemicals, Inc. |
Chemicals | 221 | 62,631 | |||||||||
a |
Airbnb, Inc., Class A |
Hotels, Restaurants & Leisure | 13 | 1,784 | ||||||||
Alexandria Real Estate Equities, Inc. |
Office REITs | 273 | 27,327 | |||||||||
Alliant Energy Corp. |
Electric Utilities | 416 | 20,155 | |||||||||
Ally Financial, Inc. |
Consumer Finance | 494 | 13,180 | |||||||||
a |
Alphabet, Inc., Class A |
Interactive Media & Services | 2,769 | 362,351 | ||||||||
a |
Alphabet, Inc., Class C |
Interactive Media & Services | 2,392 | 315,385 | ||||||||
Altria Group, Inc. |
Tobacco | 3,068 | 129,009 | |||||||||
a |
Amazon.com, Inc. |
Broadline Retail | 4,862 | 618,057 | ||||||||
Amcor PLC |
Containers & Packaging | 2,704 | 24,769 | |||||||||
American Electric Power Co., Inc. |
Electric Utilities | 897 | 67,472 | |||||||||
American Tower Corp. |
Specialized REITs | 494 | 81,238 | |||||||||
Amgen, Inc. |
Biotechnology | 741 | 199,151 | |||||||||
Analog Devices, Inc. |
Semiconductors & Semiconductor Equipment | 754 | 132,018 | |||||||||
Annaly Capital Management, Inc. |
Mortgage Real Estate Investment Trusts (REITs) | 858 | 16,139 | |||||||||
Apollo Global Management, Inc. |
Financial Services | 702 | 63,012 | |||||||||
Apple, Inc. |
Technology Hardware, Storage & Peripherals | 8,606 | 1,473,433 | |||||||||
Applied Materials, Inc. |
Semiconductors & Semiconductor Equipment | 624 | 86,393 | |||||||||
a |
Arista Networks, Inc. |
Communications Equipment | 156 | 28,693 | ||||||||
AT&T, Inc. |
Diversified Telecommunication Services | 11,726 | 176,125 | |||||||||
Automatic Data Processing, Inc. |
Professional Services | 117 | 28,148 | |||||||||
AvalonBay Communities, Inc. |
Residential REITs | 247 | 42,420 | |||||||||
Avangrid, Inc. |
Electric Utilities | 104 | 3,138 | |||||||||
Baker Hughes Co. |
Energy Equipment & Services | 780 | 27,550 | |||||||||
Bank of America Corp. |
Banks | 3,913 | 107,138 | |||||||||
Bank of New York Mellon Corp. |
Capital Markets | 1,222 | 52,118 | |||||||||
Bath & Body Works, Inc. |
Specialty Retail | 169 | 5,712 | |||||||||
Baxter International, Inc. |
Health Care Equipment & Supplies | 637 | 24,040 | |||||||||
Becton Dickinson & Co. |
Health Care Equipment & Supplies | 52 | 13,444 | |||||||||
Bentley Systems, Inc., Class B |
Software | 26 | 1,304 | |||||||||
Best Buy Co., Inc. |
Specialty Retail | 351 | 24,384 | |||||||||
a |
Bill Holdings, Inc. |
Software | 65 | 7,057 | ||||||||
BlackRock, Inc. |
Capital Markets | 247 | 159,683 | |||||||||
Blackstone, Inc. |
Capital Markets | 1,170 | 125,354 | |||||||||
a |
Block, Inc. |
Financial Services | 143 | 6,329 | ||||||||
Boston Properties, Inc. |
Office REITs | 247 | 14,692 | |||||||||
Bristol-Myers Squibb Co. |
Pharmaceuticals | 2,925 | 169,767 | |||||||||
Broadcom, Inc. |
Semiconductors & Semiconductor Equipment | 385 | 319,773 | |||||||||
Broadridge Financial Solutions, Inc. |
Professional Services | 195 | 34,915 |
franklintempleton.com |
Semiannual Report |
59 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Dividend Tilt Index ETF (continued)
Industry |
Shares |
Value |
||||||||||
Common Stocks (continued) | ||||||||||||
United States (continued) | ||||||||||||
a |
Cadence Design Systems, Inc. |
Software | 104 | $ | 24,367 | |||||||
Camden Property Trust |
Residential REITs | 195 | 18,443 | |||||||||
Campbell Soup Co. |
Food Products | 325 | 13,351 | |||||||||
Cardinal Health, Inc. |
Health Care Providers & Services | 429 | 37,246 | |||||||||
Carlyle Group, Inc. |
Capital Markets | 351 | 10,586 | |||||||||
Caterpillar, Inc. |
Machinery | 182 | 49,686 | |||||||||
a |
Ceridian HCM Holding, Inc. |
Professional Services | 208 | 14,113 | ||||||||
Charles Schwab Corp. |
Capital Markets | 234 | 12,847 | |||||||||
Chevron Corp. |
Oil, Gas & Consumable Fuels | 1,599 | 269,623 | |||||||||
Cincinnati Financial Corp. |
Insurance | 143 | 14,627 | |||||||||
Cisco Systems, Inc. |
Communications Equipment | 3,991 | 214,556 | |||||||||
Citigroup, Inc. |
Banks | 3,367 | 138,485 | |||||||||
Citizens Financial Group, Inc. |
Banks | 858 | 22,994 | |||||||||
Clorox Co. |
Household Products | 208 | 27,260 | |||||||||
a |
Cloudflare, Inc., Class A |
IT Services | 221 | 13,932 | ||||||||
CME Group, Inc. |
Capital Markets | 611 | 122,334 | |||||||||
CMS Energy Corp. |
Multi-Utilities | 507 | 26,927 | |||||||||
Coca-Cola Co. |
Beverages | 3,445 | 192,851 | |||||||||
Cognex Corp. |
Electronic Equipment, Instruments & Components | 195 | 8,276 | |||||||||
a |
Coinbase Global, Inc., Class A |
Capital Markets | 52 | 3,904 | ||||||||
Colgate-Palmolive Co. |
Household Products | 312 | 22,186 | |||||||||
Comcast Corp., Class A |
Media | 2,886 | 127,965 | |||||||||
Conagra Brands, Inc. |
Food Products | 819 | 22,457 | |||||||||
Consolidated Edison, Inc. |
Multi-Utilities | 598 | 51,147 | |||||||||
Corning, Inc. |
Electronic Equipment, Instruments & Components | 1,378 | 41,988 | |||||||||
Coterra Energy, Inc., Class A |
Oil, Gas & Consumable Fuels | 1,300 | 35,165 | |||||||||
a |
Crowdstrike Holdings, Inc., Class A |
Software | 104 | 17,408 | ||||||||
Crown Castle, Inc. |
Specialized REITs | 741 | 68,194 | |||||||||
Cummins, Inc. |
Machinery | 234 | 53,460 | |||||||||
CVS Health Corp. |
Health Care Providers & Services | 1,677 | 117,088 | |||||||||
Darden Restaurants, Inc. |
Hotels, Restaurants & Leisure | 208 | 29,790 | |||||||||
a |
Datadog, Inc., Class A |
Software | 169 | 15,394 | ||||||||
Dell Technologies, Inc., Class C |
Technology Hardware, Storage & Peripherals | 325 | 22,393 | |||||||||
Devon Energy Corp. |
Oil, Gas & Consumable Fuels | 1,053 | 50,228 | |||||||||
a |
Dexcom, Inc. |
Health Care Equipment & Supplies | 117 | 10,916 | ||||||||
Diamondback Energy, Inc. |
Oil, Gas & Consumable Fuels | 299 | 46,309 | |||||||||
Digital Realty Trust, Inc. |
Specialized REITs | 494 | 59,784 | |||||||||
Discover Financial Services |
Consumer Finance | 143 | 12,388 | |||||||||
Dominion Energy, Inc. |
Multi-Utilities | 1,495 | 66,782 | |||||||||
a |
DoorDash, Inc., Class A |
Hotels, Restaurants & Leisure | 130 | 10,331 | ||||||||
Dow, Inc. |
Chemicals | 1,209 | 62,336 | |||||||||
DTE Energy Co. |
Multi-Utilities | 364 | 36,138 | |||||||||
Duke Energy Corp. |
Electric Utilities | 1,300 | 114,738 | |||||||||
a |
Dynatrace, Inc. |
Software | 247 | 11,542 | ||||||||
East West Bancorp, Inc. |
Banks | 247 | 13,019 | |||||||||
Eastman Chemical Co. |
Chemicals | 221 | 16,955 | |||||||||
Eaton Corp. PLC |
Electrical Equipment | 390 | 83,179 | |||||||||
eBay, Inc. |
Broadline Retail | 962 | 42,415 | |||||||||
Edison International |
Electric Utilities | 650 | 41,139 | |||||||||
Eli Lilly & Co. |
Pharmaceuticals | 442 | 237,411 | |||||||||
Emerson Electric Co. |
Electrical Equipment | 364 | 35,151 | |||||||||
a |
Enphase Energy, Inc. |
Semiconductors & Semiconductor Equipment | 39 | 4,686 | ||||||||
Entegris, Inc. |
Semiconductors & Semiconductor Equipment | 39 | 3,663 | |||||||||
Entergy Corp. |
Electric Utilities | 364 | 33,670 | |||||||||
EOG Resources, Inc. |
Oil, Gas & Consumable Fuels | 78 | 9,887 | |||||||||
Equinix, Inc. |
Specialized REITs | 65 | 47,207 | |||||||||
Equity Residential |
Residential REITs | 598 | 35,109 |
60 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Dividend Tilt Index ETF (continued)
Industry |
Shares |
Value |
||||||||||
Common Stocks (continued) | ||||||||||||
United States (continued) | ||||||||||||
Essex Property Trust, Inc. |
Residential REITs | 117 | $ | 24,815 | ||||||||
Estee Lauder Cos., Inc., Class A |
Personal Care Products | 104 | 15,033 | |||||||||
Evergy, Inc. |
Electric Utilities | 403 | 20,432 | |||||||||
Eversource Energy |
Electric Utilities | 624 | 36,286 | |||||||||
a |
Exact Sciences Corp. |
Biotechnology | 91 | 6,208 | ||||||||
Exelon Corp. |
Electric Utilities | 1,677 | 63,374 | |||||||||
Extra Space Storage, Inc. |
Specialized REITs | 364 | 44,255 | |||||||||
Exxon Mobil Corp. |
Oil, Gas & Consumable Fuels | 2,964 | 348,507 | |||||||||
Fastenal Co. |
Trading Companies & Distributors | 1,001 | 54,695 | |||||||||
Federal Realty Investment Trust |
Retail REITs | 130 | 11,782 | |||||||||
FedEx Corp. |
Air Freight & Logistics | 78 | 20,664 | |||||||||
Fidelity National Financial, Inc. |
Insurance | 442 | 18,255 | |||||||||
Fidelity National Information Services, Inc. |
Financial Services | 351 | 19,400 | |||||||||
Fifth Third Bancorp |
Banks | 1,183 | 29,965 | |||||||||
FirstEnergy Corp. |
Electric Utilities | 936 | 31,992 | |||||||||
Ford Motor Co. |
Automobiles | 6,851 | 85,089 | |||||||||
a |
Fortinet, Inc. |
Software | 273 | 16,020 | ||||||||
Franklin Resources, Inc. |
Capital Markets | 468 | 11,503 | |||||||||
Garmin Ltd. |
Household Durables | 273 | 28,720 | |||||||||
Gen Digital, Inc. |
Software | 260 | 4,597 | |||||||||
General Dynamics Corp. |
Aerospace & Defense | 52 | 11,490 | |||||||||
General Mills, Inc. |
Food Products | 910 | 58,231 | |||||||||
Genuine Parts Co. |
Distributors | 104 | 15,016 | |||||||||
Gilead Sciences, Inc. |
Biotechnology | 2,197 | 164,643 | |||||||||
Goldman Sachs Group, Inc. |
Capital Markets | 260 | 84,128 | |||||||||
Hasbro, Inc. |
Leisure Products | 221 | 14,617 | |||||||||
Healthpeak Properties, Inc. |
Health Care REITs | 962 | 17,662 | |||||||||
Hewlett Packard Enterprise Co. |
Technology Hardware, Storage & Peripherals | 1,547 | 26,871 | |||||||||
Home Depot, Inc. |
Specialty Retail | 806 | 243,541 | |||||||||
Honeywell International, Inc. |
Industrial Conglomerates | 234 | 43,229 | |||||||||
Host Hotels & Resorts, Inc. |
Hotel & Resort REITs | 1,261 | 20,264 | |||||||||
HP, Inc. |
Technology Hardware, Storage & Peripherals | 1,508 | 38,756 | |||||||||
Hubbell, Inc., Class B |
Electrical Equipment | 78 | 24,446 | |||||||||
a |
HubSpot, Inc. |
Software | 52 | 25,610 | ||||||||
Huntington Bancshares, Inc. |
Banks | 2,548 | 26,499 | |||||||||
a |
IDEXX Laboratories, Inc. |
Health Care Equipment & Supplies | 26 | 11,369 | ||||||||
Illinois Tool Works, Inc. |
Machinery | 403 | 92,815 | |||||||||
Intel Corp. |
Semiconductors & Semiconductor Equipment | 4,355 | 154,820 | |||||||||
International Business Machines Corp. |
IT Services | 1,261 | 176,918 | |||||||||
International Flavors & Fragrances, Inc. |
Chemicals | 442 | 30,131 | |||||||||
International Paper Co. |
Containers & Packaging | 624 | 22,133 | |||||||||
Interpublic Group of Cos., Inc. |
Media | 650 | 18,629 | |||||||||
Intuit, Inc. |
Software | 195 | 99,633 | |||||||||
a |
Intuitive Surgical, Inc. |
Health Care Equipment & Supplies | 117 | 34,198 | ||||||||
Invesco Ltd. |
Capital Markets | 806 | 11,703 | |||||||||
Invitation Homes, Inc. |
Residential REITs | 936 | 29,662 | |||||||||
Iron Mountain, Inc. |
Specialized REITs | 507 | 30,141 | |||||||||
J M Smucker Co. |
Food Products | 26 | 3,196 | |||||||||
Johnson & Johnson |
Pharmaceuticals | 2,054 | 319,911 | |||||||||
Johnson Controls International PLC |
Building Products | 429 | 22,827 | |||||||||
JPMorgan Chase & Co. |
Banks | 1,950 | 282,789 | |||||||||
Juniper Networks, Inc. |
Communications Equipment | 598 | 16,618 | |||||||||
Kellogg Co. |
Food Products | 455 | 27,077 | |||||||||
KeyCorp |
Banks | 1,651 | 17,765 | |||||||||
Kimberly-Clark Corp. |
Household Products | 585 | 70,697 | |||||||||
Kimco Realty Corp. |
Retail REITs | 1,105 | 19,437 | |||||||||
Kinder Morgan, Inc. |
Oil, Gas & Consumable Fuels | 3,484 | 57,765 |
franklintempleton.com |
Semiannual Report |
61 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Dividend Tilt Index ETF (continued)
Industry |
Shares |
Value |
||||||||||
Common Stocks (continued) | ||||||||||||
United States (continued) | ||||||||||||
KKR & Co., Inc. |
Capital Markets | 195 | $ | 12,012 | ||||||||
KLA Corp. |
Semiconductors & Semiconductor Equipment | 143 | 65,588 | |||||||||
Kraft Heinz Co. |
Food Products | 1,378 | 46,356 | |||||||||
Lam Research Corp. |
Semiconductors & Semiconductor Equipment | 143 | 89,628 | |||||||||
Lear Corp. |
Automobile Components | 104 | 13,957 | |||||||||
Linde PLC |
Chemicals | 104 | 38,724 | |||||||||
Lockheed Martin Corp. |
Aerospace & Defense | 104 | 42,532 | |||||||||
Lowe’s Cos., Inc. |
Specialty Retail | 338 | 70,250 | |||||||||
LyondellBasell Industries NV, Class A |
Chemicals | 429 | 40,626 | |||||||||
M&T Bank Corp. |
Banks | 299 | 37,809 | |||||||||
MarketAxess Holdings, Inc. |
Capital Markets | 26 | 5,555 | |||||||||
Marvell Technology, Inc. |
Semiconductors & Semiconductor Equipment | 429 | 23,222 | |||||||||
Masco Corp. |
Building Products | 78 | 4,169 | |||||||||
Mastercard, Inc., Class A |
Financial Services | 130 | 51,468 | |||||||||
McDonald’s Corp. |
Hotels, Restaurants & Leisure | 221 | 58,220 | |||||||||
Medtronic PLC |
Health Care Equipment & Supplies | 1,833 | 143,634 | |||||||||
Merck & Co., Inc. |
Pharmaceuticals | 2,249 | 231,535 | |||||||||
a |
Meta Platforms, Inc., Class A |
Interactive Media & Services | 1,118 | 335,635 | ||||||||
MetLife, Inc. |
Insurance | 663 | 41,709 | |||||||||
Microchip Technology, Inc. |
Semiconductors & Semiconductor Equipment | 975 | 76,099 | |||||||||
Microsoft Corp. |
Software | 4,290 | 1,354,568 | |||||||||
Mid-America Apartment Communities, Inc. |
Residential REITs | 208 | 26,759 | |||||||||
a |
MongoDB, Inc. |
IT Services | 52 | 17,985 | ||||||||
Monolithic Power Systems, Inc. |
Semiconductors & Semiconductor Equipment | 78 | 36,036 | |||||||||
Morgan Stanley |
Capital Markets | 1,989 | 162,442 | |||||||||
MSCI, Inc. |
Capital Markets | 123 | 63,109 | |||||||||
NetApp, Inc. |
Technology Hardware, Storage & Peripherals | 364 | 27,620 | |||||||||
a |
Netflix, Inc. |
Entertainment | 234 | 88,358 | ||||||||
Newmont Corp. |
Metals & Mining | 1,391 | 51,397 | |||||||||
NextEra Energy, Inc. |
Electric Utilities | 455 | 26,067 | |||||||||
NIKE, Inc., Class B |
Textiles, Apparel & Luxury Goods | 572 | 54,695 | |||||||||
NiSource, Inc. |
Multi-Utilities | 676 | 16,684 | |||||||||
Northern Trust Corp. |
Capital Markets | 351 | 24,387 | |||||||||
NRG Energy, Inc. |
Electric Utilities | 390 | 15,023 | |||||||||
NVIDIA Corp. |
Semiconductors & Semiconductor Equipment | 1,534 | 667,275 | |||||||||
a |
Okta, Inc. |
IT Services | 39 | 3,179 | ||||||||
Omnicom Group, Inc. |
Media | 351 | 26,142 | |||||||||
a |
ON Semiconductor Corp. |
Semiconductors & Semiconductor Equipment | 247 | 22,959 | ||||||||
ONEOK, Inc. |
Oil, Gas & Consumable Fuels | 767 | 48,651 | |||||||||
Oracle Corp. |
Software | 975 | 103,272 | |||||||||
Packaging Corp. of America |
Containers & Packaging | 156 | 23,954 | |||||||||
a |
Palantir Technologies, Inc., Class A |
Software | 1,716 | 27,456 | ||||||||
a |
Palo Alto Networks, Inc. |
Software | 130 | 30,477 | ||||||||
Paramount Global, Class B |
Media | 1,027 | 13,248 | |||||||||
Paychex, Inc. |
Professional Services | 546 | 62,970 | |||||||||
Paycom Software, Inc. |
Professional Services | 13 | 3,371 | |||||||||
PepsiCo, Inc. |
Beverages | 975 | 165,204 | |||||||||
Pfizer, Inc. |
Pharmaceuticals | 6,539 | 216,899 | |||||||||
Philip Morris International, Inc. |
Tobacco | 2,106 | 194,973 | |||||||||
Phillips 66 |
Oil, Gas & Consumable Fuels | 702 | 84,345 | |||||||||
Pinnacle West Capital Corp. |
Electric Utilities | 195 | 14,368 | |||||||||
Pioneer Natural Resources Co. |
Oil, Gas & Consumable Fuels | 390 | 89,525 | |||||||||
PNC Financial Services Group, Inc. |
Banks | 715 | 87,781 | |||||||||
PPL Corp. |
Electric Utilities | 1,261 | 29,709 | |||||||||
Principal Financial Group, Inc. |
Insurance | 403 | 29,044 | |||||||||
Procter & Gamble Co. |
Household Products | 1,300 | 189,618 | |||||||||
Prologis, Inc. |
Industrial REITs | 572 | 64,184 |
62 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Dividend Tilt Index ETF (continued)
Industry |
Shares |
Value |
||||||||||
Common Stocks (continued) | ||||||||||||
United States (continued) | ||||||||||||
Prudential Financial, Inc. |
Insurance | 624 | $ | 59,211 | ||||||||
Public Service Enterprise Group, Inc. |
Multi-Utilities | 858 | 48,829 | |||||||||
Public Storage |
Specialized REITs | 273 | 71,941 | |||||||||
QUALCOMM, Inc. |
Semiconductors & Semiconductor Equipment | 1,638 | 181,916 | |||||||||
Realty Income Corp. |
Retail REITs | 1,170 | 58,430 | |||||||||
Regency Centers Corp. |
Retail REITs | 273 | 16,227 | |||||||||
Regions Financial Corp. |
Banks | 1,651 | 28,397 | |||||||||
ResMed, Inc. |
Health Care Equipment & Supplies | 39 | 5,767 | |||||||||
Rockwell Automation, Inc. |
Electrical Equipment | 195 | 55,745 | |||||||||
RTX Corp. |
Aerospace & Defense | 702 | 50,523 | |||||||||
a |
Salesforce, Inc. |
Software | 455 | 92,265 | ||||||||
Seagate Technology Holdings PLC |
Technology Hardware, Storage & Peripherals | 377 | 24,863 | |||||||||
Sempra |
Multi-Utilities | 78 | 5,306 | |||||||||
a |
ServiceNow, Inc. |
Software | 130 | 72,665 | ||||||||
Simon Property Group, Inc. |
Retail REITs | 546 | 58,984 | |||||||||
Skyworks Solutions, Inc. |
Semiconductors & Semiconductor Equipment | 299 | 29,478 | |||||||||
Snap-on, Inc. |
Machinery | 91 | 23,210 | |||||||||
a |
Snowflake, Inc., Class A |
IT Services | 221 | 33,762 | ||||||||
Southern Co. |
Electric Utilities | 1,872 | 121,156 | |||||||||
Southern Copper Corp. |
Metals & Mining | 143 | 10,766 | |||||||||
a |
Splunk, Inc. |
Software | 13 | 1,901 | ||||||||
Stanley Black & Decker, Inc. |
Machinery | 273 | 22,817 | |||||||||
Starbucks Corp. |
Hotels, Restaurants & Leisure | 1,365 | 124,584 | |||||||||
State Street Corp. |
Capital Markets | 559 | 37,431 | |||||||||
Stryker Corp. |
Health Care Equipment & Supplies | 65 | 17,763 | |||||||||
Sun Communities, Inc. |
Residential REITs | 130 | 15,384 | |||||||||
Synchrony Financial |
Consumer Finance | 351 | 10,730 | |||||||||
a |
Synopsys, Inc. |
Software | 39 | 17,900 | ||||||||
Sysco Corp. |
Consumer Staples Distribution & Retail | 442 | 29,194 | |||||||||
T Rowe Price Group, Inc. |
Capital Markets | 390 | 40,899 | |||||||||
Tapestry, Inc. |
Textiles, Apparel & Luxury Goods | 416 | 11,960 | |||||||||
Target Corp. |
Consumer Staples Distribution & Retail | 676 | 74,745 | |||||||||
TE Connectivity Ltd. |
Electronic Equipment, Instruments & Components | 65 | 8,029 | |||||||||
a |
Tesla, Inc. |
Automobiles | 1,404 | 351,309 | ||||||||
Texas Instruments, Inc. |
Semiconductors & Semiconductor Equipment | 1,196 | 190,176 | |||||||||
TJX Cos., Inc. |
Specialty Retail | 286 | 25,420 | |||||||||
Tractor Supply Co. |
Specialty Retail | 169 | 34,315 | |||||||||
a |
Trade Desk, Inc., Class A |
Media | 325 | 25,399 | ||||||||
Truist Financial Corp. |
Banks | 2,366 | 67,691 | |||||||||
U.S. Bancorp |
Banks | 2,444 | 80,799 | |||||||||
a |
Uber Technologies, Inc. |
Ground Transportation | 819 | 37,666 | ||||||||
UDR, Inc. |
Residential REITs | 559 | 19,940 | |||||||||
Union Pacific Corp. |
Ground Transportation | 351 | 71,474 | |||||||||
United Parcel Service, Inc., Class B |
Air Freight & Logistics | 1,118 | 174,263 | |||||||||
UnitedHealth Group, Inc. |
Health Care Providers & Services | 455 | 229,406 | |||||||||
Vail Resorts, Inc. |
Hotels, Restaurants & Leisure | 65 | 14,423 | |||||||||
Valero Energy Corp. |
Oil, Gas & Consumable Fuels | 234 | 33,160 | |||||||||
Ventas, Inc. |
Health Care REITs | 715 | 30,123 | |||||||||
Verizon Communications, Inc. |
Diversified Telecommunication Services | 5,759 | 186,649 | |||||||||
VF Corp. |
Textiles, Apparel & Luxury Goods | 585 | 10,337 | |||||||||
Viatris, Inc. |
Pharmaceuticals | 2,171 | 21,406 | |||||||||
VICI Properties, Inc. |
Specialized REITs | 1,716 | 49,936 | |||||||||
Visa, Inc., Class A |
Financial Services | 364 | 83,724 | |||||||||
Vistra Corp. |
Independent Power Producers & Energy Traders | 273 | 9,058 | |||||||||
Walgreens Boots Alliance, Inc. |
Consumer Staples Distribution & Retail | 1,417 | 31,514 | |||||||||
Walmart, Inc. |
Consumer Staples Distribution & Retail | 26 | 4,158 | |||||||||
Watsco, Inc. |
Trading Companies & Distributors | 65 | 24,552 |
franklintempleton.com |
Semiannual Report |
63 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Dividend Tilt Index ETF (continued)
Industry |
Shares |
Value |
||||||||||
Common Stocks (continued) | ||||||||||||
United States (continued) | ||||||||||||
WEC Energy Group, Inc. |
Multi-Utilities | 546 | $ | 43,980 | ||||||||
Wells Fargo & Co. |
Banks | 1,716 | 70,116 | |||||||||
Welltower, Inc. |
Health Care REITs | 494 | 40,468 | |||||||||
Westrock Co. |
Containers & Packaging | 429 | 15,358 | |||||||||
Weyerhaeuser Co. |
Specialized REITs | 897 | 27,502 | |||||||||
Whirlpool Corp. |
Household Durables | 91 | 12,167 | |||||||||
Williams Cos., Inc. |
Oil, Gas & Consumable Fuels | 2,093 | 70,513 | |||||||||
a |
Workday, Inc., Class A |
Software | 78 | 16,758 | ||||||||
WP Carey, Inc. |
Diversified REITs | 364 | 19,685 | |||||||||
Xcel Energy, Inc. |
Electric Utilities | 949 | 54,302 | |||||||||
a |
Zscaler, Inc. |
Software | 52 | 8,091 | ||||||||
|
|
|||||||||||
21,316,302 | ||||||||||||
|
|
|||||||||||
Total
Common Stocks |
21,445,239 | |||||||||||
|
|
|||||||||||
Total
Investments |
21,445,239 | |||||||||||
Other Assets, less Liabilities 0.3% |
54,513 | |||||||||||
|
|
|||||||||||
Net Assets 100.0% |
$ | 21,499,752 | ||||||||||
|
|
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bFair valued using significant unobservable inputs. See Note 8 regarding fair value measurements.
