Franklin Disruptive Commerce ETF |
Franklin Investment Grade Corporate ETF | |
Franklin Dynamic Municipal Bond ETF |
Franklin Municipal Green Bond ETF | |
Franklin Exponential Data ETF |
Franklin Senior Loan ETF | |
Franklin Genomic Advancements ETF |
Franklin Systematic Style Premia ETF | |
Franklin High Yield Corporate ETF |
Franklin U.S. Core Bond ETF | |
Franklin Income Focus ETF |
Franklin U.S. Low Volatility ETF | |
Franklin Intelligent Machines ETF |
Franklin U.S. Treasury Bond ETF | |
Franklin International Aggregate Bond ETF |
Franklin Ultra Short Bond ETF |
The Securities and Exchange Commission has adopted new regulations that will result in changes to the design and delivery of annual and semiannual shareholder reports beginning in July 2024.
If you have previously elected to receive shareholder reports electronically, you will continue to do so and need not take any action.
Otherwise, paper copies of the Fund’s shareholder reports will be mailed to you beginning in July 2024. If you would like to receive shareholder reports and other communications from the Fund electronically instead of by mail, you may make that request at any time by contacting your financial intermediary (such as a broker-dealer or bank).
Contents |
Visit franklintempleton.com for fund updates and documents, or to find helpful financial planning tools. |
Not FDIC Insured | | | May Lose Value | | | No Bank Guarantee |
franklintempleton.com | Semiannual Report | 1 |
Franklin Disruptive Commerce ETF
This semiannual report for Franklin Disruptive Commerce ETF covers the period ended September 30, 2023.
Fund Overview
Your Fund’s Goal and Main Investments
The Fund seeks capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in equity securities, predominantly common stock, of companies that are relevant to the Fund’s investment theme of disruptive commerce. These companies include those that we believe are substantially focused on, or that the investment manager believes will benefit from, electronic commerce, auctions, the sharing economy, electronic payment capabilities, drop shipping, direct marketing, significant decreases in transport and delivery costs and related activities or developments, as outlined in more detail in the Prospectus.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +2.04% based on market price and +2.00% based on net asset value (NAV). In comparison, the Russell 3000® Index, which measures the performance of the largest 3,000 U.S. companies representing the majority of the U.S. market’s total capitalization,posted a +4.86% cumulative total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 4.
Performance data represent past performance, which does not guarantee future results. Investment return and principal 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 |
||||
Broadline Retail |
22.6% | |||
Hotels, Restaurants & Leisure |
12.2% | |||
Financial Services |
11.6% | |||
Trading Companies & Distributors |
9.0% | |||
Software |
8.6% | |||
Ground Transportation |
8.5% | |||
IT Services |
6.0% | |||
Consumer Staples Distribution & Retail |
5.2% | |||
Commercial Services & Supplies |
3.8% | |||
Interactive Media & Services |
2.5% | |||
Other |
8.6% | |||
Other Net Assets |
1.4% |
1. Source: Morningstar. Frank Russell Company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company.
The 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 78.
2 |
Semiannual Report |
franklintempleton.com |
FRANKLIN DISRUPTIVE COMMERCE ETF
Top 10 Holdings | ||||
9/30/23 | ||||
Company Sector/Industry |
% of Total Net Assets |
|||
Amazon.com, Inc. Broadline Retail |
9.4% | |||
Shopify, Inc. Internet Services & Infrastructure |
6.0% | |||
Uber Technologies, Inc. Passenger Ground Transportation |
5.9% | |||
Costco Wholesale Corp. Consumer Staples Merchandise Retail |
5.2% | |||
WW Grainger, Inc. Trading Companies & Distributors |
4.7% | |||
DoorDash, Inc. Restaurants |
4.4% | |||
MercadoLibre, Inc. Broadline Retail |
4.4% | |||
Fastenal Co. Trading Companies & Distributors |
4.3% | |||
Booking Holdings, Inc. Hotels, Resorts & Cruise Lines |
3.9% | |||
Copart, Inc. Diversified Support Services |
3.8% |
Thank you for your participation in Franklin Disruptive Commerce ETF. We look forward to serving your future investment needs.
Matthew J. Moberg, CPA
Portfolio Manager
franklintempleton.com | Semiannual Report | 3 |
FRANKLIN DISRUPTIVE COMMERCE 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 (2/27/20), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/231
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
6-Month |
+2.00% | +2.04% | +2.00% | +2.04% | ||||||||||||
1-Year |
+19.83% | +19.79% | +19.83% | +19.79% | ||||||||||||
3-Year |
-41.81% | -41.87% | -16.52% | -16.54% | ||||||||||||
Since Inception (2/25/20) |
-1.13% | -1.17% | -0.32% | -0.33% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 5 for Performance Summary footnotes.
4 | Semiannual Report | franklintempleton.com |
FRANKLIN DISRUPTIVE COMMERCE ETF
PERFORMANCE SUMMARY
Total Annual Operating Expenses5
0.50% |
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. Equity securities are subject to price fluctuation and possible loss of principal. The Fund’s investment strategies incorporate the identification of thematic investment opportunities, and its performance may be negatively impacted if the investment manager does not correctly identify such opportunities or if the theme develops in an unexpected manner. By focusing its investments in consumer discretionary-related industries, the Fund carries much greater risks of adverse developments and price movements in such industries than a fund that invests in a wider variety of industries. 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. The portfolio is non-diversified and may invest in a relatively small number of issuers, which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. The manager may consider environmental, social and governance (ESG) criteria in the research or investment process; however, ESG considerations may not be a determinative factor in security selection. In addition, the manager may not assess every investment for ESG criteria, and not every ESG factor may be identified or evaluated. 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. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 5 |
FRANKLIN DISRUPTIVE COMMERCE ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
Beginning Account Value 4/1/23 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
$1,000.00 | $1,020.00 | $2.53 | $1,022.50 | $2.53 | 0.50 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period.
6 | Semiannual Report | franklintempleton.com |
Franklin Dynamic Municipal Bond ETF
This semiannual report for Franklin Dynamic Municipal Bond ETF covers the period ended September 30, 2023.
Fund Overview
Your Fund’s Goal and Main Investments
The Fund seeks to provide a high level of current income that is exempt from federal income taxes, including the federal alternative minimum tax, by normally investing at least 80% of its net assets in municipal securities whose interest is free from such taxes.1 The Fund seeks to maintain a dollar-weighted average portfolio maturity (the time in which the debt must be repaid) of three to 10 years, and may invest in municipal securities in any rating category by U.S. nationally recognized rating services (or unrated or short-term rated securities of comparable quality), including securities rated below investment grade and securities of issuers that are, or are about to be, involved in reorganizations, financial restructuring, or bankruptcy.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of -2.18% based on market price and -2.01% based on net asset value (NAV). In comparison, the Bloomberg Municipal 1-15 Year Index, which is a subset of the Bloomberg Municipal Bond Index (a market value-weighted index of tax-exempt, investment-grade municipal bonds with maturities of one year or more) posted a -3.25% cumulative total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 8.
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 Investments |
||||
Industrial Development Revenue and Pollution Control | 32.36% | |||
Special Tax | 20.15% | |||
Health Care | 14.01% | |||
Education | 8.02% | |||
Transportation | 5.75% | |||
Housing | 5.07% | |||
Local | 4.56% | |||
Lease | 2.59% | |||
State | 2.21% | |||
Other | 2.07% | |||
Cash | 1.78% | |||
Utilities | 1.30% | |||
Refunded | 0.13% |
Thank you for your participation in Franklin Dynamic Municipal Bond ETF. We look forward to serving your future investment needs.
Ben Barber, CFA
Daniel Workman, CFA
Francisco Rivera
James Conn, CFA
Portfolio Management Team
CFA® is a trademark owned by CFA institute.
1. Dividends are generally subject to state and local taxes, if any. For investors subject to alternative minimum tax, a small portion of Fund dividends may be taxable. Distributions of capital gains are generally taxable. To avoid imposition of 28% backup withholding on all Fund distributions and redemption proceeds, U.S. investors must be properly certified on Form W-9 and non-U.S. investors on Form W-8BEN.
2. Source: Morningstar. Treasuries, if held to maturity, offer a fixed rate of return and a fixed principal value; their interest payments and principal are guaranteed.
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 81.
franklintempleton.com | Semiannual Report | 7 |
FRANKLIN DYNAMIC MUNICIPAL 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 tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale 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 (9/5/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/231,2
Cumulative Total Return3 | Average Annual Total Return3 | |||||||||||||||
Based on NAV4 |
Based on market price5 |
Based on NAV4 |
Based on market price5 |
|||||||||||||
6-Month |
-2.01% | -2.18% | -2.01% | -2.18% | ||||||||||||
1-Year |
+4.35% | +4.57% | +4.35% | +4.57% | ||||||||||||
3-Year |
-2.67% | -2.60% | -0.90% | -0.88% | ||||||||||||
5-Year |
+7.94% | +7.89% | +1.54% | +1.53% | ||||||||||||
Since Inception (8/31/17) |
+7.01% | +6.99% | +1.12% | +1.12% |
Distribution Rate6 | 30-Day Standardized Yield7 |
Taxable Equivalent 30-Day Standardized Yield8 |
||||||
4.06% |
4.23% | 7.15% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 9 for Performance Summary footnotes.
8 | Semiannual Report | franklintempleton.com |
FRANKLIN DYNAMIC MUNICIPAL BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/23–9/30/23)
Net Investment Income |
$0.461108 |
Total Annual Operating Expenses9
0.30% |
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. 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. Low-rated, high-yield bonds are subject to greater price volatility, illiquidity and possibility of default. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. Unrated debt securities have less public information and independent credit analysis and they may be subject to a greater risk of illiquidity, price changes or default. 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 sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
2. Effective December 1, 2022, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
3. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
4. Assumes reinvestment of distributions based on net asset value.
5. Assumes reinvestment of distributions based on market price.
6. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/23.
7. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
8. Taxable equivalent yield assumes the 2023 maximum federal income tax rate of 37.00% plus 3.80% Medicare tax.
9. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 9 |
FRANKLIN DYNAMIC MUNICIPAL 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 4/1/23 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
$1,000.00 | $979.90 | $1.48 | $1,023.50 | $1.52 | 0.30 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period.
10 | Semiannual Report | franklintempleton.com |
This semiannual report for Franklin Exponential Data ETF covers the period ended September 30, 2023.
Fund Overview
Your Fund’s Goal and Main Investments
The Fund seeks capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in equity securities, predominantly common stock, of companies that are relevant to the Fund’s investment theme of exponential data. These companies include those that we believe are substantially focused on and/or are expected to substantially benefit from the use of large data sets and/or growth of data, including systems, services, hardware, software and other digital and physical infrastructure related to data products or services, as outlined in more detail in the Prospectus.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +6.65% based on market price and +6.52% based on net asset value (NAV). In comparison, the Russell 3000® Index, which measures the performance of the largest 3,000 U.S. companies representing the majority of the U.S. market’s total capitalization, posted a +4.86% cumulative total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 13.
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 |
||||
Software | 44.9% | |||
IT Services | 18.7% | |||
Interactive Media & Services | 8.5% | |||
Specialized REITs | 7.2% | |||
Capital Markets | 6.6% | |||
Communications Equipment | 3.0% | |||
Wireless Telecommunication Services | 3.0% | |||
Media | 2.4% | |||
Other | 2.8% | |||
Short-Term Investments & Other Net Assets | 2.9% |
Top 10 Holdings | ||||
9/30/23 | ||||
Company Sector/Industry |
% of Total Net Assets |
|||
Microsoft Corp. Information Technology |
8.4% | |||
MongoDB, Inc. Information Technology |
7.3% | |||
Palo Alto Networks, Inc. Information Technology |
5.0% | |||
ServiceNow, Inc. Information Technology |
5.0% | |||
Alphabet, Inc., Class A Communication Services |
4.9% | |||
Datadog, Inc., Class A Information Technology |
4.7% | |||
Equinix, Inc. Real Estate |
4.4% | |||
Snowflake, Inc., Class A Information Technology |
3.9% | |||
Crowdstrike Holdings, Inc., Class A Information Technology |
3.7% | |||
Fair Isaac Corp. Information Technology |
3.5% |
1. Source: Morningstar.
The index is unmanaged and includes reinvestment of any income or distributions. It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index, 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 94.
franklintempleton.com | Semiannual Report | 11 |
FRANKLIN EXPONENTIAL DATA ETF
Thank you for your participation in Franklin Exponential Data ETF. We look forward to serving your future investment needs.
Matthew J. Moberg, CPA
Portfolio Manager
12 | Semiannual Report | franklintempleton.com |
FRANKLIN EXPONENTIAL DATA 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 (1/14/21), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/231
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
6-Month |
+6.52% | +6.65% | +6.52% | +6.65% | ||||||||||||
1-Year |
+13.74% | +13.74% | +13.74% | +13.74% | ||||||||||||
Since Inception (1/12/21) |
-28.16% | -99.98% | -11.47% | -95.83% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 14 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 13 |
FRANKLIN EXPONENTIAL DATA ETF
PERFORMANCE SUMMARY
Total Annual Operating Expenses5
0.50% |
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. Equity securities are subject to price fluctuation and possible loss of principal. The Fund’s investment strategies incorporate the identification of thematic investment opportunities, and its performance may be negatively impacted if the investment manager does not correctly identify such opportunities or if the theme develops in an unexpected manner. By focusing its investments in information technology-related industries, it carries much greater risks of adverse developments and price movements in such industries than a fund that invests in a wider variety of industries. 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. 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. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.
See www.franklintempletondatasources.com for additional data provider information.
14 | Semiannual Report | franklintempleton.com |
FRANKLIN EXPONENTIAL DATA ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
Beginning Account Value 4/1/23 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
$1,000.00 | $1,065.20 | $2.48 | $1,022.60 | $2.43 | 0.48 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period.
franklintempleton.com | Semiannual Report | 15 |
Franklin Genomic Advancements ETF
This semiannual report for Franklin Genomic Advancements ETF covers the period ended September 30, 2023.
Fund Overview
Your Fund’s Goal and Main Investments
The Fund seeks capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in equity securities, predominantly common stock, of companies that are relevant to the Fund’s investment theme of genomic advancements. These companies include those that we believe are substantially focused on and/or are expected to substantially benefit from extending and enhancing the quality of human and other life (e.g. animals) through technological and scientific developments, improvements and advancements in such areas as genetic engineering, gene therapy, genome analysis and other uses, as outlined in more detail in the Prospectus.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of -6.71% based on market price and -6.71% based on net asset value (NAV). In comparison, the Russell 3000® Index, which measures the performance of the largest 3,000 U.S. companies representing the majority of the U.S. market’s total capitalization, posted a +4.86% cumulative total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 18.
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 |
||||
Life Sciences Tools & Services | 48.7% | |||
Biotechnology | 32.8% | |||
Pharmaceuticals | 6.3% | |||
Chemicals | 2.8% | |||
Health Care Providers & Services | 2.5% | |||
Health Care Technology | 2.1% | |||
Other | 2.0% | |||
Other Net Assets | 2.8% |
Top 10 Holdings | ||||
9/30/23 | ||||
Company Sector/Industry |
% of Total Net Assets |
|||
Thermo Fisher Scientific, Inc. Life Sciences Tools & Services |
6.2% | |||
Danaher Corp. Life Sciences Tools & Services |
6.1% | |||
Medpace Holdings, Inc. Life Sciences Tools & Services |
5.5% | |||
Repligen Corp. Life Sciences Tools & Services |
5.1% | |||
Vertex Pharmaceuticals, Inc. Biotechnology |
4.2% | |||
Regeneron Pharmaceuticals, Inc. Biotechnology |
4.1% | |||
Sartorius AG, 0.45% Life Sciences Tools & Services |
3.2% | |||
Krystal Biotech, Inc. Biotechnology |
3.0% | |||
Samsung Biologics Co. Ltd. Life Sciences Tools & Services |
2.9% | |||
Corteva, Inc. Chemicals |
2.8% |
1. Source: Morningstar.
The index is unmanaged and includes reinvestment of any income or distributions. It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index, 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 97.
16 | Semiannual Report | franklintempleton.com |
FRANKLIN GENOMIC ADVANCEMENTS ETF
Thank you for your participation in Franklin Genomic Advancements ETF. We look forward to serving your future investment needs.
Matthew J. Moberg, CPA
Portfolio Manager
franklintempleton.com | Semiannual Report | 17 |
FRANKLIN GENOMIC ADVANCEMENTS 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 (2/27/20), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/231
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
6-Month |
-6.71% | -6.71% | -6.71% | -6.71% | ||||||||||||
1-Year |
-4.45% | -4.45% | -4.45% | -4.45% | ||||||||||||
3-Year |
-18.70% | -18.99% | -6.67% | -6.78% | ||||||||||||
Since Inception (2/25/20) |
+13.86% | +13.78% | +3.67% | +3.65% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 19 for Performance Summary footnotes.
18 | Semiannual Report | franklintempleton.com |
FRANKLIN GENOMIC ADVANCEMENTS ETF
PERFORMANCE SUMMARY
Total Annual Operating Expenses5
0.50% |
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. Equity securities are subject to price fluctuation and possible loss of principal. The Fund’s investment strategies incorporate the identification of thematic investment opportunities, and its performance may be negatively impacted if the investment manager does not correctly identify such opportunities or if the theme develops in an unexpected manner. By focusing its investments in health care-related industries, the Fund carries much greater risks of adverse developments and price movements in such industries than a fund that invests in a wider variety of industries. 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. The portfolio is non-diversified and may invest in a relatively small number of issuers, which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. The manager may consider environmental, social and governance (ESG) criteria in the research or investment process; however, ESG considerations may not be a determinative factor in security selection. In addition, the manager may not assess every investment for ESG criteria, and not every ESG factor may be identified or evaluated. 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. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 19 |
FRANKLIN GENOMIC ADVANCEMENTS ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
Beginning Account Value 4/1/23 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
$1,000.00 | $932.90 | $2.42 | $1,022.50 | $2.53 | 0.50 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period.
20 | Semiannual Report | franklintempleton.com |
Franklin High Yield Corporate ETF
This semiannual report for Franklin High Yield Corporate ETF covers the period ended September 30, 2023.
Fund Overview
Your Fund’s Goal and Main Investments
The Fund seeks to earn a high level of current income. Its secondary goal is to seek capital appreciation to the extent it is possible and consistent with the Fund’s principal goal. The Fund normally invests at least 80% of its net assets in high yield corporate debt securities and investments that provide exposure to high yield corporate debt securities, including bonds, notes, debentures, convertible securities, bank loans and corporate loans, and senior and subordinated debt securities.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +1.84 based on market price and +2.88% based on net asset value (NAV). In comparison, the ICE BofA U.S. High Yield Constrained Index, which tracks the performance of U.S. dollar denominated below investment-grade corporate debt publicly issued in the U.S. domestic market, posted a +2.18% cumulative total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 23.
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 |
||||
Corporate Bonds & Notes | 91.9% | |||
Senior Floating Rate Interests | 3.7% | |||
Common Stocks | 0.7% | |||
Short-Term Investments & Other Net Assets | 3.7% |
Top 10 Sectors/Industries | ||||
9/30/23 | ||||
% of Total Net Assets |
||||
Energy | 10.6% | |||
Media & Entertainment | 8.9% | |||
Materials | 7.8% | |||
Financial Services | 5.9% | |||
Consumer Services | 4.7% | |||
Capital Goods | 4.2% | |||
Commercial & Professional Services | 4.0% | |||
Utilities | 3.7% | |||
Oil & Gas | 3.6% | |||
Automobiles & Components | 3.3% |
1. Source: Morningstar. Treasuries, if held to maturity, offer a fixed rate of return and a fixed principal value; their interest payments and principal are guaranteed.
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 100.
franklintempleton.com | Semiannual Report | 21 |
FRANKLIN HIGH YIELD CORPORATE ETF
Top 10 Holdings | ||||
9/30/23 | ||||
Company Sector/Industry |
% of Total Net Assets |
|||
Federal Home Loan Bank Discount Notes, 10/02/23 |
2.6% | |||
Vistra Operations Co. LLC, 5.50%, 9/01/26 Utilities |
1.3% | |||
TransDigm, Inc., 6.25%, 3/15/26 Capital Goods |
1.2% | |||
Harbour Energy PLC, 5.50%, 10/15/26 Energy |
1.0% | |||
United Rentals North America, Inc., 5.50%, 5/15/27 Commercial Services |
1.0% | |||
Jaguar Land Rover Automotive PLC, 5.50%, 7/15/29 Automobiles & Components |
1.0% | |||
Martin Midstream Partners LP/Martin Midstream Finance Corp., 11.50%, 2/15/28 Pipelines |
0.9% | |||
DaVita, Inc., 4.625%, 6/01/30 Health Care Equipment & Services |
0.9% | |||
Mauser Packaging Solutions Holding Co., 7.875%, 8/15/26 Packaging & Containers |
0.9% | |||
Carnival Corp., 5.75%, 3/01/27 Consumer Services |
0.9% |
Thank you for your participation in Franklin High Yield Corporate ETF. We look forward to serving your future investment needs.
Glenn I. Voyles, CFA
Patricia O’Connor, CFA
Jonathan G. Belk, CFA
Thomas Runkel, CFA
Pururav Thoutireddy, Ph.D.
Portfolio Management Team
22 | Semiannual Report | franklintempleton.com |
FRANKLIN HIGH YIELD CORPORATE ETF
Performance Summary as of September 30, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale 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 (6/1/18), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/231
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
6-Month |
+2.88% | +1.84% | +2.88% | +1.84% | ||||||||||||
1-Year |
+11.59% | +12.04% | +11.59% | +12.04% | ||||||||||||
3-Year |
+5.65% | +5.37% | +1.85% | +1.76% | ||||||||||||
Since Inception (5/30/18) |
+23.53% | +23.49% | +4.04% | +4.03% |
Distribution Rate5 | 30-Day Standardized Yield6 |
|||
6.95% |
7.89% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 24 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 23 |
FRANKLIN HIGH YIELD CORPORATE ETF
PERFORMANCE SUMMARY
Distributions (4/1/23–9/30/23)
Net Investment Income |
$0.784402 |
Total Annual Operating Expenses7
0.40% |
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. 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. Distributions are not guaranteed and are subject to change. Low-rated, high-yield bonds are subject to greater price volatility, illiquidity and possibility of default. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. Liquidity risk exists when securities or other investments become more difficult to sell, or are unable to be sold, at the price at which they have been valued. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance. The manager may consider environmental, social and governance (ESG) criteria in the research or investment process; however, ESG considerations may not be a determinative factor in security selection. In addition, the manager may not assess every investment for ESG criteria, and not every ESG factor may be identified or evaluated. 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. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/23.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. 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.
24 | Semiannual Report | franklintempleton.com |
FRANKLIN HIGH YIELD CORPORATE ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
Beginning Account Value 4/1/23 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
$1,000.00 | $1,028.80 | $2.03 | $1,023.00 | $2.02 | 0.40 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period.
franklintempleton.com | Semiannual Report | 25 |
This inaugural semiannual report for Franklin Income Focus ETF (the “Fund”) covers the period since the Fund’s inception on June 6, 2023, through September 30, 2023.
Fund Overview
Your Fund’s Goal and Main Investments
The Fund seeks high current income while maintaining prospects for capital appreciation. Under normal market conditions, the Fund invests in a diversified portfolio of debt and equity securities, “Income Focus” in the Fund’s name refers to the Fund’s strategy of seeking to maximize income over a full market cycle by investing opportunistically across different asset classes, markets and sectors and utilizing income generation strategies. The equity securities in which the Fund invests consist primarily of common stocks and convertible preferred securities. Debt securities include all varieties of fixed, floating and variable rate instruments, including secured and unsecured bonds, senior floating rate and term loans, mortgage-backed securities and other asset-backed securities, debentures, and shorter-term instruments.
