FRANKLIN TEMPLETON ETF TRUST


		SEMIANNUAL REPORT
		Western Asset Bond ETF September 30, 2023

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

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

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



Contents

Fund Overview			3
Performance Summary			4
Your Fund’s Expenses			6
Financial Highlights and Schedule of Investment			7
Financial Statements			23
Notes to Financial Statements			26
Shareholder Information			33

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


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



franklintempleton.com	Semiannual Report	1



2	Semiannual Report	franklintempleton.com

SEMIANNUAL REPORT

Western Asset Bond ETF

This inaugural semiannual report for Western Asset Bond ETF (the “Fund”) covers the period since the Fund’s inception on September 19, 2023, through September 30, 2023.

Fund Overview

Your Fund’s Goal and Main Investments

The Fund seeks to maximize total return, consistent with prudent investment management and liquidity needs. Under normal market conditions, investing at least 80% of its net assets, including the amount of borrowing for investment purposes, if any, in debt and fixed income securities including corporate debt securities, U.S. and non-U.S government securities, asset-backed securities, mortgage-backed securities, collateralized debt obligations and mortgage dollar rolls. The Fund also invests in derivatives instruments that provide exposure to such investments. The types of derivatives in which the Fund invests include swaps and security-based swaps, futures and options on futures, swaptions and security options.

Performance Overview

During the period since the Fund’s inception on September 19, 2023, through September 30, 2023, the Fund posted cumulative total returns of -1.76% based on market price and -1.80% based on net asset value (NAV).¹ In comparison, the Fund’s benchmark, the Bloomberg U.S. Aggregate Index, which measures the performance of the investment-grade, U.S. dollar denominated, fixed-rate taxable bond market, posted a -1.21% 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.


Portfolio Composition

9/30/23

	% of Total Net Assets
U.S. Government & Agency Securities		77.7%
Corporate Bonds & Notes		40.9%
Asset-Backed Securities		9.1%
Foreign Government and Agency Securities		1.3%
Short-Term Investments & Other Net Assets		(29.0)%


Top 10 Holdings

9/30/23

Issue/Issuer	% of Total Net Assets
U.S. Treasury Bills, 0.000%, 10/12/23		19.5%
U.S. Treasury Bills, 0.000%, 10/19/23		7.5%
Uniform Mortgage-Backed Security, TBA, 2.50%, 10/01/52		4.7%
U.S. Treasury Bills, 0.000%, 12/21/23		4.7%
Uniform Mortgage-Backed Security, TBA, 2.00%, 10/01/53		4.0%
U.S. Treasury Notes, 4.375%, 8/31/28		3.0%
U.S. Treasury Bonds, 3.625%, 5/15/53		2.7%
U.S. Treasury Bills, 0.000%, 11/21/23		2.4%
Uniform Mortgage-Backed Security, TBA, 3.00%, 10/01/53		2.2%
Uniform Mortgage-Backed Security, TBA, 3.50%, 10/01/53		2.1%

Thank you for your participation in Western Asset Bond ETF. We look forward to serving your future investment needs.

Sincerely,

Western Asset Management Company, LLC

1. Prior to the Fund’s listing on September 19, 2023, the Fund’s NAV performance is used as a proxy for the Fund’s market price returns.

2. Source: FactSet

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

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 8.



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WESTERN ASSET BOND ETF

Performance Summary as of September 30, 2023

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

Net asset value or “NAV” is the value of one share of a fund as calculated in accordance with the standard formula for valuing mutual fund shares. The price used to calculate market return (Market Price) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of a fund are listed for trading, as of the time that such fund’s NAV is calculated. Since shares of the Fund did not trade in the secondary market until after the Fund’s inception, for the period from inception to the first day of secondary trading (9/21/23), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.

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

Performance as of 9/30/23¹

Cumulative Total Return

Average Annual Total Return

Based on

NAV²

Based on
market price³

Based on
NAV²

Based on
market price³

Since Inception (9/19/23)

-1.80%

-1.76%

-1.80%

-1.76%

See page 5 for Performance Summary footnotes.



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WESTERN ASSET BOND ETF

PERFORMANCE SUMMARY

Total Annual Operating Expenses⁴

0.35%

Events such as the spread of deadly diseases, disasters, and financial, political or social disruptions, may heighten risks and adversely affect performance. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results.

All investments involve risks, including possible loss of principal. The Fund is newly organized, with a limited history of operations. Fixed income securities involve interest rate, credit, inflation and reinvestment risks, and possible loss of principal. As interest rates rise, the value of fixed income securities falls. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance. Asset-backed, mortgage-backed or mortgage-related securities are subject to prepayment and extension risks. Low-rated, high-yield bonds are subject to greater price volatility, illiquidity and possibility of default. Active management does not ensure gains or protect against market declines. 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. Active and frequent trading may increase a shareholder’s tax liability and transaction costs. 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. Assumes reinvestment of distributions based on net asset value.

3. Assumes reinvestment of distributions based on market price.

4. 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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WESTERN ASSET BOND 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 9/19/23		Ending Account Value 9/30/23		Expenses Paid During Period 9/19/23–9/30/23¹		Ending Account Value 9/30/23		Expenses Paid During Period 9/19/23–9/30/23¹		Net Annualized Expense Ratio
	$1,000.00	$	982.00	$	0.10	$	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 11/366 to reflect the one-half year period.



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FRANKLIN TEMPLETON ETF TRUST

Financial Highlights

Western Asset Bond ETF



	Period Ended September 30, 2023^a

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

Net asset value, beginning of period	$	25.00


Income from investment operations^b:

Net investment income^c		0.04

Net realized and unrealized gains (losses)		(0.49	)


Total from investment operations		(0.45	)


Net asset value, end of period	$	24.55


Total return^d		(1.80)%

Ratios to average net assets^e

Total expenses		0.35%

Net investment income		4.85%

Supplemental data

Net assets, end of period (000’s)		$41,732

Portfolio turnover rate^f		2.31%^g

^aFor the period September 19, 2023 (commencement of operations) to September 30, 2023.

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

^cBased on average daily shares outstanding.

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

^eRatios are annualized for periods less than one year.

^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:

2.31%



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FRANKLIN TEMPLETON ETF TRUST

Schedule of Investments, September 30, 2023 (unaudited)

Western Asset Bond ETF



		Country		Principal Amount*		Value
	Corporate Bonds & Notes 40.9%
	Aerospace & Defense 1.5%
	Boeing Co., 3.25%, 2/01/35		United States		60,000	$	46,177
	5.805%, 5/01/50		United States		90,000		81,573
	2.70%, 2/01/27		United States		50,000		45,302
	5.15%, 5/01/30		United States		20,000		19,116
	2.196%, 2/04/26		United States		110,000		101,025
	5.705%, 5/01/40		United States		40,000		36,933
	General Dynamics Corp., 4.25%, 4/01/50		United States		10,000		8,229
	3.25%, 4/01/25		United States		10,000		9,674
	4.25%, 4/01/40		United States		10,000		8,504
	L3Harris Technologies, Inc., 4.854%, 4/27/35		United States		10,000		9,115
	5.054%, 4/27/45		United States		10,000		8,722
	Lockheed Martin Corp., 4.50%, 5/15/36		United States		10,000		9,128
	4.15%, 6/15/53		United States		60,000		47,414
	3.90%, 6/15/32		United States		10,000		8,974
	Northrop Grumman Corp., 5.25%, 5/01/50		United States		30,000		27,717
	2.93%, 1/15/25		United States		30,000		28,940
	3.25%, 1/15/28		United States		50,000		45,885
	RTX Corp., 4.50%, 6/01/42		United States		40,000		32,769
	2.25%, 7/01/30		United States		20,000		16,108
	3.95%, 8/16/25		United States		30,000		29,043
	4.125%, 11/16/28		United States		10,000		9,331

							629,679

	Agriculture 0.5%
	Altria Group, Inc., 4.40%, 2/14/26		United States		30,000		29,134
	3.875%, 9/16/46		United States		50,000		32,851
	5.80%, 2/14/39		United States		50,000		46,390
	BAT Capital Corp., 3.557%, 8/15/27		United Kingdom		10,000		9,154
	4.54%, 8/15/47		United Kingdom		80,000		55,128
	Philip Morris International, Inc., 2.10%, 5/01/30		United States		20,000		15,975