At September 30, 2023, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts |
Notional Amount* |
Expiration Date |
Value/Unrealized Appreciation (Depreciation) |
|||||||||||||||
Equity Contracts | ||||||||||||||||||||
S&P 500 E-Mini |
Long | 2 | $ | 43,255 | 12/15/23 | $ | (2,138 | ) |
*As of period end.
See Note 7 regarding other derivative information.
See Abbreviations on page 108.
64 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Large Cap Multifactor Index ETF
Six Months Ended (unaudited) |
Year Ended March 31, |
|||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||||||
Net asset value, beginning of period |
$41.37 | $44.86 | $40.04 | $27.61 | $31.41 | $28.51 | ||||||||||||||||||
Income from investment operationsa: | ||||||||||||||||||||||||
Net investment incomeb |
0.36 | 0.82 | 0.77 | 0.72 | 0.76 | 0.66 | ||||||||||||||||||
Net realized and unrealized gains (losses) |
1.66 | (3.48) | 4.89 | 12.49 | (3.89) | 2.71 | ||||||||||||||||||
Total from investment operations |
2.02 | (2.66) | 5.66 | 13.21 | (3.13) | 3.37 | ||||||||||||||||||
Less distributions from net investment income | (0.35) | (0.83) | (0.84) | (0.78) | (0.67) | (0.47) | ||||||||||||||||||
Net asset value, end of period |
$43.04 | $41.37 | $44.86 | $40.04 | $27.61 | $31.41 | ||||||||||||||||||
Total returnc |
4.87% | (5.79)% | 14.19% | 48.22% | (10.27)% | 11.97% | ||||||||||||||||||
Ratios to average net assetsd | ||||||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.15% | 0.15% | 0.15% | 0.15% | 0.18% | 0.25% | ||||||||||||||||||
Expenses net of waiver and payments by affiliates |
0.15% | 0.15% | 0.15% | 0.15% | 0.18% | 0.25% | ||||||||||||||||||
Net investment income |
1.64% | 2.02% | 1.77% | 2.06% | 2.32% | 2.20% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) |
$871,651 | $860,419 | $966,737 | $1,353,407 | $1,311,583 | $1,008,255 | ||||||||||||||||||
Portfolio turnover ratee |
31.02%f | 51.95%f | 68.37%f | 25.05%f | 19.44%f | 18.04% |
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the
period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
dRatios are annualized for periods less than one year.
ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
f Portfolio turnover rate excluding cash creations was as follows: | 31.02% | 51.95% | 68.37% | 25.05% | 19.44% | — |
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
65 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2023 (unaudited)
Franklin U.S. Large Cap Multifactor Index ETF
Shares |
Value |
|||||||||
Common Stocks 99.8% |
||||||||||
Communication Services 8.4% |
||||||||||
a |
Alphabet, Inc., Class A |
137,295 | $ | 17,966,424 | ||||||
a |
Alphabet, Inc., Class C |
118,260 | 15,592,581 | |||||||
Comcast Corp., Class A |
150,660 | 6,680,264 | ||||||||
a |
Meta Platforms, Inc., Class A |
46,980 | 14,103,866 | |||||||
a |
Netflix, Inc. |
24,300 | 9,175,680 | |||||||
Verizon Communications, Inc. |
300,510 | 9,739,529 | ||||||||
|
|
|||||||||
73,258,344 | ||||||||||
|
|
|||||||||
Consumer Discretionary 12.1% | ||||||||||
Advance Auto Parts, Inc. |
13,365 | 747,504 | ||||||||
a |
Amazon.com, Inc. |
153,495 | 19,512,284 | |||||||
a |
AutoNation, Inc. |
5,670 | 858,438 | |||||||
a |
Booking Holdings, Inc. |
2,890 | 8,912,616 | |||||||
a |
Chipotle Mexican Grill, Inc. |
1,620 | 2,967,565 | |||||||
Darden Restaurants, Inc. |
6,885 | 986,070 | ||||||||
a |
Deckers Outdoor Corp. |
2,025 | 1,041,032 | |||||||
Domino’s Pizza, Inc. |
2,310 | 875,005 | ||||||||
DR Horton, Inc. |
27,945 | 3,003,249 | ||||||||
Gentex Corp. |
27,945 | 909,330 | ||||||||
a |
Grand Canyon Education, Inc. |
7,695 | 899,392 | |||||||
Lennar Corp., Class A |
21,870 | 2,454,470 | ||||||||
Lennar Corp., Class B |
8,505 | 869,466 | ||||||||
Lowe’s Cos., Inc. |
46,575 | 9,680,148 | ||||||||
Macy’s, Inc. |
74,925 | 869,879 | ||||||||
Marriott International, Inc., Class A |
8,505 | 1,671,743 | ||||||||
McDonald’s Corp. |
44,955 | 11,842,945 | ||||||||
Murphy USA, Inc. |
2,835 | 968,805 | ||||||||
a |
NVR, Inc. |
277 | 1,651,834 | |||||||
a |
O’Reilly Automotive, Inc. |
5,670 | 5,153,236 | |||||||
Penske Automotive Group, Inc. |
5,670 | 947,230 | ||||||||
PulteGroup, Inc. |
22,275 | 1,649,464 | ||||||||
a |
Tesla, Inc. |
46,575 | 11,653,997 | |||||||
Texas Roadhouse, Inc. |
8,910 | 856,251 | ||||||||
TJX Cos., Inc. |
87,885 | 7,811,219 | ||||||||
Toll Brothers, Inc. |
12,150 | 898,614 | ||||||||
a |
TopBuild Corp. |
3,240 | 815,184 | |||||||
a |
Victoria’s Secret & Co. |
47,790 | 797,137 | |||||||
Williams-Sonoma, Inc. |
6,480 | 1,006,992 | ||||||||
Yum! Brands, Inc. |
22,680 | 2,833,639 | ||||||||
|
|
|||||||||
105,144,738 | ||||||||||
|
|
|||||||||
Consumer Staples 4.0% | ||||||||||
Albertsons Cos., Inc., Class A |
40,905 | 930,589 | ||||||||
Altria Group, Inc. |
166,455 | 6,999,433 | ||||||||
Ingredion, Inc. |
8,910 | 876,744 | ||||||||
Lamb Weston Holdings, Inc. |
10,530 | 973,604 | ||||||||
a |
Monster Beverage Corp. |
40,095 | 2,123,030 | |||||||
Philip Morris International, Inc. |
116,235 | 10,761,036 | ||||||||
Procter & Gamble Co. |
77,355 | 11,283,000 | ||||||||
Spectrum Brands Holdings, Inc. |
10,935 | 856,757 | ||||||||
|
|
|||||||||
34,804,193 | ||||||||||
|
|
|||||||||
Energy 3.7% | ||||||||||
Chesapeake Energy Corp. |
11,340 | 977,848 | ||||||||
Devon Energy Corp. |
49,815 | 2,376,176 | ||||||||
Exxon Mobil Corp. |
88,695 | 10,428,758 | ||||||||
Marathon Petroleum Corp. |
36,855 | 5,577,636 | ||||||||
Ovintiv, Inc. |
20,655 | 982,558 |
66 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Large Cap Multifactor Index ETF (continued)
Shares |
Value |
|||||||||
Energy (continued) |
||||||||||
Phillips 66 |
30,780 | $ | 3,698,217 | |||||||
Pioneer Natural Resources Co. |
8,100 | 1,859,355 | ||||||||
a |
Southwestern Energy Co. |
134,865 | 869,879 | |||||||
TechnipFMC PLC |
48,195 | 980,286 | ||||||||
Valero Energy Corp. |
28,755 | 4,074,871 | ||||||||
|
|
|||||||||
31,825,584 | ||||||||||
|
|
|||||||||
Financials 8.4% | ||||||||||
Aon PLC, Class A |
11,340 | 3,676,655 | ||||||||
a |
Arch Capital Group Ltd. |
27,945 | 2,227,496 | |||||||
Arthur J Gallagher & Co. |
15,390 | 3,507,843 | ||||||||
a |
Berkshire Hathaway, Inc., Class B |
28,755 | 10,072,876 | |||||||
Cboe Global Markets, Inc. |
6,075 | 948,976 | ||||||||
Citigroup, Inc. |
109,350 | 4,497,565 | ||||||||
Evercore, Inc., Class A |
6,480 | 893,462 | ||||||||
First Citizens BancShares, Inc., Class A |
810 | 1,117,881 | ||||||||
Janus Henderson Group PLC |
32,400 | 836,568 | ||||||||
JPMorgan Chase & Co. |
54,675 | 7,928,968 | ||||||||
Kinsale Capital Group, Inc. |
2,430 | 1,006,336 | ||||||||
LPL Financial Holdings, Inc. |
6,075 | 1,443,724 | ||||||||
Marsh & McLennan Cos., Inc. |
17,415 | 3,314,074 | ||||||||
Mastercard, Inc., Class A |
39,285 | 15,553,324 | ||||||||
MGIC Investment Corp. |
51,030 | 851,691 | ||||||||
Moody’s Corp. |
9,720 | 3,073,172 | ||||||||
MSCI, Inc. |
4,860 | 2,493,569 | ||||||||
New York Community Bancorp, Inc. |
74,520 | 845,057 | ||||||||
OneMain Holdings, Inc. |
22,275 | 893,005 | ||||||||
Primerica, Inc. |
4,455 | 864,315 | ||||||||
Reinsurance Group of America, Inc. |
6,480 | 940,831 | ||||||||
Rithm Capital Corp. |
88,695 | 823,977 | ||||||||
RLI Corp. |
6,885 | 935,603 | ||||||||
SEI Investments Co. |
14,580 | 878,153 | ||||||||
Synchrony Financial |
34,425 | 1,052,372 | ||||||||
Unum Group |
18,630 | 916,410 | ||||||||
Western Union Co. |
74,520 | 982,174 | ||||||||
White Mountains Insurance Group Ltd. |
575 | 860,022 | ||||||||
|
|
|||||||||
73,436,099 | ||||||||||
|
|
|||||||||
Health Care 17.2% | ||||||||||
AbbVie, Inc. |
97,605 | 14,549,001 | ||||||||
a |
Align Technology, Inc. |
4,050 | 1,236,546 | |||||||
Amgen, Inc. |
19,035 | 5,115,847 | ||||||||
Becton Dickinson & Co. |
9,720 | 2,512,912 | ||||||||
a |
Biogen, Inc. |
10,125 | 2,602,226 | |||||||
Cardinal Health, Inc. |
23,895 | 2,074,564 | ||||||||
Cencora, Inc. |
5,265 | 947,542 | ||||||||
Chemed Corp. |
1,787 | 928,704 | ||||||||
Eli Lilly & Co. |
28,350 | 15,227,635 | ||||||||
Encompass Health Corp. |
12,960 | 870,394 | ||||||||
a |
Exelixis, Inc. |
40,500 | 884,925 | |||||||
Gilead Sciences, Inc. |
83,835 | 6,282,595 | ||||||||
HCA Healthcare, Inc. |
17,820 | 4,383,364 | ||||||||
a |
Horizon Therapeutics PLC |
8,100 | 937,089 | |||||||
a |
IDEXX Laboratories, Inc. |
6,075 | 2,656,415 | |||||||
a |
Intuitive Surgical, Inc. |
21,465 | 6,274,005 | |||||||
Johnson & Johnson |
105,705 | 16,463,554 | ||||||||
a |
Medpace Holdings, Inc. |
3,240 | 784,501 | |||||||
Merck & Co., Inc. |
134,865 | 13,884,352 | ||||||||
Organon & Co. |
41,715 | 724,172 |
franklintempleton.com |
Semiannual Report |
67 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Large Cap Multifactor Index ETF (continued)
Shares |
Value |
|||||||||
Health Care (continued) |
||||||||||
Pfizer, Inc. |
343,440 | $ | 11,391,905 | |||||||
Premier, Inc., Class A |
42,120 | 905,580 | ||||||||
a |
Regeneron Pharmaceuticals, Inc. |
9,159 | 7,537,491 | |||||||
STERIS PLC |
4,050 | 888,651 | ||||||||
Stryker Corp. |
25,515 | 6,972,484 | ||||||||
UnitedHealth Group, Inc. |
19,440 | 9,801,453 | ||||||||
a |
Vertex Pharmaceuticals, Inc. |
23,490 | 8,168,412 | |||||||
West Pharmaceutical Services, Inc. |
4,860 | 1,823,521 | ||||||||
Zoetis, Inc. |
15,795 | 2,748,014 | ||||||||
|
|
|||||||||
149,577,854 | ||||||||||
|
|
|||||||||
Industrials 8.4% | ||||||||||
Allison Transmission Holdings, Inc. |
14,985 | 885,014 | ||||||||
Broadridge Financial Solutions, Inc. |
4,860 | 870,183 | ||||||||
a |
Builders FirstSource, Inc. |
12,960 | 1,613,390 | |||||||
Caterpillar, Inc. |
17,415 | 4,754,295 | ||||||||
a |
Clean Harbors, Inc. |
5,670 | 948,931 | |||||||
Concentrix Corp. |
11,340 | 908,447 | ||||||||
a |
Copart, Inc. |
67,635 | 2,914,392 | |||||||
Eaton Corp. PLC |
14,175 | 3,023,244 | ||||||||
Emerson Electric Co. |
19,440 | 1,877,321 | ||||||||
Expeditors International of Washington, Inc. |
8,910 | 1,021,353 | ||||||||
Fastenal Co. |
18,630 | 1,017,943 | ||||||||
Fortune Brands Innovations, Inc. |
13,365 | 830,768 | ||||||||
General Electric Co. |
60,750 | 6,715,913 | ||||||||
Graco, Inc. |
11,745 | 855,976 | ||||||||
Hubbell, Inc., Class B |
4,860 | 1,523,173 | ||||||||
Illinois Tool Works, Inc. |
21,060 | 4,850,329 | ||||||||
Landstar System, Inc. |
4,860 | 859,928 | ||||||||
Lennox International, Inc. |
2,430 | 909,889 | ||||||||
Lincoln Electric Holdings, Inc. |
4,860 | 883,499 | ||||||||
Lockheed Martin Corp. |
18,218 | 7,450,433 | ||||||||
MSC Industrial Direct Co., Inc., Class A |
8,910 | 874,517 | ||||||||
nVent Electric PLC |
16,200 | 858,438 | ||||||||
Old Dominion Freight Line, Inc. |
7,290 | 2,982,631 | ||||||||
Owens Corning |
8,910 | 1,215,413 | ||||||||
PACCAR, Inc. |
47,790 | 4,063,106 | ||||||||
Pentair PLC |
13,365 | 865,384 | ||||||||
Republic Services, Inc. |
12,960 | 1,846,930 | ||||||||
Rollins, Inc. |
22,680 | 846,644 | ||||||||
Ryder System, Inc. |
8,910 | 952,925 | ||||||||
a |
Saia, Inc. |
2,430 | 968,720 | |||||||
Schneider National, Inc., Class B |
31,590 | 874,727 | ||||||||
Snap-on, Inc. |
4,050 | 1,032,993 | ||||||||
United Rentals, Inc. |
4,860 | 2,160,610 | ||||||||
Waste Management, Inc. |
34,830 | 5,309,485 | ||||||||
Watsco, Inc. |
2,835 | 1,070,836 | ||||||||
WW Grainger, Inc. |
4,031 | 2,788,807 | ||||||||
|
|
|||||||||
73,426,587 | ||||||||||
|
|
|||||||||
Information Technology 33.0% | ||||||||||
a |
Adobe, Inc. |
18,225 | 9,292,927 | |||||||
a |
Akamai Technologies, Inc. |
8,505 | 906,123 | |||||||
Analog Devices, Inc. |
32,400 | 5,672,916 | ||||||||
Apple, Inc. |
370,575 | 63,446,146 | ||||||||
Applied Materials, Inc. |
74,520 | 10,317,294 | ||||||||
a |
Arista Networks, Inc. |
22,680 | 4,171,532 | |||||||
a |
Arrow Electronics, Inc. |
6,885 | 862,277 | |||||||
Avnet, Inc. |
17,820 | 858,746 |
68 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Large Cap Multifactor Index ETF (continued)
Shares |
Value |
|||||||||
Information Technology (continued) |
||||||||||
Broadcom, Inc. |
18,132 | $ | 15,060,077 | |||||||
a |
Cadence Design Systems, Inc. |
23,895 | 5,598,598 | |||||||
Cisco Systems, Inc. |
240,975 | 12,954,816 | ||||||||
Cognizant Technology Solutions Corp., Class A |
16,605 | 1,124,823 | ||||||||
Crane NXT Co. |
15,390 | 855,222 | ||||||||
a |
Dropbox, Inc., Class A |
32,805 | 893,280 | |||||||
a |
Fair Isaac Corp. |
2,025 | 1,758,773 | |||||||
Hewlett Packard Enterprise Co. |
111,375 | 1,934,584 | ||||||||
HP, Inc. |
78,165 | 2,008,840 | ||||||||
Intel Corp. |
138,105 | 4,909,633 | ||||||||
International Business Machines Corp. |
29,565 | 4,147,969 | ||||||||
Jabil, Inc. |
12,555 | 1,593,104 | ||||||||
KLA Corp. |
12,960 | 5,944,234 | ||||||||
Lam Research Corp. |
12,239 | 7,671,038 | ||||||||
a |
Lattice Semiconductor Corp. |
12,150 | 1,044,050 | |||||||
a |
Manhattan Associates, Inc. |
6,075 | 1,200,785 | |||||||
Microchip Technology, Inc. |
41,310 | 3,224,245 | ||||||||
Microsoft Corp. |
181,845 | 57,417,559 | ||||||||
National Instruments Corp. |
15,390 | 917,552 | ||||||||
NetApp, Inc. |
18,630 | 1,413,644 | ||||||||
NVIDIA Corp. |
41,715 | 18,145,608 | ||||||||
a |
ON Semiconductor Corp. |
36,045 | 3,350,383 | |||||||
Oracle Corp. |
105,705 | 11,196,274 | ||||||||
QUALCOMM, Inc. |
85,455 | 9,490,632 | ||||||||
Skyworks Solutions, Inc. |
10,935 | 1,078,082 | ||||||||
a |
Synopsys, Inc. |
12,150 | 5,576,485 | |||||||
Texas Instruments, Inc. |
64,800 | 10,303,848 | ||||||||
a |
VMware, Inc., Class A |
8,100 | 1,348,488 | |||||||
|
|
|||||||||
287,690,587 | ||||||||||
|
|
|||||||||
Materials 1.6% | ||||||||||
CF Industries Holdings, Inc. |
17,010 | 1,458,437 | ||||||||
Eagle Materials, Inc. |
4,860 | 809,287 | ||||||||
LyondellBasell Industries NV, Class A |
22,275 | 2,109,443 | ||||||||
NewMarket Corp. |
2,025 | 921,456 | ||||||||
Nucor Corp. |
23,085 | 3,609,340 | ||||||||
Reliance Steel & Aluminum Co. |
5,670 | 1,486,844 | ||||||||
Southern Copper Corp. |
11,340 | 853,789 | ||||||||
Steel Dynamics, Inc. |
15,795 | 1,693,540 | ||||||||
U.S. Steel Corp. |
29,565 | 960,271 | ||||||||
|
|
|||||||||
13,902,407 | ||||||||||
|
|
|||||||||
Real Estate 1.8% | ||||||||||
Cousins Properties, Inc. |
38,880 | 791,986 | ||||||||
EastGroup Properties, Inc. |
5,265 | 876,780 | ||||||||
EPR Properties |
20,250 | 841,185 | ||||||||
Gaming & Leisure Properties, Inc. |
21,060 | 959,283 | ||||||||
Kilroy Realty Corp. |
24,705 | 780,925 | ||||||||
NNN REIT, Inc. |
23,085 | 815,824 | ||||||||
Omega Healthcare Investors, Inc. |
28,755 | 953,516 | ||||||||
Public Storage |
12,555 | 3,308,493 | ||||||||
Simon Property Group, Inc. |
22,275 | 2,406,368 | ||||||||
Spirit Realty Capital, Inc. |
23,490 | 787,620 | ||||||||
STAG Industrial, Inc. |
24,300 | 838,593 | ||||||||
VICI Properties, Inc. |
85,050 | 2,474,955 | ||||||||
|
|
|||||||||
15,835,528 | ||||||||||
|
|
franklintempleton.com |
Semiannual Report |
69 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Large Cap Multifactor Index ETF (continued)
Shares |
Value |
|||||||||
Utilities 1.2% |
||||||||||
Atmos Energy Corp. |
10,530 | $ | 1,115,443 | |||||||
Consolidated Edison, Inc. |
27,945 | 2,390,136 | ||||||||
Hawaiian Electric Industries, Inc. |
64,800 | 797,688 | ||||||||
National Fuel Gas Co. |
17,010 | 882,989 | ||||||||
Pinnacle West Capital Corp. |
11,745 | 865,372 | ||||||||
Southern Co. |
57,105 | 3,695,835 | ||||||||
Vistra Corp. |
29,160 | 967,529 | ||||||||
|
|
|||||||||
10,714,992 | ||||||||||
|
|
|||||||||
Total Common Stocks (Cost $810,987,859) |
869,616,913 | |||||||||
|
|
|||||||||
Total Investments (Cost $810,987,859) 99.8% |
869,616,913 | |||||||||
Other Assets, less Liabilities 0.2% |
2,034,169 | |||||||||
|
|
|||||||||
Net Assets 100.0% |
$ | 871,651,082 | ||||||||
|
|
aNon-income producing.