Performance Overview
Since the Fund’s inception through September 30, 2023, the Fund posted cumulative total returns of -1.49% based on market price and -1.73% based on net asset value (NAV). In comparison, the Blended Benchmark, which consists of 50% Standard & Poor’s® 500 Index (S&P 500®) and 50% Bloomberg U.S Aggregate Index, posted a -1.38% total return.1 The S&P 500® posted a +0.59% total return and the Bloomberg U.S Aggregate Index posted a -3.42% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 28.
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 |
||||
Corporate Bonds & Notes | 52.5% | |||
Equity-Linked Securities | 20.5% | |||
Common Stocks | 19.2% | |||
U.S. Government & Agency Securities | 6.5% | |||
Other Net Assets | 1.3% |
Top 10 Long Positions | ||||
9/30/23 | ||||
Company Sector/Industry, Country |
% of Total Net Assets |
|||
U.S. Treasury Bonds, 3.625%, 5/15/2053, United States |
3.1% | |||
U.S. Treasury Notes, 3.375%, 5/15/2033, United States |
2.4% | |||
Chevron Corp., Oil, Gas & Consumable Fuels, United States |
2.2% | |||
Wells Fargo Bank NA, Other, United States |
2.1% | |||
GS Finance Corp., Other, United States |
2.1% | |||
Royal Bank of Canada, Other, Canada |
2.0% | |||
Royal Bank of Canada, Other, Canada |
2.0% | |||
JPMorgan Chase Financial Co. LLC, zero cpn., Other, United States |
1.6% | |||
UBS AG, Other, Switzerland |
1.6% | |||
Citigroup Global Markets Holdings, Inc., Other, United States |
1.6% |
1. Source: FactSet. The Fund’s Blended Benchmark was calculated internally and was composed of 50% S&P 500® Index + 50% Bloomberg U.S. Aggregate Index.
2. Source: FactSet.
The indexes are unmanaged and include reinvestment of any income or distributions. They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index, 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 109.
26 | Semiannual Report | franklintempleton.com |
FRANKLIN INCOME FOCUS ETF
Thank you for your continued participation in Franklin
Income Focus ETF. We look forward to serving your future
investment needs.
Edward D. Perks, CFA
Todd Brighton, CFA
Brendan Circle, CFA
Portfolio Management Team
franklintempleton.com | Semiannual Report | 27 |
FRANKLIN INCOME FOCUS ETF
Performance Summary as of September 30, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale 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 (6/8/23), 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 Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
Since Inception (6/6/23) |
-1.73% | -1.49% | -1.73% | -1.49% |
Distribution Rate5 | 30-Day Standardized Yield6 |
|||
6.69% |
6.00% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 29 for Performance Summary footnotes.
28 | Semiannual Report | franklintempleton.com |
FRANKLIN INCOME FOCUS ETF
PERFORMANCE SUMMARY
Distributions (6/6/23–9/30/23)
Net Investment Income |
$0.325544 |
Total Annual Operating Expenses7
0.38% |
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. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. Low-rated, high-yield bonds are subject to greater price volatility, illiquidity and possibility of default. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Investments in equity index-linked notes often have risks similar to their underlying securities, which could include management risk, market risk and, as applicable, foreign securities and currency risks. The allocation of assets among different strategies, asset classes and investments may not prove beneficial or produce the desired results. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance. The manager may consider environmental, social and governance (ESG) criteria in the research or investment process; however, ESG considerations may not be a determinative factor in security selection. In addition, the manager may not assess every investment for ESG criteria, and not every ESG factor may be identified or evaluated. These and other risk considerations 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. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/23.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 29 |
FRANKLIN INCOME FOCUS 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 6/6/23 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 6/6/23–9/30/231,2 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 6/6/23–9/30/231,2 |
Net Annualized Expense Ratio2 |
|||||||||||||||||
$1,000.00 | $982.70 | $1.19 | $1,023.10 | $1.92 | 0.38 | % |
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 116/366 to reflect the one-half year period.
2. Reflects expenses after fee waivers and expense reimbursements.
30 | Semiannual Report | franklintempleton.com |
Franklin Intelligent Machines ETF
This semiannual report for Franklin Intelligent Machines ETF covers the period ended September 30, 2023.
Fund Overview
Your Fund’s Goal and Main Investments
The Fund seeks capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in equity securities, predominantly common stock, of companies that are relevant to the Fund’s investment theme of intelligent machines. These companies include those that we believe are substantially focused on and/or are expected to substantially benefit from the ongoing technology-driven transformation of products, software, systems and machinery as well as product design, manufacture, logistics, distribution and maintenance, including through developments in artificial intelligence, as outlined in more detail in the Prospectus.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +0.32 based on market price and +0.18% based on net asset value (NAV). In comparison, the Russell 3000® Index, which measures the performance of the largest 3,000 U.S. companies representing the majority of the U.S. market’s total capitalization, posted a +4.86% cumulative total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 33.
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 |
||||
Semiconductors & Semiconductor Equipment |
35.9% | |||
Software |
25.3% | |||
Health Care Equipment & Supplies |
9.6% | |||
Electronic Equipment, Instruments & Components |
7.3% | |||
Automobiles |
5.5% | |||
Computers & Peripherals |
4.7% | |||
Construction & Engineering |
3.0% | |||
Aerospace & Defense |
2.8% | |||
Other |
3.0% | |||
Other Net Assets |
2.9% |
Top 10 Holdings | ||||
9/30/23 | ||||
Company Sector/Industry |
% of Total Net Assets |
|||
NVIDIA Corp. Semiconductors & Semiconductor Equipment |
9.9% | |||
Tesla, Inc. Automobiles |
5.5% | |||
Synopsys, Inc. Software |
4.9% | |||
Cadence Design Systems, Inc. Software |
4.8% | |||
Apple, Inc. Computers & Peripherals |
4.7% | |||
Intuitive Surgical, Inc. Health Care Equipment & Supplies |
4.7% | |||
ASML Holding NV Semiconductors & Semiconductor Equipment |
4.2% | |||
Applied Materials, Inc. Semiconductors & Semiconductor Equipment |
2.8% | |||
Axon Enterprise, Inc. Aerospace & Defense |
2.8% | |||
Taiwan Semiconductor Manufacturing Co. Ltd. Semiconductors & Semiconductor Equipment |
2.8% |
1. Source: Morningstar.
The index is unmanaged and includes reinvestment of any income or distributions. It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio.
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 116.
franklintempleton.com | Semiannual Report | 31 |
FRANKLIN INTELLIGENT MACHINES ETF
Thank you for your continued participation in Franklin Intelligent Machines ETF. We look forward to serving your future investment needs.
Matthew J. Moberg, CPA
Portfolio Manager
32 | Semiannual Report | franklintempleton.com |
FRANKLIN INTELLIGENT MACHINES 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 (2/27/20), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/231
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
6-Month |
+0.18% | +0.32% | +0.18% | +0.32% | ||||||||||||
1-Year |
+30.81% | +31.10% | +30.81% | +31.10% | ||||||||||||
3-Year |
+30.09% | +29.66% | +9.17% | +9.04% | ||||||||||||
Since Inception (2/25/20) |
+77.29% | +77.21% | +17.26% | +17.24% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 34 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 33 |
FRANKLIN INTELLIGENT MACHINES ETF
PERFORMANCE SUMMARY
Total Annual Operating Expenses5
0.50% |
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. Equity securities are subject to price fluctuation and possible loss of principal. The Fund’s investment strategies incorporate the identification of thematic investment opportunities, and its performance may be negatively impacted if the investment manager does not correctly identify such opportunities or if the theme develops in an unexpected manner. By focusing its investments in technology-related industries, the Fund carries much greater risks of adverse developments and price movements in such industries than a fund that invests in a wider variety of industries. The portfolio is non-diversified and may invest in a relatively small number of issuers, which may negatively impact the Fund’s performance and result in greater fluctuation in the value of the Fund’s shares. 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. The manager may consider environmental, social and governance (ESG) criteria in the research or investment process; however, ESG considerations may not be a determinative factor in security selection. In addition, the manager may not assess every investment for ESG criteria, and not every ESG factor may be identified or evaluated. 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. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.
See www.franklintempletondatasources.com for additional data provider information.
34 | Semiannual Report | franklintempleton.com |
FRANKLIN INTELLIGENT MACHINES ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
Beginning Account Value 4/1/23 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
$1,000.00 | $1,001.80 | $2.50 | $1,022.50 | $2.53 | 0.50 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period.
franklintempleton.com | Semiannual Report | 35 |
Franklin International Aggregate Bond ETF
This semiannual report for Franklin International Aggregate Bond ETF covers the period ended September 30, 2023.
Fund Overview
Your Fund’s Goal and Main Investments
The Fund seeks total investment return, consistent with prudent investing, consisting of a combination of interest income and capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in bonds and investments that provide exposure to bonds. Bonds include debt obligations of any maturity, such as bonds, notes, bills and debentures.
Geographic Composition*
9/30/23
% of Total Net Assets |
||||
|
||||
Europe |
55.0% | |||
Asia |
14.6% | |||
North America |
7.1% | |||
Latin America & Caribbean |
3.8% | |||
Australia & New Zealand |
3.1% | |||
Supranationals |
2.5% | |||
Middle East & Africa |
1.1% | |||
Short-Term Investments & Other Net Assets |
12.8% |
*Categories within the Other category are listed in full in the Fund’s Schedule of Investments (SOI), which can be found later in this report.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of -1.32% based on market price and -1.02% based on net asset value (NAV). In comparison, the Fund’s benchmark, the Bloomberg Global Aggregate Bond ex-USD Index (100% Hedged to USD), which measures global investment-grade debt from 24 local currency markets, posted a -0.05% cumulative total return.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 37.
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 |
||||
|
||||
Foreign Government and Agency Securities |
81.6% | |||
Corporate Bonds & Notes |
5.6% | |||
Short-Term Investments & Other Net Assets |
12.8% |
Thank you for your participation in Franklin International Aggregate Bond ETF. We look forward to serving your future investment needs.
John W. Beck
Co-Lead Portfolio Manager
Sonal Desai, Ph.D.
Co-Lead Portfolio Manager
David Zahn, CFA
Patrick Klein, Ph.D.
Portfolio Management Team
1. Source: Morningstar. Treasuries, if held to maturity, offer a fixed rate of return and a fixed principal value; their interest payments and principal are guaranteed.
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 119.
36 | Semiannual Report | franklintempleton.com |
FRANKLIN INTERNATIONAL AGGREGATE 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 tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale 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 (6/1/18), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/231
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
6-Month |
-1.02% | -1.32% | -1.02% | -1.32% | ||||||||||||
1-Year |
+0.35% | +0.39% | +0.35% | +0.39% | ||||||||||||
3-Year |
-7.75% | -7.50% | -2.65% | -2.56% | ||||||||||||
5-Year |
-0.21% | +0.39% | -0.04% | +0.08% | ||||||||||||
Since Inception (5/30/18) |
-2.12% | -2.06% | -0.40% | -0.39% |
Distribution Rate5 |
30-Day Standardized Yield6 | |
13.87% | 3.01% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 38 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 37 |
FRANKLIN INTERNATIONAL AGGREGATE BOND ETF
PERFORMANCE SUMMARY
Total Annual Operating Expenses7
0.25% |
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. Fixed income securities involve interest rate, credit, inflation and reinvestment risks, and possible loss of principal. As interest rates rise, the value of fixed income securities falls. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. 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. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance. The manager may consider environmental, social and governance (ESG) criteria in the research or investment process; however, ESG considerations may not be a determinative factor in security selection. In addition, the manager may not assess every investment for ESG criteria, and not every ESG factor may be identified or evaluated. 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. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/23.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. 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.
38 | Semiannual Report | franklintempleton.com |
FRANKLIN INTERNATIONAL AGGREGATE 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 4/1/23 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
$1,000.00 | $989.80 | $1.24 | $1,023.75 | $1.26 | 0.25 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period.
franklintempleton.com | Semiannual Report | 39 |
Franklin Investment Grade Corporate ETF
This semiannual report for Franklin Investment Grade Corporate ETF covers the period ended September 30, 2023.
Fund Overview
Your Fund’s Goal and Main Investments
The Fund seeks a high level of current income as is consistent with prudent investing, while seeking preservation of capital. Under normal market conditions, the Fund invests at least 80% of its net assets in investment-grade corporate debt securities and investments.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of -3.63% based on market price and -3.30% based on net asset value (NAV).1 In comparison, the Bloomberg U.S. Corporate Investment Grade Index, which measures the performance of the investment grade, fixed-rate, taxable corporate bond market, posted a -3.37% cumulative total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 42.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Top 10 Sectors/Industries | ||||
9/30/23 | ||||
% of Total Net Assets |
||||
Banks |
21.6% | |||
Electric Utilities |
6.9% | |||
Electric |
4.9% | |||
Financial Services |
4.7% | |||
Health Care Providers & Services |
4.0% | |||
Biotechnology |
3.7% | |||
Insurance |
3.3% | |||
Oil, Gas & Consumable Fuels |
3.1% | |||
Pharmaceuticals |
3.0% | |||
Agriculture |
2.9% |
Top 10 Holdings | ||||
9/30/23 | ||||
Issue/Issuer | % of Total Net Assets |
|||
Verizon Communications, Inc., 3.40%, 3/22/41 |
1.6% | |||
Bank of America Corp., 5.202% to 4/25/28, FRN thereafter, 4/25/29 |
1.5% | |||
Goldman Sachs Group, Inc., 2.64% to 2/24/27, FRN thereafter, 2/24/28 |
1.4% | |||
U.S. Treasury Notes, 4.375%, 8/31/28 |
1.4% | |||
Amgen, Inc., 5.60%, 3/02/43 |
1.3% | |||
Wells Fargo & Co., 4.808% to 7/25/27, FRN thereafter, 7/25/28 |
1.3% | |||
Vistra Operations Co. LLC, 3.55%, 7/15/24 |
1.3% | |||
T-Mobile USA, Inc., 2.875%, 2/15/31 |
1.3% | |||
BPCE SA, 5.70%, 10/22/23 |
1.2% | |||
Elevance Health, Inc., 4.10%, 5/15/32 |
1.2% |
Effective March 2023, Josh Lohmeier was added as a portfolio manager.
1. Source: Morningstar. Treasuries, if held to maturity, offer a fixed rate of return and a fixed principal value; their interest payments and principal are guaranteed.
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 124.
40 | Semiannual Report | franklintempleton.com |
FRANKLIN INVESTMENT GRADE CORPORATE ETF
Thank you for your participation in Franklin Investment Grade Corporate ETF. We look forward to serving your future investment needs.
Marc Kremer, CFA
Shawn Lyons, CFA
Thomas Runkel, CFA
Pururav Thoutireddy, Ph.D.
Josh Lohmeier, CFA
Portfolio Management Team
franklintempleton.com | Semiannual Report | 41 |
FRANKLIN INVESTMENT GRADE CORPORATE ETF
Performance Summary as of September 30, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale 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 (10/5/16), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/231
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
6-Month |
-3.30% | -3.63% | -3.30% | -3.63% | ||||||||||||
1-Year |
+3.16% | +3.05% | +3.16% | +3.05% | ||||||||||||
3-Year |
-15.32% | -15.39% | -5.39% | -5.42% | ||||||||||||
5-Year |
+2.80% | +2.67% | +0.55% | +0.53% | ||||||||||||
Since Inception (10/3/16) |
+3.45% | +3.28% | +0.49% | +0.46% |
Distribution Rate5 | 30-Day Standardized Yield6 |
|||
4.64% |
5.56% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 43 for Performance Summary footnotes.
42 | Semiannual Report | franklintempleton.com |
FRANKLIN INVESTMENT GRADE CORPORATE ETF
PERFORMANCE SUMMARY
Distributions (4/1/23–9/30/23)
Net Investment Income |
$0.434617 |
Total Annual Operating Expenses7
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. 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. Distributions are not guaranteed and are subject to change. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. 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. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance. The manager may consider environmental, social and governance (ESG) criteria in the research or investment process; however, ESG considerations may not be a determinative factor in security selection. In addition, the manager may not assess every investment for ESG criteria, and not every ESG factor may be identified or evaluated. 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. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/23.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 43 |
FRANKLIN INVESTMENT GRADE CORPORATE ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
Beginning Account Value 4/1/23 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
$1,000.00 | $967.00 | $1.72 | $1,023.25 | $1.77 | 0.35 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period.
44 | Semiannual Report | franklintempleton.com |
Franklin Municipal Green Bond ETF
This semiannual report for Franklin Municipal Green Bond ETF covers the period ended September 30, 2023.
Fund Overview
Your Fund’s Goal and Main Investments
The Fund seeks to maximize income exempt from federal income taxes, including the federal alternative minimum tax, to the extent consistent with prudent investing and the preservation of shareholders’ capital, by normally investing at least 80% of its net assets in municipal securities whose interest is free from such taxes.1 In addition, the Fund invests at least 80% of its net assets in municipal green bonds. Municipal “green bonds” are bonds that promote environmental sustainability. The Fund buys predominately municipal securities rated, at the time of purchase, in one of the top four ratings categories by one or more U.S. nationally recognized rating services (or comparable unrated or short-term rated securities).
Performance Overview
During the six-month period, the Fund posted cumulative total returns of -4.12% based on market price and -4.17% based on net asset value (NAV). In comparison, the Bloomberg Municipal Bond Index, which is a market value-weighted index of tax-exempt, investment-grade municipal bonds with maturities of one year or more, posted a -4.05% 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 46.
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 Investments |
||||
Utilities | 18.04% | |||
Industrial Development Revenue and Pollution Control | 12.97% | |||
Transportation | 11.28% | |||
Lease | 10.47% | |||
Special Tax | 9.41% | |||
Local | 8.71% | |||
Education | 7.68% | |||
Housing | 7.15% | |||
Cash | 5.02% | |||
Other | 4.78% | |||
Health Care | 4.20% | |||
Refunded | 0.14% | |||
State | 0.14% |
Thank you for your participation in Franklin Municipal Green Bond ETF. We look forward to serving your future investment needs.
Ben Barber, CFA
Daniel Workman, CFA
Francisco Rivera
James Conn, CFA
Portfolio Management Team
1. Dividends are generally subject to state and local taxes, if any. For investors subject to alternative minimum tax, a small portion of Fund dividends may be taxable. Distributions of capital gains are generally taxable. To avoid imposition of 28% backup withholding on all Fund distributions and redemption proceeds, U.S. investors must be properly certified on Form W-9 and non-U.S. investors on Form W-8BEN
2. Source: Morningstar. Treasuries, if held to maturity, offer a fixed rate of return and a fixed principal value; their interest payments and principal are guaranteed.
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 131.
franklintempleton.com | Semiannual Report | 45 |
FRANKLIN MUNICIPAL GREEN 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 tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale 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 (9/5/17), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/231,2
Cumulative Total Return3 | Average Annual Total Return3 | |||||||||||||||
Based on NAV4 |
Based on market price5 |
Based on NAV4 |
Based on market price5 |
|||||||||||||
6-Month |
-4.17% | -4.12% | -4.17% | -4.12% | ||||||||||||
1-Year |
+3.79% | +3.98% | +3.79% | +3.98% | ||||||||||||
3-Year |
-9.96% | -9.99% | -3.44% | -3.45% | ||||||||||||
5-Year |
+5.59% | +5.54% | +1.09% | +1.08% | ||||||||||||
Since Inception (8/31/17) |
+4.03% | +4.07% | +0.65% | +0.66% |
Distribution Rate6 | 30-Day Standardized Yield7 |
Taxable Equivalent 30-Day Standardized Yield8 |
||||||
4.02% |
3.99% | 6.74% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 47 for Performance Summary footnotes.
46 | Semiannual Report | franklintempleton.com |
FRANKLIN MUNICIPAL GREEN BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/23–9/30/23)
Net Investment Income |
$0.431455 |
Total Annual Operating Expenses9
0.30% |
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. Fixed income securities involve interest rate, credit, inflation and reinvestment risks, and possible loss of principal. As interest rates rise, the value of fixed income securities falls. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. Low-rated, high-yield bonds are subject to greater price volatility, illiquidity and possibility of default. Green bonds may not result in direct environmental benefits, and the issuer may not use proceeds as intended or to appropriate new or additional projects. The manager may consider environmental, social and governance (ESG) criteria in the research or investment process; however, ESG considerations may not be a determinative factor in security selection. In addition, the manager may not assess every investment for ESG criteria, and not every ESG factor may be identified or evaluated. 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 sourced from the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
2. Effective December 1, 2022, the Fund adopted a unified fee structure whereby Management has agreed to reimburse the Fund’s acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Fund, excluding: (i) payments under the Fund’s Rule 12b-1 plan (if any); (ii) brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments); (iii) taxes; (iv) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges); (v) litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto); and (vi) other non-routine or extraordinary expenses.
3. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
4. Assumes reinvestment of distributions based on net asset value.
5. Assumes reinvestment of distributions based on market price.
6. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/23.
7. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
8. Taxable equivalent yield assumes the 2023 maximum federal income tax rate of 37.00% plus 3.80% Medicare tax.
9. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 47 |
FRANKLIN MUNICIPAL GREEN 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 4/1/23 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
$1,000.00 | $958.30 | $1.47 | $1,023.50 | $1.52 | 0.30 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period.
48 | Semiannual Report | franklintempleton.com |
This semiannual report for Franklin Senior Loan ETF covers the period ended September 30, 2023.
Fund Overview
Your Fund’s Goal and Main Investments
The Fund seeks to provide a high level of current income. A secondary goal is preservation of capital. The Fund normally invests at least 80% of its net assets in senior loans and investments that provide exposure to senior loans. Senior loans include loans referred to as leveraged loans, bank loans and/or floating rate loans
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +5.51% based on market price and +6.07% based on net asset value (NAV). In comparison, the Fund’s benchmark, the Morningstar LSTA U.S. Leveraged Loan 100 Index, which reflects the performance of the largest facilities in the leveraged loan market, posted a +6.53% cumulative total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 51.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Portfolio Composition | ||||
9/30/23 | ||||
% of Total Net Assets |
||||
Senior Floating Rate Interests | 86.1% | |||
Corporate Bonds & Notes | 5.1% | |||
Asset-Backed Securities | 0.8% | |||
Short-Term Investments & Other Net Assets | 8.0% |
Top 10 Sectors/Industries | ||||
9/30/23 | ||||
% of Total Net Assets |
||||
Software | 12.6 | % | ||
Commercial Services & Supplies | 7.3 | % | ||
Media | 6.6 | % | ||
Health Care Providers & Services | 5.6 | % | ||
Chemicals | 4.9 | % | ||
Insurance | 3.8 | % | ||
Airlines | 3.7 | % | ||
Pharmaceuticals | 2.9 | % | ||
Packaging & Containers | 2.6 | % | ||
Auto Parts & Equipment | 2.5 | % |
Top 10 Holdings | ||||
9/30/23 | ||||
Company Sector/Industry |
% of Total Net Assets |
|||
Federal Home Loan Bank Discount Notes, 10/2/2023 | 8.2 | % | ||
Verscend Holding Corp., 9.431%, 8/27/2025 IT Services |
1.5 | % | ||
Greeneden U.S. Holdings II LLC, 9.431%,
12/1/2027 Technology Hardware, Storage & Peripherals |
1.5 | % | ||
Navicure, Inc., 9.431%, 10/22/2026 Software |
1.3 | % | ||
Peraton Corp., 9.166%, 2/1/2028 Aerospace & Defense |
1.2 | % | ||
Charter NEX U.S., Inc., 9.181%,
12/1/2027 Containers & Packaging |
1.2 | % | ||
DCert Buyer, Inc., 9.316%, 10/16/2026 Software |
1.1 | % | ||
Amentum
Government Services Holdings LLC, Commercial Services & Supplies |
1.1 | % | ||
Gainwell Acquisition Corp., 9.49%, 10/1/2027 Health Care Providers & Services |
1.1 | % | ||
Athenahealth Group, Inc., 8.568%,
2/15/2029 Software |
1.0 | % |
1. Source: Morningstar.
The index is unmanaged and includes reinvestment of any income or distributions. It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index, 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 138.
franklintempleton.com | Semiannual Report | 49 |
FRANKLIN SENIOR LOAN ETF
Thank you for your participation in Franklin Senior Loan ETF.