							188,632

	Airlines 0.7%
	Delta Air Lines, Inc., 7.375%, 1/15/26		United States		90,000		91,184
	2.90%, 10/28/24		United States		20,000		19,240
	Delta Air Lines, Inc./SkyMiles IP Ltd.,^a4.75%, 10/20/28		United States		20,000		19,014
	^afirst lien, 4.50%, 10/20/25		United States		20,000		19,434
a	Mileage Plus Holdings LLC/Mileage Plus Intellectual Property Assets Ltd., 6.50%, 6/20/27		United States		22,500		22,316
a	Spirit Loyalty Cayman Ltd./Spirit IP Cayman Ltd., 8.00%, 9/20/25		United States		40,000		40,016
a	United Airlines, Inc., 4.625%, 4/15/29		United States		70,000		60,240

							271,444



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FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENT

Western Asset Bond ETF (continued)



		Country		Principal Amount*		Value
	Corporate Bonds & Notes (continued)
	Apparel 0.2%
	NIKE, Inc., 2.85%, 3/27/30		United States		20,000	$	17,337
	3.25%, 3/27/40		United States		40,000		30,322
	2.75%, 3/27/27		United States		20,000		18,486

							66,145

	Auto Manufacturers 1.1%
	Ford Motor Credit Co. LLC, 7.35%, 3/06/30		United States		200,000		202,756
	General Motors Co., 6.125%, 10/01/25		United States		20,000		19,987
	6.25%, 10/02/43		United States		20,000		17,938
	5.60%, 10/15/32		United States		10,000		9,345
a	Nissan Motor Co. Ltd., 3.522%, 9/17/25		Japan		200,000		189,006

							439,032

	Banks 11.0%
	Bank of America Corp., 4.083% to 3/20/50, FRN thereafter, 3/20/51		United States		80,000		59,212
	3.97% to 3/05/28, FRN thereafter, 3/05/29		United States		210,000		192,464
	5.00%, 1/21/44		United States		50,000		44,064
	1.319% to 6/19/25, FRN thereafter, 6/19/26		United States		140,000		128,433
	4.571% to 4/27/32, FRN thereafter, 4/27/33		United States		190,000		168,783
	3.841% to 4/25/24, FRN thereafter, 4/25/25		United States		40,000		39,440
	Bank of Montreal, 1.85%, 5/01/25		Canada		50,000		46,938
	Bank of Nova Scotia, 4.588% to 2/04/32, FRN thereafter, 5/04/37		Canada		20,000		16,683
	1.30%, 6/11/25		Canada		30,000		27,764
a	BNP Paribas SA, 2.219% to 6/09/25, FRN thereafter, 6/09/26		France		200,000		186,691
	Citigroup, Inc., 4.30%, 11/20/26		United States		70,000		66,395
	4.40%, 6/10/25		United States		60,000		58,234
	3.98% to 3/20/29, FRN thereafter, 3/20/30		United States		90,000		80,872
	4.412% to 3/31/30, FRN thereafter, 3/31/31		United States		230,000		206,957
	4.45%, 9/29/27		United States		70,000		65,747
	4.75%, 5/18/46		United States		50,000		39,183
	Credit Suisse AG, 2.95%, 4/09/25		Switzerland		250,000		237,637
	7.95%, 1/09/25		Switzerland		500,000		509,031
	Goldman Sachs Group, Inc., 2.615% to 4/22/31, FRN thereafter, 4/22/32		United States		40,000		31,262
	5.15%, 5/22/45		United States		50,000		42,911
	Series VAR1.093% to 12/09/25, FRN thereafter, 12/09/26		United States		60,000		53,701
	3.625%, 2/20/24		United States		20,000		19,813
	6.75%, 10/01/37		United States		20,000		20,271
	4.75%, 10/21/45		United States		50,000		42,146
	3.691% to 6/05/27, FRN thereafter, 6/05/28		United States		140,000		129,093
	2.60%, 2/07/30		United States		20,000		16,392
	HSBC Holdings PLC, 2.099% to 6/04/25, FRN thereafter, 6/04/26		United Kingdom		400,000		372,945
	4.762% to 3/29/32, FRN thereafter, 3/29/33		United Kingdom		200,000		170,430
	JPMorgan Chase & Co., 3.109% to 4/22/40, FRN thereafter, 4/22/41		United States		20,000		13,914
	3.109% to 4/22/50, FRN thereafter, 4/22/51		United States		20,000		12,427
	3.509% to 1/23/28, FRN thereafter, 1/23/29		United States		100,000		90,759
	2.083% to 4/22/25, FRN thereafter, 4/22/26		United States		70,000		65,722
	2.545% to 11/08/31, FRN thereafter, 11/08/32		United States		130,000		100,657



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FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENT

Western Asset Bond ETF (continued)



		Country		Principal Amount*		Value
	Corporate Bonds & Notes (continued)
	Banks (continued)
	Morgan Stanley, 3.772% to 1/24/28, FRN thereafter, 1/24/29		United States		60,000	$	54,741
	2.511% to 10/20/31, FRN thereafter, 10/20/32		United States		90,000		68,896
	PNC Financial Services Group, Inc., 5.812% to 6/12/25, FRN thereafter, 6/12/26		United States		20,000		19,846
	Royal Bank of Canada, 1.15%, 6/10/25		Canada		30,000		27,752
	3.875%, 5/04/32		Canada		20,000		17,446
	Toronto-Dominion Bank, 1.15%, 6/12/25		Canada		30,000		27,787
	4.456%, 6/08/32		Canada		20,000		17,948
	U.S. Bancorp, 5.775% to 6/12/28, FRN thereafter, 6/12/29		United States		20,000		19,479
	5.836% to 6/10/33, FRN thereafter, 6/12/34		United States		20,000		18,879
a	UBS Group AG, 4.253%, 3/23/28		Switzerland		400,000		367,937
	Wells Fargo & Co., 5.013% to 4/04/50, FRN thereafter, 4/04/51		United States		240,000		201,889
	4.478% to 4/04/30, FRN thereafter, 4/04/31		United States		50,000		45,377
	2.188% to 4/30/25, FRN thereafter, 4/30/26		United States		70,000		65,743
	2.393% to 6/02/27, FRN thereafter, 6/02/28		United States		70,000		61,410
	3.584% to 5/22/27, FRN thereafter, 5/22/28		United States		110,000		100,764
	4.75%, 12/07/46		United States		100,000		78,170
	3.35% to 3/02/32, FRN thereafter, 3/02/33		United States		30,000		24,263

							4,575,298

	Banks 0.3%
	Goldman Sachs Group, Inc., 4.25%, 10/21/25		United States		30,000		28,917
	Morgan Stanley, 2.188% to 4/28/25, FRN thereafter, 4/28/26		United States		50,000		46,989
	PNC Financial Services Group, Inc., 5.582% to 6/12/28, FRN thereafter, 6/12/29		United States		50,000		48,530
	Truist Financial Corp., 6.047% to 6/08/26, FRN thereafter, 6/08/27		United States		20,000		19,789

							144,225

	Beverages 0.5%
	Anheuser-Busch Cos. LLC/Anheuser-Busch InBev Worldwide, Inc., 4.90%, 2/01/46		United States		80,000		69,774
	3.65%, 2/01/26		Belgium		60,000		57,642
	Anheuser-Busch InBev Worldwide, Inc., 3.50%, 6/01/30		United States		10,000		8,904
	4.75%, 1/23/29		Belgium		40,000		38,798
	Coca-Cola Co., 2.60%, 6/01/50		United States		20,000		12,242
	Constellation Brands, Inc., 4.35%, 5/09/27		United States		20,000		19,147
	PepsiCo, Inc., 1.625%, 5/01/30		United States		20,000		16,080

							222,587

	Biotechnology 0.1%
	Amgen, Inc., 4.663%, 6/15/51		United States		10,000		8,102
	Gilead Sciences, Inc., 4.75%, 3/01/46		United States		10,000		8,574
	3.50%, 2/01/25		United States		40,000		38,866

							55,542

	Chemicals 0.4%
b	OCP SA, 3.75%, 6/23/31		Morocco		200,000		158,465

	Coal 0.0%^†
	Teck Resources Ltd., 3.90%, 7/15/30		Canada		10,000		8,701



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FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENT

Western Asset Bond ETF (continued)