At September 30, 2023, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts |
Notional Amount* |
Expiration Date |
Value/Unrealized Appreciation (Depreciation) |
|||||||||||||||
Equity Contracts | ||||||||||||||||||||
S&P 500 E-Mini |
Long | 8 | $1,730,200 | 12/15/23 | $(80,182 | ) |
*As of period end.
See Note 7 regarding other derivative information.
See Abbreviations on page 108.
70 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Mid Cap Multifactor Index ETF
Six Months Ended September 30, 2023 (unaudited) |
Year Ended March 31, | |||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||||||
Net asset value, beginning of period |
$43.31 | $44.90 | $40.84 | $24.94 | $30.32 | $27.70 | ||||||||||||||||||
Income from investment operationsa: | ||||||||||||||||||||||||
Net investment incomeb |
0.38 | 0.71 | 0.54 | 0.45 | 0.50 | 0.47 | ||||||||||||||||||
Net realized and unrealized gains (losses) |
(0.45) | (1.73) | 4.03 | 15.86 | (5.41) | 2.53 | ||||||||||||||||||
Total from investment operations |
(0.07) | (1.02) | 4.57 | 16.31 | (4.91) | 3.00 | ||||||||||||||||||
Less distributions from net investment income | (0.27) | (0.57) | (0.51) | (0.41) | (0.47) | (0.38) | ||||||||||||||||||
Net asset value, end of period |
$42.97 | $43.31 | $44.90 | $40.84 | $24.94 | $30.32 | ||||||||||||||||||
Total returnc |
(0.16)% | (2.17)% | 11.18% | 65.69% | (16.50)% | 10.92% | ||||||||||||||||||
Ratios to average net assetsd | ||||||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.30% | 0.30% | 0.30% | 0.30% | 0.30% | 0.30% | ||||||||||||||||||
Expenses net of waiver and payments by affiliates |
0.30% | 0.30% | 0.30% | 0.30% | 0.30% | 0.30% | ||||||||||||||||||
Net investment income |
1.73% | 1.69% | 1.21% | 1.30% | 1.60% | 1.65% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) |
$274,992 | $166,748 | $62,855 | $36,759 | $13,718 | $10,612 | ||||||||||||||||||
Portfolio turnover ratee |
13.76%f | 24.07%f | 22.76%f | 25.02%f | 24.20%f | 23.49% |
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
dRatios are annualized for periods less than one year.
ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
f Portfolio turnover rate excluding cash creations was as follows: | 13.76% | 24.07% | 22.76% | 25.02% | 24.20% | — |
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
71 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2023 (unaudited)
Franklin U.S. Mid Cap Multifactor Index ETF
Shares |
Value |
|||||||||
Common Stocks 99.7% |
||||||||||
Communication Services 1.7% |
||||||||||
Electronic Arts, Inc. |
20,736 | $ | 2,496,615 | |||||||
Omnicom Group, Inc. |
29,184 | 2,173,624 | ||||||||
a |
Playtika Holding Corp. |
9,216 | 88,750 | |||||||
|
|
|||||||||
4,758,989 | ||||||||||
|
|
|||||||||
Consumer Discretionary 16.0% | ||||||||||
Advance Auto Parts, Inc. |
9,856 | 551,246 | ||||||||
a |
AutoNation, Inc. |
5,120 | 775,168 | |||||||
Bath & Body Works, Inc. |
29,184 | 986,419 | ||||||||
Best Buy Co., Inc. |
32,640 | 2,267,501 | ||||||||
Brunswick Corp. |
9,216 | 728,064 | ||||||||
Carter’s, Inc. |
5,888 | 407,155 | ||||||||
Choice Hotels International, Inc. |
3,840 | 470,438 | ||||||||
Columbia Sportswear Co. |
4,736 | 350,938 | ||||||||
a |
Crocs, Inc. |
4,096 | 361,390 | |||||||
a |
Deckers Outdoor Corp. |
2,688 | 1,381,874 | |||||||
Dick’s Sporting Goods, Inc. |
8,960 | 972,877 | ||||||||
DR Horton, Inc. |
24,960 | 2,682,451 | ||||||||
Gap, Inc. |
20,608 | 219,063 | ||||||||
Garmin Ltd. |
21,632 | 2,275,686 | ||||||||
Genuine Parts Co. |
17,920 | 2,587,290 | ||||||||
a |
Grand Canyon Education, Inc. |
1,792 | 209,449 | |||||||
H&R Block, Inc. |
24,320 | 1,047,219 | ||||||||
Hasbro, Inc. |
17,664 | 1,168,297 | ||||||||
Kohl’s Corp. |
13,056 | 273,654 | ||||||||
LKQ Corp. |
33,024 | 1,635,018 | ||||||||
Macy’s, Inc. |
37,376 | 433,935 | ||||||||
a |
Mister Car Wash, Inc. |
4,608 | 25,390 | |||||||
Murphy USA, Inc. |
1,408 | 481,156 | ||||||||
Nordstrom, Inc. |
14,464 | 216,092 | ||||||||
a |
NVR, Inc. |
187 | 1,115,137 | |||||||
Penske Automotive Group, Inc. |
3,328 | 555,976 | ||||||||
Polaris, Inc. |
8,192 | 853,115 | ||||||||
Pool Corp. |
5,376 | 1,914,394 | ||||||||
PulteGroup, Inc. |
26,752 | 1,980,986 | ||||||||
Ralph Lauren Corp. |
5,248 | 609,240 | ||||||||
a |
Skechers USA, Inc., Class A |
16,256 | 795,731 | |||||||
Tapestry, Inc. |
37,504 | 1,078,240 | ||||||||
Tempur Sealy International, Inc. |
26,112 | 1,131,694 | ||||||||
Texas Roadhouse, Inc. |
5,632 | 541,235 | ||||||||
Thor Industries, Inc. |
5,760 | 547,949 | ||||||||
Tractor Supply Co. |
12,672 | 2,573,050 | ||||||||
a |
Ulta Beauty, Inc. |
6,203 | 2,477,788 | |||||||
VF Corp. |
39,168 | 692,099 | ||||||||
a |
Victoria’s Secret & Co. |
13,056 | 217,774 | |||||||
Williams-Sonoma, Inc. |
11,904 | 1,849,882 | ||||||||
Wingstop, Inc. |
1,792 | 322,273 | ||||||||
Yum! Brands, Inc. |
18,176 | 2,270,909 | ||||||||
|
|
|||||||||
44,035,242 | ||||||||||
|
|
|||||||||
Consumer Staples 5.3% | ||||||||||
Albertsons Cos., Inc., Class A |
48,896 | 1,112,384 | ||||||||
a |
BJ’s Wholesale Club Holdings, Inc. |
16,768 | 1,196,732 | |||||||
Casey’s General Stores, Inc. |
4,250 | 1,153,960 | ||||||||
Church & Dwight Co., Inc. |
28,800 | 2,638,944 | ||||||||
Clorox Co. |
16,768 | 2,197,614 | ||||||||
a |
Dollar Tree, Inc. |
19,712 | 2,098,342 |
72 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Mid Cap Multifactor Index ETF (continued)
Shares |
Value |
|||||||||
Consumer Staples (continued) |
||||||||||
Flowers Foods, Inc. |
30,208 | $ | 670,014 | |||||||
Kroger Co. |
58,624 | 2,623,424 | ||||||||
Lamb Weston Holdings, Inc. |
9,600 | 887,616 | ||||||||
|
|
|||||||||
14,579,030 | ||||||||||
|
|
|||||||||
Energy 7.2% | ||||||||||
Antero Midstream Corp. |
47,232 | 565,839 | ||||||||
APA Corp. |
19,712 | 810,163 | ||||||||
Chesapeake Energy Corp. |
17,664 | 1,523,167 | ||||||||
Coterra Energy, Inc., Class A |
81,152 | 2,195,162 | ||||||||
Devon Energy Corp. |
57,728 | 2,753,626 | ||||||||
Diamondback Energy, Inc. |
17,920 | 2,775,450 | ||||||||
HF Sinclair Corp. |
14,592 | 830,722 | ||||||||
Ovintiv, Inc. |
33,152 | 1,577,041 | ||||||||
Phillips 66 |
29,056 | 3,491,078 | ||||||||
Range Resources Corp. |
31,232 | 1,012,229 | ||||||||
a |
Southwestern Energy Co. |
137,088 | 884,218 | |||||||
Texas Pacific Land Corp. |
768 | 1,400,494 | ||||||||
|
|
|||||||||
19,819,189 | ||||||||||
|
|
|||||||||
Financials 11.6% | ||||||||||
Affiliated Managers Group, Inc. |
5,760 | 750,758 | ||||||||
Allstate Corp. |
24,576 | 2,738,012 | ||||||||
Ally Financial, Inc. |
40,704 | 1,085,983 | ||||||||
Assured Guaranty Ltd. |
6,400 | 387,328 | ||||||||
Cincinnati Financial Corp. |
21,376 | 2,186,551 | ||||||||
CNA Financial Corp. |
3,456 | 135,994 | ||||||||
a |
Credit Acceptance Corp. |
896 | 412,268 | |||||||
Discover Financial Services |
25,856 | 2,239,905 | ||||||||
Everest Group Ltd. |
4,352 | 1,617,508 | ||||||||
First American Financial Corp. |
14,208 | 802,610 | ||||||||
a |
FleetCor Technologies, Inc. |
4,736 | 1,209,290 | |||||||
Globe Life, Inc. |
13,440 | 1,461,331 | ||||||||
Hanover Insurance Group, Inc. |
5,376 | 596,629 | ||||||||
Hartford Financial Services Group, Inc. |
22,400 | 1,588,384 | ||||||||
Janus Henderson Group PLC |
17,664 | 456,085 | ||||||||
Kinsale Capital Group, Inc. |
1,408 | 583,095 | ||||||||
Lazard Ltd., Class A |
6,528 | 202,433 | ||||||||
MGIC Investment Corp. |
41,984 | 700,713 | ||||||||
MSCI, Inc. |
5,120 | 2,626,970 | ||||||||
Old Republic International Corp. |
17,664 | 475,868 | ||||||||
OneMain Holdings, Inc. |
10,880 | 436,179 | ||||||||
Prosperity Bancshares, Inc. |
11,392 | 621,775 | ||||||||
Regions Financial Corp. |
102,656 | 1,765,683 | ||||||||
Rithm Capital Corp. |
36,224 | 336,521 | ||||||||
SEI Investments Co. |
17,280 | 1,040,774 | ||||||||
Synchrony Financial |
64,768 | 1,979,958 | ||||||||
T Rowe Price Group, Inc. |
13,952 | 1,463,146 | ||||||||
Unum Group |
21,760 | 1,070,374 | ||||||||
Western Union Co. |
67,072 | 884,009 | ||||||||
|
|
|||||||||
31,856,134 | ||||||||||
|
|
|||||||||
Health Care 9.0% | ||||||||||
a |
Acadia Healthcare Co., Inc. |
11,136 | 782,972 | |||||||
Cencora, Inc. |
10,496 | 1,888,965 | ||||||||
Chemed Corp. |
1,854 | 963,524 | ||||||||
Encompass Health Corp. |
17,280 | 1,160,525 | ||||||||
a |
IDEXX Laboratories, Inc. |
5,760 | 2,518,675 | |||||||
a |
Incyte Corp. |
25,472 | 1,471,517 |
franklintempleton.com |
Semiannual Report |
73 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Mid Cap Multifactor Index ETF (continued)
Shares |
Value |
|||||||||
Health Care (continued) |
||||||||||
a |
Maravai LifeSciences Holdings, Inc., Class A |
11,648 | $ | 116,480 | ||||||
a |
Mettler-Toledo International, Inc. |
1,999 | 2,215,032 | |||||||
a |
Neurocrine Biosciences, Inc. |
14,336 | 1,612,800 | |||||||
Organon & Co. |
35,072 | 608,850 | ||||||||
a |
QIAGEN NV |
13,824 | 559,872 | |||||||
ResMed, Inc. |
12,672 | 1,873,809 | ||||||||
Royalty Pharma PLC, Class A |
49,024 | 1,330,511 | ||||||||
a |
Shockwave Medical, Inc. |
2,176 | 433,242 | |||||||
a |
Tenet Healthcare Corp. |
11,264 | 742,185 | |||||||
a |
United Therapeutics Corp. |
5,760 | 1,301,011 | |||||||
Universal Health Services, Inc., Class B |
9,216 | 1,158,728 | ||||||||
Viatris, Inc. |
141,440 | 1,394,598 | ||||||||
a |
Waters Corp. |
9,472 | 2,597,317 | |||||||
|
|
|||||||||
24,730,613 | ||||||||||
|
|
|||||||||
Industrials 22.1% | ||||||||||
Allegion PLC |
12,160 | 1,267,072 | ||||||||
Allison Transmission Holdings, Inc. |
14,592 | 861,804 | ||||||||
Booz Allen Hamilton Holding Corp. |
23,296 | 2,545,554 | ||||||||
a |
Builders FirstSource, Inc. |
19,712 | 2,453,947 | |||||||
CH Robinson Worldwide, Inc. |
17,408 | 1,499,351 | ||||||||
Cintas Corp. |
5,632 | 2,709,048 | ||||||||
Curtiss-Wright Corp. |
4,608 | 901,463 | ||||||||
Donaldson Co., Inc. |
17,152 | 1,022,945 | ||||||||
Dover Corp. |
19,584 | 2,732,164 | ||||||||
Esab Corp. |
5,760 | 404,467 | ||||||||
Expeditors International of Washington, Inc. |
23,424 | 2,685,093 | ||||||||
Fastenal Co. |
49,408 | 2,699,653 | ||||||||
Ferguson PLC |
13,952 | 2,294,685 | ||||||||
Genpact Ltd. |
12,160 | 440,192 | ||||||||
Graco, Inc. |
23,040 | 1,679,155 | ||||||||
Landstar System, Inc. |
5,305 | 938,667 | ||||||||
Lennox International, Inc. |
4,608 | 1,725,419 | ||||||||
Lincoln Electric Holdings, Inc. |
8,832 | 1,605,569 | ||||||||
ManpowerGroup, Inc. |
7,168 | 525,558 | ||||||||
Masco Corp. |
24,448 | 1,306,746 | ||||||||
MSC Industrial Direct Co., Inc., Class A |
7,424 | 728,666 | ||||||||
Nordson Corp. |
7,296 | 1,628,248 | ||||||||
Old Dominion Freight Line, Inc. |
8,576 | 3,508,785 | ||||||||
Otis Worldwide Corp. |
33,408 | 2,682,996 | ||||||||
Paychex, Inc. |
25,344 | 2,922,923 | ||||||||
Paycom Software, Inc. |
6,176 | 1,601,252 | ||||||||
Robert Half, Inc. |
14,336 | 1,050,542 | ||||||||
Rollins, Inc. |
36,608 | 1,366,577 | ||||||||
Ryder System, Inc. |
5,888 | 629,722 | ||||||||
a |
Saia, Inc. |
1,792 | 714,381 | |||||||
Schneider National, Inc., Class B |
8,576 | 237,469 | ||||||||
Snap-on, Inc. |
8,704 | 2,220,042 | ||||||||
Toro Co. |
13,696 | 1,138,138 | ||||||||
Trane Technologies PLC |
16,256 | 3,298,505 | ||||||||
Watsco, Inc. |
4,933 | 1,863,293 | ||||||||
WW Grainger, Inc. |
4,096 | 2,833,777 | ||||||||
|
|
|||||||||
60,723,868 | ||||||||||
|
|
|||||||||
Information Technology 12.8% | ||||||||||
Amdocs Ltd. |
16,640 | 1,405,914 | ||||||||
CDW Corp. |
15,488 | 3,124,859 | ||||||||
a |
Cirrus Logic, Inc. |
3,328 | 246,139 | |||||||
Crane NXT Co. |
3,328 | 184,937 |
74 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Mid Cap Multifactor Index ETF (continued)
Shares |
Value |
|||||||||
Information Technology (continued) |
||||||||||
Dolby Laboratories, Inc., Class A |
8,320 | $ | 659,443 | |||||||
a |
F5, Inc. |
7,680 | 1,237,555 | |||||||
a |
Fair Isaac Corp. |
3,265 | 2,835,750 | |||||||
a |
Gartner, Inc. |
5,120 | 1,759,283 | |||||||
Gen Digital, Inc. |
72,448 | 1,280,881 | ||||||||
a |
GoDaddy, Inc., Class A |
9,472 | 705,475 | |||||||
Hewlett Packard Enterprise Co. |
152,320 | 2,645,798 | ||||||||
HP, Inc. |
91,520 | 2,352,064 | ||||||||
a |
HubSpot, Inc. |
2,816 | 1,386,880 | |||||||
Jabil, Inc. |
7,680 | 974,515 | ||||||||
Juniper Networks, Inc. |
41,984 | 1,166,735 | ||||||||
a |
Manhattan Associates, Inc. |
8,960 | 1,771,034 | |||||||
Monolithic Power Systems, Inc. |
5,417 | 2,502,654 | ||||||||
National Instruments Corp. |
17,664 | 1,053,128 | ||||||||
NetApp, Inc. |
36,480 | 2,768,102 | ||||||||
Teradyne, Inc. |
19,840 | 1,993,126 | ||||||||
a |
VeriSign, Inc. |
11,904 | 2,410,917 | |||||||
Vontier Corp. |
22,144 | 684,693 | ||||||||
|
|
|||||||||
35,149,882 | ||||||||||
|
|
|||||||||
Materials 8.0% | ||||||||||
Ardagh Metal Packaging SA |
13,056 | 40,865 | ||||||||
Avery Dennison Corp. |
11,520 | 2,104,359 | ||||||||
CF Industries Holdings, Inc. |
25,600 | 2,194,944 | ||||||||
Chemours Co. |
15,744 | 441,619 | ||||||||
International Paper Co. |
42,240 | 1,498,253 | ||||||||
Louisiana-Pacific Corp. |
9,600 | 530,592 | ||||||||
LyondellBasell Industries NV, Class A |
31,104 | 2,945,549 | ||||||||
NewMarket Corp. |
384 | 174,735 | ||||||||
Nucor Corp. |
20,096 | 3,142,010 | ||||||||
Packaging Corp. of America |
9,344 | 1,434,771 | ||||||||
Reliance Steel & Aluminum Co. |
8,732 | 2,289,792 | ||||||||
RPM International, Inc. |
15,488 | 1,468,417 | ||||||||
Sealed Air Corp. |
19,840 | 651,942 | ||||||||
Sonoco Products Co. |
13,312 | 723,507 | ||||||||
Steel Dynamics, Inc. |
22,784 | 2,442,901 | ||||||||
|
|
|||||||||
22,084,256 | ||||||||||
|
|
|||||||||
Real Estate 4.1% | ||||||||||
AvalonBay Communities, Inc. |
15,232 | 2,615,944 | ||||||||
Boston Properties, Inc. |
9,856 | 586,235 | ||||||||
Camden Property Trust |
12,928 | 1,222,730 | ||||||||
EastGroup Properties, Inc. |
2,816 | 468,949 | ||||||||
Equity LifeStyle Properties, Inc. |
11,648 | 742,094 | ||||||||
Extra Space Storage, Inc. |
16,000 | 1,945,280 | ||||||||
Highwoods Properties, Inc. |
15,616 | 321,846 | ||||||||
Kilroy Realty Corp. |
7,040 | 222,534 | ||||||||
NNN REIT, Inc. |
24,320 | 859,469 | ||||||||
STAG Industrial, Inc. |
11,648 | 401,972 | ||||||||
VICI Properties, Inc. |
60,928 | 1,773,005 | ||||||||
|
|
|||||||||
11,160,058 | ||||||||||
|
|
|||||||||
Utilities 1.9% | ||||||||||
American Water Works Co., Inc. |
18,432 | 2,282,435 | ||||||||
Consolidated Edison, Inc. |
28,544 | 2,441,368 |
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Semiannual Report |
75 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Mid Cap Multifactor Index ETF (continued)
Shares |
Value |
|||||||||
Utilities (continued) |
||||||||||
National Fuel Gas Co. |
10,496 | $ | 544,847 | |||||||
|
|
|||||||||
5,268,650 | ||||||||||
|
|
|||||||||
Total Common Stocks (Cost $277,084,090) |
274,165,911 | |||||||||
|
|
|||||||||
Total Investments (Cost $277,084,090) 99.7% |
274,165,911 | |||||||||
Other Assets, less Liabilities 0.3% |
826,407 | |||||||||
|
|
|||||||||
Net Assets 100.0% |
$ | 274,992,318 | ||||||||
|
|
aNon-income producing.