We look forward to serving your future investment needs.
Reema Agarwal, CFA
Co-Lead Portfolio Manager
Justin Ma, CFA
Co-Lead Portfolio Manager
Margaret Chiu, CFA
Portfolio Manager
50 | Semiannual Report | franklintempleton.com |
FRANKLIN SENIOR LOAN ETF
Performance Summary as of September 30, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale 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 (6/1/18), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/231
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
6-Month |
+6.07% | +5.51% | +6.07% | +5.51% | ||||||||||||
1-Year |
+13.37% | +13.47% | +13.37% | +13.47% | ||||||||||||
3-Year |
+16.57% | +15.81% | +5.24% | +5.02% | ||||||||||||
5-Year |
+20.82% | +19.99% | +3.86% | +3.71% | ||||||||||||
Since Inception (5/30/18) |
+23.08% | +22.52% | +3.97% | +3.88% |
Distribution Rate5 | 30-Day Standardized Yield6 |
|||
9.36% |
9.09% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 52 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 51 |
FRANKLIN SENIOR LOAN ETF
PERFORMANCE SUMMARY
Distributions (4/1/23–9/30/23)
Net Investment Income |
$1.077485 |
Total Annual Operating Expenses7
0.45% |
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. 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. Floating-rate loans and debt securities are typically rated below investment grade and are subject to greater risk of default, which could result in loss of principal. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. Liquidity risk exists when securities or other investments become more difficult to sell, or are unable to be sold, at the price at which they have been valued. The manager may consider environmental, social and governance (ESG) criteria in the research or investment process; however, ESG considerations may not be a determinative factor in security selection. In addition, the manager may not assess every investment for ESG criteria, and not every ESG factor may be identified or evaluated. 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. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/23.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. 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.
52 | Semiannual Report | franklintempleton.com |
FRANKLIN SENIOR LOAN ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
Beginning Account Value 4/1/23 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
$1,000.00 | $1,060.70 | $2.32 | $1,022.75 | $2.28 | 0.45 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period.
franklintempleton.com | Semiannual Report | 53 |
Franklin Systematic Style Premia ETF
This semiannual report for Franklin Systematic Style Premia ETF covers the period ended September 30, 2023.
Fund Overview
Your Fund’s Goal and Main Investments
The Fund seeks to provide absolute return. The Fund seeks to achieve its investment goal by allocating its assets across two underlying alternative investment strategies, which represent top-down and bottom-up approaches to capturing factor-based risk premia. The strategies consist of a top-down risk premia strategy and a bottom-up long/short equity strategy.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +5.88% based on market price and +5.22% based on net asset value (NAV). In comparison, the ICE BofA U.S. 3-Month Treasury Bill Index, which tracks the performance of short-term U.S. government securities with a remaining term to final maturity of less than three months, posted a +2.50% cumulative total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 56.
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 |
||||
Common Stocks | 53.7% | |||
Short-Term Investments & Other Net Assets | 46.3% |
Top 10 Sectors/Industries | ||||
9/30/23 | ||||
% of Total Net Assets |
||||
Software | 6.0% | |||
Biotechnology | 4.1% | |||
Financial Services | 3.7% | |||
Oil, Gas & Consumable Fuels | 3.4% | |||
Insurance | 2.4% | |||
Interactive Media & Services | 2.0% | |||
Consumer Staples Distribution & Retail | 1.9% | |||
Banks | 1.8% | |||
Capital Markets | 1.6% | |||
Hotels, Restaurants & Leisure | 1.4% |
Top 10 Long Positions | ||||
9/30/23 | ||||
Company Sector/Industry, Country |
% of Total Net Assets |
|||
State
Street Institutional U.S. Government Money |
14.7% | |||
Money Market Funds, United States |
||||
|
||||
Meta Platforms, Inc., Class A, Interactive Media & Services, United States |
1.2% | |||
Berkshire Hathaway, Inc., Class B, Financial Services, United States |
1.1% | |||
Microsoft Corp., Software, United States |
1.0% | |||
Visa, Inc., Class A, Financial Services, United States |
1.0% | |||
Mastercard, Inc., Class A, Financial Services, United States |
1.0% | |||
AbbVie, Inc., Biotechnology, United States |
1.0% | |||
Walmart, Inc., Consumer Staples Distribution & Retail, United States |
0.9% | |||
Amgen, Inc., Biotechnology, United States |
0.9% | |||
Cisco Systems, Inc., Communications Equipment, United States |
0.9% |
1. Source: Morningstar. Treasuries, if held to maturity, offer a fixed rate of return and a fixed principal value; their interest payments and principal are guaranteed.
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 147.
54 | Semiannual Report | franklintempleton.com |
FRANKLIN SYSTEMATIC STYLE PREMIA ETF
Top 10 Short Holdings | ||||
9/30/23 | ||||
Company Sector/Industry, Country |
% of Total Value of Underlying Entity |
|||
UnitedHealth Group, Inc. Health Care Equipment & Services, United States |
1.5% | |||
AstraZeneca PLC Pharmaceuticals, Biotechnology & Life Sciences, United Kingdom |
1.5% | |||
Progressive Corp. Insurance, United States |
1.5% | |||
Keyence Corp. Technology Hardware & Equipment, Japan |
1.5% | |||
Honeywell International, Inc Capital Goods, United States |
1.4% | |||
Commonwealth Bank of Australia Banks, Australia |
1.4% | |||
The Walt Disney Co. Media & Entertainment, United States |
1.4% | |||
Micron Technology, Inc. Semiconductors & Semiconductor Equipment, United States |
1.4% | |||
Medtronic PLC Health Care Equipment & Services, United States |
1.4% | |||
Johnson & Johnson Pharmaceuticals, Biotechnology & Life Sciences, United States |
1.4% |
Effective September 2023, Christopher W. Floyd was added as a portfolio manager.
Thank you for your participation in Franklin Systematic Style Premia ETF. We look forward to serving your future investment needs.
Chandra Seethamraju, Ph.D.
Lead Portfolio Manager
Sundaram Chettiappan, CFA
Vaneet Chadha, CFA
Christopher W. Floyd, CFA
Portfolio Management Team
franklintempleton.com | Semiannual Report | 55 |
FRANKLIN SYSTEMATIC STYLE PREMIA 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 (12/20/19), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/231
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
6-Month |
+5.22% | +5.88% | +5.22% | +5.88% | ||||||||||||
1-Year |
+7.30% | +7.36% | +7.30% | +7.36% | ||||||||||||
3-Year |
+12.81% | +11.54% | +4.10% | +3.71% | ||||||||||||
Since Inception (12/18/19) |
+1.06% | +0.77% | +0.28% | +0.20% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 57 for Performance Summary footnotes.
56 | Semiannual Report | franklintempleton.com |
FRANKLIN SYSTEMATIC STYLE PREMIA ETF
PERFORMANCE SUMMARY
Total Annual Operating Expenses5
0.65% |
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. Equity securities are subject to price fluctuation and possible loss of principal. The Fund is actively managed and could experience losses if the manager’s judgement about particular investments, or its evaluation of the risks, potential returns and correlation properties of the various risk premia in which the Fund invests, prove to be incorrect. The allocation of assets among different strategies, asset classes and investments may not prove beneficial or produce the desired results. Trading models used by the manager for securities selection and asset allocation may become outdated, and the historical patterns upon which the models are based may weaken or disappear. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance. Currency management strategies could result in losses to the Fund if currencies do not perform as expected. 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. Liquidity risk exists when securities or other investments become more difficult to sell, or are unable to be sold, at the price at which they have been valued. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. To the extent the portfolio invests in a concentration of certain securities, regions or industries, it is subject to increased volatility. 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. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 57 |
FRANKLIN SYSTEMATIC STYLE PREMIA ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
Beginning Account Value 4/1/23 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
$1,000.00 | $1,052.20 | $3.33 | $1,021.75 | $3.29 | 0.65 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period.
58 | Semiannual Report | franklintempleton.com |
This semiannual report for Franklin U.S. Core Bond ETF covers the period ended September 30, 2023.
Fund Overview
Your Fund’s Goal and Main Investments
The Fund seeks total return. Under normal market conditions, the Fund invests at least 80% of its net assets in bonds of U.S. issuers, including government, corporate debt, mortgage-backed and asset-backed securities. Bonds include debt obligations of any maturity, such as bonds, notes, bills and debentures.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of -4.07% based on market price and -4.02% based on net asset value (NAV). In comparison, the Bloomberg U.S. Aggregate Index, which measures the performance of the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, posted a -4.05% cumulative total return.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 60.
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 | 46.0% | |||
Corporate Bonds & Notes | 28.6% | |||
Mortgage-Backed Securities | 18.2% | |||
Asset-Backed Securities | 2.4% | |||
Municipal Bonds | 2.0% | |||
Foreign Government and Agency Securities | 1.0% | |||
Short-Term Investments & Other Net Assets | 1.8% |
Top 10 Holdings | ||||
9/30/23 | ||||
% of Total Net Assets |
||||
U.S. Treasury Notes, 3.25%, 6/30/27 | 6.3% | |||
U.S. Treasury Notes, 1.25%, 12/31/26 | 4.6% | |||
U.S. Treasury Notes, 0.375%, 11/30/25 | 3.8% | |||
U.S. Treasury Notes, 2.125%, 3/31/24 | 3.7% | |||
U.S. Treasury Notes, 0.375%, 1/31/26 | 3.1% | |||
U.S. Treasury Notes, 2.125%, 2/29/24 | 2.7% | |||
U.S. Treasury Bonds, 1.375%, 8/15/50 | 1.6% | |||
U.S. Treasury Notes, 0.875%, 6/30/26 | 1.4% | |||
U.S. Treasury Notes, 4.00%, 10/31/29 | 1.4% | |||
U.S. Treasury Bonds, 2.00%, 11/15/41 | 1.3% |
Thank you for your participation in Franklin U.S. Core Bond ETF. We look forward to serving your future investment needs.
Patrick Klein, Ph D.
Tina Chou
Joshua Lohmeier, CFA
Portfolio Management Team
1. Source: Morningstar. Treasuries, if held to maturity, offer a fixed rate of return and a fixed principal value; their interest payments and principal are guaranteed.
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 163.
franklintempleton.com | Semiannual Report | 59 |
FRANKLIN U.S. CORE 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 tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale 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 (9/19/19), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/231
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
6-Month |
-4.02% | -4.07% | -4.02% | -4.07% | ||||||||||||
1-Year |
+0.74% | +0.69% | +0.74% | +0.69% | ||||||||||||
3-Year |
-14.97% | -15.08% | -5.26% | -5.30% | ||||||||||||
Since Inception (9/17/19) |
-8.44% | -8.49% | -2.16% | -2.18% |
Distribution Rate5 | 30-Day Standardized Yield6 |
|||
3.85% |
4.76% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 61 for Performance Summary footnotes.
60 | Semiannual Report | franklintempleton.com |
FRANKLIN U.S. CORE BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/23–9/30/23)
Net Investment Income |
$0.357382 |
Total Annual Operating Expenses7
0.15% |
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. 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. Asset-backed, mortgage-backed or mortgage-related securities are subject to prepayment and extension risks. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. The manager may consider environmental, social and governance (ESG) criteria in the research or investment process; however, ESG considerations may not be a determinative factor in security selection. In addition, the manager may not assess every investment for ESG criteria, and not every ESG factor may be identified or evaluated. 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. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/23.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 61 |
FRANKLIN U.S. CORE 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 4/1/23 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
$1,000.00 | $959.80 | $0.73 | $1,024.25 | $0.76 | 0.15 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period.
62 | Semiannual Report | franklintempleton.com |
Franklin U.S. Low Volatility ETF
This semiannual report for Franklin U.S. Low Volatility ETF covers the period ended September 30, 2023.
Fund Overview
Your Fund’s Goal and Main Investments
The Fund seeks capital appreciation with an emphasis on lower volatility. Under normal market conditions, the Fund invests at least 80% of its net assets in U.S. investments, and primarily equity securities.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +1.45% based on market price and +1.36% based on net asset value (NAV). In comparison, the Russell 1000® Index, which measures the performance of the approximately 1,000 largest companies in the Russell 3000® Index, which represents the majority of the U.S. market’s total capitalization, posted a +5.16% cumulative total return for the same period.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 65.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Top 10 Sectors/Industries | ||||
9/30/23 | ||||
% of Total Net Assets |
||||
Information Technology | 25.8% | |||
Financials | 13.2% | |||
Health Care | 13.0% | |||
Consumer Discretionary | 10.9% | |||
Industrials | 9.3% | |||
Communication Services | 8.4% | |||
Consumer Staples | 6.2% | |||
Energy | 4.7% | |||
Real Estate | 2.8% | |||
Materials | 2.6% |
Top 10 Holdings | ||||
9/30/23 | ||||
Company Sector/Industry |
% of Total Net Assets |
|||
Synopsys, Inc. Information Technology |
1.7% | |||
Vontier Corp. Information Technology |
1.7% | |||
Keysight Technologies, Inc. Information Technology |
1.6% | |||
Amphenol Corp., Class A Information Technology |
1.6% | |||
Intuit, Inc. Information Technology |
1.6% | |||
Cisco Systems, Inc. Information Technology |
1.6% | |||
Analog Devices, Inc. Information Technology |
1.6% | |||
Microsoft Corp. Information Technology |
1.6% | |||
Adobe, Inc. Information Technology |
1.6% | |||
Texas Instruments, Inc. Information Technology |
1.6% |
1. Source: Morningstar.
The index is unmanaged and includes reinvestment of any income or distributions. It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index, 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 173.
franklintempleton.com | Semiannual Report | 63 |
FRANKLIN U.S. LOW VOLATILITY ETF
Thank you for your participation in Franklin U.S. Low Volatility ETF. We look forward to serving your future investment needs.
Todd Brighton, CFA
Portfolio Manager
64 | Semiannual Report | franklintempleton.com |
FRANKLIN U.S. LOW VOLATILITY ETF
Performance Summary as of September 30, 2023
Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Total returns do not include brokerage commissions that may be payable on secondary market transactions. The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale 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 (9/22/16), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/231
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
6-Month |
+1.36% | +1.45% | +1.36% | +1.45% | ||||||||||||
1-Year |
+16.07% | +16.07% | +16.07% | +16.07% | ||||||||||||
3-Year |
+28.23% | +27.99% | +8.64% | +8.57% | ||||||||||||
5-Year |
+56.77% | +56.90% | +9.41% | +9.43% | ||||||||||||
Since Inception (9/20/16) |
+113.11% | +113.15% | +11.37% | +11.37% |
Distribution Rate5 | 30-Day Standardized Yield6 |
|||
2.02% |
1.80% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 66 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 65 |
FRANKLIN U.S. LOW VOLATILITY ETF
PERFORMANCE SUMMARY
Distributions (4/1/23–9/30/23)
Net Investment Income |
$0.383918 |
Total Annual Operating Expenses7
0.29% |
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. Equity securities are subject to price fluctuation and possible loss of principal. There can be no guarantee that the Fund’s volatility strategy will be successful, and achieving the Fund’s volatility strategy does not mean the Fund will achieve a positive or competitive return. The volatility strategy can also be expected to limit the Fund’s participation in market price appreciation when compared to similar funds that do not attempt this strategy. Small- and mid-cap stocks involve greater risks and volatility than large-cap stocks. These and other risks are discussed in the Fund’s prospectus.
ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns.
1. The total annual operating expenses are as of the Fund’s prospectus available at the time of publication. Actual expenses may be higher and may impact portfolio returns.
2. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/23.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. 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.
66 | Semiannual Report | franklintempleton.com |
FRANKLIN U.S. LOW VOLATILITY ETF
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; and (2) ongoing Fund costs, including management fees and other Fund expenses. All funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 × $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||||||||||||
Beginning Account Value 4/1/23 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
$1,000.00 | $1,013.60 | $1.46 | $1,023.55 | $1.47 | 0.29 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period.
franklintempleton.com | Semiannual Report | 67 |
Franklin U.S. Treasury Bond ETF
This semiannual report for Franklin U.S. Treasury Bond ETF covers the period ended September 30, 2023.
Fund Overview
Your Fund’s Goal and Main Investments
The Fund seeks income. Under normal market conditions, the Fund invests at least 80% of its net assets in direct obligations of the U.S. Treasury, including Treasury bonds, bills, notes and Treasury Inflation-Protected Securities (TIPS), and investments that provide exposure to direct obligations of the U.S. Treasury.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of -4.16% based on market price and -4.21% based on net asset value (NAV). In comparison, the Bloomberg U.S. Treasury Index, which measures the performance of U.S. dollar-denominated, fixed-rate, nominal debt issued by the U.S. with at least one year until final maturity, posted a -4.40% cumulative total return.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 69.
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 |
99.2% | |||
|
||||
Short-Term Investments & Other Net Assets |
0.9% | |||
|
Top 10 Holdings
9/30/23
% of
Total Net Assets |
||||
|
||||
U.S. Treasury Notes, 0.25%, 7/31/25 |
9.0% | |||
|
||||
U.S. Treasury Notes, 1.50%, 9/30/24 |
8.7% | |||
|
||||
U.S. Treasury Notes, 0.75%, 5/31/26 |
7.3% | |||
|
||||
U.S. Treasury Bonds, 1.875%, 11/15/51 |
5.4% | |||
|
||||
U.S. Treasury Bonds, 3.125%, 11/15/41 |
3.8% | |||
|
||||
U.S. Treasury Notes, 0.50%, 6/30/27 |
3.7% | |||
|
||||
U.S. Treasury Bonds, 3.00%, 5/15/42 |
3.3% | |||
|
||||
U.S. Treasury Notes, 0.375%, 1/31/26 |
3.1% | |||
|
||||
U.S. Treasury Notes, 1.50%, 11/30/24 |
3.0% | |||
|
||||
U.S. Treasury Notes, 0.375%, 9/30/27 |
3.0% | |||
|
Thank you for your participation in Franklin U.S. Treasury Bond ETF. We look forward to serving your future investment needs.
Warren Keyser
Patrick Klein, Ph.D.
Portfolio Management Team
1. Source: Morningstar. Treasuries, if held to maturity, offer a fixed rate of return and a fixed principal value; their interest payments and principal are guaranteed.
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 177.
68 | Semiannual Report | franklintempleton.com |
FRANKLIN U.S. TREASURY 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 tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale 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 (6/11/20), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/231
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
6-Month |
-4.21% | -4.16% | -4.21% | -4.16% | ||||||||||||
1-Year |
-0.83% | -0.78% | -0.83% | -0.78% | ||||||||||||
Since Inception (6/9/20) |
-14.06% | -14.02% | -4.47% | -4.46% |
Distribution Rate5 | 30-Day Standardized Yield6 |
|||
3.93% |
4.78% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 70 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 69 |
FRANKLIN U.S. TREASURY BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/23–9/30/23)
Net Investment Income |
$0.367754 |
Total Annual Operating Expenses7
0.09% |
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. Fixed income securities involve interest rate, credit, inflation and reinvestment risks, and possible loss of principal. As interest rates rise, the value of fixed income securities falls. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. 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. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/23.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. 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.
70 | Semiannual Report | franklintempleton.com |
FRANKLIN U.S. TREASURY 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 4/1/23 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Ending Account Value 9/30/23 |
Expenses Paid During |
Net Annualized Expense Ratio |
|||||||||||||||||
$1,000.00 | $957.90 | $0.44 | $1,024.55 | $0.46 | 0.09 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period.
franklintempleton.com | Semiannual Report | 71 |
This semiannual report for Franklin Ultra Short Bond ETF covers the period ended September 30, 2023.
Fund Overview
Your Fund’s Goal and Main Investments
The Fund seeks to provide a high level of current income as is consistent with prudent investing, while seeking preservation of capital. Under normal market conditions, the Fund invests at least 80% of its net assets in bonds and investments that provide exposure to bonds. The Fund targets an estimated average portfolio duration of one year or less.
Performance Overview
During the six-month period, the Fund posted cumulative total returns of +2.92% based on market price and +3.09% based on net asset value (NAV). In comparison, the ICE BofA U.S. 3-Month Treasury Bill Index, which tracks the performance of short-term U.S. government securities with a remaining term to final maturity of less than three months, posted a +2.50% cumulative total return.1 You can find more of the Fund’s performance data in the Performance Summary beginning on page 74.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Top 10 Sectors/Industries | ||||
9/30/23 | ||||
% of Total Net Assets |
||||
Banks | 32.3% | |||
Telecommunications | 10.2% | |||
Insurance | 8.1% | |||
Financial Services | 8.0% | |||
Healthcare-Products | 4.0% | |||
Miscellaneous Manufacturing | 4.0% | |||
Pipelines | 2.0% | |||
Retail | 2.0% | |||
Electric Utilities | 2.0% |
Top 10 Holdings | ||||
9/30/23 | ||||
Issue/Issuer | % of Total Net Assets |
|||
Verizon Communications, Inc., 6.726%, 5/15/25 | 6.1% | |||
Westpac Banking Corp., 6.436%, 2/26/24 | 6.1% | |||
Bank of America Corp., 6.022%, 4/22/25 | 6.1% | |||
Goldman Sachs Group, Inc., 6.796%, 5/15/26 | 4.1% | |||
AT&T, Inc., 6.852%, 6/12/24 | 4.1% | |||
Citibank Credit Card Issuance Trust, 6.058%, 4/22/26 | 4.1% | |||
Discover Card Execution Note Trust, 6.047%, 12/15/26 | 4.0% | |||
Pacific Life Global Funding II, 6.145%, 3/30/25 | 4.0% | |||
Thermo Fisher Scientific, Inc., 0.797%, 10/18/23 | 4.0% | |||
Brighthouse Financial Global Funding, secured note, 1.20%, 12/15/23 | 4.0% |
1. Source: Morningstar. Treasuries, if held to maturity, offer a fixed rate of return and a fixed principal value; their interest payments and principal are guaranteed.
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 180.
72 | Semiannual Report | franklintempleton.com |
FRANKLIN ULTRA SHORT BOND ETF
Thank you for your participation in Franklin Ultra Short Bond ETF. We look forward to serving your future investment needs.
Shawn Lyons, CFA
Thomas Runkel, CFA
Kent Burns, CFA
Johnson Ng, CFA
Portfolio Management Team
franklintempleton.com | Semiannual Report | 73 |
FRANKLIN ULTRA SHORT 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 tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale 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 (7/16/20), the NAV of the Fund is used as a proxy for the Market Price to calculate market returns. Market and NAV returns assume that dividends and capital gain distributions have been reinvested at Market Price and NAV.
Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 9/30/231
Cumulative Total Return2 | Average Annual Total Return2 | |||||||||||||||
Based on NAV3 |
Based on market price4 |
Based on NAV3 |
Based on market price4 |
|||||||||||||
6-Month |
+3.09% | +2.92% | +3.09% | +2.92% | ||||||||||||
1-Year |
+5.23% | +5.15% | +5.23% | +5.15% | ||||||||||||
Since Inception (7/14/20) |
+5.27% | +5.23% | +1.61% | +1.60% |
Distribution Rate5 |
30-Day Standardized Yield6 |
|||
4.98% |
5.52% |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 75 for Performance Summary footnotes.