		Country		Principal Amount*		Value
	Corporate Bonds & Notes (continued)
	Commercial Services & Supplies 0.2%
	PayPal Holdings, Inc., 1.65%, 6/01/25		United States		20,000	$	18,723
	2.30%, 6/01/30		United States		10,000		8,180
	United Rentals North America, Inc., 3.875%, 2/15/31		United States		70,000		58,319
	3.875%, 11/15/27		United States		10,000		9,062

							94,284

	Distribution/Wholesale 0.1%
a	H&E Equipment Services, Inc., senior note, 3.875%, 12/15/28		United States		50,000		42,751

	Diversified Telecommunication Services 0.0%^†
	Verizon Communications, Inc., 3.40%, 3/22/41		United States		20,000		14,189

	Electric 0.6%
b	Comision Federal de Electricidad, 3.875%, 7/26/33		Mexico		200,000		151,798
	Consolidated Edison Co. of New York, Inc., Series 20B3.95%, 4/01/50		United States		10,000		7,404
	Series 20A3.35%, 4/01/30		United States		10,000		8,788
	Duke Energy Ohio, Inc., 3.65%, 2/01/29		United States		10,000		9,183
	Exelon Corp., 5.625%, 6/15/35		United States		10,000		9,637
	FirstEnergy Corp., Series B4.15%, 7/15/27		United States		30,000		27,910
	Series C5.10%, 7/15/47		United States		20,000		16,997
	Pacific Gas & Electric Co., 3.50%, 8/01/50		United States		10,000		5,965
	2.50%, 2/01/31		United States		20,000		15,230
	2.10%, 8/01/27		United States		10,000		8,557
	Progress Energy, Inc., 6.00%, 12/01/39		United States		10,000		9,692

							271,161

	Energy Equipment & Services 0.0%^†
a	Schlumberger Holdings Corp., 3.90%, 5/17/28		United States		10,000		9,296

	Entertainment 0.2%
	Warnermedia Holdings, Inc., 6.412%, 3/15/26		United States		20,000		20,005
	3.755%, 3/15/27		United States		50,000		46,183
	5.05%, 3/15/42		United States		10,000		7,739
	4.279%, 3/15/32		United States		30,000		25,482

							99,409

	Environmental Control 0.1%
a	GFL Environmental, Inc., 4.25%, 6/01/25		Canada		40,000		38,481
	Republic Services, Inc., 2.50%, 8/15/24		United States		20,000		19,432

							57,913

	Financial Services 0.8%
	AerCap Ireland Capital DAC/AerCap Global Aviation Trust, 3.00%, 10/29/28		Ireland		150,000		128,686
	Air Lease Corp., 3.375%, 7/01/25		United States		20,000		19,010
	5.30%, 2/01/28		United States		20,000		19,336
	American Express Co., 4.05%, 5/03/29		United States		30,000		27,937
	Charles Schwab Corp., 5.875%, 8/24/26		United States		50,000		49,855
	6.136% to 8/24/33, FRN thereafter, 8/24/34		United States		20,000		19,466



franklintempleton.com	Semiannual Report	11

FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENT

Western Asset Bond ETF (continued)



		Country		Principal Amount*		Value
	Corporate Bonds & Notes (continued)
	Financial Services (continued)
	Intercontinental Exchange, Inc., 4.60%, 3/15/33		United States		10,000	$	9,188
	Mastercard, Inc., 3.85%, 3/26/50		United States		10,000		7,711
	Visa, Inc., 4.30%, 12/14/45		United States		30,000		25,422
	2.05%, 4/15/30		United States		20,000		16,524
	3.15%, 12/14/25		United States		20,000		19,096


							342,231

	Food 0.3%
	Kraft Heinz Foods Co., 5.20%, 7/15/45		United States		70,000		61,230
	Mars, Inc.,^a 2.70%, 4/01/25		United States		20,000		19,168
	^a 3.20%, 4/01/30		United States		10,000		8,788
	Mondelez International, Inc., 1.50%, 5/04/25		United States		40,000		37,439


							126,625

	Gas 0.4%
b	Promigas SA ESP/Gases del Pacifico SAC, 3.75%, 10/16/29		Colombia		200,000		164,806

	Health Care Providers & Services 0.9%
	Centene Corp., 4.25%, 12/15/27		United States		20,000		18,455
	4.625%, 12/15/29		United States		20,000		18,036
	3.00%, 10/15/30		United States		10,000		8,078
	2.625%, 8/01/31		United States		10,000		7,672
	3.375%, 2/15/30		United States		10,000		8,352
	CVS Health Corp., 4.30%, 3/25/28		United States		30,000		28,401
	Elevance Health, Inc., 4.375%, 12/01/47		United States		10,000		7,970
	4.10%, 5/15/32		United States		10,000		8,913
	3.65%, 12/01/27		United States		10,000		9,275
	HCA, Inc., 7.69%, 6/15/25		United States		20,000		20,479
	5.875%, 2/01/29		United States		10,000		9,842
	3.50%, 9/01/30		United States		30,000		25,392
	5.50%, 6/15/47		United States		20,000		17,091
	Humana, Inc., 3.95%, 3/15/27		United States		10,000		9,492
	4.50%, 4/01/25		United States		10,000		9,823
	4.95%, 10/01/44		United States		20,000		16,889
a	LifePoint Health, Inc., 9.875%, 8/15/30		United States		60,000		58,163
	UnitedHealth Group, Inc., 3.875%, 8/15/59		United States		40,000		28,521
	4.20%, 5/15/32		United States		40,000		36,522
	4.00%, 5/15/29		United States		20,000		18,727


							366,093

	Healthcare-Products 0.1%
	Abbott Laboratories, 4.75%, 11/30/36		United States		10,000		9,510
	4.90%, 11/30/46		United States		20,000		18,232


							27,742

	Home Builders 0.0%^†
	Lennar Corp., 4.75%, 11/29/27		United States		10,000		9,639

	Insurance 0.1%
	Berkshire Hathaway Finance Corp., 4.25%, 1/15/49		United States		40,000		32,826
	MetLife, Inc., 6.40%, 12/15/66		United States		10,000		9,784



12	Semiannual Report	franklintempleton.com

FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENT

Western Asset Bond ETF (continued)



		Country		Principal Amount*		Value
	Corporate Bonds & Notes (continued)
	Insurance (continued)
a	Principal Life Global Funding II, 1.25%, 6/23/25		United States		10,000	$	9,229


							51,839

	Internet 1.0%
	Alphabet, Inc., 1.90%, 8/15/40		United States		30,000		18,781
	1.10%, 8/15/30		United States		10,000		7,788
	Amazon.com, Inc., 3.15%, 8/22/27		United States		80,000		74,458
	3.10%, 5/12/51		United States		30,000		19,819
	4.95%, 12/05/44		United States		70,000		65,325
	3.60%, 4/13/32		United States		70,000		62,094
b	Prosus NV, 3.061%, 7/13/31		China		200,000		148,588


							396,853

	Iron/Steel 0.3%
	ArcelorMittal SA, 7.00%, 10/15/39		Luxembourg		10,000		10,038
	Vale Overseas Ltd., 6.125%, 6/12/33		Brazil		100,000		96,703

							106,741

	Leisure Time 0.6%
a	Carnival Corp., 10.50%, 6/01/30		United States		60,000		61,844
a	NCL Corp. Ltd., 7.75%, 2/15/29		United States		70,000		65,047
a	Royal Caribbean Cruises Ltd., 7.25%, 1/15/30		United States		60,000		59,535
a	VOC Escrow Ltd., 5.00%, 2/15/28		United States		70,000		63,738


							250,164

	Lodging 0.5%
a	Hilton Domestic Operating Co., Inc., 3.625%, 2/15/32		United States		50,000		40,357
	Las Vegas Sands Corp., 3.20%, 8/08/24		United States		90,000		87,128
	2.90%, 6/25/25		United States		70,000		65,301


							192,786

	Machinery-Diversified 0.1%
	Deere & Co., 3.75%, 4/15/50		United States		50,000		39,576
	3.10%, 4/15/30		United States		10,000		8,801
	Otis Worldwide Corp., 2.056%, 4/05/25		United States		10,000		9,444