At September 30, 2023, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||
Description | Type | Number of Contracts |
Notional Amount* |
Expiration Date |
Value/Unrealized Appreciation (Depreciation) |
|||||||||||||||
Equity Contracts | ||||||||||||||||||||
S&P MidCap 400 E-Mini |
Long | 3 | $756,120 | 12/15/23 | $(20,647 | ) |
*As of period end.
See Abbreviations on page 108.
76 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Small Cap Multifactor Index ETF
Six Months Ended September 30, |
Year Ended March 31, | |||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||||||
Net asset value, beginning of period |
$34.10 | $36.16 | $36.53 | $20.48 | $27.66 | $26.66 | ||||||||||||||||||
Income from investment operationsa: | ||||||||||||||||||||||||
Net investment incomeb |
0.30 | 0.54 | 0.38 | 0.28 | 0.39 | 0.47 | ||||||||||||||||||
Net realized and unrealized gains (losses) |
0.12 | (2.10) | (0.36) | 16.15 | (7.15) | 0.87 | ||||||||||||||||||
Total from investment operations |
0.42 | (1.56) | 0.02 | 16.43 | (6.76) | 1.34 | ||||||||||||||||||
Less distributions from net investment income | (0.21) | (0.50) | (0.39) | (0.38) | (0.42) | (0.34) | ||||||||||||||||||
Net asset value, end of period |
$34.31 | $34.10 | $36.16 | $36.53 | $20.48 | $27.66 | ||||||||||||||||||
Total returnc |
1.23% | (4.21)% | 0.02% | 80.74% | (24.83)% | 5.05% | ||||||||||||||||||
Ratios to average net assetsd | ||||||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.35% | 0.35% | 0.35% | 0.35% | 0.35% | 0.35% | ||||||||||||||||||
Expenses net of waiver and payments by affiliates |
0.35% | 0.35% | 0.35% | 0.35% | 0.35% | 0.35% | ||||||||||||||||||
Net investment income |
1.70% | 1.60% | 1.00% | 0.99% | 1.41% | 1.69% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) |
$27,451 | $17,048 | $16,273 | $14,613 | $13,310 | $17,979 | ||||||||||||||||||
Portfolio turnover ratee |
15.53%f | 28.79%f | 27.64%f | 34.77%f | 23.83%f | 22.17% |
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
dRatios are annualized for periods less than one year.
ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
f Portfolio turnover rate excluding cash creations was as follows: | 15.53% | 28.79% | 27.64% | 34.77% | 23.83% | — |
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
77 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2023 (unaudited)
Franklin U.S. Small Cap Multifactor Index ETF
Shares |
Value |
|||||||||
Common Stocks 99.9% | ||||||||||
Communication Services 2.8% | ||||||||||
a |
AMC Networks, Inc., Class A |
1,280 | $ | 15,078 | ||||||
a |
Cargurus, Inc. |
1,888 | 33,078 | |||||||
Cogent Communications Holdings, Inc. |
1,856 | 114,886 | ||||||||
a |
IDT Corp., Class B |
656 | 14,465 | |||||||
John Wiley & Sons, Inc., Class A |
1,856 | 68,987 | ||||||||
a |
Liberty Latin America Ltd., Class A |
1,536 | 12,534 | |||||||
a |
Ooma, Inc. |
944 | 12,281 | |||||||
a |
Playstudios, Inc. |
2,704 | 8,599 | |||||||
Scholastic Corp. |
1,168 | 44,548 | ||||||||
Shutterstock, Inc. |
1,088 | 41,398 | ||||||||
Spok Holdings, Inc. |
432 | 6,165 | ||||||||
TEGNA, Inc. |
9,152 | 133,345 | ||||||||
Telephone & Data Systems, Inc. |
4,416 | 80,857 | ||||||||
a |
Thryv Holdings, Inc. |
1,040 | 19,521 | |||||||
a |
Yelp, Inc. |
3,392 | 141,073 | |||||||
a |
ZipRecruiter, Inc., Class A |
2,496 | 29,927 | |||||||
|
|
|||||||||
776,742 | ||||||||||
|
|
|||||||||
Consumer Discretionary 16.4% | ||||||||||
a |
1-800- Flowers.com, Inc., Class A |
1,104 | 7,728 | |||||||
a |
Abercrombie & Fitch Co., Class A |
2,464 | 138,896 | |||||||
Academy Sports & Outdoors, Inc. |
3,104 | 146,726 | ||||||||
Acushnet Holdings Corp. |
1,712 | 90,804 | ||||||||
a |
Adtalem Global Education, Inc. |
1,312 | 56,219 | |||||||
American Eagle Outfitters, Inc. |
6,816 | 113,214 | ||||||||
a |
Asbury Automotive Group, Inc. |
896 | 206,143 | |||||||
Big 5 Sporting Goods Corp. |
928 | 6,505 | ||||||||
Bloomin’ Brands, Inc. |
4,864 | 119,606 | ||||||||
Bluegreen Vacations Holding Corp. |
336 | 12,324 | ||||||||
Buckle, Inc. |
1,648 | 55,027 | ||||||||
Build-A-Bear Workshop, Inc. |
592 | 17,411 | ||||||||
Caleres, Inc. |
1,472 | 42,335 | ||||||||
Camping World Holdings, Inc., Class A |
1,776 | 36,248 | ||||||||
a |
CarParts.com, Inc. |
1,840 | 7,581 | |||||||
Cato Corp., Class A |
688 | 5,270 | ||||||||
Cheesecake Factory, Inc. |
2,656 | 80,477 | ||||||||
a |
Chico’s FAS, Inc. |
3,824 | 28,604 | |||||||
a |
Chuy’s Holdings, Inc. |
816 | 29,033 | |||||||
Cracker Barrel Old Country Store, Inc. |
1,280 | 86,016 | ||||||||
Designer Brands, Inc., Class A |
1,056 | 13,369 | ||||||||
a |
Destination XL Group, Inc. |
2,480 | 11,110 | |||||||
Dillard’s, Inc., Class A |
208 | 68,808 | ||||||||
a |
Duluth Holdings, Inc., Class B |
592 | 3,558 | |||||||
a |
Duolingo, Inc. |
608 | 100,849 | |||||||
a |
Envela Corp. |
176 | 834 | |||||||
Escalade, Inc. |
192 | 2,940 | ||||||||
Ethan Allen Interiors, Inc. |
1,232 | 36,837 | ||||||||
a |
Fiesta Restaurant Group, Inc. |
416 | 3,519 | |||||||
a |
Figs, Inc., Class A |
5,296 | 31,246 | |||||||
Foot Locker, Inc. |
3,168 | 54,965 | ||||||||
a |
Frontdoor, Inc. |
3,104 | 94,951 | |||||||
a |
Genesco, Inc. |
576 | 17,752 | |||||||
a |
G-III Apparel Group Ltd. |
1,584 | 39,473 | |||||||
Group 1 Automotive, Inc. |
640 | 171,974 | ||||||||
Guess?, Inc. |
1,152 | 24,929 | ||||||||
Haverty Furniture Cos., Inc. |
848 | 24,405 | ||||||||
a |
Helen of Troy Ltd. |
928 | 108,168 |
78 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Small Cap Multifactor Index ETF (continued)
Shares |
Value |
|||||||||
Consumer Discretionary (continued) | ||||||||||
Hibbett, Inc. |
624 | $ | 29,646 | |||||||
Hooker Furnishings Corp. |
208 | 4,046 | ||||||||
Installed Building Products, Inc. |
1,024 | 127,887 | ||||||||
a |
J Jill, Inc. |
96 | 2,842 | |||||||
Jack in the Box, Inc. |
688 | 47,513 | ||||||||
a |
JAKKS Pacific, Inc. |
144 | 2,677 | |||||||
Johnson Outdoors, Inc., Class A |
240 | 13,126 | ||||||||
Kontoor Brands, Inc. |
2,752 | 120,840 | ||||||||
La-Z-Boy, Inc. |
1,984 | 61,266 | ||||||||
LCI Industries |
1,056 | 123,995 | ||||||||
a |
Lincoln Educational Services Corp. |
496 | 4,191 | |||||||
a |
Lovesac Co. |
560 | 11,155 | |||||||
a |
M/I Homes, Inc. |
544 | 45,718 | |||||||
a |
Malibu Boats, Inc., Class A |
816 | 40,000 | |||||||
Marine Products Corp. |
448 | 6,366 | ||||||||
a |
MarineMax, Inc. |
880 | 28,882 | |||||||
a |
MasterCraft Boat Holdings, Inc. |
736 | 16,354 | |||||||
MDC Holdings, Inc. |
2,144 | 88,397 | ||||||||
a |
Modine Manufacturing Co. |
1,536 | 70,272 | |||||||
Monarch Casino & Resort, Inc. |
528 | 32,789 | ||||||||
Monro, Inc. |
1,232 | 34,213 | ||||||||
Movado Group, Inc. |
784 | 21,442 | ||||||||
Nathan’s Famous, Inc. |
64 | 4,522 | ||||||||
a |
National Vision Holdings, Inc. |
2,992 | 48,411 | |||||||
a |
ODP Corp. |
1,648 | 76,055 | |||||||
a |
ONE Group Hospitality, Inc. |
912 | 5,016 | |||||||
a |
OneWater Marine, Inc., Class A |
448 | 11,478 | |||||||
Oxford Industries, Inc. |
752 | 72,290 | ||||||||
Papa John’s International, Inc. |
1,344 | 91,688 | ||||||||
Patrick Industries, Inc. |
800 | 60,048 | ||||||||
Perdoceo Education Corp. |
3,488 | 59,645 | ||||||||
PetMed Express, Inc. |
880 | 9,020 | ||||||||
a |
Portillo’s, Inc., Class A |
1,312 | 20,192 | |||||||
a |
Potbelly Corp. |
656 | 5,117 | |||||||
a |
Revolve Group, Inc. |
1,824 | 24,825 | |||||||
Rocky Brands, Inc. |
320 | 4,704 | ||||||||
a |
Sally Beauty Holdings, Inc. |
5,744 | 48,135 | |||||||
Shoe Carnival, Inc. |
736 | 17,686 | ||||||||
Signet Jewelers Ltd. |
1,984 | 142,471 | ||||||||
Smith & Wesson Brands, Inc. |
2,192 | 28,299 | ||||||||
Sonic Automotive, Inc., Class A |
800 | 38,208 | ||||||||
a |
Sonos, Inc. |
4,784 | 61,761 | |||||||
a |
Sportsman’s Warehouse Holdings, Inc. |
2,048 | 9,196 | |||||||
Standard Motor Products, Inc. |
1,008 | 33,889 | ||||||||
Steven Madden Ltd. |
3,520 | 111,830 | ||||||||
Strategic Education, Inc. |
1,040 | 78,260 | ||||||||
a |
Stride, Inc. |
1,792 | 80,694 | |||||||
Sturm Ruger & Co., Inc. |
816 | 42,530 | ||||||||
a |
Target Hospitality Corp. |
624 | 9,909 | |||||||
a |
Tile Shop Holdings, Inc. |
1,312 | 7,203 | |||||||
a |
Torrid Holdings, Inc. |
320 | 707 | |||||||
a |
United Homes Group, Inc. |
128 | 717 | |||||||
a |
Universal Technical Institute, Inc. |
1,232 | 10,324 | |||||||
Upbound Group, Inc. |
2,672 | 78,690 | ||||||||
Weyco Group, Inc. |
272 | 6,895 | ||||||||
Winmark Corp. |
144 | 53,731 | ||||||||
Winnebago Industries, Inc. |
576 | 34,243 | ||||||||
Wolverine World Wide, Inc. |
3,216 | 25,921 |
franklintempleton.com |
Semiannual Report |
79 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Small Cap Multifactor Index ETF (continued)
Shares |
Value |
|||||||||
Consumer Discretionary (continued) | ||||||||||
a |
XPEL, Inc. |
880 | $ | 67,857 | ||||||
|
|
|||||||||
4,511,638 | ||||||||||
|
|
|||||||||
Consumer Staples 7.6% | ||||||||||
a |
BellRing Brands, Inc. |
4,944 | 203,841 | |||||||
Cal-Maine Foods, Inc. |
1,280 | 61,978 | ||||||||
a |
Central Garden & Pet Co. |
416 | 18,362 | |||||||
a |
Central Garden & Pet Co., Class A |
1,632 | 65,427 | |||||||
Coca-Cola Consolidated, Inc. |
233 | 148,263 | ||||||||
Edgewell Personal Care Co. |
1,872 | 69,189 | ||||||||
a |
elf Beauty, Inc. |
1,920 | 210,874 | |||||||
Ingles Markets, Inc., Class A |
704 | 53,032 | ||||||||
Inter Parfums, Inc. |
912 | 122,518 | ||||||||
J & J Snack Foods Corp. |
432 | 70,697 | ||||||||
John B Sanfilippo & Son, Inc. |
400 | 39,520 | ||||||||
Lancaster Colony Corp. |
800 | 132,024 | ||||||||
Medifast, Inc. |
592 | 44,311 | ||||||||
a |
National Beverage Corp. |
1,200 | 56,424 | |||||||
Natural Grocers by Vitamin Cottage, Inc., Class C |
437 | 5,642 | ||||||||
a |
Nature’s Sunshine Products, Inc. |
272 | 4,507 | |||||||
Nu Skin Enterprises, Inc., Class A |
2,608 | 55,316 | ||||||||
Oil-Dri Corp. of America |
112 | 6,916 | ||||||||
PriceSmart, Inc. |
1,056 | 78,598 | ||||||||
SpartanNash Co. |
1,712 | 37,664 | ||||||||
a |
Sprouts Farmers Market, Inc. |
4,960 | 212,288 | |||||||
a |
United Natural Foods, Inc. |
2,176 | 30,769 | |||||||
Universal Corp. |
1,088 | 51,364 | ||||||||
a |
USANA Health Sciences, Inc. |
544 | 31,884 | |||||||
Vector Group Ltd. |
6,560 | 69,798 | ||||||||
Village Super Market, Inc., Class A |
464 | 10,505 | ||||||||
WD-40 Co. |
672 | 136,577 | ||||||||
Weis Markets, Inc. |
848 | 53,424 | ||||||||
|
|
|||||||||
2,081,712 | ||||||||||
|
|
|||||||||
Energy 5.1% | ||||||||||
Ardmore Shipping Corp. |
944 | 12,281 | ||||||||
Berry Corp. |
1,520 | 12,464 | ||||||||
California Resources Corp. |
3,040 | 170,270 | ||||||||
Chord Energy Corp. |
1,664 | 269,685 | ||||||||
Civitas Resources, Inc. |
1,552 | 125,510 | ||||||||
Comstock Resources, Inc. |
2,992 | 33,002 | ||||||||
CONSOL Energy, Inc. |
1,728 | 181,285 | ||||||||
Crescent Energy Co., Class A |
1,216 | 15,370 | ||||||||
CVR Energy, Inc. |
960 | 32,669 | ||||||||
Evolution Petroleum Corp. |
736 | 5,034 | ||||||||
Granite Ridge Resources, Inc. |
640 | 3,904 | ||||||||
a |
Gulfport Energy Corp. |
208 | 24,681 | |||||||
International Seaways, Inc. |
784 | 35,280 | ||||||||
Magnolia Oil & Gas Corp., Class A |
6,752 | 154,688 | ||||||||
Northern Oil & Gas, Inc. |
1,552 | 62,437 | ||||||||
Peabody Energy Corp. |
4,128 | 107,287 | ||||||||
a |
ProFrac Holding Corp., Class A |
512 | 5,571 | |||||||
Riley Exploration Permian, Inc. |
208 | 6,612 | ||||||||
Scorpio Tankers, Inc. |
1,040 | 56,285 | ||||||||
SFL Corp. Ltd. |
4,736 | 52,806 | ||||||||
a |
SilverBow Resources, Inc. |
608 | 21,748 | |||||||
VAALCO Energy, Inc. |
3,712 | 16,296 | ||||||||
|
|
|||||||||
1,405,165 | ||||||||||
|
|
80 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Small Cap Multifactor Index ETF (continued)
Shares |
Value |
|||||||||
Financials 9.2% | ||||||||||
1st Source Corp. |
704 | $ | 29,631 | |||||||
a |
Ambac Financial Group, Inc. |
992 | 11,964 | |||||||
Arrow Financial Corp. |
624 | 10,625 | ||||||||
Associated Banc-Corp. |
6,272 | 107,314 | ||||||||
Banco Latinoamericano de Comercio Exterior SA, Class E |
1,328 | 28,154 | ||||||||
Bank of Marin Bancorp |
304 | 5,557 | ||||||||
b |
Blackstone Mortgage Trust, Inc., Class A |
7,568 | 164,604 | |||||||
Brookline Bancorp, Inc. |
3,232 | 29,444 | ||||||||
Cass Information Systems, Inc. |
416 | 15,496 | ||||||||
Chemung Financial Corp. |
96 | 3,803 | ||||||||
City Holding Co. |
576 | 52,042 | ||||||||
a |
Consumer Portfolio Services, Inc. |
320 | 2,902 | |||||||
CVB Financial Corp. |
4,896 | 81,127 | ||||||||
Donegal Group, Inc., Class A |
656 | 9,351 | ||||||||
a |
Donnelley Financial Solutions, Inc. |
1,024 | 57,631 | |||||||
Dynex Capital, Inc. |
1,728 | 20,632 | ||||||||
Eagle Bancorp, Inc. |
640 | 13,728 | ||||||||
Enact Holdings, Inc. |
1,232 | 33,547 | ||||||||
a |
Enova International, Inc. |
624 | 31,743 | |||||||
ESSA Bancorp, Inc. |
176 | 2,642 | ||||||||
Essent Group Ltd. |
4,288 | 202,780 | ||||||||
EVERTEC, Inc. |
2,512 | 93,396 | ||||||||
Farmers & Merchants Bancorp, Inc. |
272 | 4,768 | ||||||||
Farmers National Banc Corp. |
1,328 | 15,352 | ||||||||
Financial Institutions, Inc. |
560 | 9,425 | ||||||||
First Business Financial Services, Inc. |
288 | 8,643 | ||||||||
First Foundation, Inc. |
1,376 | 8,366 | ||||||||
First Merchants Corp. |
2,224 | 61,872 | ||||||||
First of Long Island Corp. |
1,024 | 11,786 | ||||||||
FirstCash Holdings, Inc. |
736 | 73,880 | ||||||||
Flushing Financial Corp. |
640 | 8,403 | ||||||||
a |
Genworth Financial, Inc., Class A |
19,792 | 115,981 | |||||||
German American Bancorp, Inc. |
1,104 | 29,907 | ||||||||
Guaranty Bancshares, Inc. |
368 | 10,558 | ||||||||
Home Bancorp, Inc. |
144 | 4,589 | ||||||||
Home BancShares, Inc. |
3,712 | 77,729 | ||||||||
Hope Bancorp, Inc. |
4,272 | 37,807 | ||||||||
a |
International Money Express, Inc. |
1,584 | 26,817 | |||||||
Investors Title Co. |
48 | 7,108 | ||||||||
Jackson Financial, Inc., Class A |
3,216 | 122,916 | ||||||||
KKR Real Estate Finance Trust, Inc. |
1,264 | 15,004 | ||||||||
Lakeland Bancorp, Inc. |
2,640 | 33,317 | ||||||||
Macatawa Bank Corp. |
928 | 8,315 | ||||||||
Mercury General Corp. |
912 | 25,563 | ||||||||
a |
Mr Cooper Group, Inc. |
2,464 | 131,972 | |||||||
National Western Life Group, Inc., Class A |
112 | 48,999 | ||||||||
NBT Bancorp, Inc. |
1,872 | 59,324 | ||||||||
a |
NerdWallet, Inc., Class A |
1,392 | 12,375 | |||||||
Nexpoint Real Estate Finance, Inc. |
272 | 4,450 | ||||||||
a |
NMI Holdings, Inc., Class A |
1,984 | 53,747 | |||||||
Northeast Community Bancorp, Inc. |
336 | 4,959 | ||||||||
Northfield Bancorp, Inc. |
1,856 | 17,539 | ||||||||
Northwest Bancshares, Inc. |
5,232 | 53,523 | ||||||||
OceanFirst Financial Corp. |
2,096 | 30,329 | ||||||||
PacWest Bancorp |
2,512 | 19,870 | ||||||||
Parke Bancorp, Inc. |
400 | 6,516 | ||||||||
Penns Woods Bancorp, Inc. |
128 | 2,698 | ||||||||
Peoples Bancorp, Inc. |
1,280 | 32,486 | ||||||||
Peoples Financial Services Corp. |
272 | 10,907 |
franklintempleton.com |
Semiannual Report |
81 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Small Cap Multifactor Index ETF (continued)
Shares |
Value |
|||||||||
Financials (continued) | ||||||||||
Preferred Bank |
272 | $ | 16,932 | |||||||
Regional Management Corp. |
208 | 5,757 | ||||||||
Selective Insurance Group, Inc. |
1,184 | 122,153 | ||||||||
Silvercrest Asset Management Group, Inc., Class A |
320 | 5,078 | ||||||||
Southern Missouri Bancorp, Inc. |
336 | 13,000 | ||||||||
Summit Financial Group, Inc. |
240 | 5,410 | ||||||||
Tompkins Financial Corp. |
592 | 29,002 | ||||||||
TPG RE Finance Trust, Inc. |
3,152 | 21,213 | ||||||||
TrustCo Bank Corp. |
752 | 20,522 | ||||||||
Victory Capital Holdings, Inc., Class A |
960 | 32,006 | ||||||||
West BanCorp, Inc. |
688 | 11,221 | ||||||||
a |
World Acceptance Corp. |
176 | 22,363 | |||||||
|
|
|||||||||
2,520,570 | ||||||||||