74 | Semiannual Report | franklintempleton.com |
FRANKLIN ULTRA SHORT BOND ETF
PERFORMANCE SUMMARY
Distributions (4/1/23–9/30/23)
Net Investment Income |
$0.588365 |
Total Annual Operating Expenses7
0.15% |
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. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. 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. The Fund should not be considered an alternative to money market funds or certificates of deposit (CDs). To the extent the portfolio invests in a concentration of certain securities, regions or industries, it is subject to increased volatility. 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. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance. The manager may consider environmental, social and governance (ESG) criteria in the research or investment process; however, ESG considerations may not be a determinative factor in security selection. In addition, the manager may not assess every investment for ESG criteria, and not every ESG factor may be identified or evaluated. 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. Total return calculations represent the cumulative and average annual changes in value of an investment over the periods indicated. Return for less than one year, if any, has not been annualized.
3. Assumes reinvestment of distributions based on net asset value.
4. Assumes reinvestment of distributions based on market price.
5. Distribution rate is based on an annualization of the September dividend and the NAV per share on 9/30/23.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report.
See www.franklintempletondatasources.com for additional data provider information.
franklintempleton.com | Semiannual Report | 75 |
FRANKLIN ULTRA SHORT 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 4/1/23 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Ending Account Value 9/30/23 |
Expenses Paid During Period 4/1/23–9/30/231 |
Net Annualized Expense Ratio |
|||||||||||||||||
$1,000.00 | $1,030.90 | $0.20 | $1,024.80 | $0.20 | 0.04 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 183/366 to reflect the one-half year period.
76 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Franklin Disruptive Commerce ETF
Six Months Ended (unaudited) |
Year Ended March 31, | |||||||||||||||||||
2023 | 2022 | 2021 | 2020a | |||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||
Net asset value, beginning of period |
$24.05 | $30.97 | $49.21 | $21.32 | $25.00 | |||||||||||||||
Income from investment operationsb: |
||||||||||||||||||||
Net investment income (loss)c |
(0.01 | ) | 0.02 | (0.19 | ) | (0.21 | ) | (0.01 | ) | |||||||||||
Net realized and unrealized gains (losses) |
0.49 | (6.94 | ) | (17.73 | ) | 28.10 | (3.67 | ) | ||||||||||||
Total from investment operations |
0.48 | (6.92 | ) | (17.92 | ) | 27.89 | (3.68 | ) | ||||||||||||
Net realized gains |
— | — | (0.32 | ) | — | — | ||||||||||||||
Net asset value, end of period |
$24.53 | $24.05 | $30.97 | $49.21 | $21.32 | |||||||||||||||
Total returnd |
2.00% | (22.34)% | (36.59)% | 130.82% | (14.72)% | |||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.50% | 0.50% | 0.62% | 0.87% | 12.59% | |||||||||||||||
Expenses net of waiver and payments by affiliates |
0.50% | 0.50% | 0.50% | 0.50% | 0.50% | |||||||||||||||
Net investment income (loss) |
(0.05)% | 0.07% | (0.40)% | (0.44)% | (0.32)% | |||||||||||||||
Supplemental data | ||||||||||||||||||||
Net assets, end of period (000’s) |
$9,813 | $9,619 | $18,584 | $41,827 | $2,132 | |||||||||||||||
Portfolio turnover ratef |
8.83%g | 47.01%g | 89.85%g | 45.81%g | 0.94%g |
aFor the period February 25, 2020 (commencement of operations) to March 31, 2020.
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: | 8.83% | 47.01% | 89.79% | 45.81% | 0.94% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 77 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2023 (unaudited)
Franklin Disruptive Commerce ETF
Country | Shares | Value | ||||||||||||
Common Stocks 98.6% |
||||||||||||||
Air Freight & Logistics 0.8% | ||||||||||||||
United Parcel Service, Inc., Class B |
United States | 483 | $ | 75,285 | ||||||||||
|
|
|||||||||||||
Broadline Retail 22.6% | ||||||||||||||
a,b |
Alibaba Group Holding Ltd., Class A |
China | 11,206 | 122,478 | ||||||||||
a |
Amazon.com, Inc. |
United States | 7,218 | 917,552 | ||||||||||
eBay, Inc. |
United States | 2,003 | 88,312 | |||||||||||
a |
Etsy, Inc. |
United States | 1,814 | 117,148 | ||||||||||
a |
Global-e Online Ltd. |
Israel | 4,283 | 170,206 | ||||||||||
b |
JD.com, Inc., ADR |
China | 1,151 | 33,529 | ||||||||||
a |
MercadoLibre, Inc. |
Brazil | 337 | 427,276 | ||||||||||
Naspers Ltd., Class N |
South Africa | 584 | 93,789 | |||||||||||
a,b |
PDD Holdings, Inc., ADR |
China | 1,568 | 153,774 | ||||||||||
Prosus NV |
Netherlands | 3,153 | 93,204 | |||||||||||
|
|
|||||||||||||
2,217,268 | ||||||||||||||
|
|
|||||||||||||
Commercial Services & Supplies 3.8% | ||||||||||||||
a |
Copart, Inc. |
United States | 8,598 | 370,488 | ||||||||||
|
|
|||||||||||||
Consumer Staples Distribution & Retail 5.2% | ||||||||||||||
Costco Wholesale Corp. |
United States | 910 | 514,114 | |||||||||||
|
|
|||||||||||||
Containers & Packaging 1.4% | ||||||||||||||
Graphic Packaging Holding Co. |
United States | 1,224 | 27,270 | |||||||||||
Packaging Corp. of America |
United States | 705 | 108,253 | |||||||||||
|
|
|||||||||||||
135,523 | ||||||||||||||
|
|
|||||||||||||
Entertainment 1.6% | ||||||||||||||
a |
Netflix, Inc. |
United States | 332 | 125,363 | ||||||||||
a |
ROBLOX Corp., Class A |
United States | 912 | 26,412 | ||||||||||
|
|
|||||||||||||
151,775 | ||||||||||||||
|
|
|||||||||||||
Financial Services 11.6% | ||||||||||||||
a |
Adyen NV, ADR |
Netherlands | 14,291 | 105,753 | ||||||||||
a |
Block, Inc. |
United States | 891 | 39,436 | ||||||||||
a |
Dlocal Ltd. |
Uruguay | 1,925 | 36,902 | ||||||||||
a |
Flywire Corp. |
United States | 2,363 | 75,356 | ||||||||||
Jack Henry & Associates, Inc. |
United States | 528 | 79,802 | |||||||||||
Mastercard, Inc., Class A |
United States | 933 | 369,384 | |||||||||||
a |
PayPal Holdings, Inc. |
United States | 478 | 27,944 | ||||||||||
a |
Toast, Inc., Class A |
United States | 3,588 | 67,203 | ||||||||||
Visa, Inc., Class A |
United States | 1,452 | 333,975 | |||||||||||
|
|
|||||||||||||
1,135,755 | ||||||||||||||
|
|
|||||||||||||
Food Products 0.7% | ||||||||||||||
a |
Freshpet, Inc. |
United States | 1,028 | 67,725 | ||||||||||
|
|
|||||||||||||
Ground Transportation 8.5% | ||||||||||||||
Old Dominion Freight Line, Inc. |
United States | 370 | 151,382 | |||||||||||
a |
Uber Technologies, Inc. |
United States | 12,605 | 579,704 | ||||||||||
a |
XPO, Inc. |
United States | 1,404 | 104,822 | ||||||||||
|
|
|||||||||||||
835,908 | ||||||||||||||
|
|
|||||||||||||
Hotels, Restaurants & Leisure 12.2% | ||||||||||||||
a |
Airbnb, Inc., Class A |
United States | 1,795 | 246,292 | ||||||||||
a |
Booking Holdings, Inc. |
United States | 124 | 382,410 | ||||||||||
a |
DoorDash, Inc., Class A |
United States | 5,473 | 434,939 | ||||||||||
a |
Expedia Group, Inc. |
United States | 420 | 43,289 | ||||||||||
a |
MakeMyTrip Ltd. |
India | 1,888 | 76,502 | ||||||||||
a,b,c |
Meituan, Class B |
China | 985 | 14,413 | ||||||||||
|
|
|||||||||||||
1,197,845 | ||||||||||||||
|
|
78 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Disruptive Commerce ETF (continued)
Country | Shares | Value | ||||||||||||
Common Stocks (continued) |
||||||||||||||
Industrial REITs 1.8% | ||||||||||||||
Prologis, Inc. |
United States | 1,607 | $ | 180,321 | ||||||||||
|
|
|||||||||||||
Interactive Media & Services 2.5% | ||||||||||||||
a |
Alphabet, Inc., Class A |
United States | 755 | 98,799 | ||||||||||
a |
Meta Platforms, Inc., Class A |
United States | 344 | 103,272 | ||||||||||
b |
Tencent Holdings Ltd. |
China | 1,215 | 47,503 | ||||||||||
|
|
|||||||||||||
249,574 | ||||||||||||||
|
|
|||||||||||||
IT Services 6.0% | ||||||||||||||
a |
Shopify, Inc., Class A |
Canada | 10,809 | 589,847 | ||||||||||
|
|
|||||||||||||
Media 1.0% | ||||||||||||||
a |
Trade Desk, Inc., Class A |
United States | 1,254 | 98,000 | ||||||||||
|
|
|||||||||||||
Professional Services 0.5% | ||||||||||||||
TransUnion |
United States | 654 | 46,951 | |||||||||||
|
|
|||||||||||||
Real Estate Management & Development 0.7% | ||||||||||||||
a |
CoStar Group, Inc. |
United States | 929 | 71,431 | ||||||||||
|
|
|||||||||||||
Software 8.6% | ||||||||||||||
a |
Autodesk, Inc. |
United States | 467 | 96,627 | ||||||||||
a |
Bill Holdings, Inc. |
United States | 885 | 96,084 | ||||||||||
a |
Descartes Systems Group, Inc. |
Canada | 2,799 | 205,391 | ||||||||||
a |
Manhattan Associates, Inc. |
United States | 1,520 | 300,443 | ||||||||||
a |
Sprout Social, Inc., Class A |
United States | 365 | 18,206 | ||||||||||
a |
SPS Commerce, Inc. |
United States | 500 | 85,305 | ||||||||||
a |
Unity Software, Inc. |
United States | 1,392 | 43,695 | ||||||||||
|
|
|||||||||||||
845,751 | ||||||||||||||
|
|
|||||||||||||
Specialty Retail 0.1% | ||||||||||||||
ZOZO, Inc. |
Japan | 512 | 9,410 | |||||||||||
|
|
|||||||||||||
Trading Companies & Distributors 9.0% | ||||||||||||||
Fastenal Co. |
United States | 7,699 | 420,674 | |||||||||||
WW Grainger, Inc. |
United States | 667 | 461,457 | |||||||||||
|
|
|||||||||||||
882,131 | ||||||||||||||
|
|
|||||||||||||
Total Common Stocks (Cost $10,214,671) |
9,675,102 | |||||||||||||
|
|
|||||||||||||
Total Investments (Cost $10,214,671) 98.6% |
9,675,102 | |||||||||||||
Other Assets, less Liabilities 1.4% |
137,719 | |||||||||||||
|
|
|||||||||||||
Net Assets 100.0% |
$ | 9,812,821 | ||||||||||||
|
|
aNon-income producing.
bVariable interest entity (VIE). See the Fund’s statement of additional information and/or notes to financial statements regarding investments made through a VIE structure. At September 30, 2023, the aggregate value of these securities was $371,697, representing 3.8% of net assets.
cSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2023, the value of was $14,413, representing 0.1% of net assets.
See Abbreviations on page 220.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 79 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Dynamic Municipal Bond ETF
Six Months Ended September 30, 2023 (unaudited) |
Year Ended March 31, | |||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||||||
Net asset value, beginning of period |
$23.88 | $24.81 | $26.32 | $24.72 | $24.97 | $24.40 | ||||||||||||||||||
Income from investment operationsa: |
||||||||||||||||||||||||
Net investment incomeb |
0.45 | 0.74 | 0.61 | 0.59 | 0.58 | 0.63 | ||||||||||||||||||
Net realized and unrealized gains (losses) |
(0.92 | ) | (0.96 | ) | (1.56 | ) | 1.59 | (0.17 | ) | 0.57 | ||||||||||||||
Total from investment operations |
(0.47 | ) | (0.22 | ) | (0.95 | ) | 2.18 | 0.41 | 1.20 | |||||||||||||||
Less distributions from net investment income |
(0.46 | ) | (0.71 | ) | (0.56 | ) | (0.58 | ) | (0.66 | ) | (0.63 | ) | ||||||||||||
Net asset value, end of period |
$22.95 | $23.88 | $24.81 | $26.32 | $24.72 | $24.97 | ||||||||||||||||||
Total returnc |
(2.01)% | (0.82)% | (3.70)% | 8.84% | 1.61% | 4.99% | ||||||||||||||||||
Ratios to average net assetsd | ||||||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.30% | 0.57% | 0.75% | 1.01% | 1.46% | 2.15% | ||||||||||||||||||
Expenses net of waiver and payments by affiliates |
0.30% | 0.30% | 0.30% | 0.30% | 0.30% | 0.30% | ||||||||||||||||||
Net investment income |
3.80% | 3.12% | 2.32% | 2.29% | 2.29% | 2.57% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) |
$127,346 | $101,497 | $76,908 | $42,112 | $12,362 | $7,490 | ||||||||||||||||||
Portfolio turnover ratee |
37.40%f | 64.13%f | 27.62%f | 14.05%f | 35.28%f | 35.63% |
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
dRatios are annualized for periods less than one year.
ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
f Portfolio turnover rate excluding cash creations was as follows: | 37.40% | 64.13% | 27.62% | 14.05% | 35.28% |
80 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2023 (unaudited)
Franklin Dynamic Municipal Bond ETF
Principal Amount | * | Value | ||||||||
Municipal Bonds 101.1% |
||||||||||
Alabama 3.5% | ||||||||||
Black Belt Energy Gas District, |
||||||||||
a 4.00%, 12/01/52 |
500,000 | $ | 467,260 | |||||||
a Gas Project, Series 2022E, VRDN, 5.00%, 5/01/53 |
1,350,000 | 1,364,636 | ||||||||
a Refunding, VRDN, 4.00%, 6/01/51 |
240,000 | 226,445 | ||||||||
a Series C-1, 5.25%, 2/01/53 |
1,250,000 | 1,269,063 | ||||||||
b |
County of Mobile, Gomesa Projects, 4.00%, 11/01/45 |
100,000 | 82,290 | |||||||
MidCity Improvement District, 4.25%, 11/01/32 |
600,000 | 511,815 | ||||||||
a |
Southeast Energy Authority A Cooperative District, Cooperative District, 5.50%, 1/01/53 |
500,000 | 513,359 | |||||||
|
|
|||||||||
4,434,868 | ||||||||||
|
|
|||||||||
Alaska 0.8% | ||||||||||
Alaska Industrial Development & Export Authority, Greater Fairbanks Community Hospital Foundation Obligated Group, Refunding, 4.00%, 4/01/32 |
100,000 | 93,642 | ||||||||
Northern Tobacco Securitization Corp., 4.00%, 6/01/39 |
1,000,000 | 911,543 | ||||||||
|
|
|||||||||
1,005,185 | ||||||||||
|
|
|||||||||
Arizona 1.5% | ||||||||||
a |
Chandler Industrial Development Authority, 5.00%, 9/01/42 |
1,000,000 | 1,011,406 | |||||||
City of Phoenix Civic Improvement Corp., Wastewater Revenue, Series 2018A, 5.00%, 7/01/25 |
100,000 | 102,117 | ||||||||
Glendale Industrial Development Authority, 4.00%, 5/15/31 |
160,000 | 142,917 | ||||||||
Industrial Development Authority of the City of Phoenix Arizona, Downtown Phoenix Student Housing II LLC, Series A, 5.00%, 7/01/31 |
100,000 | 102,245 | ||||||||
La Paz County Industrial Development Authority, 5.00%, 2/15/31 |
100,000 | 100,068 | ||||||||
b |
Sierra
Vista Industrial Development Authority, Georgetown Community Development
Authority, |
250,000 | 226,337 | |||||||
Tempe
Industrial Development Authority, Tempe Life Care Village Obligated Group,
Refunding, |
200,000 | 179,741 | ||||||||
|
|
|||||||||
1,864,831 | ||||||||||
|
|
|||||||||
Arkansas 0.1% | ||||||||||
Arkansas
Development Finance Authority, Baptist Memorial Health Care Obligated
Group, Refunding, |
100,000 | 101,864 | ||||||||
|
|
|||||||||
California 11.4% | ||||||||||
a |
California Community Choice Financing Authority, 5.25%, 1/01/54 |
3,250,000 | 3,244,429 | |||||||
b |
California
Community College Financing Authority, NCCD-Napa Valley Properties LLC,
Series 2022A, |
500,000 | 464,598 | |||||||
California Community Housing Agency, |
||||||||||
b 4.00%, 2/01/43 |
350,000 | 278,024 | ||||||||
b 4.00%, 8/01/47 |
285,000 | 212,155 | ||||||||
b Arbors Apartments, Series A, 5.00%, 8/01/50 |
300,000 | 259,533 | ||||||||
b Fountains at Emerald Park, 4.00%, 8/01/46 |
800,000 | 614,542 | ||||||||
b Verdant at Green Valley Apartments, 5.00%, 8/01/49 |
300,000 | 262,676 | ||||||||
California Municipal Finance Authority, |
||||||||||
AMT, Series 2018A, 3.50%, 12/31/35 |
100,000 | 85,407 | ||||||||
Biola University, Inc., Refunding, 5.00%, 10/01/29 |
100,000 | 102,235 | ||||||||
Caritas Corp., Refunding Series 2021B, 3.00%, 8/15/31 |
165,000 | 147,441 | ||||||||
Series 2020B, 4.00%, 9/01/30 |
50,000 | 48,220 | ||||||||
Series 2021A, 4.00%, 9/01/30 |
205,000 | 196,646 | ||||||||
Series 2021C, 4.00%, 9/01/31 |
295,000 | 280,745 | ||||||||
b,c |
California Pollution Control Financing Authority, CalPlant I LLC, AMT, 7.50%, 7/01/32 |
250,000 | 12,500 | |||||||
California School Finance Authority, |
||||||||||
b 5.00%, 6/01/27 |
50,000 | 52,446 | ||||||||
b 5.00%, 6/01/27 |
50,000 | 49,930 | ||||||||
b Classical Academy Obligated Group, Series 2020A, 3.00%, 10/01/30 |
200,000 | 177,648 | ||||||||
b John Adams Academies Obligated Group, Series 2022A, 4.50%, 7/01/32 |
250,000 | 237,305 |
franklintempleton.com | Semiannual Report | 81 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
Principal Amount | * | Value | ||||||||
Municipal Bonds (continued) |
||||||||||
California (continued) |
||||||||||
California Statewide Communities Development Authority, |
||||||||||
Community Facilities District No 2015, 4.00%, 9/01/29 |
110,000 | $ | 105,332 | |||||||
Community Facilities District No 2015-01, 5.00%, 9/01/27 |
55,000 | 56,089 | ||||||||
Community Facilities District No 2016-02, 4.00%, 9/01/30 |
130,000 | 123,669 | ||||||||
Community Facilities District No 2018, 4.00%, 9/01/30 |
150,000 | 142,865 | ||||||||
Improvement Area No. 1, 4.00%, 9/01/31 |
200,000 | 190,590 | ||||||||
Southern California Edison Co, Refunding, 1.75%, 9/01/29 |
1,500,000 | 1,213,187 | ||||||||
Special Assessment, 4.00%, 9/02/28 |
250,000 | 240,394 | ||||||||
Special Assessment, 4.00%, 9/02/31 |
100,000 | 92,543 | ||||||||
Special Assessment, Series 2020B, 4.00%, 9/02/30 |
125,000 | 118,488 | ||||||||
Special Assessment, Series 2021A, 4.00%, 9/02/31 |
150,000 | 137,622 | ||||||||
City of Gardena, 2.066%, 4/01/26 |
1,000,000 | 920,927 | ||||||||
b |
CMFA Special Finance Agency, 4.00%, 8/01/45 |
500,000 | 380,162 | |||||||
b |
CMFA Special Finance Agency VII, 4.00%, 8/01/47 |
800,000 | 614,332 | |||||||
b |
CMFA Special Finance Agency VIII, 4.00%, 8/01/47 |
355,000 | 273,775 | |||||||
b |
CMFA Special Finance Agency XII, 4.375%, 8/01/49 |
250,000 | 180,967 | |||||||
CSCDA Community Improvement Authority, |
||||||||||
b 4.00%, 9/01/46 |
350,000 | 269,938 | ||||||||
b Jefferson Anaheim Social Bonds, 2.875%, 8/01/41 |
155,000 | 125,333 | ||||||||
b Renaissance at City Center, 5.00%, 7/01/51 |
250,000 | 217,132 | ||||||||
b |
Elsinore
Valley Municipal Water District, Community Facilities District No 2020,
Series 2021A, |
100,000 | 95,524 | |||||||
Perris Joint Powers Authority, Refunding, Series 2017B, 5.00%, 9/01/25 |
100,000 | 100,904 | ||||||||
River Islands Public Financing Authority, Community Facilities District No 2003-, 5.00%, 9/01/32 |
500,000 | 485,613 | ||||||||
Sierra View Local Health Care District, Tulare County, Refunding, 5.00%, 7/01/30 |
100,000 | 103,425 | ||||||||
a |
Southern California Public Power Authority, 5.244%, 11/01/38 |
1,100,000 | 935,537 | |||||||
Sulphur Springs Union School District, Community Facilities District No 2014-1, 5.00%, 9/01/31 . |
135,000 | 138,191 | ||||||||
Transbay Joint Powers Authority, Redevelopment Project Green Bond Subordinate Tax, 2.40%, 10/01/49 |
100,000 | 100,000 | ||||||||
Washington Township Health Care District, 4.25%, 8/01/43 |
500,000 | 478,881 | ||||||||
|
|
|||||||||
14,567,900 | ||||||||||
|
|
|||||||||
Colorado 2.9% | ||||||||||
Colorado Educational & Cultural Facilities Authority, Golden View Classical Academy, Refunding, 4.00%, 1/01/32 |
200,000 | 183,561 | ||||||||
Colorado Health Facilities Authority, |
||||||||||
4.00%, 8/01/37 |
1,475,000 | 1,342,601 | ||||||||
4.00%, 8/01/39 |
1,085,000 | 958,538 | ||||||||
Christian Living Neighborhoods Obligated Group, Refunding, 4.00%, 1/01/29 |
100,000 | 93,847 | ||||||||
Denver Health & Hospital Authority, Series A, 4.00%, 12/01/37 |
1,000,000 | 859,081 | ||||||||
Southglenn Metropolitan District, Refunding, 5.00%, 12/01/30 |
100,000 | 97,170 | ||||||||
Southlands Metropolitan District No. 1, Refunding, Series 2017A-1, 3.50%, 12/01/27 |
100,000 | 91,699 | ||||||||
|
|
|||||||||
3,626,497 | ||||||||||
|
|
|||||||||
Connecticut 0.2% | ||||||||||
Connecticut Housing Finance Authority, Refunding, Series 2016A-1, 2.875%, 11/15/30 |
135,000 | 121,477 | ||||||||
Connecticut State Health & Educational Facilities Authority, |
||||||||||
Series 2017I-1, 5.00%, 7/01/29 |