							57,821

	Media 2.1%
a	CCO Holdings LLC/CCO Holdings Capital Corp., 4.50%, 6/01/33		United States		190,000		145,585
	Charter Communications Operating LLC/Charter Communications Operating Capital, 4.908%, 7/23/25		United States		40,000		39,099
	5.375%, 5/01/47		United States		30,000		22,882
	5.125%, 7/01/49		United States		30,000		21,894
	2.80%, 4/01/31		United States		30,000		23,410
	5.05%, 3/30/29		United States		70,000		65,456
	5.50%, 4/01/63		United States		30,000		22,220
	Comcast Corp., 3.999%, 11/01/49		United States		50,000		37,152
	4.15%, 10/15/28		United States		90,000		85,288
	4.25%, 10/15/30		United States		50,000		46,076
	5.65%, 6/15/35		United States		10,000		9,887
	3.90%, 3/01/38		United States		50,000		40,881
	3.375%, 8/15/25		United States		70,000		67,341
	3.45%, 2/01/50		United States		30,000		20,304



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FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENT

Western Asset Bond ETF (continued)



		Country		Principal Amount*		Value
	Corporate Bonds & Notes (continued)
	Media (continued)
a	DISH DBS Corp., 5.75%, 12/01/28		United States		120,000	$	92,475
	Fox Corp., 5.476%, 1/25/39		United States		20,000		17,299
	Time Warner Cable LLC, 6.55%, 5/01/37		United States		90,000		81,688
	Walt Disney Co., 6.20%, 12/15/34		United States		20,000		20,796

							859,733

	Mining 1.7%
a	Anglo American Capital PLC, 4.75%, 4/10/27		South Africa		200,000		191,796
	Barrick North America Finance LLC, 5.75%, 5/01/43		Canada		20,000		19,289
	5.70%, 5/30/41		Canada		20,000		19,190
	BHP Billiton Finance USA Ltd., 5.00%, 9/30/43		Australia		20,000		18,073
a	First Quantum Minerals Ltd., 8.625%, 6/01/31		Zambia		200,000		199,286
b	Freeport Indonesia PT, 5.315%, 4/14/32		Indonesia		200,000		181,786
	Freeport-McMoRan, Inc., 5.45%, 3/15/43		United States		50,000		42,695
a	Glencore Funding LLC, 3.875%, 10/27/27		Australia		20,000		18,626
	Yamana Gold, Inc., 4.625%, 12/15/27		Canada		20,000		18,791

							709,532

	Miscellaneous Manufacturing 0.1%
	3M Co., 3.70%, 4/15/50		United States		30,000		21,433
	3.375%, 3/01/29		United States		10,000		8,940
	2.00%, 2/14/25		United States		10,000		9,484
	3.05%, 4/15/30		United States		10,000		8,653
	Eaton Corp., 4.15%, 11/02/42		United States		10,000		8,149

							56,659

	Oil & Gas 4.8%
	Apache Corp., 5.10%, 9/01/40		United States		30,000		23,865
	5.35%, 7/01/49		United States		10,000		7,672
	4.25%, 1/15/44		United States		60,000		39,356
	7.75%, 12/15/29		United States		10,000		10,248
	BP Capital Markets America, Inc., 2.772%, 11/10/50		United States		30,000		17,694
	3.41%, 2/11/26		United States		30,000		28,686
	3.588%, 4/14/27		United States		10,000		9,433
	1.749%, 8/10/30		United States		30,000		23,739
	Chevron Corp., 1.995%, 5/11/27		United States		10,000		8,967
a	Chord Energy Corp., 6.375%, 6/01/26		United States		40,000		39,260
	Continental Resources, Inc., 4.375%, 1/15/28		United States		30,000		27,840
	^a 5.75%, 1/15/31		United States		20,000		18,797
	4.90%, 6/01/44		United States		20,000		14,715
	^a 2.268%, 11/15/26		United States		10,000		8,864
	Coterra Energy, Inc., 3.90%, 5/15/27		United States		50,000		46,983
	4.375%, 3/15/29		United States		50,000		46,330
	Devon Energy Corp., 5.60%, 7/15/41		United States		100,000		88,589
	5.85%, 12/15/25		United States		20,000		19,905
	4.50%, 1/15/30		United States		20,000		18,185
	Diamondback Energy, Inc., 3.50%, 12/01/29		United States		30,000		26,643
	4.40%, 3/24/51		United States		20,000		14,766



14	Semiannual Report	franklintempleton.com

FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENT

Western Asset Bond ETF (continued)



		Country		Principal Amount*		Value
	Corporate Bonds & Notes (continued)
	Oil & Gas (continued)
	Ecopetrol SA, 8.875%, 1/13/33		Colombia		200,000	$	195,513
	EOG Resources, Inc., 4.95%, 4/15/50		United States		40,000		35,453
	3.90%, 4/01/35		United States		20,000		16,995
	4.375%, 4/15/30		United States		10,000		9,432
	EQT Corp., 6.125%, 2/01/25		United States		10,000		9,975
	5.00%, 1/15/29		United States		30,000		28,228
	3.90%, 10/01/27		United States		50,000		46,287
	Exxon Mobil Corp., 3.482%, 3/19/30		United States		20,000		18,071
	4.114%, 3/01/46		United States		60,000		48,232
	3.043%, 3/01/26		United States		10,000		9,487
b	KazMunayGas National Co. JSC, 3.50%, 4/14/33		Kazakhstan		200,000		150,025
	Occidental Petroleum Corp., 7.50%, 5/01/31		United States		20,000		21,247
	3.20%, 8/15/26		United States		40,000		36,775
	6.625%, 9/01/30		United States		60,000		60,860
	6.60%, 3/15/46		United States		50,000		49,189
	6.45%, 9/15/36		United States		40,000		39,320
	4.40%, 4/15/46		United States		20,000		14,698
	4.625%, 6/15/45		United States		30,000		21,610
	4.50%, 7/15/44		United States		20,000		14,123
	4.20%, 3/15/48		United States		40,000		27,680
	5.55%, 3/15/26		United States		20,000		19,756
	3.40%, 4/15/26		United States		20,000		18,696
	4.10%, 2/15/47		United States		50,000		33,084
	Petrobras Global Finance BV, 6.50%, 7/03/33		Brazil		200,000		191,101
	Pioneer Natural Resources Co., 2.15%, 1/15/31		United States		30,000		23,692
	1.125%, 1/15/26		United States		10,000		9,042
	Range Resources Corp., 4.875%, 5/15/25		United States		40,000		38,831
	Shell International Finance BV, 4.00%, 5/10/46		Netherlands		30,000		23,259
	2.75%, 4/06/30		Netherlands		20,000		17,212
	3.25%, 4/06/50		Netherlands		30,000		19,949
	6.375%, 12/15/38		Netherlands		10,000		10,675
	4.375%, 5/11/45		Netherlands		10,000		8,218
	Southwestern Energy Co., 5.375%, 3/15/30		United States		50,000		45,613
b	Tengizchevroil Finance Co. International Ltd., 3.25%, 8/15/30		Kazakhstan		200,000		152,322


							2,005,187

	Oil & Gas Services 0.0%^†
	Halliburton Co., 4.85%, 11/15/35		United States		10,000		9,003
	5.00%, 11/15/45		United States		10,000		8,489


							17,492

	Oil, Gas & Consumable Fuels 0.1%
	Cheniere Energy, Inc., 4.625%, 10/15/28		United States		20,000		18,407
	Chevron Corp., 3.078%, 5/11/50		United States		10,000		6,719


							25,126

	Paper & Forest Products 0.4%
	Suzano Austria GmbH, 3.75%, 1/15/31		Brazil		200,000		164,567

	Personal Care Products 0.0%^†
	Procter & Gamble Co., 3.00%, 3/25/30		United States		10,000		8,889



franklintempleton.com	Semiannual Report	15

FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENT

Western Asset Bond ETF (continued)



		Country		Principal Amount*		Value
	Corporate Bonds & Notes (continued)
	Personal Products 0.1%
a	Kenvue, Inc., 4.90%, 3/22/33		United States		30,000	$	28,688