|
|
|||||||||
Health Care 8.5% | ||||||||||
a |
ACADIA Pharmaceuticals, Inc. |
2,704 | 56,351 | |||||||
a |
Alkermes PLC |
6,080 | 170,301 | |||||||
a |
AMN Healthcare Services, Inc. |
2,080 | 177,174 | |||||||
a |
Amphastar Pharmaceuticals, Inc. |
736 | 33,849 | |||||||
a |
Assertio Holdings, Inc. |
1,168 | 2,990 | |||||||
a |
AtriCure, Inc. |
1,872 | 81,994 | |||||||
Atrion Corp. |
48 | 19,832 | ||||||||
a |
Axogen, Inc. |
800 | 4,000 | |||||||
a |
Catalyst Pharmaceuticals, Inc. |
4,160 | 48,630 | |||||||
a |
Community Health Systems, Inc. |
5,904 | 17,122 | |||||||
CONMED Corp. |
1,216 | 122,634 | ||||||||
a |
Corcept Therapeutics, Inc. |
3,856 | 105,057 | |||||||
a |
CorVel Corp. |
368 | 72,367 | |||||||
a |
Cross Country Healthcare, Inc. |
1,632 | 40,457 | |||||||
a |
Eagle Pharmaceuticals, Inc. |
464 | 7,317 | |||||||
Embecta Corp. |
2,672 | 40,214 | ||||||||
a |
Harmony Biosciences Holdings, Inc. |
672 | 22,021 | |||||||
a |
Harvard Bioscience, Inc. |
848 | 3,646 | |||||||
a |
Hims & Hers Health, Inc. |
2,816 | 17,713 | |||||||
a |
Inari Medical, Inc. |
1,760 | 115,104 | |||||||
a |
InfuSystem Holdings, Inc. |
400 | 3,856 | |||||||
a |
Inmode Ltd. |
1,824 | 55,559 | |||||||
a |
Innoviva, Inc. |
3,152 | 40,945 | |||||||
a |
Intercept Pharmaceuticals, Inc. |
928 | 17,205 | |||||||
iRadimed Corp. |
352 | 15,618 | ||||||||
a |
Ironwood Pharmaceuticals, Inc. |
6,144 | 59,167 | |||||||
a |
Joint Corp. |
656 | 5,897 | |||||||
a |
Kiniksa Pharmaceuticals Ltd., Class A |
688 | 11,951 | |||||||
LeMaitre Vascular, Inc. |
784 | 42,712 | ||||||||
a |
Merit Medical Systems, Inc. |
2,208 | 152,396 | |||||||
a |
MiMedx Group, Inc. |
4,256 | 31,026 | |||||||
National HealthCare Corp. |
560 | 35,829 | ||||||||
National Research Corp. |
704 | 31,237 | ||||||||
a |
Neogen Corp. |
8,192 | 151,880 | |||||||
a |
Nevro Corp. |
1,040 | 19,989 | |||||||
a |
NextGen Healthcare, Inc. |
1,872 | 44,423 | |||||||
a |
Organogenesis Holdings, Inc. |
2,704 | 8,599 | |||||||
a |
Orthofix Medical, Inc. |
1,056 | 13,580 | |||||||
Patterson Cos., Inc. |
4,144 | 122,828 | ||||||||
a |
Pediatrix Medical Group, Inc. |
4,240 | 53,890 | |||||||
Phibro Animal Health Corp., Class A |
976 | 12,464 | ||||||||
a |
Prestige Consumer Healthcare, Inc. |
2,144 | 122,615 | |||||||
a |
Quipt Home Medical Corp. |
832 | 4,235 | |||||||
a |
Semler Scientific, Inc. |
128 | 3,247 |
82 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Small Cap Multifactor Index ETF (continued)
Shares |
Value |
|||||||||
Health Care (continued) | ||||||||||
SIGA Technologies, Inc. |
1,936 | $ | 10,164 | |||||||
a |
Tactile Systems Technology, Inc. |
880 | 12,364 | |||||||
a |
Treace Medical Concepts, Inc. |
1,520 | 19,927 | |||||||
a |
UFP Technologies, Inc. |
208 | 33,582 | |||||||
a |
Vanda Pharmaceuticals, Inc. |
2,304 | 9,953 | |||||||
a |
Viemed Healthcare, Inc. |
736 | 4,953 | |||||||
a,b |
Zynex, Inc. |
1,072 | 8,576 | |||||||
|
|
|||||||||
2,319,440 | ||||||||||
|
|
|||||||||
Industrials 23.7% | ||||||||||
ACCO Brands Corp. |
4,000 | 22,960 | ||||||||
Alamo Group, Inc. |
416 | 71,910 | ||||||||
Allient, Inc. |
608 | 18,799 | ||||||||
Applied Industrial Technologies, Inc. |
1,872 | 289,430 | ||||||||
a |
Atkore, Inc. |
1,696 | 253,026 | |||||||
Barnes Group, Inc. |
1,376 | 46,743 | ||||||||
Barrett Business Services, Inc. |
256 | 23,101 | ||||||||
a |
BlueLinx Holdings, Inc. |
368 | 30,209 | |||||||
Boise Cascade Co. |
1,712 | 176,405 | ||||||||
a |
Bowman Consulting Group Ltd. |
208 | 5,830 | |||||||
Brink’s Co. |
1,840 | 133,658 | ||||||||
a |
Casella Waste Systems, Inc., Class A |
1,888 | 144,054 | |||||||
a |
Cimpress PLC |
784 | 54,888 | |||||||
Comfort Systems USA, Inc. |
1,392 | 237,211 | ||||||||
CompX International, Inc. |
68 | 1,264 | ||||||||
a |
Concrete Pumping Holdings, Inc. |
736 | 6,315 | |||||||
Costamare, Inc. |
2,176 | 20,933 | ||||||||
Covenant Logistics Group, Inc. |
512 | 22,451 | ||||||||
CRA International, Inc. |
272 | 27,407 | ||||||||
CSG Systems International, Inc. |
1,424 | 72,795 | ||||||||
CSW Industrials, Inc. |
592 | 103,742 | ||||||||
a |
Daseke, Inc. |
1,616 | 8,290 | |||||||
Deluxe Corp. |
1,968 | 37,176 | ||||||||
a |
Distribution Solutions Group, Inc. |
384 | 9,984 | |||||||
a |
DXP Enterprises, Inc. |
608 | 21,244 | |||||||
Eagle Bulk Shipping, Inc. |
512 | 21,519 | ||||||||
Encore Wire Corp. |
672 | 122,613 | ||||||||
Ennis, Inc. |
1,216 | 25,804 | ||||||||
ESCO Technologies, Inc. |
832 | 86,894 | ||||||||
Exponent, Inc. |
2,336 | 199,962 | ||||||||
Forward Air Corp. |
1,216 | 83,588 | ||||||||
a |
Franklin Covey Co. |
528 | 22,662 | |||||||
Franklin Electric Co., Inc. |
2,064 | 184,171 | ||||||||
FTAI Aviation Ltd. |
2,048 | 72,806 | ||||||||
a |
GEO Group, Inc. |
4,432 | 36,254 | |||||||
Global Industrial Co. |
672 | 22,512 | ||||||||
a |
GMS, Inc. |
1,904 | 121,799 | |||||||
Gorman-Rupp Co. |
784 | 25,794 | ||||||||
H&E Equipment Services, Inc. |
1,248 | 53,901 | ||||||||
Healthcare Services Group, Inc. |
3,136 | 32,709 | ||||||||
Heartland Express, Inc. |
2,192 | 32,200 | ||||||||
Heidrick & Struggles International, Inc. |
1,088 | 27,222 | ||||||||
a |
Heritage-Crystal Clean, Inc. |
880 | 39,908 | |||||||
Hillenbrand, Inc. |
2,672 | 113,052 | ||||||||
HNI Corp. |
2,152 | 74,524 | ||||||||
a |
Hudson Technologies, Inc. |
1,664 | 22,131 | |||||||
a |
IBEX Holdings Ltd. |
432 | 6,674 | |||||||
ICF International, Inc. |
832 | 100,514 | ||||||||
a |
IES Holdings, Inc. |
176 | 11,593 |
franklintempleton.com |
Semiannual Report |
83 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Small Cap Multifactor Index ETF (continued)
Shares |
Value |
|||||||||
Industrials (continued) | ||||||||||
Insperity, Inc. |
1,568 | $ | 153,037 | |||||||
Kadant, Inc. |
480 | 108,264 | ||||||||
Karat Packaging, Inc. |
208 | 4,796 | ||||||||
Kelly Services, Inc., Class A |
1,472 | 26,776 | ||||||||
Kforce, Inc. |
1,040 | 62,046 | ||||||||
Korn Ferry |
2,576 | 122,205 | ||||||||
a |
Legalzoom.com, Inc. |
4,400 | 48,136 | |||||||
a |
Liquidity Services, Inc. |
1,040 | 18,325 | |||||||
LSI Industries, Inc. |
560 | 8,893 | ||||||||
Luxfer Holdings PLC |
1,168 | 15,242 | ||||||||
Marten Transport Ltd. |
2,576 | 50,773 | ||||||||
a |
Masterbrand, Inc. |
2,592 | 31,493 | |||||||
Matson, Inc. |
1,552 | 137,693 | ||||||||
Matthews International Corp., Class A |
1,072 | 41,712 | ||||||||
McGrath RentCorp |
1,008 | 101,042 | ||||||||
Miller Industries, Inc. |
432 | 16,939 | ||||||||
MillerKnoll, Inc. |
3,104 | 75,893 | ||||||||
a |
Mistras Group, Inc. |
432 | 2,354 | |||||||
Moog, Inc., Class A |
560 | 63,258 | ||||||||
Mueller Industries, Inc. |
2,336 | 175,574 | ||||||||
Mueller Water Products, Inc., Class A |
5,952 | 75,471 | ||||||||
National Presto Industries, Inc. |
208 | 15,072 | ||||||||
NL Industries, Inc. |
368 | 1,748 | ||||||||
a |
NV5 Global, Inc. |
544 | 52,349 | |||||||
Omega Flex, Inc. |
176 | 13,856 | ||||||||
a |
PAM Transportation Services, Inc. |
304 | 6,551 | |||||||
a |
Performant Financial Corp. |
1,696 | 3,833 | |||||||
a |
PGT Innovations, Inc. |
1,296 | 35,964 | |||||||
Pitney Bowes, Inc. |
5,584 | 16,864 | ||||||||
Preformed Line Products Co. |
112 | 18,209 | ||||||||
a |
Radiant Logistics, Inc. |
1,616 | 9,130 | |||||||
Resources Connection, Inc. |
1,760 | 26,242 | ||||||||
Rush Enterprises, Inc., Class A |
2,520 | 102,892 | ||||||||
Rush Enterprises, Inc., Class B |
432 | 19,565 | ||||||||
Safe Bulkers, Inc. |
2,704 | 8,761 | ||||||||
Simpson Manufacturing Co., Inc. |
1,888 | 282,841 | ||||||||
Standex International Corp. |
512 | 74,593 | ||||||||
Steelcase, Inc., Class A |
3,712 | 41,463 | ||||||||
Tennant Co. |
896 | 66,438 | ||||||||
a |
Titan Machinery, Inc. |
832 | 22,115 | |||||||
a |
Transcat, Inc. |
272 | 26,648 | |||||||
a |
TriNet Group, Inc. |
752 | 87,593 | |||||||
a |
TrueBlue, Inc. |
1,232 | 18,073 | |||||||
UFP Industries, Inc. |
2,528 | 258,867 | ||||||||
UniFirst Corp. |
576 | 93,894 | ||||||||
Universal Logistics Holdings, Inc. |
352 | 8,863 | ||||||||
Veritiv Corp. |
576 | 97,286 | ||||||||
Wabash National Corp. |
928 | 19,599 | ||||||||
Watts Water Technologies, Inc., Class A |
1,312 | 226,740 | ||||||||
Werner Enterprises, Inc. |
3,472 | 135,234 | ||||||||
|
|
|||||||||
6,511,836 | ||||||||||
|
|
|||||||||
Information Technology 13.5% | ||||||||||
A10 Networks, Inc. |
3,632 | 54,589 | ||||||||
American Software, Inc., Class A |
1,280 | 14,669 | ||||||||
a |
Appfolio, Inc., Class A |
816 | 149,026 | |||||||
a |
Aviat Networks, Inc. |
416 | 12,979 | |||||||
a |
Avid Technology, Inc. |
1,424 | 38,263 | |||||||
a |
Axcelis Technologies, Inc. |
704 | 114,787 |
84 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Small Cap Multifactor Index ETF (continued)
Shares |
Value |
|||||||||
Information Technology (continued) | ||||||||||
Badger Meter, Inc. |
1,312 | $ | 188,757 | |||||||
Belden, Inc. |
1,312 | 126,674 | ||||||||
a |
Blackbaud, Inc. |
1,728 | 121,513 | |||||||
a |
Box, Inc., Class A |
3,200 | 77,472 | |||||||
a |
Calix, Inc. |
2,176 | 99,748 | |||||||
a |
Cambium Networks Corp. |
432 | 3,166 | |||||||
Climb Global Solutions, Inc. |
80 | 3,441 | ||||||||
a |
CommVault Systems, Inc. |
2,176 | 147,119 | |||||||
a,b |
CompoSecure, Inc. |
304 | 1,961 | |||||||
a |
Consensus Cloud Solutions, Inc. |
784 | 19,741 | |||||||
a |
CPI Card Group, Inc. |
80 | 1,482 | |||||||
a |
eGain Corp. |
736 | 4,512 | |||||||
a |
Enfusion, Inc., Class A |
1,056 | 9,472 | |||||||
a |
ePlus, Inc. |
1,104 | 70,126 | |||||||
a |
Extreme Networks, Inc. |
5,568 | 134,801 | |||||||
Hackett Group, Inc. |
1,168 | 27,553 | ||||||||
a |
Harmonic, Inc. |
3,264 | 31,432 | |||||||
Immersion Corp. |
608 | 4,019 | ||||||||
Information Services Group, Inc. |
1,424 | 6,237 | ||||||||
a |
Insight Enterprises, Inc. |
1,296 | 188,568 | |||||||
InterDigital, Inc. |
528 | 42,367 | ||||||||
a |
inTEST Corp. |
240 | 3,641 | |||||||
Kulicke & Soffa Industries, Inc. |
2,496 | 121,380 | ||||||||
Napco Security Technologies, Inc. |
1,376 | 30,616 | ||||||||
a |
NetScout Systems, Inc. |
2,544 | 71,283 | |||||||
a |
Novanta, Inc. |
1,600 | 229,504 | |||||||
NVE Corp. |
128 | 10,514 | ||||||||
a |
OneSpan, Inc. |
1,600 | 17,200 | |||||||
a |
OSI Systems, Inc. |
768 | 90,655 | |||||||
PC Connection, Inc. |
464 | 24,768 | ||||||||
Power Integrations, Inc. |
2,416 | 184,365 | ||||||||
Progress Software Corp. |
1,984 | 104,319 | ||||||||
a |
PROS Holdings, Inc. |
880 | 30,466 | |||||||
a |
Qualys, Inc. |
1,872 | 285,574 | |||||||
a |
Rambus, Inc. |
3,440 | 191,918 | |||||||
Richardson Electronics Ltd. |
240 | 2,623 | ||||||||
a |
Rimini Street, Inc. |
2,464 | 5,421 | |||||||
Sapiens International Corp. NV |
624 | 17,740 | ||||||||
a |
SPS Commerce, Inc. |
1,680 | 286,625 | |||||||
a |
Squarespace, Inc., Class A |
1,664 | 48,206 | |||||||
Vishay Intertechnology, Inc. |
5,392 | 133,290 | ||||||||
a |
Vishay Precision Group, Inc. |
464 | 15,581 | |||||||
a |
Workiva, Inc. |
1,008 | 102,151 | |||||||
a |
Yext, Inc. |
2,480 | 15,698 | |||||||
|
|
|||||||||
3,718,012 | ||||||||||
|
|
|||||||||
Materials 3.6% | ||||||||||
Alpha Metallurgical Resources, Inc. |
256 | 66,491 | ||||||||
Arch Resources, Inc. |
640 | 109,222 | ||||||||
b |
Caledonia Mining Corp. PLC |
336 | 3,313 | |||||||
Chase Corp. |
160 | 20,357 | ||||||||
Commercial Metals Co. |
4,592 | 226,891 | ||||||||
a |
Core Molding Technologies, Inc. |
144 | 4,103 | |||||||
Greif, Inc., Class A |
1,200 | 80,172 | ||||||||
Greif, Inc., Class B |
256 | 17,039 | ||||||||
Innospec, Inc. |
912 | 93,206 | ||||||||
Kronos Worldwide, Inc. |
848 | 6,572 | ||||||||
Myers Industries, Inc. |
1,600 | 28,688 | ||||||||
Olympic Steel, Inc. |
368 | 20,685 |
franklintempleton.com |
Semiannual Report |
85 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Small Cap Multifactor Index ETF (continued)
Shares |
Value |
|||||||||
Materials (continued) | ||||||||||
Ramaco Resources, Inc., Class A |
864 | $ | 9,495 | |||||||
Ramaco Resources, Inc., Class B |
208 | 2,481 | ||||||||
Ryerson Holding Corp. |
832 | 24,203 | ||||||||
Sensient Technologies Corp. |
1,712 | 100,118 | ||||||||
SunCoke Energy, Inc. |
3,152 | 31,993 | ||||||||
Sylvamo Corp. |
1,168 | 51,322 | ||||||||
Tredegar Corp. |
992 | 5,367 | ||||||||
Warrior Met Coal, Inc. |
1,888 | 96,439 | ||||||||
|
|
|||||||||
998,157 | ||||||||||
|
|
|||||||||
Real Estate 4.0% | ||||||||||
American Assets Trust, Inc. |
1,920 | 37,344 | ||||||||
Broadstone Net Lease, Inc. |
7,264 | 103,875 | ||||||||
CareTrust REIT, Inc. |
4,624 | 94,792 | ||||||||
City Office REIT, Inc. |
1,536 | 6,528 | ||||||||
Community Healthcare Trust, Inc. |
1,008 | 29,938 | ||||||||
COPT Defense Properties |
4,848 | 115,528 | ||||||||
a Forestar Group, Inc. |
352 | 9,483 | ||||||||
Four Corners Property Trust, Inc. |
3,312 | 73,493 | ||||||||
Hudson Pacific Properties, Inc. |
2,992 | 19,897 | ||||||||
Innovative Industrial Properties, Inc. |
560 | 42,370 | ||||||||
LTC Properties, Inc. |
1,552 | 49,866 | ||||||||
LXP Industrial Trust |
11,216 | 99,822 | ||||||||
Marcus & Millichap, Inc. |
1,008 | 29,575 | ||||||||
Orion Office REIT, Inc. |
1,200 | 6,252 | ||||||||
Piedmont Office Realty Trust, Inc., Class A |
2,880 | 16,186 | ||||||||
PotlatchDeltic Corp. |
3,184 | 144,522 | ||||||||
RE/MAX Holdings, Inc., Class A |
912 | 11,801 | ||||||||
Retail Opportunity Investments Corp. |
3,504 | 43,379 | ||||||||
RMR Group, Inc., Class A |
704 | 17,262 | ||||||||
Tanger Factory Outlet Centers, Inc. |
4,576 | 103,417 | ||||||||
a |
Transcontinental Realty Investors, Inc. |
48 | 1,470 | |||||||
Universal Health Realty Income Trust |
304 | 12,291 | ||||||||
Whitestone REIT |
2,032 | 19,568 | ||||||||
|
|
|||||||||
1,088,659 | ||||||||||
|
|
|||||||||
Utilities 5.5% | ||||||||||
American States Water Co. |
1,760 | 138,477 | ||||||||
Artesian Resources Corp., Class A |
336 | 14,109 | ||||||||
Avista Corp. |
3,200 | 103,584 | ||||||||
Brookfield Infrastructure Corp., Class A |
4,240 | 149,842 | ||||||||
California Water Service Group |
2,576 | 121,871 | ||||||||
Genie Energy Ltd., Class B |
480 | 7,070 | ||||||||
Global Water Resources, Inc. |
488 | 4,758 | ||||||||
MGE Energy, Inc. |
1,520 | 104,135 | ||||||||
Northwest Natural Holding Co. |
1,408 | 53,729 | ||||||||
Northwestern Energy Group, Inc. |
2,400 | 115,344 | ||||||||
Otter Tail Corp. |
1,584 | 120,257 | ||||||||
PNM Resources, Inc. |
3,712 | 165,592 | ||||||||
SJW Group |
1,232 | 74,055 | ||||||||
Southwest Gas Holdings, Inc. |
2,880 | 173,981 | ||||||||
Spire, Inc. |
1,760 | 99,581 | ||||||||
Unitil Corp. |
656 | 28,018 |
86 |
Semiannual Report |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Small Cap Multifactor Index ETF (continued)
Shares |
Value |
|||||||||
Utilities (continued) | ||||||||||
York Water Co. |
608 | $ | 22,794 | |||||||
|
|
|||||||||
1,497,197 | ||||||||||
|
|
|||||||||
Total Common Stocks (Cost $27,397,932) |
27,429,128 | |||||||||
|
|
|||||||||
Total
Investments before Short-Term Investments |
27,429,128 | |||||||||
|
|
|||||||||
Short-Term Investments 0.5% | ||||||||||
Investments from Cash Collateral Received for Loaned Securities 0.5% | ||||||||||
Money Market Funds 0.5% | ||||||||||
c,d |
Institutional Fiduciary Trust - Money Market Portfolio, 5.15% |
$ | 134,800 | 134,800 | ||||||
|
|
|||||||||
Total Short-Term Investments (Cost $134,800) |
134,800 | |||||||||
|
|
|||||||||
Total Investments (Cost $27,532,732) 100.4% |
27,563,928 | |||||||||
Other Assets, less Liabilities (0.4)% |
(113,130 | ) | ||||||||
|
|
|||||||||
Net Assets 100.0% |
$ | 27,450,798 | ||||||||
|
|
aNon-income producing.
bA portion or all of the security is on loan at September 30, 2023. See Note 1(d).
cThe rate shown is the annualized seven-day effective yield at period end.
dSee Note 3(c) regarding investments in affiliated management investment companies.
See Abbreviations on page 108.