5,000 | 5,152 | ||||||||
b Series 2020A, 5.00%, 1/01/30 |
150,000 | 143,610 | ||||||||
|
|
|||||||||
270,239 | ||||||||||
|
|
|||||||||
Delaware 0.1% | ||||||||||
County of Kent, CHF-Dover LLC, 5.00%, 7/01/29 |
100,000 | 100,676 | ||||||||
b,d |
Red River Biorefinery LLC, 15.00%, 12/31/23 |
10,000 | 10,000 | |||||||
|
|
|||||||||
110,676 | ||||||||||
|
|
82 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
Principal Amount | * | Value | ||||||||
Municipal Bonds (continued) | ||||||||||
District of Columbia 0.2% | ||||||||||
District of Columbia, 5.50%, 2/28/35 |
200,000 | $ | 216,478 | |||||||
|
|
|||||||||
Florida 12.7% | ||||||||||
Abbott Square Community Development District, Special Assessment, Series 2022, 5.00%, 6/15/32 |
200,000 | 195,332 | ||||||||
b |
Artisan Lakes East Community Development District, Special Assessment, Series 2021-2, 2.30%, 5/01/26 |
100,000 | 93,448 | |||||||
b |
Astonia Community Development District, Assessment Area One Project, Special Assessment, 3.375%, 5/01/30 |
145,000 | 134,155 | |||||||
Avalon Groves Community Development District, Assessment Area 3, Special Assessment, 2.375%, 5/01/26 |
95,000 | 89,033 | ||||||||
b |
Avalon Park West Community Development District, Special Assessment, Refunding, 3.25%, 5/01/30 |
100,000 | 91,184 | |||||||
Avenir Community Development District, Assessment Area 2, Special Assessment, Series 2021A, 2.75%, 5/01/31 |
90,000 | 76,942 | ||||||||
Babcock Ranch Community Independent Special District, |
||||||||||
Assessment Area 2C, Special Assessment, 3.00%, 5/01/30 |
50,000 | 44,712 | ||||||||
Assessment Area 3B, Special Assessment, 3.00%, 5/01/30 |
145,000 | 129,650 | ||||||||
Belmond Reserve Community Development District, Special Assessment, Series 2020, 3.25%, 5/01/30 |
100,000 | 89,186 | ||||||||
Berry Bay Community Development District, Assessment Area 1, Special Assessment, 3.125%, 5/01/31 |
100,000 | 86,738 | ||||||||
Black Creek Community Development District, 5.125%, 6/15/32 |
100,000 | 97,797 | ||||||||
Capital Projects Finance Authority, |
||||||||||
5.00%, 10/01/34 |
785,000 | 789,137 | ||||||||
University Project, Series 2020A-1, 5.00%, 10/01/32 |
455,000 | 460,891 | ||||||||
Capital Trust Agency, Inc., |
||||||||||
b 3.00%, 7/01/31 |
125,000 | 106,281 | ||||||||
b Educational Growth Fund LLC, 3.375%, 7/01/31 |
100,000 | 91,354 | ||||||||
Liza Jackson Preparatory School, Inc., 4.00%, 8/01/30 |
90,000 | 84,612 | ||||||||
b WFCS Holdings II LLC, Series 2021A, 3.30%, 1/01/31 |
300,000 | 255,650 | ||||||||
Coddington Community Development District, Special Assessment, 5.00%, 5/01/32 |
275,000 | 270,643 | ||||||||
Coral Keys Homes Community Development District, Special Assessment, 3.125%, 5/01/30 |
165,000 | 149,651 | ||||||||
Cordoba Ranch Community Development District, Special Assessment, Refunding, 3.00%, 5/01/31 |
100,000 | 88,382 | ||||||||
Cordova Palms Community Development District, |
||||||||||
Assessment Area 1, Special Assessment, 4.80%, 5/01/27 |
135,000 | 133,079 | ||||||||
Special Assessment, 2.80%, 5/01/31 |
100,000 | 84,320 | ||||||||
County of Osceola Transportation Revenue, zero cpn., 10/01/32 |
150,000 | 96,899 | ||||||||
b |
Cypress Bluff Community Development District, Special Assessment, Series 2020A, 3.125%, 5/01/30 |
60,000 | 52,846 | |||||||
Cypress Park Estates Community Development District, Special Assessment, Series 2022, 4.375%, 5/01/27 |
120,000 | 116,858 | ||||||||
Cypress Ridge Community Development District, 4.875%, 5/01/30 |
500,000 | 489,389 | ||||||||
b |
DW Bayview Community Development District, Special Assessment, 3.00%, 5/01/32 |
100,000 | 83,943 | |||||||
e |
East 547 Community Development District, 5.50%, 5/01/30 |
100,000 | 100,111 | |||||||
East Bonita Beach Road Community Development District, Special Assessment, 3.00%, 5/01/32 |
100,000 | 83,891 | ||||||||
Edgewater East Community Development District, Special Assessment, 3.10%, 5/01/31 |
100,000 | 86,300 | ||||||||
b |
Enbrook Community Development District, Special Assessment, 3.00%, 5/01/30 |
100,000 | 87,313 | |||||||
Epperson North Community Development District, Assessment Area 2, Special Assessment, 3.00%, 5/01/31 |
80,000 | 68,456 | ||||||||
Florida Development Finance Corp., |
||||||||||
a,b 7.50%, 7/01/57 |
250,000 | 245,420 | ||||||||
a,b 8.00%, 7/01/57 |
500,000 | 495,008 | ||||||||
a,b Brightline Trains Florida LLC, AMT, VRDN, 6.375%, 1/01/49 |
175,000 | 166,806 | ||||||||
a,b Brightline Trains Florida LLC, Refunding, VRDN, 7.25%, 7/01/57 |
250,000 | 260,000 | ||||||||
b Glenridge on Palmer Ranch Obligated Group, Refunding, 5.00%, 6/01/31 |
200,000 | 189,726 |
franklintempleton.com | Semiannual Report | 83 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
Principal Amount | * | Value | ||||||||
Municipal Bonds (continued) | ||||||||||
Florida (continued) | ||||||||||
b Mayflower Retirement Community, Refunding, 4.00%, 6/01/31 |
100,000 | $ | 83,751 | |||||||
Shands Jacksonville Medical Center Obligated Group, Refunding, 5.00%, 2/01/38 |
1,400,000 | 1,249,866 | ||||||||
b |
Forest Lake Community Development District, Assessment Area 1 Project, Special Assessment, 3.25%, 5/01/30 |
145,000 | 132,601 | |||||||
Grand Oaks Community Development District, Special Assessment, 4.00%, 5/01/30 |
150,000 | 140,696 | ||||||||
Hammock Reserve Community Development District, Assessment Area One Project, Special Assessment, 3.25%, 5/01/30 |
100,000 | 91,449 | ||||||||
Herons Glen Recreation District, Special Assessment, Refunding, 3.00%, 5/01/32 |
100,000 | 89,740 | ||||||||
Hills of Minneola Community Development District, |
||||||||||
South Parcel Assessment Area, Special Assessment, 2.375%, 5/01/26 |
60,000 | 56,218 | ||||||||
b South Parcel Assessment Area, Special Assessment, 3.50%, 5/01/31 |
100,000 | 88,998 | ||||||||
Holly Hill Road East Community Development District, Assessment Area 3 Project, Special Assessment, 4.00%, 11/01/25 |
65,000 | 63,994 | ||||||||
Indigo Community Development District, 2021 Assessment Area, Phase A1, Special Assessment, 2.70%, 5/01/31 |
100,000 | 83,537 | ||||||||
Kindred Community Development District II, |
||||||||||
5.65%, 5/01/43 |
180,000 | 173,392 | ||||||||
Special Assessment, 2.20%, 5/01/26 |
50,000 | 46,662 | ||||||||
Special Assessment, 3.00%, 5/01/30 |
155,000 | 135,668 | ||||||||
Kingman Gate Community Development District, |
||||||||||
Special Assessment, 2.50%, 6/15/26 |
65,000 | 61,332 | ||||||||
Special Assessment, 3.125%, 6/15/30 |
110,000 | 99,545 | ||||||||
Lakes at Bella Lago Community Development District, 5.75%, 5/01/43 |
165,000 | 158,080 | ||||||||
Lakes of Sarasota Community Development District, |
||||||||||
Special Assessment, Series 2021A-1, 3.40%, 5/01/31 |
135,000 | 120,171 | ||||||||
Special Assessment, Series 2021B-1, 3.00%, 5/01/26 |
115,000 | 110,314 | ||||||||
Lakewood Ranch Stewardship District, |
||||||||||
4.25%, 5/01/26 |
245,000 | 241,679 | ||||||||
e 6.125%, 5/01/43 |
500,000 | 501,770 | ||||||||
b Northeast Sector Project, Special Assessment, Refunding, 3.20%, 5/01/30 |
100,000 | 88,511 | ||||||||
b Special Assessment, 3.125%, 5/01/30 |
60,000 | 52,921 | ||||||||
Special Assessment, 3.20%, 5/01/30 |
175,000 | 154,739 | ||||||||
Star Farms at Lakewood Ranch Proj-Phase 1/2, Special Assessment, 2.70%, 5/01/31 |
100,000 | 83,704 | ||||||||
Lawson Dunes Community Development District, Special Assessment, 4.375%, 5/01/27 |
145,000 | 141,835 | ||||||||
b |
Magnolia Park Community Development District, Special Assessment, Refunding, 4.00%, 5/01/31 |
47,000 | 45,739 | |||||||
Meadow View at Twin Creeks Community Development District, Phase 4, Special Assessment, 3.00%, 5/01/31 |
75,000 | 64,015 | ||||||||
Miami Health Facilities Authority, Miami Jewish Health Systems Obligated Group, Refunding, 5.00%, 7/01/28 |
150,000 | 138,852 | ||||||||
Mirada II Community Development District, Special Assessment, 3.125%, 5/01/31 |
100,000 | 86,665 | ||||||||
North AR-1 Pasco Community Development District, Assessment Area Two, Special Assessment, Series 2021A, 3.25%, 5/01/31 |
100,000 | 87,234 | ||||||||
b |
North Powerline Road Community Development District, Special Assessment, 4.75%, 5/01/27 |
200,000 | 196,386 | |||||||
Old Hickory Community Development District, Special Assessment, 3.00%, 6/15/30 |
100,000 | 89,414 | ||||||||
Palm Beach County Health Facilities Authority, |
||||||||||
5.00%, 5/15/27 |
292,000 | 277,252 | ||||||||
Jupiter Medical Center Obligated Group, 5.00%, 11/01/32 |
100,000 | 101,521 | ||||||||
Palm Coast Park Community Development District, 4.15%, 5/01/27 |
200,000 | 195,221 | ||||||||
Parkview at Long Lake Ranch Community Development District, Special Assessment, 3.125%, 5/01/30 |
100,000 | 87,909 | ||||||||
Parrish Plantation Community Development District, Special Assessment, 3.125%, 5/01/31 |
100,000 | 86,674 | ||||||||
Pine Ridge Plantation Community Development District, Subordinate Lien, Special Assessment, Refunding, Series 2020A-2, 3.30%, 5/01/30 |
150,000 | 133,303 | ||||||||
Preserve at South Branch Community Development District, Special Assessment, Series 2021, 3.00%, 5/01/31 |
100,000 | 88,324 | ||||||||
Reunion East Community Development District, Special Assessment, 2.85%, 5/01/31 |
100,000 | 85,655 |
84 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
Principal Amount | * | Value | ||||||||
Municipal Bonds (continued) | ||||||||||
Florida (continued) | ||||||||||
River Hall Community Development District, |
||||||||||
Special Assessment, Refunding, Series 2021A-2, 3.00%, 5/01/24 |
30,000 | $ | 29,678 | |||||||
Special Assessment, Refunding, Series 2021A-2, 3.00%, 5/01/25 |
40,000 | 38,837 | ||||||||
Rivers Edge II Community Development District, Special Assessment,, 3.00%, 5/01/31 |
100,000 | 85,353 | ||||||||
b |
Rivers Edge III Community Development District, Special Assessment,, 2.40%, 5/01/26 |
100,000 | 93,678 | |||||||
Saddle Creek Preserve of Polk County Community Development District, Special Assessment, 3.00%, 6/15/30 |
80,000 | 69,841 | ||||||||
Sanctuary Cove Community Development District, Special Assessment, 2.125%, 5/01/26 |
135,000 | 125,591 | ||||||||
Sandmine Road Community Development District, |
||||||||||
b Assessment Area One, Special Assessment, 3.125%, 5/01/30 |
100,000 | 90,434 | ||||||||
Assessment Area Two, Special Assessment, 2.30%, 11/01/26 |
45,000 | 41,769 | ||||||||
Sandridge Community Development District, Special Assessment, Series 2021A1, 2.875%, 5/01/26 |
100,000 | 94,851 | ||||||||
Sawyers Landing Community Development District, Special Assessment, 3.75%, 5/01/31 |
150,000 | 132,452 | ||||||||
Scenic Terrace North Community Development District, 2023 Assessment Area, Special Assessment, 5.125%, 5/01/30 |
500,000 | 491,501 | ||||||||
Shingle Creek at Bronson Community Development District, Special Assessment, 3.10%, 6/15/31 |
100,000 | 86,455 | ||||||||
Six Mile Creek Community Development District, Assessment Area 2, Phase 3, Special Assessment, 3.10%, 5/01/31 |
75,000 | 64,477 | ||||||||
South Fork East Community Development District, 4.00%, 5/01/31 |
755,000 | 695,779 | ||||||||
b |
Stillwater Community Development District, 2021 Project, Special Assessment, 3.00%, 6/15/31 . |
100,000 | 85,385 | |||||||
Summer Woods Community Development District, Assessment Area Three Project, Special Assessment, 3.15%, 5/01/31 |
75,000 | 64,999 | ||||||||
Sunbridge Stewardship District, Special Assessment, 4.50%, 5/01/27 |
135,000 | 133,286 | ||||||||
Tamarindo Community Development District, Special Assessment, 3.00%, 5/01/31 |
100,000 | 85,564 | ||||||||
Timber Creek Southwest Community Development District, Special Assessment, Series 2020, 3.00%, 6/15/30 |
150,000 | 130,774 | ||||||||
Tohoqua Community Development District, |
||||||||||
Special Assessment, 2.50%, 5/01/26 |
140,000 | 131,561 | ||||||||
Special Assessment, 2.875%, 5/01/31 |
100,000 | 84,968 | ||||||||
Tradition Community Development District No. 9, Special Assessment, 2.70%, 5/01/31 |
100,000 | 83,777 | ||||||||
b |
Trevesta Community Development District, Special Assessment, 3.25%, 5/01/30 |
100,000 | 88,748 | |||||||
Twisted Oaks Pointe Community Development District, 5.875%, 5/01/43 |
170,000 | 163,884 | ||||||||
V-Dana Community Development District, Assessment Area One-2021 Project, Special Assessment, Series 2021P, 3.125%, 5/01/31 |
100,000 | 86,974 | ||||||||
b |
Veranda Community Development District II, Special Assessment, Refunding, 3.10%, 5/01/31 |
70,000 | 60,178 | |||||||
Viera Stewardship District, Village 2, Special Assessment, Series 2021, 2.80%, 5/01/31 |
130,000 | 109,856 | ||||||||
Village Community Development District No. 13, Limited Offering, Special Assessment, 3.00%, 5/01/29 |
100,000 | 91,472 | ||||||||
West Villages Improvement District, Unit of Development No 7, Special Assessment, 3.125%, 5/01/31 |
100,000 | 86,633 | ||||||||
Windward Community Development District, Special Assessment, Series 2020A-1, 3.65%, 5/01/30 |
100,000 | 90,789 | ||||||||
Wiregrass II Community Development District, Assessment Area Two, Special Assessment, 4.50%, 5/01/27 |
225,000 | 220,083 | ||||||||
|
|
|||||||||
16,220,107 | ||||||||||
|
|
|||||||||
Georgia 5.9% | ||||||||||
b |
Development Authority of Rockdale County, AHPC Terraces at Fieldstone LLC, Series 2021B-S, 4.50%, 12/01/36 |
100,000 | 77,703 | |||||||
b |
George L Smith II Congress Center Authority, Signia Hotel Management LLC,, 3.625%, 1/01/31 |
350,000 | 295,318 | |||||||
Main Street Natural Gas, Inc., |
||||||||||
a 5.00%, 6/01/53 |
2,000,000 | 1,984,624 | ||||||||
a 5.00%, 12/01/53 |
1,250,000 | 1,264,989 | ||||||||
a 5.258%, 12/01/53 |
1,000,000 | 993,576 | ||||||||
a,b Gas Supply Revenue, , Series 2022C, VRDN, 4.00%, 8/01/52 |
1,500,000 | 1,414,727 |
franklintempleton.com | Semiannual Report | 85 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
Principal Amount | * | Value | ||||||||
Municipal Bonds (continued) |
||||||||||
Georgia (continued) |
||||||||||
a Series 2022B, 5.00%, 12/01/52 |
1,500,000 | $ | 1,497,932 | |||||||
|
|
|||||||||
7,528,869 | ||||||||||
|
|
|||||||||
Illinois 8.4% | ||||||||||
Chicago Board of Education, 5.00%, 12/01/36 |
100,000 | 98,552 | ||||||||
Chicago Board of Education Dedicated Capital Improvement Tax, 5.00%, 4/01/38 |
2,075,000 | 2,111,678 | ||||||||
City of Chicago, |
||||||||||
5.00%, 1/01/34 |
1,100,000 | 1,127,008 | ||||||||
5.50%, 1/01/39 |
1,050,000 | 1,079,692 | ||||||||
Illinois Finance Authority, |
||||||||||
a 5.00%, 5/15/50 |
750,000 | 761,626 | ||||||||
Lifespace Communities, Inc. Obligated Group, Refunding, Series 2015A, 5.00%, 5/15/24 |
245,000 | 242,477 | ||||||||
b Refunding, 4.00%, 10/01/31 |
180,000 | 163,812 | ||||||||
a Refunding, Monthly, VRDN, 4.917%, 11/01/34 |
395,000 | 392,890 | ||||||||
Metropolitan Pier & Exposition Authority, |
||||||||||
4.00%, 12/15/42 |
1,015,000 | 877,745 | ||||||||
McCormick Place Expansion, Refunding, 3.00%, 6/15/25 |
1,000,000 | 968,127 | ||||||||
zero cpn., 12/15/30 |
300,000 | 216,572 | ||||||||
Southwestern Illinois Development Authority, zero cpn., 12/01/24 |
245,000 | 232,437 | ||||||||
State of Illinois, |
||||||||||
6.00%, 11/01/26 |
1,325,000 | 1,346,599 | ||||||||
Series 2020B, 5.00%, 10/01/31 |
150,000 | 157,426 | ||||||||
Series 2021B, 3.00%, 12/01/41 |
500,000 | 364,674 | ||||||||
Series A, 5.00%, 3/01/31 |
325,000 | 342,490 | ||||||||
b |
Upper Illinois River Valley Development Authority, Refunding, 3.50%, 12/01/32 |
118,783 | 98,947 | |||||||
Village of Villa Park, Garden Station Redevelopment Area, 4.50%, 12/31/38 |
100,000 | 73,084 | ||||||||
|
|
|||||||||
10,655,836 | ||||||||||
|
|
|||||||||
Indiana 0.5% | ||||||||||
b |
City of Goshen, Green Oaks of Goshen LLC, 4.75%, 8/01/24 |
130,000 | 125,375 | |||||||
b |
City of Jeffersonville, Vivera Senior Living of Columbus LLC, Series 2020A, 4.75%, 11/01/30 |
100,000 | 85,447 | |||||||
Indiana Finance Authority, |
||||||||||
Ohio Valley Electric Corp., Series 2012C, 3.00%, 11/01/30 |
150,000 | 134,901 | ||||||||
University of Evansville, 7.00%, 9/01/32 |
180,000 | 164,801 | ||||||||
b |
Indiana Housing & Community Development Authority, Vita of Marion LLC, Series 2021A, 5.00%, 4/01/31 |
100,000 | 85,401 | |||||||
|
|
|||||||||
595,925 | ||||||||||
|
|
|||||||||
Iowa 2.7% | ||||||||||
Iowa Finance Authority, |
||||||||||
a 4.00%, 12/01/50 |
2,000,000 | 1,868,309 | ||||||||
4.125%, 5/15/38 |
100,000 | 74,320 | ||||||||
a 4.274%, 5/15/56 |
500,000 | 456,564 | ||||||||
5.00%, 5/15/32 |
500,000 | 451,073 | ||||||||
Iowa Tobacco Settlement Authority, Refunding, Series 2021B-1, 4.00%, 6/01/49 |
610,000 | 564,703 | ||||||||
|
|
|||||||||
3,414,969 | ||||||||||
|
|
|||||||||
Kentucky 1.3% | ||||||||||
a |
City of Berea, 4.60%, 6/01/29 |
230,000 | 230,000 | |||||||
a |
County of Owen, Refunding, VRDN, Series A, 2.45%, 6/01/39 |
100,000 | 88,464 | |||||||
Kentucky Economic Development Finance Authority, 5.00%, 8/01/29 |
280,000 | 290,689 | ||||||||
a |
Kentucky Public Energy Authority, Kentucky Public Energy Authority, , Series 2022A2, Daily, VRDN, 4.758%, 8/01/52 |
1,035,000 | 981,995 | |||||||
Louisville/Jefferson County Metropolitan Government, Refunding, 4.00%, 5/01/29 |
100,000 | 90,917 | ||||||||
|
|
|||||||||
1,682,065 | ||||||||||
|
|
86 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
Principal Amount | * | Value | ||||||||
Municipal Bonds (continued) | ||||||||||
Louisiana 1.9% | ||||||||||
Lakeshore Villages Master Community Development District, 5.00%, 6/01/32 |
245,000 | $ | 238,438 | |||||||
Louisiana Local Government Environmental Facilities & Community Development Authority, |
||||||||||
3.50%, 11/01/32 |
2,000,000 | 1,843,819 | ||||||||
b 3.90%, 11/01/44 |
185,000 | 152,351 | ||||||||
b 5.00%, 7/01/29 |
95,000 | 89,202 | ||||||||
b Patriot Services Group Obligated Group, 5.25%, 10/01/32 |
145,000 | 118,760 | ||||||||
|
|
|||||||||
2,442,570 | ||||||||||
|
|
|||||||||
Maryland 1.8% | ||||||||||
b |
City of Baltimore, Harbor Point Special Taxing District, Refunding, 3.25%, 6/01/31 |
100,000 | 86,745 | |||||||
County of Frederick, Oakdale-Lake Linganore Development District, 3.25%, 7/01/29 |
140,000 | 127,084 | ||||||||
Maryland Economic Development Corp., Ports America Chesapeake LLC, Refunding, Series 2017A, 5.00%, 6/01/27 |
100,000 | 101,323 | ||||||||
Maryland Health & Higher Educational Facilities Authority, |
||||||||||
Adventist Healthcare Obligated Group, Refunding, 4.00%, 1/01/30 |
145,000 | 138,697 | ||||||||
Refunding, 5.00%, 6/01/30 |
100,000 | 104,242 | ||||||||
a |
Montgomery County Housing Opportunities Commission, 4.55%, 1/01/63 |
1,700,000 | 1,700,000 | |||||||
|
|
|||||||||
2,258,091 | ||||||||||
|
|
|||||||||
Massachusetts 0.6% | ||||||||||
Massachusetts Development Finance Agency, |
||||||||||
Foxborough Regional Charter School, Refunding, 5.00%, 7/01/27 |
80,000 | 79,025 | ||||||||
Salem Community Corp. Obligated Group, Refunding, 5.00%, 1/01/28 |
200,000 | 192,802 | ||||||||
Massachusetts Educational Financing Authority, 4.25%, 7/01/44 |
500,000 | 463,651 | ||||||||
|
|
|||||||||
735,478 | ||||||||||
|
|
|||||||||
Michigan 1.2% | ||||||||||
City of Detroit, 6.00%, 5/01/43 |
375,000 | 396,223 | ||||||||
Grand Rapids Economic Development Corp., Refunding, 4.00%, 11/01/27 |
100,000 | 93,336 | ||||||||
b |
Kalamazoo Economic Development Corp., Refunding, 5.00%, 8/15/31 |
110,000 | 101,420 | |||||||
Michigan Finance Authority, |
||||||||||
5.25%, 11/01/39 |
500,000 | 489,927 | ||||||||
Lawrence Technological University Obligated Group, Refunding, 4.00%, 2/01/27 |
190,000 | 180,528 | ||||||||