	Pharmaceuticals 2.0%
	AbbVie, Inc., 4.25%, 11/21/49		United States		30,000		23,772
	3.20%, 11/21/29		United States		80,000		70,637
	2.60%, 11/21/24		United States		130,000		125,373
	Becton Dickinson & Co., 4.685%, 12/15/44		United States		10,000		8,415
	Bristol-Myers Squibb Co., 3.20%, 6/15/26		United States		20,000		18,979
	4.55%, 2/20/48		United States		10,000		8,355
	Cigna Group, 4.80%, 8/15/38		United States		50,000		44,082
	4.125%, 11/15/25		United States		10,000		9,685
	4.375%, 10/15/28		United States		30,000		28,395
	2.375%, 3/15/31		United States		20,000		15,986
	CVS Health Corp., 5.05%, 3/25/48		United States		90,000		74,844
	3.875%, 7/20/25		United States		10,000		9,666
	2.125%, 9/15/31		United States		70,000		53,570
	Johnson & Johnson, 3.625%, 3/03/37		United States		50,000		42,176
	Merck & Co., Inc., 1.45%, 6/24/30		United States		20,000		15,681
	Pfizer, Inc., 1.70%, 5/28/30		United States		50,000		40,116
	7.20%, 3/15/39		United States		20,000		23,042
	Teva Pharmaceutical Finance Netherlands III BV, 8.125%, 9/15/31		Israel		200,000		207,160


							819,934

	Pipelines 3.2%
	Cameron LNG LLC, ^a 2.902%, 7/15/31		United States		10,000		8,279
	^a 3.302%, 1/15/35		United States		30,000		23,913
	Cheniere Energy Partners LP, 3.25%, 1/31/32		United States		40,000		31,836
	Columbia Pipelines Operating Co. LLC, ^a 6.036%, 11/15/33		United States		50,000		48,833
	^a 6.544%, 11/15/53		United States		20,000		19,575
	Energy Transfer LP, 6.25%, 4/15/49		United States		90,000		82,718
	3.75%, 5/15/30		United States		40,000		34,867
	2.90%, 5/15/25		United States		20,000		19,009
	5.25%, 4/15/29		United States		20,000		19,186
	Enterprise Products Operating LLC, 2.80%, 1/31/30		United States		60,000		50,978
	3.70%, 1/31/51		United States		80,000		56,698
	Series H6.65%, 10/15/34		United States		10,000		10,588
	4.15%, 10/16/28		United States		30,000		28,146
	5.375% to 2/15/28, FRN thereafter, 2/15/78		United States		10,000		8,340
	EQM Midstream Partners LP, 5.50%, 7/15/28		United States		40,000		37,581
	Kinder Morgan, Inc., 5.55%, 6/01/45		United States		60,000		51,628
	4.30%, 6/01/25		United States		10,000		9,747
	4.30%, 3/01/28		United States		10,000		9,416
	MPLX LP, 4.875%, 6/01/25		United States		10,000		9,811
	4.875%, 12/01/24		United States		20,000		19,723
	5.20%, 3/01/47		United States		50,000		40,893
	4.50%, 4/15/38		United States		20,000		16,220
	4.80%, 2/15/29		United States		20,000		18,986



16	Semiannual Report	franklintempleton.com

FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENT

Western Asset Bond ETF (continued)



		Country		Principal Amount*		Value
	Corporate Bonds & Notes (continued)
	Pipelines (continued)
b	Oleoducto Central SA, 4.00%, 7/14/27		Colombia		200,000	$	178,397
	ONEOK, Inc., 6.05%, 9/01/33		United States		30,000		29,491
	6.625%, 9/01/53		United States		40,000		39,216
	5.55%, 11/01/26		United States		10,000		9,937
	5.80%, 11/01/30		United States		20,000		19,591
	Southern Natural Gas Co. LLC, 8.00%, 3/01/32		United States		20,000		22,017
	Targa Resources Corp., 4.95%, 4/15/52		United States		10,000		7,705
	Targa Resources Partners LP/Targa Resources Partners Finance Corp., 5.00%, 1/15/28		United States		30,000		28,563
	6.875%, 1/15/29		United States		30,000		30,055
	4.875%, 2/01/31		United States		30,000		26,905
a	Tennessee Gas Pipeline Co. LLC, 2.90%, 3/01/30		United States		40,000		33,441
	Transcontinental Gas Pipe Line Co. LLC, 7.85%, 2/01/26		United States		60,000		62,402
a	Venture Global Calcasieu Pass LLC, 3.875%, 11/01/33		United States		50,000		38,875
	Western Midstream Operating LP, 3.10%, 2/01/25		United States		10,000		9,577
	4.05%, 2/01/30		United States		80,000		70,015
	5.25%, 2/01/50		United States		20,000		15,604
	Williams Cos., Inc., 5.75%, 6/24/44		United States		20,000		18,158
	3.50%, 11/15/30		United States		50,000		43,143


							1,340,063

	Retail 0.6%
	Costco Wholesale Corp., 1.60%, 4/20/30		United States		20,000		16,070
	1.375%, 6/20/27		United States		40,000		34,988
	Home Depot, Inc., 3.90%, 6/15/47		United States		50,000		38,236
	2.70%, 4/15/30		United States		20,000		17,092
	2.50%, 4/15/27		United States		20,000		18,258
	Lowe’s Cos., Inc., 4.50%, 4/15/30		United States		10,000		9,335
	McDonald’s Corp., 4.20%, 4/01/50		United States		30,000		23,319
	3.60%, 7/01/30		United States		20,000		17,868
	3.50%, 3/01/27		United States		40,000		37,672
	Walmart, Inc., 1.80%, 9/22/31		United States		10,000		7,876
	1.50%, 9/22/28		United States		20,000		16,977


							237,691

	Semiconductors 0.7%
a	Broadcom, Inc., 4.926%, 5/15/37		United States		90,000		77,619
	Intel Corp., 4.75%, 3/25/50		United States		30,000		24,831
	3.70%, 7/29/25		United States		10,000		9,684
	5.125%, 2/10/30		United States		20,000		19,636
	1.60%, 8/12/28		United States		20,000		16,922
	Micron Technology, Inc., 5.875%, 2/09/33		United States		10,000		9,561
	NVIDIA Corp., 2.85%, 4/01/30		United States		10,000		8,730
	3.50%, 4/01/40		United States		140,000		110,313
	NXP BV/NXP Funding LLC/NXP USA, Inc., 2.70%, 5/01/25		China		20,000		19,002
	Texas Instruments, Inc., 1.75%, 5/04/30		United States		20,000		16,199


							312,497



franklintempleton.com	Semiannual Report	17

FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENT

Western Asset Bond ETF (continued)



	Country		Principal Amount*		Value
Corporate Bonds & Notes (continued)
Software 0.3%
Microsoft Corp., 3.30%, 2/06/27		United States		20,000	$	18,986
2.921%, 3/17/52		United States		10,000		6,566
Oracle Corp., 2.875%, 3/25/31		United States		90,000		73,554
1.65%, 3/25/26		United States		50,000		45,303

						144,409

Telecommunications 1.5%
AT&T, Inc., 4.30%, 2/15/30		United States		20,000		18,218
1.70%, 3/25/26		United States		10,000		9,076
3.50%, 9/15/53		United States		30,000		18,552
2.55%, 12/01/33		United States		40,000		29,392
3.55%, 9/15/55		United States		20,000		12,256
5.55%, 8/15/41		United States		30,000		26,960
Telefonica Emisiones SA, 5.213%, 3/08/47		Spain		150,000		119,612
T-Mobile USA, Inc., 3.50%, 4/15/25		United States		80,000		77,212
3.00%, 2/15/41		United States		10,000		6,631
3.375%, 4/15/29		United States		50,000		44,023
Verizon Communications, Inc., 4.329%, 9/21/28		United States		100,000		94,005
4.862%, 8/21/46		United States		70,000		57,920
2.875%, 11/20/50		United States		20,000		11,572
2.355%, 3/15/32		United States		120,000		91,589

						617,018

Transportation 0.3%
Burlington Northern Santa Fe LLC, 2.875%, 6/15/52		United States		10,000		6,166
Canadian Pacific Railway Co., 3.10%, 12/02/51		Canada		20,000		12,528
Union Pacific Corp., 3.75%, 2/05/70		United States		20,000		13,418
3.839%, 3/20/60		United States		40,000		28,120
2.891%, 4/06/36		United States		40,000		30,333
3.75%, 7/15/25		United States		20,000		19,382

						109,947

Wireless Telecommunication Services 0.4%
T-Mobile USA, Inc., 3.875%, 4/15/30		United States		190,000		168,406