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
87 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities
September 30, 2023 (unaudited)
Franklin Emerging Market Core Dividend Tilt Index ETF |
Franklin International Core Dividend Tilt Index ETF |
Franklin U.S. Core Dividend Tilt Index ETF |
||||||||||
Assets: |
||||||||||||
Investments in securities: |
||||||||||||
Cost – Unaffiliated issuers |
$ 13,022,633 | $ | 457,018,197 | $ | 21,576,766 | |||||||
Value – Unaffiliated issuers |
$ 11,473,400 | $ | 452,775,805 | $ | 21,445,239 | |||||||
Foreign currency, at value (cost $40,855 and $1,509,971, respectively) |
40,756 | 1,510,187 | — | |||||||||
Receivables: |
||||||||||||
Dividends |
63,898 | 1,650,758 | 56,482 | |||||||||
European Union tax reclaims receivable (Note 1e) |
— | 249,327 | — | |||||||||
Investment securities sold |
28,164 | — | — | |||||||||
Deposits with brokers for: |
||||||||||||
Futures contracts |
2,770 | 83,682 | 2,240 | |||||||||
|
|
|||||||||||
Total assets |
11,608,988 | 456,269,759 | 21,503,961 | |||||||||
|
|
|||||||||||
Liabilities: |
||||||||||||
Payables: |
||||||||||||
European Union tax reclaim contingent fees payable (Note 1e) |
— | 62,332 | — | |||||||||
Management fees |
1,838 | 33,826 | 1,072 | |||||||||
Variation margin on futures contracts |
1,410 | 10,074 | 90 | |||||||||
Funds advanced by custodian |
16,766 | 40,289 | 3,047 | |||||||||
Deferred tax |
32,665 | — | — | |||||||||
|
|
|||||||||||
Total liabilities |
52,679 | 146,521 | 4,209 | |||||||||
|
|
|||||||||||
Net assets, at value |
$ 11,556,309 | $ | 456,123,238 | $ | 21,499,752 | |||||||
|
|
|||||||||||
Net assets consist of: |
||||||||||||
Paid-in capital |
$ 43,918,309 | $ | 457,324,126 | $ | 22,033,888 | |||||||
Total distributable earnings (loss) |
(32,362,000 | ) | (1,200,888 | ) | (534,136 | ) | ||||||
|
|
|||||||||||
Net assets, at value |
$ 11,556,309 | $ | 456,123,238 | $ | 21,499,752 | |||||||
|
|
|||||||||||
Shares outstanding |
500,000 | 16,300,000 | 650,000 | |||||||||
|
|
|||||||||||
Net asset value per share |
$ 23.11 | $ | 27.98 | $ | 33.08 | |||||||
|
|
88 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
September 30, 2023 (unaudited)
Franklin U.S. Large Cap Multifactor Index ETF |
Franklin U.S. Mid Cap Multifactor Index ETF |
Franklin U.S. Small Cap Multifactor Index ETF |
||||||||||
Assets: |
||||||||||||
Investments in securities: |
||||||||||||
Cost – Unaffiliated issuers |
$810,987,859 | $ | 277,084,090 | $ | 27,397,932 | |||||||
Cost – Non-controlled affiliates (Note 3c) |
— | — | 134,800 | |||||||||
Value – Unaffiliated issuers+ |
$869,616,913 | $ | 274,165,911 | $ | 27,429,128 | |||||||
Value – Non-controlled affiliates (Note 3c) |
— | — | 134,800 | |||||||||
Cash |
1,310,137 | 479,015 | 4,333 | |||||||||
Receivables: |
||||||||||||
Capital shares sold |
4,304,438 | — | — | |||||||||
Dividends |
722,459 | 376,276 | 26,877 | |||||||||
Investment securities sold |
— | — | 189,646 | |||||||||
Deposits with brokers for: |
||||||||||||
Futures contracts |
89,600 | 43,200 | — | |||||||||
|
|
|||||||||||
Total assets |
876,043,547 | 275,064,402 | 27,784,784 | |||||||||
|
|
|||||||||||
Liabilities: |
||||||||||||
Payables: |
||||||||||||
Investment securities purchased |
4,278,502 | — | 191,161 | |||||||||
Management fees |
109,152 | 68,785 | 8,025 | |||||||||
Variation margin on futures contracts |
4,811 | 3,299 | — | |||||||||
Payable upon return of securities loaned |
— | — | 134,800 | |||||||||
|
|
|||||||||||
Total liabilities |
4,392,465 | 72,084 | 333,986 | |||||||||
|
|
|||||||||||
Net assets, at value |
$871,651,082 | $ | 274,992,318 | $ | 27,450,798 | |||||||
|
|
|||||||||||
Net assets consist of: |
||||||||||||
Paid-in capital |
$916,933,368 | $ | 276,141,516 | $ | 29,054,568 | |||||||
Total distributable earnings (loss) |
(45,282,286 | ) | (1,149,198 | ) | (1,603,770 | ) | ||||||
|
|
|||||||||||
Net assets, at value |
$871,651,082 | $ | 274,992,318 | $ | 27,450,798 | |||||||
|
|
|||||||||||
Shares outstanding |
20,250,000 | 6,400,000 | 800,000 | |||||||||
|
|
|||||||||||
Net asset value per share |
$ 43.04 | $ | 42.97 | $ | 34.31 | |||||||
|
|
|||||||||||
+Includes securities loaned |
— | — | 131,806 |
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
89 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations
for the period ended September 30, 2023 (unaudited)
Franklin Emerging Market Core Dividend Tilt Index ETF |
Franklin Tilt Index ETF |
Franklin U.S. Core Dividend Tilt Index ETF |
Franklin U.S. Large Cap Multifactor Index ETF |
|||||||||||||
Investment income: |
||||||||||||||||
Dividends: (net of foreign taxes)a |
||||||||||||||||
Unaffiliated issuers |
$ 402,241 | $ 8,301,832 | $275,732 | $ 7,908,683 | ||||||||||||
European Union tax reclaims (Note 1e) |
— | 249,327 | — | — | ||||||||||||
Interest: |
||||||||||||||||
Unaffiliated issuers |
— | 5,610 | 327 | 8,602 | ||||||||||||
Interest from securities loaned (Note 1d): |
||||||||||||||||
Unaffiliated issuers (net of fees and rebates) |
— | — | 702 | 20,454 | ||||||||||||
|
|
|||||||||||||||
Total investment income |
402,241 | 8,556,769 | 276,761 | 7,937,739 | ||||||||||||
|
|
|||||||||||||||
Expenses: |
||||||||||||||||
Management fees (Note 3a) |
11,396 | 170,839 | 6,956 | 666,036 | ||||||||||||
Contingent fees for European Union tax reclaims (Note 1e) |
— | 62,332 | — | — | ||||||||||||
|
|
|||||||||||||||
Total expenses |
11,396 | 233,171 | 6,956 | 666,036 | ||||||||||||
Expenses waived/paid by affiliates (Note 3c) |
— | (1 | ) | (22 | ) | (646 | ) | |||||||||
|
|
|||||||||||||||
Net expenses |
11,396 | 233,170 | 6,934 | 665,390 | ||||||||||||
|
|
|||||||||||||||
Net investment income |
390,845 | 8,323,599 | 269,827 | 7,272,349 | ||||||||||||
|
|
|||||||||||||||
Realized and unrealized gains (losses): |
||||||||||||||||
Net realized gain (loss) from: |
||||||||||||||||
Investments: |
||||||||||||||||
Unaffiliated issuers |
(20,156 | ) | (4,038,294 | ) | (90,293 | ) | (609,128 | ) | ||||||||
In-kind redemptions |
— | 6,848,821 | 165,492 | 14,819,393 | ||||||||||||
Foreign currency transactions |
(4,675 | ) | (64,316 | ) | 1,091 | — | ||||||||||
Futures contracts |
1,215 | 58,373 | 10,082 | 127,850 | ||||||||||||
|
|
|||||||||||||||
Net realized gain (loss) |
(23,616 | ) | 2,804,584 | 86,372 | 14,338,115 | |||||||||||
|
|
|||||||||||||||
Net change in unrealized appreciation (depreciation)on: |
||||||||||||||||
Investments: |
||||||||||||||||
Unaffiliated issuers |
(289,217 | ) | (16,786,556 | ) | 538,081 | 22,036,607 | ||||||||||
Translation of other assets and liabilities denominated in foreign currencies |
(213 | ) | (11,353 | ) | (592 | ) | — | |||||||||
Futures contracts |
(3,444 | ) | (89,122 | ) | (5,845 | ) | (129,655 | ) | ||||||||
Change in deferred taxes on unrealized appreciation . |
(19,045 | ) | — | — | — | |||||||||||
|
|
|||||||||||||||
Net change in unrealized appreciation (depreciation) |
(311,919 | ) | (16,887,031 | ) | 531,644 | 21,906,952 | ||||||||||
|
|
|||||||||||||||
Net realized and unrealized gain (loss) |
(335,535 | ) | (14,082,447 | ) | 618,016 | 36,245,067 | ||||||||||
|
|
|||||||||||||||
Net increase (decrease) in net assets resulting from operations |
$ 55,310 | $ (5,758,848 | ) | $887,843 | $43,517,416 | |||||||||||
|
|
|||||||||||||||
aForeign taxes withheld on dividends |
$ 54,638 | $ 854,520 | $ 140 | $ 2,522 | ||||||||||||
|
|
90 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the period ended September 30, 2023 (unaudited)
Franklin U.S. Mid Cap Multifactor Index ETF |
Franklin U.S. Small Cap Multifactor Index ETF |
|||||||
Investment income: |
||||||||
Dividends: (net of foreign taxes)a |
||||||||
Unaffiliated issuers |
$ 2,236,507 | $ 224,374 | ||||||
Interest: |
||||||||
Unaffiliated issuers |
2,613 | 106 | ||||||
Interest from securities loaned (Note 1d): |
||||||||
Unaffiliated issuers (net of fees and rebates) |
— | 224 | ||||||
Non-Controlled affiliates (Note 3c) |
106 | — | ||||||
|
|
|||||||
Total investment income |
2,239,226 | 224,704 | ||||||
|
|
|||||||
Expenses: |
||||||||
Management fees (Note 3a) |
330,397 | 38,398 | ||||||
|
|
|||||||
Total expenses |
330,397 | 38,398 | ||||||
Expenses waived/paid by affiliates (Note 3c) |
(169 | ) | (21 | ) | ||||
|
|
|||||||
Net expenses |
330,228 | 38,377 | ||||||
|
|
|||||||
Net investment income |
1,908,998 | 186,327 | ||||||
|
|
|||||||
Realized and unrealized gains (losses): |
||||||||
Net realized gain (loss) from: |
||||||||
Investments: |
||||||||
Unaffiliated issuers |
(3,670,983 | ) | (37,893 | ) | ||||
In-kind redemptions |
6,927,046 | 522,250 | ||||||
Futures contracts |
105 | 786 | ||||||
|
|
|||||||
Net realized gain (loss) |
3,256,168 | 485,143 | ||||||
|
|
|||||||
Net change in unrealized appreciation (depreciation) on: |
||||||||
Investments: |
||||||||
Unaffiliated issuers |
(9,538,145 | ) | (708,068 | ) | ||||
Futures contracts |
(20,647 | ) | — | |||||
|
|
|||||||
Net change in unrealized appreciation (depreciation) |
(9,558,792 | ) | (708,068 | ) | ||||
|
|
|||||||
Net realized and unrealized gain (loss) |
(6,302,624 | ) | (222,925 | ) | ||||
|
|
|||||||
Net increase (decrease) in net assets resulting from operations |
$(4,393,626 | ) | $ (36,598 | ) | ||||
|
|
|||||||
aForeign taxes withheld on dividends |
$280 | $331 | ||||||
|
|
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
91 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
Franklin Emerging Market Core Dividend Tilt Index ETF |
Franklin International Core Dividend Tilt Index ETF |
|||||||||||||||
Six Months Ended September 30, 2023 (unaudited) |
Year Ended March 31, 2023 |
Six Months Ended September 30, 2023 (unaudited) |
Year Ended March 31, 2023 |
|||||||||||||
Increase (decrease) in net assets: |
||||||||||||||||
Operations: |
||||||||||||||||
Net investment income |
$ 390,845 | $ 781,802 | $ 8,323,599 | $ 3,041,681 | ||||||||||||
Net realized gain (loss) |
(23,616 | ) | (1,041,456 | ) | 2,804,584 | (512,681 | ) | |||||||||
Net change in unrealized appreciation (depreciation) |
(311,919 | ) | (1,864,591 | ) | (16,887,031 | ) | 10,343,790 | |||||||||
|
|
|||||||||||||||
Net increase (decrease) in net assets resulting from operations |
55,310 | (2,124,245 | ) | (5,758,848 | ) | 12,872,790 | ||||||||||
|
|
|||||||||||||||
Distributions to shareholders (Note 1f) |
(438,404 | ) | (808,733 | ) | (8,759,463 | ) | (1,624,260 | ) | ||||||||
|
|
|||||||||||||||
Capital share transactions: (Note 2) |
— | (2,127,127 | ) | 230,182,201 | 212,018,520 | |||||||||||
|
|
|||||||||||||||
Net increase (decrease) in net assets |
(383,094 | ) | (5,060,105 | ) | 215,663,890 | 223,267,050 | ||||||||||
Net assets: |
||||||||||||||||
Beginning of period |
11,939,403 | 16,999,508 | 240,459,348 | 17,192,298 | ||||||||||||
|
|
|||||||||||||||
End of period |
$11,556,309 | $11,939,403 | $456,123,238 | $240,459,348 | ||||||||||||
|
|
92 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin U.S. Core Dividend Tilt Index ETF |
Franklin U.S. Large Cap Multifactor Index ETF |
|||||||||||||||
Six Months Ended September 30, 2023 (unaudited) |
Year Ended March 31, 2023 |
Six Months Ended September 30, 2023 (unaudited) |
Year Ended March 31, 2023 |
|||||||||||||
Increase (decrease) in net assets: |
||||||||||||||||
Operations: |
||||||||||||||||
Net investment income |
$ 269,827 | $ 846,405 | $ 7,272,349 | $ 18,872,049 | ||||||||||||
Net realized gain (loss) |
86,372 | (312,029 | ) | 14,338,115 | (23,086,299 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) |
531,644 | (5,195,037 | ) | 21,906,952 | (54,043,236 | ) | ||||||||||
|
|
|||||||||||||||
Net increase (decrease) in net assets resulting from operations |
887,843 | (4,660,661 | ) | 43,517,416 | (58,257,486 | ) | ||||||||||
|
|
|||||||||||||||
Distributions to shareholders (Note 1f) |
(298,650 | ) | (1,064,664 | ) | (7,096,255 | ) | (19,321,124 | ) | ||||||||
|
|
|||||||||||||||
Capital share transactions: (Note 2) |
(3,308,244 | ) | (906,573 | ) | (25,188,991 | ) | (28,739,866 | ) | ||||||||
|
|
|||||||||||||||
Net increase (decrease) in net assets |
(2,719,051 | ) | (6,631,898 | ) | 11,232,170 | (106,318,476 | ) | |||||||||
Net assets: |
||||||||||||||||
Beginning of period |
24,218,803 | 30,850,701 | 860,418,912 | 966,737,388 | ||||||||||||
|
|
|||||||||||||||
End of period |
$21,499,752 | $24,218,803 | $871,651,082 | $860,418,912 | ||||||||||||
|
|
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
93 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin U.S. Mid Cap Multifactor Index ETF |
Franklin U.S. Small Cap Multifactor Index ETF |
|||||||||||||||
Six Months Ended September 30, 2023 (unaudited) |
Year Ended March 31, 2023 |
Six Months Ended September 30, 2023 (unaudited) |
Year Ended March 31, 2023 |
|||||||||||||
Increase (decrease) in net assets: |
||||||||||||||||
Operations: |
||||||||||||||||
Net investment income |
$ 1,908,998 | $ 1,602,216 | $ 186,327 | $ 245,401 | ||||||||||||
Net realized gain (loss) |
3,256,168 | 2,382,285 | 485,143 | (599,460 | ) | |||||||||||
Net change in unrealized appreciation (depreciation) |
(9,558,792 | ) | (833,649 | ) | (708,068 | ) | (440,618 | ) | ||||||||
|
|
|||||||||||||||
Net increase (decrease) in net assets resulting from operations |
(4,393,626 | ) | 3,150,852 | (36,598 | ) | (794,677 | ) | |||||||||
|
|
|||||||||||||||
Distributions to shareholders (Note 1f) |
(1,623,929 | ) | (1,398,123 | ) | (137,147 | ) | (231,686 | ) | ||||||||
|
|
|||||||||||||||
Capital share transactions: (Note 2) |
114,262,300 | 102,139,664 | 10,576,982 | 1,801,034 | ||||||||||||
|
|
|||||||||||||||
Net increase (decrease) in net assets |
108,244,745 | 103,892,393 | 10,403,237 | 774,671 | ||||||||||||
Net assets: |
||||||||||||||||
Beginning of period |
166,747,573 | 62,855,180 | 17,047,561 | 16,272,890 | ||||||||||||
|
|
|||||||||||||||
End of period |
$274,992,318 | $166,747,573 | $27,450,798 | $17,047,561 | ||||||||||||
|
|
94 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Notes to Financial Statements (unaudited)
1. Organization and Significant Accounting Policies
Franklin Templeton ETF Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company consisting of fifty-one separate funds, six of which are included in this report (Funds). The Funds follow the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946, Financial Services - Investment Companies (“ASC 946”) and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP), including, but not limited to, ASC 946. The Funds are exchange traded funds (ETF) and seek to provide the investment results that closely correspond, before fees and expenses, to the performance of Fund’s corresponding underlying index.
The following summarizes the Funds’ significant accounting policies.
a. Financial Instrument Valuation
The Funds’ investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Funds calculate the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Funds’ Board of Trustees (the Board), the Board has designated the Fund’s investment manager as the valuation designee and has responsibility for oversight of valuation. The investment manager is assisted by the Fund’s administrator in performing this responsibility, including leading the cross-functional Valuation Committee (VC).
The Funds may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.
Equity securities, exchange trade funds and derivative financial instruments listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. London time on the
day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.
Investments in open-end mutual funds are valued at the closing NAV.
The Funds have procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Funds primarily employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, As per standards minutes and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.
Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Funds’ business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Funds’ portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. In order to minimize the potential for these differences, an independent pricing service may be used to adjust the Fund’s portfolio securities to the latest indications of fair value at 4 p.m. Eastern time on September 30, 2023. At September 30, 2023, certain securities may have been fair valued using these procedures, in which case the securities were categorized as Level 2 inputs within the fair value hierarchy (referred to as “market level fair value”).
When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the Funds’ NAV is not calculated, which could result in
franklintempleton.com |
Semiannual Report |
95 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
a. Financial Instrument Valuation (continued)
differences between the value of the Funds’ portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Funds for financial reporting purposes.
b. Foreign Currency Translation
Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Funds may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.
The Funds do not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments in the Statements of Operations.
Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.
c. Derivative Financial Instruments
Certain or all Funds invested in derivative financial instruments in order to manage risk or gain exposure to various other investments or markets. Derivatives are
financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown in the Statements of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statements of Operations.
Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties. The Funds attempt to reduce their exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of default, or early termination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty.
Termination events applicable to the Funds include failure of the Funds to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. However, absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statements of Assets and Liabilities. Early termination by the counterparty may result in an immediate payment by the Funds of any net liability owed to that counterparty under the ISDA agreement.
Collateral requirements differ by type of derivative. Collateral terms are contract specific for OTC derivatives. For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the Fund or the applicable counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary depending on the counterparty and the type of agreement. Generally, collateral is determined at
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
c. Derivative Financial Instruments (continued)
the close of Fund business each day and any additional collateral required due to changes in derivative values may be delivered by the Fund or the counterparty the next business day, or within a few business days. Collateral pledged and/or received by the Fund, if any, is held in segregated accounts with the Fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Funds’ investment objectives. To the extent that the amounts due to the Fund from its counterparties are not subject to collateralization or are not fully collateralized, the Fund bears the risk of loss from counterparty non-performance.
Certain or all Funds entered into exchange traded futures contracts primarily to manage and/or gain exposure to equity price risk. A futures contract is an agreement between the Fund and a counterparty to buy or sell an asset at a specified price on a future date. Required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Statements of Assets and Liabilities.
See Note 7 regarding other derivative information.
d. Securities Lending
Certain or all Funds participate in an agency based securities lending program to earn additional income. The Fund receives cash collateral against the loaned securities in an amount equal to at least 102% of the fair value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the fair value of loaned securities, as determined at the close of Fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. The collateral is deposited into a joint cash account with other funds and is used to invest in a money market fund managed by Franklin Advisers, Inc., an affiliate of the Funds. These securities received as collateral are held in segregated accounts with the Funds’ custodian. The Fund cannot repledge or resell these securities received as collateral. As such, the non-cash collateral is excluded from the Statements of Assets and Liabilities. The Fund may receive income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. Income from securities loaned, net of fees paid to the securities lending agent and/or third-party vendor, is reported separately in the Statements of Operations. The Fund bears
the market risk with respect to the collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. If the borrower defaults on its obligation to return the securities loaned, the Fund has the right to repurchase the securities in the open market using the collateral received. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower.
e. Income and Deferred Taxes
It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
The Funds may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which the Funds invest. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Funds invest. When a capital gain tax is determined to apply, certain or all Funds record an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.
Each Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of September 30, 2023, each Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.
As a result of several court cases, in certain countries across the European Union the Fund filed additional tax reclaims for previously withheld taxes on dividends earned in those countries (EU reclaims). Income recognized, if any, for EU reclaims is reflected as European Union tax reclaims in the Statements of Operations and any related receivable is reflected as European Union tax reclaims receivable in the Statements of Assets and Liabilities. Any fees associated with these filings are reflected as European Union tax reclaim contingent fees in the Statements of Operations. When uncertainty exists as to the ultimate resolution of
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
e. Income and Deferred Taxes (continued)
these proceedings, the likelihood of receipt of these EU reclaims, and the potential timing of payment, no amounts are reflected in the financial statements. For U.S. income tax purposes, EU reclaims received by the Funds, if any, reduce the amount of foreign taxes Fund shareholders can use as tax deductions or credits on their income tax returns. In the event that EU reclaims received by the Funds during a fiscal year exceed foreign withholding taxes paid by the Funds, and the Funds previously passed through to its shareholders foreign taxes incurred by the Fund to be used as a credit or deduction on a shareholder’s income tax return, the Funds will enter into a closing agreement with the Internal Revenue Service (IRS) in order to pay the associated tax liability on behalf of the Funds shareholders. During the fiscal year ended March 31, 2023, the Funds received EU reclaims in excess of the foreign taxes paid during the year. The Funds determined to enter into a closing agreement with the IRS and recorded the estimated payments as a reduction to income, as reflected adjustments to estimated payments as other income in the Statement of Operations.
f. Security Transactions, Investment Income, Expenses and Distributions
Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest Income and estimated expenses are accrued daily. Dividend income is recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Funds. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income
tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.
Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust. Certain Fund specific expenses are allocated directly to the Fund that incurred the expense. These expenses are paid by the Fund or by the investment manager, as applicable, according to the terms of the unified management fee agreement.
g. Accounting Estimates
The preparation of financial statement in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
h. Guarantees and Indemnifications
Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Funds, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.
2. Shares of Beneficial Interest
Shares of the Funds are issued and redeemed at their respective NAV only in aggregations of a specific number of shares or multiples thereof (Creation Units). Only certain large institutional investors (Authorized Participants) may engage in creation or redemption transactions directly with the Funds. Once created, shares of the Funds generally trade in the secondary market in amounts less than one Creation Unit. The market price of the Funds’ shares will be based on the price in the secondary market which may be at, above or below the most recent NAV. Creation Units may be issued and redeemed in exchange for a designated portfolio of securities and/or cash (which may include cash in lieu of certain securities).
Authorized Participants pay a standard transaction fee to the shareholder servicing agent when purchasing or redeeming Creation Units of the Funds regardless of the number of Creation Units that are being created or redeemed on the same day by the Authorized Participant. The standard transaction fee is imposed to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units and is not charged to or paid by the Funds.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest (continued)
In addition, for cash Creation Unit transactions, a variable fee for creation transactions and redemption transactions may be charged to the Authorized Participant to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades. Variable fees, if any, are included in capital share transactions in the Statements of Changes in Net Assets.
At September 30, 2023, there were an unlimited number of shares authorized (without par value). Transactions in the Funds’ shares were as follows:
Franklin Emerging Market Core Dividend Tilt Index ETF | ||||||||||||||||||||
Six Months Ended September 30, 2023 |
Year Ended March 31, 2023 |
|||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold |
— | $ | — | — | $ | 2,776 | ||||||||||||||
Shares redeemed |
— | — | (100,000 | ) | (2,129,903 | ) | ||||||||||||||
Net increase (decrease) |
— | $ | — | (100,000 | ) | $ | (2,127,127 | ) | ||||||||||||
Franklin International Core Dividend Tilt Index ETF | ||||||||||||||||||||
Six Months Ended September 30, 2023 |
Year Ended March 31, 2023 |
|||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold |
8,900,000 | $ | 259,337,276 | 7,800,000 | $ | 212,018,520 | ||||||||||||||
Shares redeemed |
(1,000,000 | ) | (29,155,075 | ) | — | — | ||||||||||||||
Net increase (decrease) |
7,900,000 | $ | 230,182,201 | 7,800,000 | $ | 212,018,520 | ||||||||||||||
Franklin U.S. Core Dividend Tilt Index ETF | ||||||||||||||||||||
Six Months Ended September 30, 2023 |
Year Ended March 31, 2023 |
|||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold |
— | $ | — | 700,000 | $ | 23,221,006 | ||||||||||||||
Shares redeemed |
(100,000 | ) | (3,308,244 | ) | (800,000 | ) | (24,127,579 | ) | ||||||||||||
Net increase (decrease) |
(100,000 | ) | $ | (3,308,244 | ) | (100,000 | ) | $ | (906,573 | ) | ||||||||||
Franklin U.S. Large Cap Multifactor Index ETF | ||||||||||||||||||||
Six Months Ended September 30, 2023 |
Year Ended March 31, 2023 |
|||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold |
1,150,000 | $ | 49,893,661 | 6,300,000 | $ | 256,215,911 | ||||||||||||||
Shares redeemed |
(1,700,000 | ) | (75,082,652 | ) | (7,050,000 | ) | (284,955,777 | ) | ||||||||||||
Net increase (decrease) |
(550,000 | ) | $ | (25,188,991 | ) | (750,000 | ) | $ | (28,739,866 | ) |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest (continued)
Franklin U.S. Mid Cap Multifactor Index ETF | ||||||||||||||||||||
Six Months Ended September 30, 2023 |
Year Ended March 31, 2023 |
|||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold |
3,600,000 | $ | 159,533,677 | 2,800,000 | $ | 116,565,797 | ||||||||||||||
Shares redeemed |
(1,050,000 | ) | (45,271,377 | ) | (350,000 | ) | (14,426,133 | ) | ||||||||||||
Net increase (decrease) |
2,550,000 | $ | 114,262,300 | 2,450,000 | $ | 102,139,664 | ||||||||||||||
Franklin U.S. Small Cap Multifactor Index ETF | ||||||||||||||||||||
Six Months Ended September 30, 2023 |
Year Ended March 31, 2023 |
|||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||
Shares sold |
350,000 | $ | 12,337,724 | 50,000 | $ | 1,801,034 | ||||||||||||||
Shares redeemed |
(50,000 | ) | (1,760,742 | ) | — | — | ||||||||||||||
Net increase (decrease) |
300,000 | $ | 10,576,982 | 50,000 | $ | 1,801,034 |
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Funds are also officers and/or directors of the following subsidiaries:
Subsidiary | Affiliation | |
Franklin Advisers, Inc. (Advisers) |
Investment manager | |
Franklin Advisory Services, LLC (FASL) |
Investment manager | |
Franklin Templeton Services, LLC (FT Services) |
Administrative manager | |
Franklin Distributors, LLC (Distributors) |
Principal underwriter |
a. Management fees
The Funds pay a unified management fee to Advisers whereby Advisers has agreed to reimburse the Funds’ acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Funds, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding payments under the Funds’ Rule 12b-1 plan (if any), brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments), taxes, interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto), and other non-routine or extraordinary expenses. The fee is calculated daily and paid monthly according to the terms of the management agreement. The gross effective investment management fees are based on the average daily net assets of each of the Funds as follows:
Gross Effective Investment Management Fee Rate | ||
Franklin Emerging Market Core Dividend Tilt Index ETF |
0.19% | |
Franklin International Core Dividend Tilt Index ETF |
0.09% | |
Franklin U.S. Core Dividend Tilt Index ETF |
0.06% | |
Franklin U.S. Large Cap Multifactor Index ETF |
0.15% | |
Franklin U.S. Mid Cap Multifactor Index ETF |
0.30% | |
Franklin U.S. Small Cap Multifactor Index ETF |
0.35% |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates (continued)
b. Administrative Fees
Under an agreement with FASL, FT Services provides administrative services to the Fund. The fee is paid by FASL based on the Fund’s average daily net assets, and is not an additional expense of the Fund.
c. Investments in Affiliated Management Investment Companies
Certain or all Funds invests in one or more affiliated management investment companies. As defined in the 1940 Act, an investment is deemed to be a “Controlled Affiliate” of a fund when a fund owns, either directly or indirectly, 25% or more of the affiliated fund’s outstanding shares or has the power to exercise control over management or policies of such fund. The Fund does not invest for purposes of exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statements of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate.
During the period ended September 30, 2023, investments in affiliated management investment companies were as follows:
Value at Beginning of Period |
Purchases | Sales | Realized Gain (Loss) |
Net Change in Unrealized Appreciation (Depreciation) |
Value at End of Period |
Number of Shares Held at End of Period |
Investment Income |
|||||||||||||||||||||||||
Franklin International Core Dividend Tilt Index ETF Non-Controlled Affiliates |
|
Income from loaned |
| |||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Institutional Fiduciary Trust - Money Market Portfolio, 5.15% |
$ | — | $ | — | $ | — | $ | — | $ | — | $ | — | — | $ | (42 | ) | ||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Franklin U.S. Core Dividend Tilt Index ETF Non-Controlled Affiliates |
|
Income from Securities loaned |
| |||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Institutional Fiduciary Trust - Money Market Portfolio, 5.15% |
$ | — | $ | 341,874 | $ | (341,874 | ) | $ | — | $ | — | $ | — | — | $ | 17 | ||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Franklin U.S. Large Cap Multifactor Index ETF Non-Controlled Affiliates |
|
Income from Securities loaned |
| |||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Institutional Fiduciary Trust - Money Market Portfolio, 5.15% |
$ | — | $ | 9,833,500 | $ | (9,833,500 | ) | $ | — | $ | — | $ | — | — | $ | 151 | ||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Franklin U.S. Mid Cap Multifactor Index ETF Non-Controlled Affiliates |
|
Income from Securities loaned |
| |||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Institutional Fiduciary Trust - Money Market Portfolio, 5.15% |
$ | 130,050 | $ | 882,660 | $ | (1,012,710 | ) | $ | — | $ | — | $ | — | — | $ | 106 | ||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Franklin U.S. Small Cap Multifactor Index ETF Non-Controlled Affiliates |
|
Income from Securities loaned |
| |||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Institutional Fiduciary Trust - Money Market Portfolio, 5.15% |
$ | — | $ | 396,966 | $ | (262,166 | ) | $ | — | $ | — | $ | 134,800 | 134,800 | $ | 224 | ||||||||||||||||
|
|
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates (continued)
d. Other Affiliated Transactions
At September 30, 2023, the shares of Franklin U.S. Large Cap Multifactor Index ETF were owned by the following entities:
Funds | Shares |
Percentage of Sharesa | ||||||
Franklin U.S. Large Cap Multifactor Index ETF | ||||||||
Franklin Moderate Allocation Fund |
1,694,717 | 8.4% | ||||||
Franklin Growth Allocation Fund |
1,759,851 | 8.7% | ||||||
Franklin 529 Portfolios |
4,114,717 | 20.3% | ||||||
|
|
|||||||
7,569,285 | 37.4% | |||||||
|
|
aInvestment activities of significant shareholders could have a material impact on the Funds.
4. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains, if any. At March 31, 2023, the capital loss carryforwards were as follows:
Franklin Emerging Market Core Dividend Tilt Index ETF |
Franklin International Core Dividend Tilt Index ETF |
Franklin U.S. Core Dividend Tilt Index ETF |
Franklin U.S. Large Cap Multifactor Index ETF |
|||||||||||||
Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term |
$13,150,118 | $ — | $ — | $ 11,323,282 | ||||||||||||
Short term |
17,514,104 | — | 529,041 | 107,361,467 | ||||||||||||
|
|
|||||||||||||||
Total capital loss carryforwards |
$30,664,222 | $ — | $529,041 | $118,684,749 | ||||||||||||
|
|
|||||||||||||||
Franklin U.S. Mid Cap Multifactor Index ETF |
Franklin U.S. Small Cap Multifactor Index ETF |
|||||||||||||||
Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term |
$ 582,274 | $1,272,971 | ||||||||||||||
Short term |
1,342,610 | 883,324 | ||||||||||||||
|
|
|||||||||||||||
Total capital loss carryforwards |
$ 1,924,884 | $2,156,295 | ||||||||||||||
|
|
At September 30, 2023, the cost of investments, net unrealized appreciation (depreciation) and undistributed ordinary income for income tax purposes were as follows:
Franklin Emerging Market Core Dividend Tilt Index ETF |
Franklin International Core Dividend Tilt Index ETF |
Franklin U.S. Core Dividend Tilt Index ETF |
Franklin U.S. Large Cap Multifactor Index ETF |
|||||||||||||
Cost of investments |
$ 13,022,633 | $457,018,197 | $21,576,766 | $810,987,859 | ||||||||||||
|
|
|||||||||||||||
Unrealized appreciation |
$ 1,148,090 | $ 16,808,920 | $ 1,917,008 | $ 93,685,543 | ||||||||||||
Unrealized depreciation |
(2,697,323 | ) | (21,051,312 | ) | (2,048,535 | ) | (35,056,489 | ) | ||||||||
|
|
|||||||||||||||
Net unrealized appreciation (depreciation) |
$ (1,549,233 | ) | $ (4,242,392 | ) | $ (131,527 | ) | $ 58,629,054 | |||||||||
|
|
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
4. Income Taxes (continued)
Franklin U.S. Mid Cap Multifactor Index ETF |
Franklin U.S. Small Cap Multifactor Index ETF |
|||||||
Cost of investments |
$277,084,090 | $27,532,732 | ||||||
|
|
|||||||
Unrealized appreciation |
$ 12,504,285 | $ 2,533,852 | ||||||
Unrealized depreciation |
(15,422,464 | ) | (2,502,656 | ) | ||||
|
|
|||||||
Net unrealized appreciation (depreciation) |
$ (2,918,179 | ) | $ 31,196 | |||||
|
|
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of passive foreign investment company shares.
5. Investment Transactions
Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the period ended September 30, 2023, were as follows:
Franklin Emerging Market Core Dividend Tilt Index ETF |
Franklin International Core Dividend Tilt Index ETF |
Franklin U.S. Core Dividend Tilt Index ETF |
Franklin U.S. Large Cap Multifactor Index ETF |
|||||||||||||
Purchases |
$2,956,548 | $48,327,415 | $2,130,956 | $274,831,618 | ||||||||||||
Sales |
$3,054,158 | $42,562,795 | $2,151,522 | $275,294,271 | ||||||||||||
Franklin U.S. Mid Cap Multifactor Index ETF |
Franklin U.S. Small Cap Multifactor Index ETF |
|||||||||||||||
Purchases |
$30,896,019 | $3,500,815 | ||||||||||||||
Sales |
$30,478,274 | $3,444,990 |
In-kind transactions associated with creation and redemptions for the period ended September 30, 2023, were as follows:
Franklin Emerging Market Core Dividend Tilt Index ETF |
Franklin International Core Dividend Tilt Index ETF |
Franklin U.S. Core Dividend Tilt Index ETF |
Franklin U.S. Large Cap Multifactor Index ETF |
|||||||||||||
Cost of Securities Received |
$ — | $251,727,623 | $ — | $49,565,748 | ||||||||||||
Value of Securities Delivereda |
$804,277 | $ 29,494,804 | $3,295,369 | $74,629,510 | ||||||||||||
Franklin U.S. Mid Cap Multifactor Index ETF |
Franklin U.S. Small Cap Multifactor Index ETF |
|||||||||||||||
Cost of Securities Received |
$158,702,397 | $12,325,480 | ||||||||||||||
Value of Securities Delivereda |
$ 45,209,462 | $ 1,758,818 |
aRealized gains and losses from in-kind redemptions, as shown on the Statement of Operations, are not recognized by the Funds for tax purposes.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
5. Investment Transactions (continued)
At September 30, 2023, in connection with securities lending transactions, certain or all Funds loaned investments and received cash collateral as follows:
Franklin U.S. Small Cap Multifactor Index ETF |
||||
Securities lending transactionsa: |
||||
Equity Investmentsb |
$134,800 | |||
|
|
aThe agreements can be terminated at any time.
bThe gross amount of recognized liability for such transactions is included in payable upon return of securities loaned in the Statements of Assets and Liabilities.
6. Concentration of Risk
Investing in foreign securities may include certain risks and considerations not typically associated with investing in U.S. securities, such as fluctuating currency values and changing local, regional and global economic, political and social conditions, which may result in greater market volatility. Political and financial uncertainty in many foreign regions may increase market volatility and the economic risk of investing in foreign securities. In addition, certain foreign securities may not be as liquid as U.S. securities.
Russia’s military invasion of Ukraine in February 2022, the resulting responses by the United States and other countries, and the potential for wider conflict could increase volatility and uncertainty in the financial markets and adversely affect regional and global economies. The United States and other countries have imposed broad-ranging economic sanctions on Russia and certain Russian individuals, banking entities and corporations as a response to its invasion of Ukraine. The United States and other countries have also imposed economic sanctions on Belarus and may impose sanctions on other countries that support Russia’s military invasion. These sanctions, as well as any other economic consequences related to the invasion, such as additional sanctions, boycotts or changes in consumer or purchaser preferences or cyberattacks on governments, companies or individuals, may further decrease the value and liquidity of certain Russian securities and securities of issuers in other countries that are subject to economic sanctions related to the invasion. To the extent that the Funds have exposure to Russian investments or investments in countries affected by the invasion, the Funds’ ability to price, buy, sell, receive or deliver such investments was impaired. The Funds could determine at any time that certain of the most affected securities have little or no value. In addition, any exposure that the Funds may have to counterparties in Russia or in countries affected by the invasion could negatively impact the Funds’ portfolio. The extent and duration of Russia’s military actions and the repercussions of such actions (including any retaliatory actions or countermeasures that may be taken by those subject to sanctions) are impossible to predict, but could result in significant market disruptions, including in the oil and natural gas markets, and may negatively affect global supply chains, inflation and global growth. These and any related events could significantly impact each Fund’s performance and the value of an investment in the Funds, even beyond any direct exposure the Funds may have to Russian issuers or issuers in other countries affected by the invasion.
Certain investments in China companies may be made through a special structure known as a variable interest entity (VIE). In a VIE structure, foreign investors, such as Franklin Emerging Market Core Dividend Tilt Index ETF will only own stock in a shell company rather than directly in the VIE, which must be owned by Chinese nationals (and/or China companies) to obtain the licenses and/or assets required to operate in a restricted or prohibited sector in China. The value of the shell company is derived from its ability to consolidate the VIE into its financials pursuant to contractual arrangements that allow the shell company to exert a degree of control over, and obtain economic benefits arising from, the VIE without formal legal ownership. While VIEs are a longstanding industry practice and are well known by Chinese officials and regulators, the structure historically has not been formally recognized under Chinese law and it is uncertain whether Chinese officials or regulators will withdraw their implicit acceptance of the structure. It is also uncertain whether the contractual arrangements, which may be subject to conflicts of interest between the legal owners of the VIE and foreign investors, would be enforced by Chinese courts or arbitration bodies. Prohibitions of these structures by the Chinese government, or the inability to enforce such contracts,
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
6. Concentration of Risk (continued)
from which the shell company derives its value, would likely cause the VIE-structured holding(s) to suffer significant, detrimental, and possibly permanent losses, and in turn, adversely affect the Funds’ returns and net asset value.
7. Other Derivative Information
At September 30, 2023, the Funds’ investments in derivative contracts are reflected in the Statements of Asset and Liabilities as follows:
Asset Derivatives |
Liability Derivatives |
|||||||||||
Statements
of Assets and Liabilities Location |
Fair Value | Statements
of Assets and Liabilities Location |
Fair Value | |||||||||
Franklin Emerging Market Core Dividend Tilt Index ETF |
||||||||||||
Equity contracts |
Variation margin on futures contracts |
$ | — |
Variation margin on futures contracts |
$ | 1,664 | a | |||||
|
|
|
|
|||||||||
Franklin International Core Dividend Tilt Index ETF |
||||||||||||
Equity contracts |
Variation margin on futures contracts |
$ | — |
Variation margin on futures contracts |
$ | 59,614 | a | |||||
|
|
|
|
|||||||||
Franklin U.S. Core Dividend Tilt Index ETF |
||||||||||||
Equity contracts |
Variation margin on futures contracts |
$ | — |
Variation margin on futures contracts |
$ | 2,138 | a | |||||
|
|
|
|
|||||||||
Franklin U.S. Large Cap Multifactor Index ETF |
||||||||||||
Equity contracts |
Variation margin on futures contracts |
$ | — |
Variation margin on futures contracts |
$ | 80,182 | a | |||||
|
|
|
|
|||||||||
Franklin U.S. Mid Cap Multifactor Index ETF |
||||||||||||
Equity contracts |
Variation margin on futures contracts |
$ | — |
Variation margin on futures contracts |
$ | 20,647 | a | |||||
|
|
|
|
aThis amount reflects the cumulative appreciation (depreciation) of future contracts as reported in the Schedule of Investments. Only the variation margin receivable/payable at year end is separately reported within the Statements of Assets and Liabilities. Prior variation margin movements were recorded to cash upon receipt or payment.
For the period ended September 30, 2023, the effect of derivative contracts in the Funds’ Statements of Operations was as follows:
Derivative Contracts Not Accounted for as Hedging Instruments |
Statements of Operations Locations |
Net Realized Gain (Loss) for the Period |
Statements of Operations Locations |
Net Change in Unrealized Appreciation (Depreciation) for the Period |
||||||||
Franklin Emerging Market Core Dividend Tilt Index ETF | ||||||||||||
Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
Equity contracts |
Futures contracts |
$ | 1,215 |
Futures contracts |
$ | (3,444 | ) | |||||
|
|
|
|
|||||||||
Franklin International Core Dividend Tilt Index ETF | ||||||||||||
Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
Equity contracts |
Futures contracts |
$ | 58,373 |
Futures contracts |
$ | (89,122 | ) | |||||
|
|
|
|
|||||||||
Franklin U.S. Core Dividend Tilt Index ETF | ||||||||||||
Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
Equity contracts |
Futures contracts |
$ | 10,082 |
Futures contracts |
$ | (5,845 | ) | |||||
|
|
|
|
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
7. Other Derivative Information (continued)
Derivative Contracts Not Accounted for as Hedging Instruments |
Statements of Operations Locations |
Net Realized Gain (Loss) for the Period |
Statements of Operations Locations |
Net Change in Unrealized Appreciation (Depreciation) for the Period |
||||||||
Franklin U.S. Large Cap Multifactor Index ETF | ||||||||||||
Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
Equity contracts |
Futures contracts |
$ | 127,850 |
Futures contracts |
$ | (129,655 | ) | |||||
|
|
|
|
|||||||||
Franklin U.S. Mid Cap Multifactor Index ETF |
||||||||||||
Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
Equity contracts |
Futures contracts |
$ | 105 |
Futures contracts |
$ | (20,647 | ) | |||||
|
|
|
|
|||||||||
Franklin U.S. Small Cap Multifactor Index ETF | ||||||||||||
Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
|||||||||||
Equity contracts |
Futures contracts |
$ | 786 |
Futures contracts |
$ | — | ||||||
|
|
|
|
For the period ended September 30, 2023, the average month end notional amount of futures contracts and average month end contract value for forward exchange contracts were as follows:
Franklin Emerging 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 |
|||||||||||||
Futures contracts |
$ 92,591 | $2,065,645 | $71,375 | $992,800 | ||||||||||||
Franklin U.S. Mid Cap Multifactor Index ETF |
||||||||||||||||
Futures contracts |
$360,128 |
See Note 1(c) regarding derivative financial instruments.