Lawrence Technological University Obligated Group, Refunding, 4.00%, 2/01/32 |
285,000 | 255,494 | ||||||||
|
|
|||||||||
1,516,928 | ||||||||||
|
|
|||||||||
Minnesota 1.2% | ||||||||||
County of Mille Lacs, Series 2018A, 3.00%, 2/01/24 |
135,000 | 134,225 | ||||||||
Duluth Economic Development Authority, Refunding, 4.00%, 7/01/31 |
125,000 | 112,052 | ||||||||
a |
Minnesota Municipal Gas Agency, 4.564%, 12/01/52 |
1,200,000 | 1,174,266 | |||||||
St. Louis Park Independent School District No. 283, Series 2018A, 5.00%, 2/01/25 |
100,000 | 101,596 | ||||||||
|
|
|||||||||
1,522,139 | ||||||||||
|
|
|||||||||
Mississippi 0.2% | ||||||||||
b |
Mississippi Development Bank, Magnolia Regional Health Center, Refunding, 5.00%, 10/01/31 |
150,000 | 148,354 | |||||||
Mississippi Home Corp., |
||||||||||
b Patriot Services Group Obligated Group, Series 2021D-8, 3.50%, 6/01/33 |
100,000 | 79,903 | ||||||||
Patriot Services Group Pascagoula Portfolio II Obligated Group, Series 2021A, 3.65%, 6/01/33 |
100,000 | 80,987 | ||||||||
|
|
|||||||||
309,244 | ||||||||||
|
|
|||||||||
Missouri 0.1% | ||||||||||
Cape Girardeau County Industrial Development Authority, SoutheastHEALTH Obligated Group, 5.00%, 3/01/29 |
130,000 | 130,284 | ||||||||
City of Maryland Heights, Westport Plaza Redevelopment, 3.625%, 11/01/31 |
40,000 | 36,806 | ||||||||
|
|
|||||||||
167,090 | ||||||||||
|
|
|||||||||
Montana 0.1% | ||||||||||
Cascade County High School District A Great Falls, 5.00%, 7/01/25 |
100,000 | 101,795 | ||||||||
|
|
franklintempleton.com | Semiannual Report | 87 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
Principal Amount | * | Value | ||||||||
Municipal Bonds (continued) | ||||||||||
Nevada 0.4% | ||||||||||
City of Las Vegas Special Improvement District No. 611, Special Improvement District No 611, Special Assessment, 3.50%, 6/01/31 |
160,000 | $ | 136,746 | |||||||
City of Las Vegas Special Improvement District No. 816, Special Assessment, 2.50%, 6/01/29 |
200,000 | 169,829 | ||||||||
Tahoe-Douglas Visitors Authority, 5.00%, 7/01/31 |
250,000 | 250,709 | ||||||||
|
|
|||||||||
557,284 | ||||||||||
|
|
|||||||||
New Jersey 2.0% | ||||||||||
b |
Camden County Improvement Authority, Camden Prep High School Project, 5.00%, 7/15/32 |
250,000 | 250,975 | |||||||
New Jersey Economic Development Authority, |
||||||||||
5.00%, 7/01/32 |
100,000 | 98,188 | ||||||||
a AMT, Refunding, VRDN, 2.20%, 10/01/39 |
100,000 | 82,599 | ||||||||
United Airlines, Inc., 5.25%, 9/15/29 |
250,000 | 249,362 | ||||||||
New Jersey Higher Education Student Assistance Authority, 4.00%, 12/01/44 |
1,000,000 | 902,232 | ||||||||
New Jersey Transportation Trust Fund Authority, 4.00%, 6/15/42 |
1,000,000 | 907,857 | ||||||||
|
|
|||||||||
2,491,213 | ||||||||||
|
|
|||||||||
New York 8.1% | ||||||||||
a |
City of New York, 4.25%, 10/01/46 |
1,000,000 | 1,000,000 | |||||||
Metropolitan Transportation Authority, |
||||||||||
Green Bond, Series 2017C-1, 5.00%, 11/15/28 |
1,260,000 | 1,306,104 | ||||||||
Green Bond, Series 2017C-1, 5.00%, 11/15/30 |
530,000 | 548,241 | ||||||||
New York City Municipal Water Finance Authority, |
||||||||||
a 4.25%, 6/15/33 |
885,000 | 885,000 | ||||||||
a 4.75%, 6/15/50 |
200,000 | 200,000 | ||||||||
a |
New York City Transitional Finance Authority Future Tax Secured Revenue, 4.75%, 11/01/36 |
100,000 | 100,000 | |||||||
New York State Dormitory Authority, St Joseph’s College, 5.00%, 7/01/30 |
65,000 | 66,427 | ||||||||
a,b |
New York State Environmental Facilities Corp., Casella Waste Systems Inc, 5.125%, 9/01/50 |
250,000 | 246,772 | |||||||
New York Transportation Development Corp., |
||||||||||
2.25%, 8/01/26 |
90,000 | 84,957 | ||||||||
3.00%, 8/01/31 |
210,000 | 181,709 | ||||||||
4.00%, 1/01/36 |
450,000 | 415,265 | ||||||||
5.00%, 1/01/36 |
935,000 | 930,907 | ||||||||
5.00%, 10/01/40 |
3,000,000 | 2,883,741 | ||||||||
AMT, 5.25%, 8/01/31 |
80,000 | 80,984 | ||||||||
Port Authority of New York & New Jersey, |
||||||||||
4.00%, 7/15/35 |
1,000,000 | 956,284 | ||||||||
Series 230TH, 3.00%, 12/01/31 |
500,000 | 472,160 | ||||||||
|
|
|||||||||
10,358,551 | ||||||||||
|
|
|||||||||
North Dakota 0.6% | ||||||||||
City of Horace, 5.125%, 7/01/25 |
500,000 | 501,640 | ||||||||
County of Burleigh, 5.10%, 4/15/36 |
250,000 | 233,081 | ||||||||
b,c |
County of Grand Forks, Red River Biorefinery LLC, AMT, 6.625%, 12/15/31 |
125,000 | 62,500 | |||||||
|
|
|||||||||
797,221 | ||||||||||
|
|
|||||||||
Ohio 2.2% | ||||||||||
Akron Bath Copley Joint Township Hospital District, Summa Health System Obligated Group, Refunding, 4.00%, 11/15/33 |
150,000 | 138,005 | ||||||||
Buckeye Tobacco Settlement Financing Authority, 4.00%, 6/01/38 |
250,000 | 236,250 | ||||||||
County of Cuyahoga, Eliza Jennings Obligated Group, Refunding, 5.00%, 5/15/32 |
555,000 | 519,107 | ||||||||
County of Franklin, |
||||||||||
Ohio Living Obligated Group, Refunding, 4.00%, 7/01/33 |
200,000 | 179,800 | ||||||||
Wesley Communities Obligated Group, Refunding, 5.00%, 11/15/30 |
100,000 | 94,991 | ||||||||
Franklin County Convention Facilities Authority, 5.00%, 12/01/30 |
100,000 | 97,427 | ||||||||
a |
Ohio Air Quality Development Authority, 4.25%, 11/01/39 |
1,000,000 | 978,683 | |||||||
Ohio Higher Educational Facility Commission, Cleveland Institute of Music/The, 5.00%, 12/01/32 |
300,000 | 294,341 | ||||||||
Ohio Housing Finance Agency, 8.00%, 8/01/34 |
100,000 | 96,898 |
88 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
Principal Amount | * | Value | ||||||||
Municipal Bonds (continued) | ||||||||||
Ohio (continued) | ||||||||||
State of Ohio, Refunding, 5.00%, 11/15/33 |
200,000 | $ | 200,609 | |||||||
|
|
|||||||||
2,836,111 | ||||||||||
|
|
|||||||||
Oregon 0.3% | ||||||||||
Union County Hospital Facility Authority, Grande Ronde Hospital Inc Obligated Group, 5.00%, 7/01/31 |
340,000 | 343,702 | ||||||||
|
|
|||||||||
Pennsylvania 1.1% | ||||||||||
Allegheny County Higher Education Building Authority, Robert Morris University, 5.00%, 10/15/26 |
100,000 | 99,502 | ||||||||
b |
Allentown Neighborhood Improvement Zone Development Authority, 5.00%, 5/01/28 |
100,000 | 100,569 | |||||||
Berks County Industrial Development Authority, 4.00%, 11/01/31 |
560,000 | 322,341 | ||||||||
Franklin County Industrial Development Authority, Refunding, 5.00%, 12/01/28 |
100,000 | 94,129 | ||||||||
a |
Luzerne County Industrial Development Authority, Pennsylvania-American Water Co., AMT, Refunding, VRDN, 2.45%, 12/01/39 |
100,000 | 86,686 | |||||||
Pennsylvania Economic Development Financing Authority, UPMC Obligated Group, Series 2017A, 3.375%, 11/15/33 |
125,000 | 112,942 | ||||||||
Philadelphia Authority for Industrial Development, MaST Community Charter School II, 5.00%, 8/01/30 |
150,000 | 149,505 | ||||||||
Redevelopment Authority of the City of Philadelphia, Social Bond, Series 2021A, 2.799%, 9/01/33 |
500,000 | 392,716 | ||||||||
Westmoreland County Industrial Development Authority, Excela Health Obligated Group, Refunding, Series 2020A, 5.00%, 7/01/30 |
100,000 | 100,412 | ||||||||
|
|
|||||||||
1,458,802 | ||||||||||
|
|
|||||||||
Puerto Rico 2.0% | ||||||||||
Commonwealth of Puerto Rico, |
||||||||||
Series 2021A1, 4.00%, 7/01/33 |
359,628 | 323,107 | ||||||||
Series 2021A1, 4.00%, 7/01/35 |
8,654 | 7,541 | ||||||||
Series 2021A1, 4.00%, 7/01/37 |
7,428 | 6,254 | ||||||||
Series 2021A1, 4.00%, 7/01/41 |
10,099 | 8,149 | ||||||||
Series 2021A1, 4.00%, 7/01/46 |
110,503 | 85,543 | ||||||||
Series 2021A1, 5.625%, 7/01/27 |
10,626 | 10,915 | ||||||||
Series 2021A1, 5.625%, 7/01/29 |
10,454 | 10,818 | ||||||||
Series 2021A1, 5.75%, 7/01/31 |
1,015,723 | 1,062,728 | ||||||||
a VRDN, 11/01/43 |
45,587 | 23,706 | ||||||||
zero cpn., 7/01/24 |
1,570 | 1,517 | ||||||||
zero cpn., 7/01/33 |
12,391 | 7,324 | ||||||||
GDB Debt Recovery Authority of Puerto Rico, 7.50%, 8/20/40 |
316,056 | 256,005 | ||||||||
HTA HRRB Custodial Trust, 5.25%, 7/01/32 |
200,000 | 199,245 | ||||||||
Puerto Rico Commonwealth Aqueduct & Sewer Authority, 6.125%, 7/01/24 |
5,000 | 5,050 | ||||||||
Puerto Rico Electric Power Authority, |
||||||||||
5.25%, 7/01/32 |
175,000 | 172,647 | ||||||||
Refunding, Series 2007VV, 5.25%, 7/01/27 |
170,000 | 169,302 | ||||||||
Puerto Rico Industrial Tourist Educational Medical & Environmental Control Financing Authority, |
||||||||||
4.00%, 7/01/37 |
100,000 | 86,509 | ||||||||
4.00%, 7/01/39 |
100,000 | 84,712 | ||||||||
4.00%, 7/01/40 |
100,000 | 83,983 | ||||||||
|
|
|||||||||
2,605,055 | ||||||||||
|
|
|||||||||
South Carolina 2.4% | ||||||||||
b |
County of Richland, Village at Sandhill Improvement District, Special Assessment, Refunding, 3.00%, 11/01/26 |
100,000 | 91,632 | |||||||
Patriots Energy Group, Refunding, 4.00%, 6/01/33 |
100,000 | 95,720 | ||||||||
a |
Patriots Energy Group Financing Agency, 5.25%, 10/01/54 |
2,500,000 | 2,517,913 |
franklintempleton.com | Semiannual Report | 89 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
Principal Amount | * | Value | ||||||||
Municipal Bonds (continued) |
||||||||||
South Carolina (continued) |
||||||||||
South Carolina Jobs-Economic Development Authority, |
||||||||||
AHPC Vista Towers 2021 LLC, 3.65%, 12/01/36 |
100,000 | $ | 76,075 | |||||||
b Columbia Portfolio Obligated Group, 5.75%, 6/01/37 |
315,000 | 200,512 | ||||||||
b Orchard Pk and Willowbrook Apartment, 3.65%, 12/01/36 |
100,000 | 76,299 | ||||||||
|
|
|||||||||
3,058,151 | ||||||||||
|
|
|||||||||
Tennessee 5.4% | ||||||||||
Chattanooga Health Educational & Housing Facility Board, 4.00%, 8/01/38 |
1,125,000 | 1,007,364 | ||||||||
Cleveland Housing Authority, |
||||||||||
b Cleveland Forward Phase One LLC, 6.25%, 4/01/41 |
300,000 | 270,618 | ||||||||
b Cleveland Forward Phase Two LLC, 6.25%, 4/01/41 |
100,000 | 90,206 | ||||||||
a |
Tennergy Corp., 5.50%, 10/01/53 |
2,000,000 | 2,032,473 | |||||||
a |
Tennessee Energy Acquisition Corp., 5.00%, 5/01/52 |
3,500,000 | 3,470,780 | |||||||
|
|
|||||||||
6,871,441 | ||||||||||
|
|
|||||||||
Texas 12.1% | ||||||||||
Cedar Port Navigation & Improvement District, 4.00%, 9/01/38 |
1,450,000 | 1,328,152 | ||||||||
City of Cedar Park, Refunding, 5.00%, 2/15/24 |
100,000 | 100,386 | ||||||||
City of Celina, |
||||||||||
b Celina Hills Public Improvement District, Special Assessment, 4.375%, 9/01/27 |
75,000 | 72,442 | ||||||||
b Chalk Hill Public Improvement District No 2, Special Assessment, 5.00%, 9/01/30 |
185,000 | 180,250 | ||||||||
b Edgewood Creek Public Improvement District, Special Assessment, 3.75%, 9/01/31 |
180,000 | 153,798 | ||||||||
b Pravin Public Improvement District, Special Assessment, 6.50%, 9/01/43 |
103,000 | 98,143 | ||||||||
b Special Assessment, 3.625%, 9/01/30 |
100,000 | 87,174 | ||||||||
b Sutton Fields II Public Improvement District, Special Assessment, 2.875%, 9/01/27 |
75,000 | 66,327 | ||||||||
b The Parks at Wilson Creek Public Improvement District, Special Assessment, 3.25%, 9/01/31 |
110,000 | 95,061 | ||||||||
b Wells North Public Improvement District, Special Assessment, 3.25%, 9/01/30 |
180,000 | 154,151 | ||||||||
b |
City of Crandall, Special Assessment, 4.75%, 9/15/31 |
100,000 | 89,230 | |||||||
City of Fate, |
||||||||||
b Monterra Public Improvement District, Special Assessment, 2.75%, 8/15/26 |
59,000 | 54,107 | ||||||||
b Williamsburg East Public Improvement District, Special Assessment, 3.375%, 8/15/30 |
145,000 | 124,111 | ||||||||
City of Horseshoe Bay, Escondido Public Improvement District, Special Assessment, Refunding, 3.00%, 10/01/30 |
140,000 | 119,977 | ||||||||
City of Houston Airport System Revenue, 4.00%, 7/01/40 |
1,000,000 | 904,053 | ||||||||
b |
City of Hutto, Emory Crossing Public Improvement District Impt Area No 2, Special Assessment, 4.50%, 9/01/30 |
270,000 | 265,906 | |||||||
City of Kyle, |
||||||||||
b 4.50%, 9/01/33 |
395,000 | 378,206 | ||||||||
b Creeks Public Improvement District, Special Assessment, 2.75%, 9/01/26 |
100,000 | 90,217 | ||||||||
Kyle 57 Public Improvement District, Series 2022, 4.75%, 9/01/32 |
133,000 | 126,310 | ||||||||
b Plum Creek North Public Improvement District, Special Assessment, 4.375%, 9/01/32 |
215,000 | 198,274 | ||||||||
City of Lago Vista, |
||||||||||
Special Assessment, Refunding, 3.125%, 9/01/30 |
130,000 | 115,059 | ||||||||
b Tessera on Lake Travis Public Improvement District, Special Assessment, Refunding, 5.00%, 9/01/30 |
140,000 | 127,915 | ||||||||
City of Leander, Oak Creek Public Improvement District, Special Assessment, Refunding, 3.25%, 9/01/32 |
100,000 | 83,912 | ||||||||
b |
City of Liberty Hill, Summerlyn West Public Improvement District, Special Assessment, 3.125%, 9/01/30 |
75,000 | 63,482 | |||||||
b |
City of Manor, 5.25%, 9/15/43 |
200,000 | 186,185 | |||||||
b |
City of Mclendon-Chisholm, Sonoma Public Improvement District, Special Assessment, 5.375%, 9/15/32 |
155,000 | 150,130 | |||||||
City of Mesquite, |
||||||||||
b 4.00%, 9/01/30 |
130,000 | 125,825 | ||||||||
b Solterra Public Improvement District Improvement Area C-1, Special Assessment, 5.375%, 9/01/43 |
102,000 | 95,949 |
90 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
Principal Amount | * | Value | ||||||||
Municipal Bonds (continued) | ||||||||||
Texas (continued) | ||||||||||
City of Pilot Point, |
| |||||||||
b Creekview Public Improvement District, Special Assessment, Series 2022, 5.25%, 9/15/32 |
150,000 | $ | 145,850 | |||||||
b Creekview Public Improvement District, Special Assessment, Series 2022, 5.75%, 9/15/32 |
145,000 | 140,757 | ||||||||
City of Princeton, |
| |||||||||
b Special Assessment, 3.25%, 9/01/30 |
100,000 | 86,615 | ||||||||
b Winchester Public Improvement District, Special Assessment, 2.875%, 9/01/31 |
100,000 | 82,167 | ||||||||
b |
City of Royse City, Creekshaw Public Improvement District, Special Assessment, 3.125%, 9/15/25 |
135,000 | 128,424 | |||||||
b |
City of Sachse, 6.00%, 9/15/28 |
100,000 | 99,701 | |||||||
City of Tomball, |
| |||||||||
b Raburn Reserve Public Improvement District Area No 2, Special Assessment, 4.875%, 9/15/33 |
145,000 | 141,547 | ||||||||
b Raburn Reserve Public Improvement District, Special Assessment, 3.375%, 9/15/30 |
100,000 | 88,286 | ||||||||
b |
County of Hays, La Cima Public Improvement District, Special Assessment, 3.25%, 9/15/30 |
150,000 | 126,895 | |||||||
b |
County of Medina, Woodlands Public Improvement District IA#1 Project, Special Assessment, 3.50%, 9/01/26 |
100,000 | 90,807 | |||||||
Fulshear Municipal Utility District No. 3A, 4.25%, 9/01/41 |
1,005,000 | 897,477 | ||||||||
Harris County Municipal Utility District No. 171, |
||||||||||
e 4.75%, 12/01/40 |
1,215,000 | 1,181,548 | ||||||||
e 6.75%, 12/01/26 |
1,015,000 | 1,079,675 | ||||||||
Lakes Fresh Water Supply District of Denton County, 4.375%, 9/01/42 |
1,350,000 | 1,227,853 | ||||||||
Matagorda County Navigation District No. 1, 5.125%, 11/01/28 |
1,000,000 | 1,011,978 | ||||||||
New Hope Cultural Education Facilities Finance Corp., |
||||||||||
5.00%, 4/01/31 |
30,000 | 30,786 | ||||||||
5.00%, 7/01/47 |
100,000 | 90,750 | ||||||||
CHF-Collegiate Housing College Station I LLC, 5.00%, 4/01/29 |
100,000 | 97,888 | ||||||||
Refunding, 4.00%, 1/01/29 |
100,000 | 88,704 | ||||||||
North Parkway Municipal Management District No. 1, |
||||||||||
b Legacy Hills Public Improvement District, Special Assessment, 3.625%, 9/15/31 |
50,000 | 43,122 | ||||||||
b Special Assessment, 4.25%, 9/15/31 |
152,000 | 141,758 | ||||||||
Northlake Municipal Management District No. 1, 5.00%, 3/01/40 |
925,000 | 920,616 | ||||||||
Texas Municipal Gas Acquisition & Supply Corp. III, 5.00%, 12/15/31 |
1,750,000 | 1,724,502 | ||||||||
Viridian Municipal Management District, |
||||||||||
Special Assessment, 2.875%, 12/01/30 |
100,000 | 82,594 | ||||||||
Viridian Public Improvement District, Special Assessment, 2.375%, 12/01/25 |
40,000 | 37,151 | ||||||||
|
|
|||||||||
15,422,183 | ||||||||||
|
|
|||||||||
Utah 0.5% | ||||||||||
Military Installation Development Authority, Series 2021A-2, 4.00%, 6/01/36 |
250,000 | 201,272 | ||||||||
b |
Utah Charter School Finance Authority, Wallace Stegner Academy, Series 2022A, 5.25%, 6/15/32 |
230,000 | 222,804 | |||||||
Utah Infrastructure Agency, 5.00%, 10/15/32 |
250,000 | 252,122 | ||||||||
|
|
|||||||||
676,198 | ||||||||||
|
|
|||||||||
Virginia 0.2% | ||||||||||
b |
Peninsula Town Center Community Development Authority, Special Assessment, Refunding, 4.50%, 9/01/28 |
100,000 | 97,091 | |||||||
Virginia Small Business Financing Authority, National Senior Campuses, Inc. Obligated Group, Refunding, 5.00%, 1/01/33 |
100,000 | 101,125 | ||||||||
|
|
|||||||||
198,216 | ||||||||||
|
|
|||||||||
Washington 3.2% | ||||||||||
Skagit County Public Hospital District No. 1, Refunding, 5.00%, 12/01/29 |
100,000 | 99,031 | ||||||||
Washington Health Care Facilities Authority, |
||||||||||
b 3.00%, 12/01/34 |
125,000 | 104,659 | ||||||||
b 5.00%, 12/01/32 |
250,000 | 260,289 | ||||||||
5.00%, 8/01/35 |
970,000 | 994,454 | ||||||||
5.00%, 8/01/39 |
1,000,000 | 1,004,023 |
franklintempleton.com | Semiannual Report | 91 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Dynamic Municipal Bond ETF (continued)
Principal Amount | * | Value | ||||||||
Municipal Bonds (continued) | ||||||||||
Washington (continued) | ||||||||||
Washington State Housing Finance Commission, |
||||||||||
5.00%, 7/01/38 |
1,255,000 | $ | 1,261,970 | |||||||
b eliseo Obligated Group, Series 2021A, 4.00%, 1/01/31 |
100,000 | 88,922 | ||||||||
b Madison at Rivers Edge Apartments LLC, 3.65%, 1/01/37 |
100,000 | 76,277 | ||||||||
b Presbyterian Retirement Communities Northwest Obligated Group, Series 2019A, 5.00%, 1/01/34 |
100,000 | 87,130 | ||||||||
b Spokane United Methodist Homes Obligated Group, 5.00%, 1/01/32 |
100,000 | 90,118 | ||||||||
|
|
|||||||||
4,066,873 | ||||||||||
|
|
|||||||||
West Virginia 0.2% | ||||||||||
a |
West Virginia Economic Development Authority, Appalachian Power Co., VRDN, 3.75%, 12/01/42 |
250,000 | 246,088 | |||||||
|
|
|||||||||
Wisconsin 1.1% | ||||||||||
Public Finance Authority, |
||||||||||
b 5.00%, 3/01/37 |
385,000 | 336,501 | ||||||||
b Coral Academy of Science Reno, 5.375%, 6/01/37 |
335,000 | 316,830 | ||||||||
b Friends Homes Obligated Group, Refunding, 4.00%, 9/01/29 |
100,000 | 91,707 | ||||||||
b Ocean Academy Charter School, 4.00%, 10/15/31 |
100,000 | 87,106 | ||||||||
b Refunding, 4.00%, 3/01/27 |
45,000 | 43,906 | ||||||||
b Refunding, 4.00%, 7/01/31 |
100,000 | 87,691 | ||||||||
b Refunding, 5.00%, 10/01/24 |
100,000 | 99,598 | ||||||||
b Refunding, 5.00%, 10/01/29 |
100,000 | 98,829 | ||||||||
b Signature Preparatory, 5.00%, 6/15/31 |
120,000 | 112,324 | ||||||||
a,b VRDN, 3.50%, 12/01/50 |
100,000 | 77,199 | ||||||||
|
|
|||||||||
1,351,691 | ||||||||||
|
|
|||||||||
Senior Floating Rate Interest 0.4% |
||||||||||
Real Estate Development 0.4% | ||||||||||
Centennial Gardens LP, Delayed Draw Term Loan, 6.874%, 8/01/24 |
500,000 | 506,700 | ||||||||
|
|
|||||||||
Total Floating Rate Loans (Cost $500,000) |
506,700 | |||||||||
|
|
|||||||||
Total Investments (Cost $136,693,505) 101.5% |
129,195,124 | |||||||||
Other Assets, less Liabilities (1.5)% |
(1,849,254 | ) | ||||||||
|
|
|||||||||
Net Assets 100.0% |
$ | 127,345,870 | ||||||||
|
|
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aVariable rate security. The rate shown represents the yield at period end.
bSecurity 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 $19,766,562, representing 15.5% of net assets.
cSee Note 7 regarding defaulted securities.
dFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.
eSecurity purchased on a when-issued basis. See Note 1(b).