Total Corporate Bonds & Notes (Cost $17,327,365)						17,067,931

U.S. Government & Agency Securities 77.7%
Federal Home Loan Mortgage Corp., 2.00%, 8/01/41		United States		424,169		341,654
3.00%, 9/01/40		United States		256,379		221,094
3.65%, 10/01/29		United States		100,000		91,991
Federal Home Loan Mortgage Corp. Multifamily Structured Pass- Through Certificates, 4.80%, 9/25/28		United States		100,000		98,252
Federal Home Loan Mortgage Corp. STACR REMIC Trust,^a,c7.165%, 1/25/42		United States		100,000		98,830
^a,c7.715%, 2/25/42		United States		150,000		151,046
^a,c8.665%, 5/25/42		United States		100,000		103,869
Federal National Mortgage Association, 2.50%, 11/01/41		United States		250,435		205,902
3.00%, 9/01/61		United States		275,820		224,664



18	Semiannual Report	franklintempleton.com

FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENT

Western Asset Bond ETF (continued)



		Country		Principal Amount*		Value
	U.S. Government & Agency Securities (continued)
	Government National Mortgage Association, 5.50%, 5/20/53		United States		99,026	$	96,190
	Government National Mortgage Association, TBA, 2.00%, 10/20/53		United States		500,000		395,371
	2.50%, 10/20/53		United States		900,000		735,713
	3.00%, 10/20/53		United States		900,000		762,891
	3.50%, 10/20/53		United States		500,000		438,008
	4.00%, 10/20/53		United States		300,000		270,316
	4.50%, 10/20/53		United States		500,000		461,934
	5.00%, 10/20/53		United States		500,000		473,828
	5.50%, 10/20/53		United States		300,000		291,141
	6.00%, 10/20/53		United States		400,000		396,375
	6.50%, 10/20/53		United States		100,000		100,570
	U.S. Treasury Bills, 0.000%, 10/10/23		United States		660,000		659,229
	0.000%, 10/12/23		United States		8,150,000		8,138,064
	0.000%, 10/19/23		United States		3,150,000		3,142,139
	0.000%, 11/21/23		United States		1,000,000		992,625
	0.000%, 12/21/23		United States		2,000,000		1,976,407
	U.S. Treasury Bonds, 3.625%, 5/15/53		United States		1,370,000		1,134,638
	U.S. Treasury Notes, 4.375%, 8/31/28		United States		1,250,000		1,237,695
	4.625%, 9/15/26		United States		70,000		69,661
	5.00%, 8/31/25		United States		140,000		139,726
	Uniform Mortgage-Backed Security, TBA, 1.50%, 10/01/53		United States		100,000		71,867
	2.00%, 10/01/53		United States		2,200,000		1,673,891
	2.50%, 10/01/52		United States		2,500,000		1,984,664
	3.00%, 10/01/53		United States		1,100,000		909,691
	3.50%, 10/01/53		United States		1,000,000		860,078
	4.00%, 10/01/53		United States		900,000		801,351
	4.50%, 10/01/52		United States		600,000		550,922
	5.00%, 10/01/53		United States		500,000		471,758
	5.50%, 10/01/53		United States		700,000		676,512
	6.00%, 10/01/53		United States		600,000		592,172
	6.50%, 10/01/53		United States		400,000		401,844

	Total U.S. Government & Agency Securities (Cost $32,777,712)						32,444,573

	Foreign Government and Agency Securities 1.3%
b	Dominican Republic International Bonds, 6.000%, 2/22/33		Dominican Republic		200,000		177,102
b	Ivory Coast Government International Bonds, 6.125%, 6/15/33		Ivory Coast		200,000		166,293
	Mexico Government International Bonds, 4.875%, 5/19/33		Mexico		200,000		179,612

	Total Foreign Government and Agency Securities (Cost $537,971)						523,007

	Asset-Backed Securities 9.1%
a,c	AB BSL CLO 4 Ltd., Series 2023-4A, Class A, 6.957%, 4/20/36		Cayman Islands		200,000		200,350
	Angel Oak Mortgage Trust, ^{a,c ,} Series 2022-3, Class A3, 4.141%,1/25/67		United States		105,614		91,997
	^{a ,} Series 2023-1, Class A1, 4.75%,9/26/67		United States		152,609		145,962
a	Avis Budget Rental Car Funding AESOP LLC, Series 2023-8A, Class A, 6.02%, 2/20/30		United States		150,000		149,560
a,c	Bain Capital Credit CLO Ltd., Series 2023-1A, Class AN, 6.573%, 4/16/36		Jersey		200,000		200,403
	Bank, Series 2017-BNK7, Class A5, 3.435%, 9/15/60		United States		100,000		91,021
	Benchmark Mortgage Trust, Series 2023-B39, Class A5, 5.754%, 7/15/56		United States		150,000		149,764



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FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENT

Western Asset Bond ETF (continued)



		Country		Principal Amount*		Value
	Asset-Backed Securities (continued)
	BX Commercial Mortgage Trust,^a,c,Series 2021-VOLT, Class A, 6.147%,9/15/36		United States		110,000	$	107,161
	^a,c,Series 2023-VLT2, Class A, 7.613%,6/15/40		United States		100,000		100,108
	BX Trust,^a,Series 2019-OC11, Class A, 3.202%,12/09/41		United States		130,000		109,829
	^a,c,Series 2021-BXMF, Class A, 6.082%,10/15/26		United States		110,000		107,799
	CGMS Commercial Mortgage Trust, Series 2017-B1, Class A3, 3.197%, 8/15/50		United States		164,505		149,310
a	College Avenue Student Loans LLC, Series 2021-C, Class C, 3.06%, 7/26/55		United States		190,000		161,500
a	Domino’s Pizza Master Issuer LLC, Series 2018-1A, Class A2II, 4.328%, 7/25/48		United States		180,975		168,488
a,c	Dryden 87 CLO Ltd., Series 2021-87A, Class A1, 6.741%, 5/20/34		Cayman Islands		350,000		347,389
a	Ent Auto Receivables Trust, Series 2023-1A, Class A4, 6.26%, 11/15/29		United States		100,000		100,095
a,c	Extended Stay America Trust, Series 2021-ESH, Class C, 7.147%, 7/15/38		United States		133,068		131,273
a,c	GoldenTree Loan Management U.S. CLO 1 Ltd., Series 2021-11A, Class A, 6.718%, 10/20/34		Cayman Islands		300,000		298,443
c	GS Mortgage Securities Trust, Series 2018-GS10, Class A5, 4.155%, 7/10/51		United States		110,000		99,848
a,c	LAQ Mortgage Trust, Series 2023-LAQ, Class A, 7.424%, 3/15/36		United States		201,889		201,475
a,c	Nelnet Student Loan Trust, Series 2021-CA, Class AFL, 6.179%, 4/20/62		United States		142,541		140,251
a	SG Residential Mortgage Trust, Series 2022-2, Class A1, 5.353%, 8/25/62		United States		113,332		109,828
	UBS Commercial Mortgage Trust, Series 2017-C4, Class A3, 3.301%, 10/15/50		United States		118,434		107,743
a	Verus Securitization Trust, Series 2023-4, Class A1, 5.811%, 5/25/68		United States		101,816		99,855
a,c	Voya CLO Ltd., Series 2018-2A, Class A1, 6.57%, 7/15/31		Cayman Islands		250,000		249,823

	Total Asset-Backed Securities (Cost $3,818,236)						3,819,275

	Total Investments before Short-Term Investments (Cost $54,461,284)						53,854,786

	Short-Term Investments 2.5%
	Commercial Paper 0.6%
	Natixis SA, 6.014%, 6/17/24		France		250,000		239,691

	U.S. Government & Agency Securities 1.8%
d	Federal Home Loan Bank Discount Notes, 10/4/23		United States		770,000		769,775



20	Semiannual Report	franklintempleton.com

FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENT

Western Asset Bond ETF (continued)



		Country		Principal Amount*		Value
	Short-Term Investments (continued)
	Money Market Funds 0.1%
e	Invesco Government & Agency Portfolio, 4.71%		United States		24,830	$	24,830

	Total Short-Term Investments (Cost $1,034,236)						1,034,296

	Total Investments (Cost $55,495,520) 131.5%						54,889,082
	Other Assets, less Liabilities (31.5)%						(13,156,778	)

	Net Assets 100.0%					$	41,732,304

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

^†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 $5,950,297, representing 14.3% of net assets.

^bSecurity 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 $1,629,582, representing 3.9% of net assets.

^cVariable rate security. The rate shown represents the yield at period end.