8. Fair Value Measurements
The Funds follow a fair value hierarchy that distinguishes between market data obtained from independent sources
(observable inputs) and the Funds’ own market assumptions (unobservable inputs). These inputs are used in determining the value of the Funds’ financial instruments and are summarized in the following fair value hierarchy:
• |
Level 1 – quoted prices in active markets for identical financial instruments |
• |
Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.) |
• |
Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of financial instruments) |
The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
8. Fair Value Measurements (continued)
A summary of inputs used as of September 30, 2023, in valuing the Funds’ assets and liabilities carried at fair value, is as follows:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Franklin Emerging Market Core Dividend Tilt Index ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Equity Investmentsb |
$ | 11,468,804 | $ | 4,596 | $ | —c | $ | 11,473,400 | ||||||||
|
|
|||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: |
||||||||||||||||
Futures Contracts |
$ | 1,664 | $ | — | $ | — | $ | 1,664 | ||||||||
|
|
|||||||||||||||
Franklin International Core Dividend Tilt Index ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Equity Investmentsb |
$ | 452,775,805 | $ | — | $ | — | $ | 452,775,805 | ||||||||
|
|
|||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: |
||||||||||||||||
Futures Contracts |
$ | 59,614 | $ | — | $ | — | $ | 59,614 | ||||||||
|
|
|||||||||||||||
Franklin U.S. Core Dividend Tilt Index ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Equity Investmentsb |
$ | 21,445,239 | $ | — | $ | —c | $ | 21,445,239 | ||||||||
|
|
|||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: |
||||||||||||||||
Futures Contracts |
$ | 2,138 | $ | — | $ | — | $ | 2,138 | ||||||||
|
|
|||||||||||||||
Franklin U.S. Large Cap Multifactor Index ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Equity Investmentsb |
$ | 869,616,913 | $ | — | $ | — | $ | 869,616,913 | ||||||||
|
|
|||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: |
||||||||||||||||
Futures Contracts |
$ | 80,182 | $ | — | $ | — | $ | 80,182 | ||||||||
|
|
|||||||||||||||
Franklin U.S. Mid Cap Multifactor Index ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Equity Investmentsb |
$ | 274,165,911 | $ | — | $ | — | $ | 274,165,911 | ||||||||
|
|
|||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: |
||||||||||||||||
Futures Contracts |
$ | 20,647 | $ | — | $ | — | $ | 20,647 | ||||||||
|
|
|||||||||||||||
Franklin U.S. Small Cap Multifactor Index ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Equity Investmentsb |
$ | 27,429,128 | $ | — | $ | — | $ | 27,429,128 | ||||||||
Short-Term Investments |
134,800 | — | — | 134,800 | ||||||||||||
|
|
|||||||||||||||
Total Investments in Securities |
$ | 27,563,928 | $ | — | $ | — | $ | 27,563,928 | ||||||||
|
|
aFor detailed categories, see the accompanying Schedules of Investments.
bIncludes common and preferred stocks, warrants, as well as other equity investments.
cIncludes financial instruments determined to have no value.
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
9. New Accounting Pronouncements
In June 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-03, Fair Value Measurement (Topic 820) - Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in the ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, should not be considered in measuring fair value. The ASU is effective for interim and annual reporting periods beginning after December 15, 2023, with the option of early adoption. Management has reviewed the requirements and concluded that the adoption of this ASU does not have a material impact on the financial statements. As permitted, Management has elected to early adopt the provision.
10. Subsequent Events
The Funds have evaluated subsequent events through the issuance of these Financial Statements and determined that no events have occurred that require disclosure.
Abbreviations
Selected Portfolio | ||
GDR | Global Depositary Receipt | |
NVDR | Non-Voting Depositary Receipt | |
REIT | Real Estate Investment Trust | |
SPA | Standby Purchase Agreement |
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FRANKLIN TEMPLETON ETF TRUST
Board Approval of Investment
Management Agreements
FRANKLIN TEMPLETON ETF TRUST
Franklin Emerging Market Core Dividend Tilt Index ETF
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
(each a Fund)
May 11, 2023 15(c) Meeting
At a meeting held on May 11, 2023 (May Meeting), the Board of Trustees (Board) of Franklin Templeton ETF Trust (Trust), including a majority of the trustees who are not “interested persons” as defined in the Investment Company Act of 1940 (Independent Trustees), reviewed and approved the continuance of the investment management agreement between Franklin Advisory Services, LLC (Manager) and the Trust, on behalf of each Fund (each a Management Agreement) for an additional one-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the continuation of each Management Agreement. Although the Management Agreements for the Funds were considered at the same Board meeting, the Board considered the information provided to it about the Funds together and with respect to each Fund separately as the Board deemed appropriate.
In considering the continuation of each Management Agreement, the Board reviewed and considered information provided by the Manager at the May Meeting and throughout the year at meetings of the Board and its committees. The Board also reviewed and considered information provided in response to a detailed set of requests for information submitted to the Manager by Independent Trustee counsel on behalf of the Independent Trustees in connection with the annual contract renewal process. In addition, prior to the May Meeting, the Independent Trustees held a virtual contract renewal meeting at which the Independent Trustees conferred amongst themselves and Independent Trustee counsel about contract renewal matters and, subsequently, requested additional information from management that the Independent Trustees reviewed and considered prior to and at the May Meeting. The Board reviewed and considered all of the factors it deemed relevant in approving the continuance of each Management Agreement, including, but not limited to: (i) the nature, extent and quality of the
services provided by the Manager; (ii) the investment performance of each Fund, as well as each Fund’s tracking error against a specified benchmark index as of a recent period; (iii) the costs of the services provided and profits realized by the Manager and its affiliates from the relationship with each Fund; (iv) the extent to which economies of scale are realized as each Fund grows; and (v) whether fee levels reflect these economies of scale for the benefit of Fund investors (Factors).
In approving the continuance of each Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of each Management Agreement are fair and reasonable and that the continuance of the Management Agreement is in the best interests of the applicable Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.
Nature, Extent and Quality of Services
The Board reviewed and considered information regarding the nature, extent and quality of investment management services provided by the Manager and its affiliates to the Funds and their shareholders. This information included, among other things, the qualifications, background and experience of the senior management and investment personnel of the Manager; the structure of investment personnel compensation; oversight of third-party service providers; investment performance reports and related financial information for each Fund; reports on expenses; legal and compliance matters; risk controls; pricing and other services provided by the Manager and its affiliates; and management fees charged by the Manager and its affiliates to US funds and other accounts, including management’s explanation of differences among accounts where relevant. The Board acknowledged management’s continued development of strategies to address areas of heightened concern in the registered fund industry, including various regulatory initiatives and continuing geopolitical concerns.
The Board also reviewed and considered the benefits provided to Fund shareholders of investing in a fund that is part of the Franklin Templeton (FT) family of funds. The Board noted the financial position of Franklin Resources, Inc. (FRI), the Manager’s parent, and its commitment to the registered fund business as evidenced by its continued introduction of new funds, reassessment of the fund offerings in response to the market environment and project initiatives and capital investments relating to the services provided to the Funds by the FT organization. The Board specifically noted FT’s commitment to technological innovation and advancement and investments to promote alternative investing.
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Following consideration of such information, the Board was satisfied with the nature, extent and quality of services provided by the Manager and its affiliates to the Funds and their shareholders.
Fund Performance
The Board reviewed and considered the performance results of each Fund for various time periods ended February 28, 2023. The Board considered the performance returns for each Fund in comparison to the performance returns of registered funds deemed comparable to the Fund included in a universe (Performance Universe) selected by Broadridge Financial Solutions, Inc. (Broadridge), an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the registered funds included in a Performance Universe. The Board also reviewed and considered Fund performance reports provided and discussions that occurred with portfolio managers at Board meetings throughout the year. The Board noted its ongoing discussions with management about the performance of the Funds to date, particularly as compared to peers, the importance of performance to asset growth and growth of market share, and the performance of the Funds in periods of volatility. In addition, the Board acknowledged information provided regarding management’s strategy behind the overall product line up, the sources of asset growth, the nature of management’s research, potential use of innovative data and technology, and investments in marketing and distribution. Finally, the Board noted management’s high level of client engagement and the strength of its compliance program. A summary of each Fund’s performance results is below.
Franklin Emerging Market Core Dividend Tilt Index ETF and Franklin U.S. Core Dividend Tilt Index ETF - The Performance Universe for the Franklin Emerging Market Core Dividend Tilt Index ETF included the Fund and all retail and institutional emerging markets funds and exchange-traded funds. The Performance Universe for the Franklin U.S. Core Dividend Tilt Index ETF included the Fund and all retail and institutional equity income funds and exchange-traded funds. The Funds commenced operations on June 1, 2016, and thus have been in operation for less than 10 years. The Board noted that the Funds’ annualized total returns for the one-, three- and five-year periods were below the medians of their respective Performance Universes. The Board further noted that, in light of the Funds’ use of a “passive” or
indexing investment approach, management evaluates the Funds based on their tracking error against a specified benchmark. The Board also noted that for the one-year period ended February 28, 2023, the Funds’ tracking errors were within the tolerance anticipated for the Funds. The Board considered that it had approved changes to each Fund’s name, ticker, underlying index, investment universe, investment goal, and investment strategies, effective August 1, 2022, to reposition each Fund as a dividend tilt/yield enhanced index-based ETF (Fund Repositioning). Based on the foregoing, the Board concluded that each Fund’s Management Agreement should be continued for an additional one-year period, and that management’s efforts should continue to be closely monitored.
Franklin U.S. Large Cap Multifactor Index ETF and Franklin U.S. Small Cap Multifactor Index ETF - The Performance Universe for the Franklin U.S. Large Cap Multifactor Index ETF included the Fund and all retail and institutional large-cap core funds and exchange-traded funds. The Performance Universe for the Franklin U.S. Small Cap Multifactor Index ETF included the Fund and all retail and institutional small-cap core funds and exchange-traded funds. The Funds commenced operations on April 26, 2017, and thus have been in operation for less than ten years. The Board noted that the Funds’ annualized total returns for the one-year period were above the medians of their respective Performance Universes, but for the three- and five-year periods were below the medians of their respective Performance Universes. The Board further noted that, in light of the Funds’ use of a “passive” or indexing investment approach, management evaluates the Funds based on their tracking error against a specified benchmark. The Board noted that for the one-year period ended February 28, 2023, the Funds’ tracking errors were within the tolerance anticipated for the Funds. The Board considered that it had approved a Fund Repositioning for each Fund, effective August 1, 2022. Based on the foregoing, the Board concluded that each Fund’s Management Agreement should be continued for an additional one-year period, and that management’s efforts should continue to be closely monitored.
Franklin International Core Dividend Tilt Index ETF and Franklin U.S. Mid Cap Multifactor Index ETF - The Performance Universe for the Franklin International Core Dividend Tilt Index ETF included the Fund and all retail and institutional international large-cap core funds and exchange-traded funds. The Performance Universe for the Franklin U.S. Mid Cap Multifactor Index ETF included the Fund and all retail and institutional mid-cap growth funds and
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exchange-traded funds. The Franklin International Core Dividend Tilt Index ETF commenced operations on June 1, 2016, and the Franklin U.S. Mid Cap Multifactor Index ETF commenced operations on April 26, 2017, thus each Fund has been in operation for less than 10 years. The Board noted that the Funds’ annualized total returns for the one-, three- and five-year periods were above the medians and in the first quintile (best) of their respective Performance Universes. The Board further noted that, in light of the Funds’ use of a “passive” or indexing investment approach, management evaluates the Funds based on their tracking error against a specified benchmark. The Board also noted that for the one-year period ended February 28, 2023, the Funds’ tracking errors were within the tolerance anticipated for each Fund. The Board considered that it had approved a Fund Repositioning for each Fund, effective August 1, 2022. The Board concluded that the Funds’ performance was satisfactory.
Comparative Fees and Expenses
The Board reviewed and considered information regarding each Fund’s actual total expense ratio, noting that each Fund pays a Unified Fee (as defined below). The Board considered the actual total expense ratio and, separately, the contractual management fee rate, without the effect of fee waivers, if any (Management Rate), of each Fund in comparison to the median expense ratio and median Management Rate, respectively, of other exchange-traded funds deemed comparable to and with a similar expense structure to the Fund selected by Broadridge (Expense Group). Broadridge fee and expense data is based upon information taken from each fund’s most recent annual or semi-annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios and Management Rates generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Broadridge to be an appropriate measure of comparative fees and expenses. The Broadridge Management Rate includes administrative charges. The Board received a description of the methodology used by Broadridge to select the exchange-traded funds included in an Expense Group.
Franklin Emerging Market Core Dividend Tilt Index ETF and Franklin International Core Dividend Tilt Index ETF - The Expense Group for the Franklin Emerging Market Core Dividend Tilt Index ETF was comprised of strategic beta exchange-traded funds, which included the Fund and three other emerging markets funds. The Expense Group for the
Franklin International Core Dividend Tilt Index ETF was comprised of strategic beta exchange-traded funds, which included the Fund and two international multi-cap growth funds, seven international equity income funds, and one international multi-cap value fund. The Board noted that the Management Rates and actual total expense ratios for the Funds were below the medians of their respective Expense Groups. The Board also noted the small size of the Franklin Emerging Market Core Dividend Tilt Index ETF’s Expense Group. The Board further noted that the Funds have a unified management fee (Unified Fee) and that pursuant to the Unified Fee arrangement the Manager reimburses each Fund for all of its acquired fund fees and expenses (if any) and pays all of the ordinary operating expenses of each Fund, except for (i) the Fund’s Unified Fee, (ii) future Rule 12b-1 fees (if any), (iii) brokerage expenses, (iv) taxes, (v) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), (vi) litigation expenses (including litigation to which the Trust or the Fund may be a party and indemnification of the Trustees and officers with respect thereto), and (vii) other non-routine or extraordinary expenses (Unified Fee Arrangement). The Board also considered the reduction in the Franklin Emerging Market Core Dividend Tilt Index ETF’s Management Rate from 0.45% to 0.19% and the reduction in the Franklin International Core Dividend Tilt Index ETF’s Management Rate from 0.40% to 0.09%, each of which became effective August 1, 2022. The Board concluded that the Management Rates charged to Funds are reasonable.
Franklin U.S. Core Dividend Tilt Index ETF - The Expense Group for the Fund was comprised of strategic beta exchange-traded funds, which included the Fund and nine other equity income funds. The Board noted that the Management Rate for the Fund was below the median and in the first quintile (least expensive) of its Expense Group, and the actual total expense ratio for the Fund was less than half of a basis point above the median of its Expense Group. The Board further noted that the Fund has a Unified Fee and the terms of the Unified Fee Arrangement. The Board further considered the reduction in the Fund’s Management Rate from 0.45% to 0.06% that became effective August 1, 2022. The Board concluded that the Management Rate charged to the Fund is reasonable.
Franklin U.S. Large Cap Multifactor Index ETF - The Expense Group for the Fund was comprised of strategic beta exchange-traded funds, which included the Fund, four other large-cap core funds, and two large-cap growth funds. The Board noted that the Management Rate for the Fund was equal to the median of its Expense Group, and the
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actual total expense ratio for the Fund was below the median for its Expense Group. The Board further noted that the Fund has a Unified Fee and the terms of the Unified Fee Arrangement. The Board concluded that the Management Rate charged to the Fund is reasonable.
Franklin U.S. Small Cap Multifactor Index ETF - The Expense Group for the Fund was comprised of strategic beta exchange-traded funds, which included the Fund and 10 other small-cap core funds. The Board noted that the Management Rate for the Fund was equal to the median of its Expense Group, and the actual total expense ratio for the Fund was less than one basis point above the median of its Expense Group. The Board further noted that the Fund has a Unified Fee and the terms of the Unified Fee Arrangement. The Board concluded that the Management Rate charged to the Fund is reasonable.
Franklin U.S. Mid Cap Multifactor Index ETF - The Expense Group for the Fund was comprised of strategic beta exchange-traded funds, which included the Fund, five mid-cap core funds, and one mid-cap value fund. The Board noted that the Management Rate for the Fund was below the median of its Expense Group, and the actual total expense ratio was equal to the median of its Expense Group. The Board further noted that the Fund has a Unified Fee and the terms of the Unified Fee Arrangement. The Board concluded that the Management Rate charged to the Fund is reasonable.
Profitability
The Board reviewed and considered information regarding the profits realized by the Manager and its affiliates in connection with the operation of each Fund. In this respect, the Board considered the Fund profitability analysis that addresses the overall profitability of FT’s US fund business, as well as its profits in providing investment management and other services to each of the individual funds during the 12-month period ended September 30, 2022, being the most recent fiscal year-end for FRI. The Board noted that although management continually makes refinements to its methodologies used in calculating profitability in response to organizational and product-related changes, the overall methodology has remained consistent with that used in the Funds’ profitability report presentations from prior years. The Board also noted that PricewaterhouseCoopers LLP, auditor to FRI and certain FT funds, has been engaged to periodically review and assess the allocation methodologies to be used solely by the Funds’ Board with respect to the profitability analysis.
The Board noted management’s belief that costs incurred in establishing the infrastructure necessary for the type of fund operations conducted by the Manager and its affiliates may not be fully reflected in the expenses allocated to each Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. As part of this evaluation, the Board considered management’s outsourcing of certain operations, which effort has required considerable up-front expenditures but, over the long run, is expected to result in greater efficiencies. The Board also noted management’s expenditures in improving shareholder services provided to the Funds, as well as the need to implement systems and meet additional regulatory and compliance requirements resulting from recent US Securities and Exchange Commission and other regulatory requirements.
The Board also considered the extent to which the Manager and its affiliates might derive ancillary benefits from fund operations, including potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with service providers and counterparties. Based upon its consideration of all these factors, the Board concluded that the level of profits realized by the Manager and its affiliates from providing services to each Fund was not excessive in view of the nature, extent and quality of services provided to each Fund.
Economies of Scale
The Board reviewed and considered the extent to which the Manager may realize economies of scale, if any, as each Fund grows larger and whether each Fund’s management fee structure reflects any economies of scale for the benefit of shareholders. The Board considered that each Fund would likely experience benefits from the Unified Fee at the Fund’s projected asset levels because of the Manager’s contractual requirement to bear most of the Fund’s ordinary operating expenses. The Board noted that, under the Unified Fee, it is not anticipated that any of the Funds will generate significant, if any, profit for the Manager and/or its affiliates for some time. The Board also considered management’s view that any analyses of potential economies of scale in managing a particular fund are inherently limited in light of the joint and common costs and investments the Manager incurs across the FT family of funds as a whole. The Board also noted that, as of December 31, 2022, each Fund (except for the Franklin U.S. Large Cap Multifactor Index ETF) had net assets below $150 million. The Board also noted management’s representation that, while the Franklin U.S. Large Cap Multifactor Index ETF had net
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assets of approximately $905 million as of December 31, 2022, none of the Funds experienced a profit for the fiscal year ended September 30, 2022. The Board recognized that there would not likely be any economies of scale for a Fund until the Fund’s assets grow.
Conclusion
Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved the continuation of each Management Agreement for an additional one-year period.
September 7, 2023 Board Meeting
At a meeting held on September 7, 2023 (September Meeting), the Board reviewed and approved, on behalf of each Fund, a new investment sub-advisory agreement between the Manager and Franklin Templeton Institutional, LLC (Sub-Adviser) for an initial two-year period (each a New Sub-Advisory Agreement).
The Board reviewed and considered all information provided by the Manager and Sub-Adviser at the September Meeting with respect to each New Sub-Advisory Agreement and noted its review and consideration of the information it received in connection with the May Meeting. In particular, the Board reviewed and considered the factors it deemed relevant in approving each New Sub-Advisory Agreement, including, but not limited to: (i) the nature, extent, and quality of the services to be provided by the Sub-Adviser; and (ii) the costs of the services to be provided by the Sub-Adviser. The Board also considered that management proposed that the Board approve each New Sub-Advisory Agreement in order to facilitate portfolio management team continuity in light of the planned relocation of a co-portfolio manager of each Fund. The Board reviewed and further considered the form of New Sub-Advisory Agreement and the terms of each New Sub-Advisory Agreement, which were discussed at the September Meeting. The Board also considered the information regarding the investment sub-advisory fee to be charged by the Sub-Adviser. The Board determined that the conclusions it made at the May Meeting regarding each Fund’s Factors had not changed. The Board noted counsel’s legal analysis and conclusion that Fund shareholders would not be required to approve the New Sub-Advisory Agreement.
The Board, including a majority of the Independent Trustees, determined that the hiring of the Sub-Adviser is in the best interests of each Fund and its shareholders. The Board also determined that the terms of each New Sub-Advisory
Agreement are fair and reasonable. The Board noted that the Sub-Adviser is paid by the Manager out of the management fee it receives from each Fund and that the allocation of the fee between the Manager and Sub-Adviser reflects the services provided by each to the Fund. The Board concluded that the sub-advisory fee paid to the Sub-Adviser is reasonable.
Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described Factors and conclusions, the Board unanimously approved each New Sub-Advisory Agreement for an initial two-year period.
Liquidity Risk Management Program –
In-Kind ETFs
Franklin International Core Dividend Tilt Index ETF
Franklin U.S. Large Cap Multifactor Index ETF
Franklin U.S. Mid Cap Multifactor Index ETF
Franklin U.S. Small Cap Multifactor Index ETF
Each of the Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. Each of the Funds is an exchange-traded fund (“ETF”) that is considered an “In-Kind ETF” under the Liquidity Rule, which means that the Fund satisfies requests for redemption through in-kind transfers of portfolio securities, positions, and other assets, except for a de minimis amount of cash, and publishes its portfolio holdings daily. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the SEC (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. As an In-Kind ETF, the Fund is not required to include in the LRMP policies and procedures relating to classification of portfolio holdings into four liquidity categories or establishing a highly liquid investment minimum (“HLIM”).
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The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Legal, Investment Compliance, Investment Operations, Valuation Committee, Product Management and Global Product Strategy.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; its short and long-term cash flow projections; and its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit. Because the Funds are ETFs, the ILC also considers, as relevant, (1) the relationship between the Fund’s portfolio liquidity and the way in which, and the prices and spread at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants and (2) the effect of the composition of baskets on the overall liquidity of the Fund’s portfolio.
At meetings of the Funds’ Board of Trustees held in May 2023, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program for the year ended December 31, 2022. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP, including the Highly Liquid Investment Minimum (“HLIM”) where applicable, was implemented and operated effectively and achieved the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund.
Liquidity Risk Management Program –
Non-In-Kind ETFs
Franklin Emerging Market Core Dividend Tilt Index ETF Franklin U.S. Core Dividend Tilt Index ETF
Each of the Franklin Templeton and Legg Mason Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the
risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for Funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the Securities and Exchange Commission (“SEC”) (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
The Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) is the appointed Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for Franklin Templeton and Legg Mason products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Legal, Investment Compliance, Investment Operations, Valuation Committee, Product Management and Global Product Strategy.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; its short and long-term cash flow projections; and its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit. Classification of the Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value.
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Each Fund primarily holds liquid assets that are defined under the Liquidity Rule as “Highly Liquid Investments”, and therefore is not required to establish an HLIM. Highly Liquid Investments are defined as cash and any investment reasonably expected to be convertible to cash in current market conditions in three business days or less without the conversion to cash significantly changing the market value of the investment.
At meetings of the Funds’ Board of Trustees held in May 2023, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program for the year ended December 31, 2022. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP, including the Highly Liquid Investment Minimum (“HLIM”) where applicable, was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund.
Quarterly Schedule of Investments
The Trust files a complete schedule of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year as an exhibit to its report on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.
Premium/Discount Information
Information about the differences between the daily market price on the secondary market for the shares of each Fund and each Fund’s net asset value may be found on each Fund’s website at franklintempleton.com.
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