See Abbreviations on page 220.
92 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Exponential Data ETF
Six Months Ended September 30, 2023 (unaudited) |
Year Ended March 31, | |||||||||||||||
2023 | 2022 | 2021a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||
Net asset value, beginning of period |
$16.86 | $22.78 | $23.34 | $25.00 | ||||||||||||
Income from investment operationsb: | ||||||||||||||||
Net investment income (loss)c |
0.01 | (0.01 | ) | (0.05 | ) | (— | )d | |||||||||
Net realized and unrealized gains (losses) |
1.09 | (5.91 | ) | (0.51 | ) | (1.66 | ) | |||||||||
Total from investment operations |
1.10 | (5.92 | ) | (0.56 | ) | (1.66 | ) | |||||||||
Net asset value, end of period |
$17.96 | $16.86 | $22.78 | $23.34 | ||||||||||||
Total returne |
6.52% | (25.99)% | (2.40)% | (6.64)% | ||||||||||||
Ratios to average net assetsf | ||||||||||||||||
Expenses before waiver and payments by affiliates |
0.50% | 0.50% | 1.73% | 5.95% | ||||||||||||
Expenses net of waiver and payments by affiliates |
0.48% | 0.50% | 0.38% | 0.25% | ||||||||||||
Net investment income (loss) |
0.11% | (0.07)% | (0.20)% | (0.07)% | ||||||||||||
Supplemental data | ||||||||||||||||
Net assets, end of period (000’s) |
$3,592 | $3,372 | $3,417 | $2,334 | ||||||||||||
Portfolio turnover rateg |
5.45%h | 20.94%h | 49.72%h | 23.20%h |
aFor the period January 12, 2021 (commencement of operations) to March 31, 2021.
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.
dAmount rounds to less than $0.01 per share.
eTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
fRatios are annualized for periods less than one year.
gPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
hPortfolio turnover rate excluding cash creations was as follows: | 5.45% | 20.94% | 49.72% | 23.20% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 93 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2023 (unaudited)
Franklin Exponential Data ETF
Country | Shares | Value | ||||||||||||
Common Stocks 97.1% |
||||||||||||||
Capital Markets 6.6% | ||||||||||||||
FactSet Research Systems, Inc. |
United States | 152 | $ | 66,464 | ||||||||||
Moody’s Corp. |
United States | 66 | 20,867 | |||||||||||
MSCI, Inc. |
United States | 149 | 76,449 | |||||||||||
S&P Global, Inc. |
United States | 196 | 71,620 | |||||||||||
|
|
|||||||||||||
235,400 | ||||||||||||||
|
|
|||||||||||||
Communications Equipment 3.0% | ||||||||||||||
a |
Arista Networks, Inc. |
United States | 593 | 109,070 | ||||||||||
|
|
|||||||||||||
Electronic Equipment, Instruments & Components 1.0% | ||||||||||||||
a |
Keysight Technologies, Inc. |
United States | 277 | 36,650 | ||||||||||
|
|
|||||||||||||
Health Care Equipment & Supplies 1.1% | ||||||||||||||
a |
Dexcom, Inc. |
United States | 421 | 39,279 | ||||||||||
|
|
|||||||||||||
Interactive Media & Services 8.5% | ||||||||||||||
a |
Alphabet, Inc., Class A |
United States | 1,349 | 176,530 | ||||||||||
a |
Meta Platforms, Inc., Class A |
United States | 366 | 109,877 | ||||||||||
a |
ZoomInfo Technologies, Inc., Class A |
United States | 1,113 | 18,253 | ||||||||||
|
|
|||||||||||||
304,660 | ||||||||||||||
|
|
|||||||||||||
IT Services 18.7% | ||||||||||||||
Accenture PLC, Class A |
United States | 249 | 76,470 | |||||||||||
a |
Akamai Technologies, Inc. |
United States | 88 | 9,376 | ||||||||||
a |
Cloudflare, Inc., Class A |
United States | 1,063 | 67,012 | ||||||||||
a |
Endava PLC, ADR |
United Kingdom | 210 | 12,044 | ||||||||||
a |
EPAM Systems, Inc. |
United States | 41 | 10,483 | ||||||||||
a |
Gartner, Inc. |
United States | 226 | 77,656 | ||||||||||
a |
Globant SA |
United States | 78 | 15,432 | ||||||||||
a |
MongoDB, Inc. |
United States | 762 | 263,545 | ||||||||||
a |
Snowflake, Inc., Class A |
United States | 917 | 140,090 | ||||||||||
|
|
|||||||||||||
672,108 | ||||||||||||||
|
|
|||||||||||||
Media 2.4% | ||||||||||||||
a |
Trade Desk, Inc., Class A |
United States | 1,093 | 85,418 | ||||||||||
|
|
|||||||||||||
Professional Services 0.7% | ||||||||||||||
TransUnion |
United States | 252 | 18,091 | |||||||||||
Verisk Analytics, Inc. |
United States | 37 | 8,741 | |||||||||||
|
|
|||||||||||||
26,832 | ||||||||||||||
|
|
|||||||||||||
Software 44.9% | ||||||||||||||
a |
Adobe, Inc. |
United States | 17 | 8,668 | ||||||||||
a |
Confluent, Inc., Class A |
United States | 1,330 | 39,381 | ||||||||||
a |
Crowdstrike Holdings, Inc., Class A |
United States | 785 | 131,393 | ||||||||||
a |
Datadog, Inc., Class A |
United States | 1,865 | 169,883 | ||||||||||
a |
Fair Isaac Corp. |
United States | 146 | 126,805 | ||||||||||
a |
Fortinet, Inc. |
United States | 1,354 | 79,453 | ||||||||||
a |
Gitlab, Inc., Class A |
United States | 258 | 11,667 | ||||||||||
a |
HubSpot, Inc. |
United States | 114 | 56,145 | ||||||||||
Microsoft Corp. |
United States | 950 | 299,963 | |||||||||||
a |
Monday.com Ltd. |
United States | 505 | 80,406 | ||||||||||
a |
Palo Alto Networks, Inc. |
United States | 773 | 181,222 | ||||||||||
a |
Qualys, Inc. |
United States | 61 | 9,306 | ||||||||||
a |
Salesforce, Inc. |
United States | 257 | 52,115 | ||||||||||
a |
SentinelOne, Inc., Class A |
United States | 2,569 | 43,313 | ||||||||||
a |
ServiceNow, Inc. |
United States | 318 | 177,749 | ||||||||||
a |
Sprinklr, Inc., Class A |
United States | 1,646 | 22,781 | ||||||||||
a |
Sprout Social, Inc., Class A |
United States | 286 | 14,266 | ||||||||||
Trend Micro, Inc. |
Japan | 1,209 | 45,921 |
94 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Exponential Data ETF (continued)
Country | Shares | Value | ||||||||||||
Common Stocks (continued) |
||||||||||||||
Software (continued) | ||||||||||||||
a |
Zscaler, Inc. |
United States | 402 | $ | 62,547 | |||||||||
|
|
|||||||||||||
1,612,984 | ||||||||||||||
|
|
|||||||||||||
Specialized REITs 7.2% | ||||||||||||||
Crown Castle, Inc. |
United States | 573 | 52,733 | |||||||||||
Equinix, Inc. |
United States | 218 | 158,325 | |||||||||||
SBA Communications Corp. |
United States | 235 | 47,040 | |||||||||||
|
|
|||||||||||||
258,098 | ||||||||||||||
|
|
|||||||||||||
Wireless Telecommunication Services 3.0% | ||||||||||||||
a |
T-Mobile U.S., Inc. |
United States | 770 | 107,838 | ||||||||||
|
|
|||||||||||||
Total Common Stocks (Cost $3,351,143) |
3,488,337 | |||||||||||||
|
|
|||||||||||||
Total Investments before Short-Term Investments (Cost $3,351,143) |
3,488,337 | |||||||||||||
|
|
|||||||||||||
Short-Term Investments 2.9% |
||||||||||||||
Money Market Funds 2.9% | ||||||||||||||
b,c |
Institutional Fiduciary Trust - Money Market Portfolio, 5.15% |
United States | 102,704 | 102,704 | ||||||||||
|
|
|||||||||||||
Total Short-Term Investments (Cost $102,704) |
102,704 | |||||||||||||
|
|
|||||||||||||
Total Investments (Cost $3,453,847) 100.0% |
3,591,041 | |||||||||||||
Other Assets, less Liabilities 0.0%† |
1,363 | |||||||||||||
|
|
|||||||||||||
Net Assets 100.0% |
$ | 3,592,404 | ||||||||||||
|
|
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bThe rate shown is the annualized seven-day effective yield at period end.
cSee Note 3(d) regarding investments in affiliated management investment companies.
See Abbreviations on page 220.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 95 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Genomic Advancements ETF
Six Months Ended September 30, 2023 (unaudited) |
Year Ended March 31, | |||||||||||||||||||
2023 | 2022 | 2021 | 2020a | |||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||
Net asset value, beginning of period |
$30.40 | $37.00 | $43.26 | $22.58 | $25.00 | |||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||
Net investment income (loss)c |
(0.04 | ) | (0.05 | ) | (0.15 | ) | (0.18 | ) | (0.01 | ) | ||||||||||
Net realized and unrealized gains (losses) |
(2.00 | ) | (6.55 | ) | (5.99 | ) | 20.92 | (2.41 | ) | |||||||||||
Total from investment operations |
(2.04 | ) | (6.60 | ) | (6.14 | ) | 20.74 | (2.42 | ) | |||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income |
— | — | (0.12 | ) | (0.01 | ) | — | |||||||||||||
Net realized gains |
— | — | — | (0.05 | ) | — | ||||||||||||||
Total distributions |
— | — | (0.12 | ) | (0.06 | ) | — | |||||||||||||
Net asset value, end of period |
$28.36 | $30.40 | $37.00 | $43.26 | $22.58 | |||||||||||||||
Total returnd |
(6.71)% | (17.84)% | (14.26)% | 91.81% | (9.68)% | |||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.50% | 0.50% | 0.66% | 1.84% | 12.22% | |||||||||||||||
Expenses net of waiver and payments by affiliates |
0.50% | 0.50% | 0.50% | 0.50% | 0.50% | |||||||||||||||
Net investment income (loss) |
(0.26)% | (0.16)% | (0.32)% | (0.45)% | (0.37)% | |||||||||||||||
Supplemental data | ||||||||||||||||||||
Net assets, end of period (000’s) |
$8,507 | $10,641 | $14,799 | $15,140 | $2,258 | |||||||||||||||
Portfolio turnover ratef |
2.74%g | 32.63%g | 61.43%g | 46.58%g | 2.20%g |
aFor the period February 25, 2020 (commencement of operations) to March 31, 2020.
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: | 2.74% | 31.65% | 59.54% | 44.75% | 2.20% |
96 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2023 (unaudited)
Franklin Genomic Advancements ETF
Country | Shares | Value | ||||||||||||
Common Stocks 94.0% |
||||||||||||||
Biotechnology 32.8% | ||||||||||||||
a |
Alnylam Pharmaceuticals, Inc. |
United States | 1,143 | $ | 202,425 | |||||||||
a |
Avid Bioservices, Inc. |
United States | 10,600 | 100,064 | ||||||||||
a |
Bavarian Nordic AS |
Denmark | 1,522 | 34,251 | ||||||||||
a |
Beam Therapeutics, Inc. |
United States | 1,720 | 41,366 | ||||||||||
a |
BioNTech SE, ADR |
Germany | 2,026 | 220,105 | ||||||||||
a |
CRISPR Therapeutics AG |
Switzerland | 1,371 | 62,230 | ||||||||||
a |
Dynavax Technologies Corp. |
United States | 6,720 | 99,254 | ||||||||||
a |
Exact Sciences Corp. |
United States | 2,075 | 141,557 | ||||||||||
a |
Intellia Therapeutics, Inc. |
United States | 4,555 | 144,029 | ||||||||||
a |
Ionis Pharmaceuticals, Inc. |
United States | 4,500 | 204,120 | ||||||||||
a |
Krystal Biotech, Inc. |
United States | 2,181 | 252,996 | ||||||||||
a |
Moderna, Inc. |
United States | 1,775 | 183,340 | ||||||||||
a |
Natera, Inc. |
United States | 884 | 39,117 | ||||||||||
a |
PTC Therapeutics, Inc. |
United States | 551 | 12,348 | ||||||||||
a |
Regeneron Pharmaceuticals, Inc. |
United States | 422 | 347,289 | ||||||||||
a |
Rocket Pharmaceuticals, Inc. |
United States | 4,212 | 86,304 | ||||||||||
a |
Sarepta Therapeutics, Inc. |
United States | 1,834 | 222,317 | ||||||||||
a |
Twist Bioscience Corp. |
United States | 1,242 | 25,163 | ||||||||||
a |
Veracyte, Inc. |
United States | 687 | 15,341 | ||||||||||
a |
Vertex Pharmaceuticals, Inc. |
United States | 1,030 | 358,172 | ||||||||||
|
|
|||||||||||||
2,791,788 | ||||||||||||||
|
|
|||||||||||||
Chemicals 2.8% | ||||||||||||||
Corteva, Inc. |
United States | 4,595 | 235,080 | |||||||||||
|
|
|||||||||||||
Health Care Providers & Services 2.5% | ||||||||||||||
a |
Guardant Health, Inc. |
United States | 2,500 | 74,100 | ||||||||||
Laboratory Corp. of America Holdings |
United States | 436 | 87,658 | |||||||||||
a |
Privia Health Group, Inc. |
United States | 2,304 | 52,992 | ||||||||||
|
|
|||||||||||||
214,750 | ||||||||||||||
|
|
|||||||||||||
Health Care Technology 2.1% |
||||||||||||||
a |
Doximity, Inc., Class A |
United States | 1,065 | 22,599 | ||||||||||
a |
Schrodinger, Inc. |
United States | 4,228 | 119,525 | ||||||||||
Simulations Plus, Inc. |
United States | 861 | 35,904 | |||||||||||
|
|
|||||||||||||
178,028 | ||||||||||||||
|
|
|||||||||||||
Life Sciences Tools & Services 45.5% | ||||||||||||||
Agilent Technologies, Inc. |
United States | 1,461 | 163,369 | |||||||||||
a |
Avantor, Inc. |
United States | 1,037 | 21,860 | ||||||||||
a |
Azenta, Inc. |
United States | 467 | 23,439 | ||||||||||
a |
Bio-Rad Laboratories, Inc., Class A |
United States | 205 | 73,482 | ||||||||||
Bio-Techne Corp. |
United States | 1,252 | 85,224 | |||||||||||
Bruker Corp. |
United States | 3,576 | 222,785 | |||||||||||
a |
Charles River Laboratories International, Inc. |
United States | 953 | 186,769 | ||||||||||
Danaher Corp. |
United States | 2,081 | 516,296 | |||||||||||
a |
Evotec SE |
Germany | 4,567 | 91,387 | ||||||||||
a |
Fortrea Holdings, Inc. |
United States | 436 | 12,465 | ||||||||||
a |
ICON PLC, ADR |
Ireland | 470 | 115,738 | ||||||||||
a |
IQVIA Holdings, Inc. |
United States | 466 | 91,686 | ||||||||||
Lonza Group AG |
Switzerland | 374 | 173,999 | |||||||||||
a |
Medpace Holdings, Inc. |
United States | 1,939 | 469,490 | ||||||||||
a |
Olink Holding AB, ADR |
Sweden | 480 | 7,080 | ||||||||||
a,b |
OmniAb, Inc., 12.5 Earnout |
United States | 240 | — | ||||||||||
a,b |
OmniAb, Inc., 15.0 Earnout |
United States | 240 | — | ||||||||||
a |
Oxford Nanopore Technologies PLC |
United Kingdom | 28,572 | 71,700 | ||||||||||
a |
Pacific Biosciences of California, Inc. |
United States | 2,325 | 19,414 | ||||||||||
a |
QIAGEN NV |
Netherlands | 4,319 | 174,920 |
franklintempleton.com | Semiannual Report | 97 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Genomic Advancements ETF (continued)
Country | Shares | Value | ||||||||||||
Common Stocks (continued) | ||||||||||||||
Life Sciences Tools & Services (continued) | ||||||||||||||
a |
Repligen Corp. |
United States | 2,730 | $ | 434,097 | |||||||||
Revvity, Inc. |
United States | 1,202 | 133,061 | |||||||||||
a,c |
Samsung Biologics Co. Ltd. |
South Korea | 489 | 246,783 | ||||||||||
Thermo Fisher Scientific, Inc. |
United States | 1,050 | 531,478 | |||||||||||
|
|
|||||||||||||
3,866,522 | ||||||||||||||
|
|
|||||||||||||
Office REITs 0.4% | ||||||||||||||
Alexandria Real Estate Equities, Inc. |
United States | 320 | 32,032 | |||||||||||
|
|
|||||||||||||
Pharmaceuticals 6.3% | ||||||||||||||
AstraZeneca PLC, ADR |
United Kingdom | 3,314 | 224,424 | |||||||||||
Bristol-Myers Squibb Co. |
United States | 1,380 | 80,095 | |||||||||||
Eli Lilly & Co. |
United States | 345 | 185,310 | |||||||||||
a |
Ligand Pharmaceuticals, Inc. |
United States | 805 | 48,236 | ||||||||||
|
|
|||||||||||||
538,065 | ||||||||||||||
|
|
|||||||||||||
Software 1.6% | ||||||||||||||
a |
Cadence Design Systems, Inc. |
United States | 585 | 137,065 | ||||||||||
|
|
|||||||||||||
Total Common Stocks (Cost $10,622,525) |
7,993,330 | |||||||||||||
|
|
|||||||||||||
Preferred Stock 3.2% |
||||||||||||||
Life Sciences Tools & Services 3.2% | ||||||||||||||
d |
Sartorius AG, 0.45%, pfd. |
Germany | 801 | 272,906 | ||||||||||
|
|
|||||||||||||
Total Preferred Stocks (Cost $512,401) |
272,906 | |||||||||||||
|
|
|||||||||||||
Total Investments (Cost $11,134,926) 97.2% |
8,266,236 | |||||||||||||
Other Assets, less Liabilities 2.8% |
240,744 | |||||||||||||
|
|
|||||||||||||
Net Assets 100.0% |
$ | 8,506,980 | ||||||||||||
|
|
aNon-income producing.
bFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.
cSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2023, the value of was $246,783, representing 2.9% of net assets.
dVariable rate security. The rate shown represents the yield at period end.
See Abbreviations on page 220.
98 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin High Yield Corporate ETF
Six Months Ended (unaudited) |
Year Ended March 31, | |||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019a | ||||||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||||||
Net asset value, beginning of period |
$22.63 | $24.76 | $26.16 | $22.67 | $25.45 | $25.00 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec |
0.70 | 1.25 | 1.20 | 1.23 | 1.33 | 1.21 | ||||||||||||||||||
Net realized and unrealized gains (losses) |
(0.06 | ) | (1.95 | ) | (1.34 | ) | 3.73 | (2.51 | ) | 0.49 | ||||||||||||||
Total from investment operations |
0.64 | (0.70 | ) | (0.14 | ) | 4.96 | (1.18 | ) | 1.70 | |||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income |
(0.78 | ) | (1.36 | ) | (1.18 | ) | (1.47 | ) | (1.56 | ) | (1.23 | ) | ||||||||||||
Net realized gains |
— | (0.07 | ) | (0.08 | ) | — | (0.04 | ) | (0.02 | ) | ||||||||||||||
Total distributions |
(0.78 | ) | (1.43 | ) | (1.26 | ) | (1.47 | ) | (1.60 | ) | (1.25 | ) | ||||||||||||
Net asset value, end of period |
$22.49 | $22.63 | $24.76 | $26.16 | $22.67 | $25.45 | ||||||||||||||||||
Total returnd |
2.88% | (2.68)% | (0.69)% | 22.28% | (5.12)% | 7.07% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.40% | 0.40% | 0.47% | 0.64% | 0.86% | 1.54% | ||||||||||||||||||
Expenses net of waiver and payments by affiliates |
0.40% | 0.40% | 0.40% | 0.40% | 0.40% | 0.40% | ||||||||||||||||||
Net investment income |
6.20% | 5.51% | 4.62% | 4.84% | 5.29% | 5.80% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) |
$223,742 | $208,167 | $334,286 | $346,586 | $130,362 | $10,181 | ||||||||||||||||||
Portfolio turnover ratef |
12.12%g | 17.13%g | 43.83%g | 53.18%g | 129.98%g | 23.57% |
aFor the period May 30, 2018 (commencement of operations) to March 31, 2019.