^dThe security was issued on a discount basis with no stated coupon rate.

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

At September 30, 2023, the Fund had the following interest rate swap contracts outstanding. See Note 1(c).


Interest Rate Swap Contracts

Description	Periodic Payment Rate Received (Paid)		Payment Frequency		Maturity Date		Notional Amount		Value			Unamortized Upfront Payments (Receipts)			Unrealized Appreciation (Depreciation)
Interest rate contracts
Chicago Mercantile Exchange		5.13%		Annually		5/15/48	$	1,442,000	$	215,989		$	163,461		$	52,528
LCH Limited		4.18%		Annually		2/29/28	$	5,564,000	$	(39,173	)	$	(25,704	)	$	(13,469	)

															$	39,059

At September 30, 2023, the Fund had the following credit default swap contracts outstanding. See Note 1(c).


Credit Default Swap Contracts

Description	Periodic Payment Rate Received (Paid)		Payment Frequency		Maturity Date		Notional Amount		Value		Unamortized Upfront Payments (Receipts)			Unrealized Appreciation (Depreciation)
Credit rate contracts
Intercontinental Exchange, Inc.		1%		Quarterly		12/20/28	$	1,250,000	$	15,265	$	(15,598	)	$	(333	)

														$	(333	)

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)

Interest rate contracts

3-Month CME Term SOFR

Long

8,109,850

3/18/25

354

3-Month CME Term SOFR

Long

8,403,938

3/17/26

(948

)



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FRANKLIN TEMPLETON ETF TRUST

SCHEDULE OF INVESTMENT

Western Asset Bond ETF (continued)


Futures Contracts (continued)

Description	Type		Number of Contracts		Notional Amount		Expiration Date		Value/Unrealized Appreciation (Depreciation)
Interest rate contracts (continued)
U.S. Treasury 2 Yr. Note		Long		9	$	1,824,398		12/29/23	$	125
U.S. Treasury 5 Yr. Note		Long		11		1,158,953		12/29/23		(3,199	)
U.S. Treasury Bond Long		Long		45		5,120,156		12/19/23		(196,953	)
U.S. Treasury Bond Ultra		Long		15		1,780,313		12/19/23		(88,745	)
3-Month CME Term SOFR		Short		38		8,982,250		3/19/24		(1,980	)
U.S. Treasury 10 Yr. Note		Short		31		3,349,937		12/19/23		29,915
Ultra 10 Yr. U.S. Treasury Note		Short		11		1,227,188		12/19/23		21,497

Total Futures Contracts									$	(239,934	)

See Note 6 regarding other derivative information.

See Abbreviations on page 32.



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

FRANKLIN TEMPLETON ETF TRUST

FINANCIAL STATEMENTS

Statements of Assets and Liabilities

September 30, 2023 (unaudited)

Western Asset Bond ETF


Assets:
Investments in securities:
Cost – Unaffiliated issuers	$	55,495,520
Value – Unaffiliated issuers	$	54,889,082
Cash		149,567
Receivables:
Interest		287,718
Investment securities sold		581,875
Variation margin on futures contracts		26,597
Deposits with brokers for:
Futures contracts		450,003
Swap contracts		301,000

Total assets		56,685,842

Liabilities:
Payables:
Investment securities purchased		14,817,850
Management fees		4,425
Variation margin on centrally cleared swap contracts		131,263

Total liabilities		14,953,538

Net assets, at value	$	41,732,304

Net assets consist of:
Paid-in capital	$	42,500,000
Total distributable earnings (loss)		(767,696	)

Net assets, at value	$	41,732,304

Shares outstanding		1,700,000

Net asset value per share	$	24.55



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FRANKLIN TEMPLETON ETF TRUST

FINANCIAL STATEMENTS

Statements of Operations

for the period ended September 30, 2023 (unaudited)^a

Western Asset Bond ETF


Investment income:
Interest:
Unaffiliated issuers	$	65,801

Total investment income		65,801

Expenses:
Management fees (Note 3a)		4,426

Total expenses		4,426

Net investment income		61,375

Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		(19,234	)
Futures contracts		(3,606	)
Swap contracts		1,415

Net realized gain (loss)		(21,425	)

Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		(606,438	)
Futures contracts		(239,934	)
Swap contracts		38,726

Net change in unrealized appreciation (depreciation)		(807,646	)

Net realized and unrealized gain (loss)		(829,071	)

Net increase (decrease) in net assets resulting from operations	$	(767,696	)

^aFor the period September 19, 2023 (commencement of operations) to September 30, 2023.



24	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

Western Asset Bond ETF



	Period Ended September 30, 2023 (unaudited)^a
Increase (decrease) in net assets:
Operations:
Net investment income	$	61,375
Net realized loss		(21,425	)
Net change in unrealized appreciation (depreciation)		(807,646	)

Net increase (decrease) in net assets resulting from operations		(767,696	)

Capital share transactions: (Note 2)		42,500,000

Net increase (decrease) in net assets		41,732,304
Net assets:
Beginning of period		—

End of period	$	41,732,304

^aFor the period September 19, 2023 (commencement of operations) to September 30, 2023.



franklintempleton.com	The accompanying notes are an integral part of these financial statements. \| Semiannual Report	25

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, one of which is included in this report (Fund). The Fund follows 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 Fund is an exchange traded fund (ETF) and seek to provide the investment results that closely correspond, before fees and expenses, to the performance of Fund corresponding underlying index.

The following summarizes the Fund’s significant accounting policies.

a. Financial Instrument Valuation

The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Fund’s Board of Trustees (the Board), the Board has designated the Fund’s investment manager as the valuation designee and has responsibility for oversight of valuation. The investment manager is assisted by the Fund’s administrator in performing this responsibility, including leading the cross-functional Valuation Committee (VC).

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

Equity securities, exchange trade funds and derivative financial instruments listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded or as of 4 p.m. Eastern time. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. London time on the

day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.

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

Certain derivative financial instruments are centrally cleared or trade in the OTC market. The Funds pricing services use various techniques including industry standard option pricing models and proprietary discounted cash flow models to determine the fair value of those instruments. The Funds’ net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.

The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Fund primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any 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 Fund 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 Fund’s 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



26	Semiannual Report	franklintempleton.com

FRANKLIN TEMPLETON ETF TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

1. Organization and Significant Accounting Policies (continued)

a. Financial Instrument Valuation (continued)

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 Fund’s NAV is not calculated, which could result in differences between the value of the Fund’s 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 Fund 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 Fund 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 Fund does 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

The Fund 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 Statement of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statement of Operations.

Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties. The Fund attempts 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. 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.

The Fund entered into credit default swap contracts primarily to manage and/or gain exposure to credit risk. A credit default swap is an agreement between the Fund and a counterparty whereby the buyer of the contract receives



franklintempleton.com	Semiannual Report	27

FRANKLIN TEMPLETON ETF TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

1. Organization and Significant Accounting Policies (continued)

c. Derivative Financial Instruments (continued)

credit protection and the seller of the contract guarantees the credit worthiness of a referenced debt obligation. These agreements may be privately negotiated in the over-thecounter market (OTC credit default swaps) or may be executed in a multilateral trade facility platform, such as a registered exchange (centrally cleared credit default swaps). The underlying referenced debt obligation may be a single issuer of corporate or sovereign debt, a credit index, a basket of issuers or indices, or a tranche of a credit index or basket of issuers or indices. In the event of a default of the underlying referenced debt obligation, the buyer is entitled to receive the notional amount of the credit default swap contract from the seller in exchange for the referenced debt obligation, a net settlement amount equal to the notional amount of the credit default swap less the recovery value of the referenced debt obligation, or other agreed upon amount. For centrally cleared credit default swaps, 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. Over the term of the contract, the buyer pays the seller a periodic stream of payments, provided that no event of default has occurred. Such periodic payments are accrued daily as an unrealized appreciation or depreciation until the payments are made, at which time they are realized.

The Fund entered into interest rate swap contracts primarily to manage interest rate risk. An interest rate swap is an agreement between the Fund and a counterparty to exchange cash flows based on the difference between two interest rates, applied to a notional amount. These agreements may be privately negotiated in the over-the-counter market (OTC interest rate swaps) or may be executed on a registered exchange (centrally cleared interest rate swaps). For centrally cleared interest rate swaps, 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. Over the term of the contract, contractually required payments to be paid and to be received are accrued daily and recorded as unrealized appreciation or depreciation until the payments are made, at which time they are realized.

Collateral requirements differ by type of derivative. Collateral terms are contract specific for OTC derivatives. For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the Fund or the applicable

counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary depending on the counterparty and the type of agreement. Generally, collateral is determined at the close of Fund business each day and any additional collateral required due to changes in derivative values may be delivered by the Fund or the counterparty the next business day, or within a few business days. Collateral pledged and/or received by the Fund, if any, is held in segregated accounts with the Fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Funds’ investment objectives. To the extent that the amounts due to the Fund from its counterparties are not subject to collateralization or are not fully collateralized, the Funds bears the risk of loss from counterparty non-performance.

The Fund 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 6 regarding other derivative information.

d. Income and Deferred Taxes

It is 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 Fund 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 Fund invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a capital gain tax is determined to apply, Fund records an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.

The 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



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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

1. Organization and Significant Accounting Policies (continued)

d. Income and Deferred Taxes (continued)

its technical merits. As of September 30, 2023, Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

e. Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Dividend income and capital gain distributions are recorded on the ex-dividend date except for certain dividends from securities where the dividend rate is not available. In such cases, the dividend is recorded as soon as the information is received by the Fund. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations.

Temporary differences are not reclassified, as they may reverse in subsequent periods.

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

f. Accounting Estimates

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

g. 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 Fund are issued and redeemed at their respective NAV only in aggregations of a specified number of shares or multiples thereof (Creation Units). Only certain large institutional investors (Authorized Participants) may engage in creation or redemption transactions directly with the Fund. Once created, shares of the Fund generally trade in the secondary market in amounts less than one Creation Unit. The market price of the Fund’s 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 Fund 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 Fund. Such transactions fees are treated as increases in capital and are disclosed in the Fund’s Statements of Changes in Net Assets

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



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FRANKLIN TEMPLETON ETF TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

2. Shares of Beneficial Interest (continued)

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



	Period Ended September 30, 2023^a

	Shares			Amount
Shares sold		1,700,001		$	42,500,025
Shares redeemed		(1	)		(25	)

Net increase (decrease)		1,700,000		$	42,500,000

^aFor the period September 19, 2023 (commencement of operations) to September 30, 2023.

3. Transactions with Affiliates

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



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

a. Management fees

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

The Fund pays gross effective investment management fees 0.35% per year on the average daily net assets of the Fund.

b. Administrative Fees

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

c. Other Affiliated Transactions

At September 30, 2023, the shares of Western Asset Bond ETF is owned by the following investment entity:



Funds	Shares		Percentage of Outstanding Shares

Western Asset Bond ETF
Franklin Resources Inc.		400,000		23.5%



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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

4. Income Taxes

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


Cost of investments	$	55,495,520

Unrealized appreciation	$	9,932
Unrealized depreciation		(616,370	)

Net unrealized appreciation (depreciation)	$	(606,438	)

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of financial futures transactions and gains/losses realized on in-kind shareholder redemptions.

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, $26,434,630 and $588,256, respectively.

There were no In-kind transactions associated with creation and redemptions for the period ended September 30, 2023.

6. Other Derivative Information

At September 30, 2023, the Fund’s investments in derivative contracts are reflected in the Statement of Assets and Liabilities as follows:

Asset Derivatives

Liability Derivatives

Statement of Assets and
Liabilities Location

Fair Value

Statement of Assets and
Liabilities Location

Fair Value

Interest rate contracts

Variation margin on futures contracts

—

Variation margin on futures contracts

239,934

Interest rate contracts

Swap contracts

38,726

Swap contracts

—

^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 Fund’s Statement of Operations was as follows:



Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Operations Locations	NetRealized Gain (Loss) for the Period			Statement of Operations Locations	Net Change in Unrealized Appreciation (Depreciation) for the Period
	Net realized gain (loss) from:				Net change in unrealized appreciation (depreciation) on:

Interest rate contracts	Futures contracts	$	(3,606	)	Futures contracts	$	(239,934	)

Credit contracts	Swap contracts		—		Swap Contracts		(333	)

Interest rate contracts	Swap contracts		1,415		Swap contracts		39,059


Totals		$	(2,191	)		$	(201,208	)

For the period ended September 30, 2023, the average month end notional amount of futures contracts and swap contracts were as follows:



	Western Asset Bond ETF
Credit default contracts	$	1,265,265
Interest rate contracts	$	1,442,000
Futures contracts	$	40,295,781



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FRANKLIN TEMPLETON ETF TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

7. Fair Value Measurements

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

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

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



	Level 1		Level 2		Level 3		Total

Western Asset Bond ETF

Assets:
Investments in Securities:^a
Corporate Bonds & Notes	$	—	$	17,067,931	$	—	$	17,067,931
Foreign Government and Agency Securities		—		523,007		—		523,007
Asset-Backed Securities		—		3,819,275		—		3,819,275
U.S. Government & Agency Securities		—		33,214,348		—		33,214,348
Short-Term Investments		24,830		239,691		—		264,521

Total Investments in Securities	$	24,830	$	54,864,252	$	—	$	54,889,082

Other Financial Instruments:
Futures Contracts	$	51,891	$	—	$	—	$	51,891
Interest Rate Swaps		—		52,528		—		52,528

Total Other Financial Instruments	$	51,891	$	52,528	$	—	$	104,419


Liabilities:
Other Financial Instruments:
Futures Contracts	$	291,825	$	—	$	—	$	291,825
Interest Rate Swaps		—		13,469		—		13,469
Credit Default Swap Contracts		—		333		—		333

Total Other Financial Instruments	$	291,825	$	13,802	$	—	$	305,627

^aFor detailed categories, see the accompanying Schedules of Investments.

8. 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 material impact on the financial statements. As permitted, Management has elected to early adopt the provisions.

9. Subsequent Events

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

Abbreviations


CLO		Collateralized Loan Obligation



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Shareholder Information

Board Approval of Investment Management Agreements

FRANKLIN TEMPLETON ETF TRUST

Western Asset Bond ETF

(Fund)

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

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

In approving each Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of the proposed Management Agreements are fair and reasonable and that such Management Agreements are in the best interests of the Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.

Nature, Extent and Quality of Services

The Board reviewed and considered information regarding the nature, extent and quality of investment management services to be provided by the applicable Managers and their affiliates to the Fund and its shareholders. This information included, among other things, the Fund’s proposed investment strategies and the ability of the applicable Managers to implement such investment strategies; the qualifications, background and experience of the investment personnel that will be responsible for the day-to-day portfolio management of the Fund; each Manager’s experience as the Manager of other funds and accounts, including other series of the Trust and other funds in the FT family of funds; each Manager’s strength and reputation within the industry; the personnel, operations, financial condition, and investment management capabilities, methodologies and resources of each Manager; and each Manager’s compliance capabilities. Following consideration of such information, the Board was satisfied with the nature, extent and quality of services to be provided by each Manager and its affiliates to the Fund and its shareholders.

Fund Performance

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

Comparative Fees and Expenses

The Board reviewed and considered information regarding the Fund’s estimated total expense ratio, noting that the Fund will pay a Unified Fee. The Board considered the estimated total expense ratio and, separately, the proposed contractual Unified Fee, without the effect of fee waivers, if any (Management Rate) of the Fund in comparison to the median expense ratio and median Management Rate, respectively, of other exchange-traded funds deemed comparable to and with a similar expense structure as the



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FRANKLIN TEMPLETON ETF TRUST

SHAREHOLDER INFORMATION

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

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

Profitability

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

Economies of Scale

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

Conclusion

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

Proxy Voting Policies and Procedures

The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.

Quarterly Schedule of Investments

The Trust files a complete schedule of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year as an exhibit to its report on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the Commission’s website at sec.gov.



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SHAREHOLDER INFORMATION

The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.

Premium/Discount Information

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



franklintempleton.com	Semiannual Report	35

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	Semiannual Report Western Asset Bond ETF

	Investment Manager	Distributor	Investor Services
	Franklin Advisers, Inc.	Franklin Distributors, LLC	Transfer Agent
		(800) DIAL BEN^®/342-5236	State Street Bank and
	Subadvisor	franklintempleton.com	Trust Company
	Western Asset Management		1 Heritage Drive
	Company, LLC		Mail Stop OHD0100
			North Quincy, MA 02171
© 2023 Franklin Templeton Investments. All rights reserved.			WABF S 11/23