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”).
g Portfolio turnover rate excluding cash creations was as follows: | 12.12% | 17.13% | 43.83% | 53.18% | 129.98% | — |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 99 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2023 (unaudited)
Franklin High Yield Corporate ETF
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes 91.9% |
||||||||||||||
Airlines 1.6% | ||||||||||||||
a |
American Airlines, Inc./AAdvantage Loyalty IP Ltd., 5.50%, 4/20/26 |
United States | 2,016,666 | $ | 1,971,398 | |||||||||
a |
United Airlines, Inc., 4.375%, 4/15/26 |
United States | 1,700,000 | 1,573,835 | ||||||||||
|
|
|||||||||||||
3,545,233 | ||||||||||||||
|
|
|||||||||||||
Apparel 0.3% | ||||||||||||||
a |
Hanesbrands, Inc., 9.00%, 2/15/31 |
United States | 800,000 | 763,417 | ||||||||||
|
|
|||||||||||||
Auto Manufacturers 0.2% | ||||||||||||||
Ford Motor Credit Co. LLC, 6.95%, 3/06/26 |
United States | 500,000 | 499,640 | |||||||||||
|
|
|||||||||||||
Automobiles & Components 3.3% | ||||||||||||||
Adient Global Holdings Ltd., |
||||||||||||||
a |
7.00%, 4/15/28 |
United States | 500,000 | 496,486 | ||||||||||
a |
8.25%, 4/15/31 |
United States | 1,400,000 | 1,403,427 | ||||||||||
a |
Dornoch Debt Merger Sub, Inc., 6.625%, 10/15/29 |
United States | 1,900,000 | 1,573,032 | ||||||||||
Goodyear Tire & Rubber Co., |
||||||||||||||
4.875%, 3/15/27 |
United States | 1,000,000 | 922,165 | |||||||||||
5.00%, 7/15/29 |
United States | 1,100,000 | 948,944 | |||||||||||
a |
Jaguar Land Rover Automotive PLC, 5.50%, 7/15/29 |
United Kingdom | 2,500,000 | 2,140,364 | ||||||||||
|
|
|||||||||||||
7,484,418 | ||||||||||||||
|
|
|||||||||||||
Capital Goods 4.2% | ||||||||||||||
a |
ATS Corp., 4.125%, 12/15/28 |
Canada | 900,000 | 797,735 | ||||||||||
a |
Chart Industries, Inc., 7.50%, 1/01/30 |
United States | 1,000,000 | 1,006,730 | ||||||||||
a |
Cornerstone Building Brands, Inc., 6.125%, 1/15/29 |
United States | 1,400,000 | 1,062,984 | ||||||||||
a |
Knife River Corp., 7.75%, 5/01/31 |
United States | 900,000 | 902,983 | ||||||||||
a |
Stericycle, Inc., 3.875%, 1/15/29 |
United States | 1,700,000 | 1,467,814 | ||||||||||
a |
TransDigm, Inc., senior secured note, 6.25%, 3/15/26 |
United States | 2,800,000 | 2,753,676 | ||||||||||
a |
Vertiv Group Corp., 4.125%, 11/15/28 |
United States | 1,700,000 | 1,495,848 | ||||||||||
|
|
|||||||||||||
9,487,770 | ||||||||||||||
|
|
|||||||||||||
Chemicals 1.6% | ||||||||||||||
Celanese U.S. Holdings LLC, 6.33%, 7/15/29 |
United States | 1,900,000 | 1,863,990 | |||||||||||
a |
Rain Carbon, Inc., 12.25%, 9/01/29 |
United States | 1,700,000 | 1,785,000 | ||||||||||
|
|
|||||||||||||
3,648,990 | ||||||||||||||
|
|
|||||||||||||
Commercial & Professional Services 4.0% | ||||||||||||||
a |
APX Group, Inc., 5.75%, 7/15/29 |
United States | 1,200,000 | 1,012,544 | ||||||||||
a |
Gartner, Inc., 3.625%, 6/15/29 |
United States | 1,000,000 | 856,488 | ||||||||||
Grand Canyon University, 5.125%, 10/01/28 |
United States | 1,900,000 | 1,730,976 | |||||||||||
a |
H&E Equipment Services, Inc., senior note, 3.875%, 12/15/28 |
United States | 2,100,000 | 1,795,530 | ||||||||||
a |
MPH Acquisition Holdings LLC, 5.75%, 11/01/28 |
United States | 1,600,000 | 1,203,144 | ||||||||||
a |
Prime Security Services Borrower LLC/Prime Finance, Inc., first lien, 3.375%, 8/31/27 |
United States | 1,900,000 | 1,666,485 | ||||||||||
a |
PROG Holdings, Inc., 6.00%, 11/15/29 |
United States | 800,000 | 698,960 | ||||||||||
|
|
|||||||||||||
8,964,127 | ||||||||||||||
|
|
|||||||||||||
Commercial Services 1.3% | ||||||||||||||
a |
Ashtead Capital, Inc., 1.50%, 8/12/26 |
United Kingdom | 700,000 | 616,373 | ||||||||||
United Rentals North America, Inc., 5.50%, 5/15/27 |
United States | 2,300,000 | 2,237,468 | |||||||||||
|
|
|||||||||||||
2,853,841 | ||||||||||||||
|
|
|||||||||||||
Construction Materials 1.1% | ||||||||||||||
a |
AmeriTex HoldCo Intermediate LLC, 10.25%, 10/15/28 |
United States | 800,000 | 792,000 | ||||||||||
a |
Camelot Return Merger Sub, Inc., 8.75%, 8/01/28 |
United States | 200,000 | 193,184 | ||||||||||
a |
Emerald Debt Merger Sub LLC, 6.625%, 12/15/30 |
United States | 1,600,000 | 1,542,280 | ||||||||||
|
|
|||||||||||||
2,527,464 | ||||||||||||||
|
|
100 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin High Yield Corporate ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) |
||||||||||||||
Consumer Discretionary Distribution & Retail 1.1% | ||||||||||||||
a |
Fertitta Entertainment LLC/Fertitta Entertainment Finance Co., Inc., 6.75%, 1/15/30 |
United States | 1,200,000 | $ | 979,555 | |||||||||
a |
Gap, Inc., 3.625%, 10/01/29 |
United States | 700,000 | 518,862 | ||||||||||
Macy’s Retail Holdings LLC, |
||||||||||||||
a |
6.125%, 3/15/32 |
United States | 400,000 | 330,552 | ||||||||||
a |
5.875%, 3/15/30 |
United States | 700,000 | 594,209 | ||||||||||
|
|
|||||||||||||
2,423,178 | ||||||||||||||
|
|
|||||||||||||
Consumer Durables & Apparel 0.4% | ||||||||||||||
a |
Ashton Woods USA LLC/Ashton Woods Finance Co., 4.625%, 4/01/30 |
United States | 1,200,000 | 983,628 | ||||||||||
|
|
|||||||||||||
Consumer Services 4.7% |
||||||||||||||
a,b,c |
24 Hour Fitness Worldwide, Inc., senior note, 8.00%, 6/01/22 |
United States | 800,000 | — | ||||||||||
Carnival Corp., |
||||||||||||||
a |
7.625%, 3/01/26 |
United States | 800,000 | 778,775 | ||||||||||
a |
senior note, 5.75%, 3/01/27 |
United States | 2,200,000 | 1,993,396 | ||||||||||
a |
NCL Corp. Ltd., 5.875%, 3/15/26 |
United States | 1,300,000 | 1,201,724 | ||||||||||
a |
Royal Caribbean Cruises Ltd., 5.50%, 8/31/26 |
United States | 1,800,000 | 1,700,578 | ||||||||||
a |
Station Casinos LLC, 4.50%, 2/15/28 |
United States | 1,900,000 | 1,659,489 | ||||||||||
a |
Studio City Finance Ltd., 5.00%, 1/15/29 |
United States | 2,300,000 | 1,732,406 | ||||||||||
a |
Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., 5.50%, 3/01/25 |
United States | 1,500,000 | 1,476,241 | ||||||||||
|
|
|||||||||||||
10,542,609 | ||||||||||||||
|
|
|||||||||||||
Distribution/Wholesale 0.2% | ||||||||||||||
a |
Ritchie Bros Holdings, Inc., 6.75%, 3/15/28 |
Canada | 400,000 | 399,580 | ||||||||||
|
|
|||||||||||||
Diversified Financial Services 1.8% | ||||||||||||||
a |
GGAM Finance Ltd., 8.00%, 6/15/28 |
Ireland | 1,600,000 | 1,598,460 | ||||||||||
a |
Jane Street Group/JSG Finance, Inc., 4.50%, 11/15/29 |
United States | 800,000 | 688,448 | ||||||||||
OneMain Finance Corp., 9.00%, 1/15/29 |
United States | 1,500,000 | 1,496,640 | |||||||||||
a |
PRA Group, Inc., 8.375%, 2/01/28 |
United States | 300,000 | 273,187 | ||||||||||
|
|
|||||||||||||
4,056,735 | ||||||||||||||
|
|
|||||||||||||
Electric 0.4% |
||||||||||||||
a |
Talen Energy Supply LLC, 8.625%, 6/01/30 |
United States | 800,000 | 820,793 | ||||||||||
|
|
|||||||||||||
Energy 10.6% | ||||||||||||||
a |
Antero Resources Corp., 7.625%, 2/01/29 |
United States | 601,000 | 609,604 | ||||||||||
a |
Atlantica Sustainable Infrastructure PLC, 4.125%, 6/15/28 |
Spain | 1,500,000 | 1,296,258 | ||||||||||
a |
Calumet Specialty Products Partners LP/Calumet Finance Corp., 8.125%, 1/15/27 |
United States | 500,000 | 479,618 | ||||||||||
Cheniere Energy Partners LP, 4.50%, 10/01/29 |
United States | 500,000 | 453,297 | |||||||||||
Cheniere Energy, Inc., 4.625%, 10/15/28 |
United States | 1,300,000 | 1,196,476 | |||||||||||
a |
Chesapeake Energy Corp., 6.75%, 4/15/29 |
United States | 2,000,000 | 1,959,216 | ||||||||||
Crestwood Midstream Partners LP/Crestwood Midstream Finance Corp., 5.75%, 4/01/25 |
United States | 500,000 | 492,365 | |||||||||||
a |
CrownRock LP/CrownRock Finance, Inc., 5.00%, 5/01/29 |
United States | 1,100,000 | 1,031,800 | ||||||||||
a |
CSI Compressco LP/CSI Compressco Finance, Inc., first lien, 7.50%, 4/01/25 |
United States | 1,000,000 | 973,640 | ||||||||||
a |
DT Midstream, Inc., 4.125%, 6/15/29 |
United States | 700,000 | 606,110 | ||||||||||
a |
Enerflex Ltd., 9.00%, 10/15/27 |
Canada | 1,000,000 | 988,545 | ||||||||||
EnLink Midstream Partners LP, 4.15%, 6/01/25 |
United States | 1,900,000 | 1,815,545 | |||||||||||
a |
EQM Midstream Partners LP, 7.50%, 6/01/27 |
United States | 1,600,000 | 1,604,747 | ||||||||||
a |
Harbour Energy PLC, 5.50%, 10/15/26 |
United Kingdom | 2,400,000 | 2,240,448 | ||||||||||
Hilcorp Energy I LP/Hilcorp Finance Co., |
||||||||||||||
a |
6.00%, 2/01/31 |
United States | 400,000 | 353,421 | ||||||||||
a |
senior note, 5.75%, 2/01/29 |
United States | 1,000,000 | 904,074 | ||||||||||
a |
Kinetik Holdings LP, 5.875%, 6/15/30 |
United States | 1,300,000 | 1,220,245 | ||||||||||
a |
Nabors Industries Ltd., senior note, 7.25%, 1/15/26 |
United States | 500,000 | 483,700 | ||||||||||
a |
Nabors Industries, Inc., 7.375%, 5/15/27 |
United States | 500,000 | 484,148 |
franklintempleton.com | Semiannual Report | 101 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin High Yield Corporate ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) |
||||||||||||||
Energy (continued) | ||||||||||||||
Occidental Petroleum Corp., 8.875%, 7/15/30 |
United States | 700,000 | $ | 787,731 | ||||||||||
a |
SunCoke Energy, Inc., 4.875%, 6/30/29 |
United States | 600,000 | 510,576 | ||||||||||
Sunoco LP/Sunoco Finance Corp., 6.00%, 4/15/27 |
United States | 700,000 | 679,192 | |||||||||||
Venture Global Calcasieu Pass LLC, |
||||||||||||||
a |
4.125%, 8/15/31 |
United States | 700,000 | 575,142 | ||||||||||
a |
3.875%, 8/15/29 |
United States | 900,000 | 758,307 | ||||||||||
a |
Weatherford International Ltd., 6.50%, 9/15/28 |
United States | 1,100,000 | 1,101,193 | ||||||||||
|
|
|||||||||||||
23,605,398 | ||||||||||||||
|
|
|||||||||||||
Entertainment 1.6% | ||||||||||||||
a |
Allwyn Entertainment Financing U.K. PLC, 7.875%, 4/30/29 |
Czech Republic | 1,700,000 | 1,723,375 | ||||||||||
a |
Banijay Entertainment SASU, 8.125%, 5/01/29 |
France | 1,200,000 | 1,191,870 | ||||||||||
a |
Caesars Entertainment, Inc., 7.00%, 2/15/30 |
United States | 600,000 | 584,473 | ||||||||||
|
|
|||||||||||||
3,499,718 | ||||||||||||||
|
|
|||||||||||||
Financial Services 5.9% | ||||||||||||||
a |
Apollo Commercial Real Estate Finance, Inc., 4.625%, 6/15/29 |
United States | 2,000,000 | 1,510,535 | ||||||||||
a |
Global Net Lease, Inc./Global Net Lease Operating Partnership LP, senior note, 3.75%, 12/15/27 |
United States | 1,400,000 | 1,085,148 | ||||||||||
Iron Mountain, Inc., |
||||||||||||||
a |
5.625%, 7/15/32 |
United States | 600,000 | 518,647 | ||||||||||
a |
7.00%, 2/15/29 |
United States | 1,000,000 | 978,943 | ||||||||||
a |
Jefferson Capital Holdings LLC, 6.00%, 8/15/26 |
United States | 1,500,000 | 1,328,574 | ||||||||||
a |
Ladder Capital Finance Holdings LLLP/Ladder Capital Finance Corp., 4.75%, 6/15/29 |
United States | 1,600,000 | 1,294,552 | ||||||||||
a |
Necessity Retail REIT, Inc./American Finance Operating Partner LP,4.50%, 9/30/28 |
United States | 1,900,000 | 1,445,387 | ||||||||||
a |
Oxford Finance LLC/Oxford Finance Co.-Issuer II, Inc., 6.375%, 2/01/27 |
United States | 1,500,000 | 1,395,683 | ||||||||||
a |
PRA Group, Inc., 5.00%, 10/01/29 |
United States | 1,500,000 | 1,141,004 | ||||||||||
a |
RHP Hotel Properties LP/RHP Finance Corp., 7.25%, 7/15/28 |
United States | 500,000 | 491,717 | ||||||||||
VICI Properties LP/VICI Note Co., Inc., |
||||||||||||||
a |
5.75%, 2/01/27 |
United States | 200,000 | 193,812 | ||||||||||
a |
3.875%, 2/15/29 |
United States | 2,000,000 | 1,730,357 | ||||||||||
|
|
|||||||||||||
13,114,359 | ||||||||||||||
|
|
|||||||||||||
Food 1.9% | ||||||||||||||
a |
Albertsons Cos., Inc./Safeway, Inc./New Albertsons LP/Albertsons LLC, 3.50%, 3/15/29 |
United States | 1,700,000 | 1,450,900 | ||||||||||
Pilgrim’s Pride Corp., 6.875%, 5/15/34 |
United States | 1,700,000 | 1,670,381 | |||||||||||
a |
U.S. Foods, Inc., 7.25%, 1/15/32 |
United States | 1,100,000 | 1,100,264 | ||||||||||
|
|
|||||||||||||
4,221,545 | ||||||||||||||
|
|
|||||||||||||
Food, Beverage & Tobacco 0.5% | ||||||||||||||
a |
Primo Water Holdings, Inc., 4.375%, 4/30/29 |
Canada | 1,200,000 | 1,027,296 | ||||||||||
|
|
|||||||||||||
Hand/Machine Tools 0.5% | ||||||||||||||
Regal Rexnord Corp., |
||||||||||||||
a |
6.40%, 4/15/33 |
United States | 500,000 | 482,126 | ||||||||||
a |
6.30%, 2/15/30 |
United States | 600,000 | 580,046 | ||||||||||
|
|
|||||||||||||
1,062,172 | ||||||||||||||
|
|
|||||||||||||
Health Care Equipment & Services 2.4% |
||||||||||||||
Centene Corp., 4.25%, 12/15/27 |
United States | 2,100,000 | 1,937,806 | |||||||||||
CHS/Community Health Systems, Inc., |
||||||||||||||
a |
6.875%, 4/15/29 |
United States | 900,000 | 479,250 | ||||||||||
a |
senior secured note, 6.00%, 1/15/29 |
United States | 1,100,000 | 889,533 | ||||||||||
a |
DaVita, Inc., 4.625%, 6/01/30 |
United States | 2,500,000 | 2,055,903 | ||||||||||
|
|
|||||||||||||
5,362,492 | ||||||||||||||
|
|
102 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin High Yield Corporate ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) |
||||||||||||||
Healthcare-Products 0.7% | ||||||||||||||
a |
Garden Spinco Corp., 8.625%, 7/20/30 |
United States | 1,600,000 | $ | 1,671,769 | |||||||||
|
|
|||||||||||||
Healthcare-Services 2.3% | ||||||||||||||
a |
CHS/Community Health Systems, Inc., 8.00%, 3/15/26 |
United States | 500,000 | 477,108 | ||||||||||
a |
Fortrea Holdings, Inc., 7.50%, 7/01/30 |
United States | 2,000,000 | 1,948,530 | ||||||||||
Tenet Healthcare Corp., |
||||||||||||||
a |
6.75%, 5/15/31 |
United States | 500,000 | 482,860 | ||||||||||
6.125%, 10/01/28 |
United States | 1,000,000 | 939,680 | |||||||||||
6.125%, 6/15/30 |
United States | 1,500,000 | 1,408,199 | |||||||||||
|
|
|||||||||||||
5,256,377 | ||||||||||||||
|
|
|||||||||||||
Home Builders 0.5% | ||||||||||||||
a |
Dream Finders Homes, Inc., 8.25%, 8/15/28 |
United States | 1,000,000 | 1,007,760 | ||||||||||
|
|
|||||||||||||
Household & Personal Products 1.0% | ||||||||||||||
a |
Spectrum Brands, Inc., 5.50%, 7/15/30 |
United States | 800,000 | 726,290 | ||||||||||
a |
VM Consolidated, Inc., 5.50%, 4/15/29 |
United States | 1,600,000 | 1,441,982 | ||||||||||
|
|
|||||||||||||
2,168,272 | ||||||||||||||
|
|
|||||||||||||
Household Products 0.4% | ||||||||||||||
a |
Coty, Inc./HFC Prestige Products, Inc./HFC Prestige International U.S. LLC, 6.625%, 7/15/30 |
United States | 900,000 | 879,723 | ||||||||||
|
|
|||||||||||||
Insurance 0.8% | ||||||||||||||
a |
Alliant Holdings Intermediate LLC/Alliant Holdings Co-Issuer, 6.75%, 4/15/28 |
United States | 700,000 | 676,224 | ||||||||||
a |
Jones Deslauriers Insurance Management, Inc., 10.50%, 12/15/30 |
Canada | 1,000,000 | 1,019,259 | ||||||||||
|
|
|||||||||||||
1,695,483 | ||||||||||||||
|
|
|||||||||||||
Iron/Steel 0.4% | ||||||||||||||
ATI, Inc., 7.25%, 8/15/30 |
United States | 1,000,000 | 993,720 | |||||||||||
|
|
|||||||||||||
Leisure Time 0.3% | ||||||||||||||
a |
Carnival Holdings Bermuda Ltd., 10.375%, 5/01/28 |
United States | 600,000 | 643,787 | ||||||||||
|
|
|||||||||||||
Lodging 0.8% | ||||||||||||||
Las Vegas Sands Corp., |
||||||||||||||
3.20%, 8/08/24 |
United States | 600,000 | 580,851 | |||||||||||
3.50%, 8/18/26 |
United States | 1,400,000 | 1,274,925 | |||||||||||
|
|
|||||||||||||
1,855,776 | ||||||||||||||
|
|
|||||||||||||
Machinery-Diversified 0.1% | ||||||||||||||
a |
Titan Acquisition Ltd./Titan Co.-Borrower LLC, 7.75%, 4/15/26 |
Canada | 300,000 | 294,383 | ||||||||||
|
|
|||||||||||||
Materials 6.9% |
||||||||||||||
a |
Advanced Drainage Systems, Inc., 6.375%, 6/15/30 |
United States | 1,000,000 | 961,585 | ||||||||||
a |
Arcosa, Inc., 4.375%, 4/15/29 |
United States | 1,400,000 | 1,223,240 | ||||||||||
Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc., |
||||||||||||||
a |
senior note, 5.25%, 8/15/27 |
Luxembourg | 200,000 | 167,164 | ||||||||||
a |
first lien, 5.25%, 4/30/25 |
Luxembourg | 1,700,000 | 1,658,913 | ||||||||||
a |
ASP Unifrax Holdings, Inc., 5.25%, 9/30/28 |
United States | 300,000 | 214,113 | ||||||||||
a |
Consolidated Energy Finance SA, 5.625%, 10/15/28 |
Luxembourg | 400,000 | 330,896 | ||||||||||
a |
Constellium SE, 3.75%, 4/15/29 |
France | 1,800,000 | 1,509,996 | ||||||||||
a |
Eco Material Technologies, Inc., 7.875%, 1/31/27 |
United States | 1,300,000 | 1,240,836 | ||||||||||
a |
Gates Global LLC/Gates Corp., senior note, 6.25%, 1/15/26 |
United States | 1,600,000 | 1,560,996 | ||||||||||
a |
Glatfelter Corp., 4.75%, 11/15/29 |
United States | 900,000 | 594,000 | ||||||||||
a |
GPD Cos., Inc., senior secured note, 10.125%, 4/01/26 |
United States | 550,000 | 507,714 | ||||||||||
a |
Novelis Corp., 4.75%, 1/30/30 |
United States | 1,800,000 | 1,560,221 | ||||||||||
a |
OI European Group BV, 4.75%, 2/15/30 |
United States | 1,200,000 | 1,045,435 | ||||||||||
a |
Pactiv Evergreen Group Issuer, Inc./Pactiv Evergreen Group Issuer LLC, 4.00%, 10/15/27 |
United States | 1,500,000 | 1,332,900 |
franklintempleton.com | Semiannual Report | 103 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin High Yield Corporate ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) |
||||||||||||||
Materials (continued) | ||||||||||||||
a |
Rain CII Carbon LLC/CII Carbon Corp., 7.25%, 4/01/25 |
United States | 22,000 | $ | 21,363 | |||||||||
a |
Trivium Packaging Finance BV, senior note, 5.50%, 8/15/26 |
Netherlands | 1,600,000 | 1,493,653 | ||||||||||
|
|
|||||||||||||
15,423,025 | ||||||||||||||
|
|
|||||||||||||
Media & Entertainment 8.1% | ||||||||||||||
CCO Holdings LLC/CCO Holdings Capital Corp., |
||||||||||||||
a |
5.375%, 6/01/29 |
United States | 1,400,000 | 1,257,533 | ||||||||||
a |
4.50%, 8/15/30 |
United States | 1,700,000 | 1,397,601 | ||||||||||
a |
Clear Channel International BV, 6.625%, 8/01/25 |
United States | 600,000 | 593,797 | ||||||||||
a |
Clear Channel Outdoor Holdings, Inc., 7.50%, 6/01/29 |
United States | 1,500,000 | 1,149,231 | ||||||||||
a |
Cogent Communications Group, Inc., 3.50%, 5/01/26 |
United States | 1,200,000 | 1,109,580 | ||||||||||
a |
CSC Holdings LLC, 7.50%, 4/01/28 |
United States | 2,500,000 | 1,627,438 | ||||||||||
Diamond Sports Group LLC/Diamond Sports Finance Co., |
||||||||||||||
a,b |
senior note, 6.625%, 8/15/27 |
United States | 900,000 | 18,563 | ||||||||||
a,b |
5.375%, 8/15/26 |
United States | 900,000 | 20,250 | ||||||||||
a |
Directv Financing LLC/Directv Financing Co.-Obligor, Inc., 5.875%, 8/15/27 . |
United States | 2,100,000 | 1,859,445 | ||||||||||
a |
DISH DBS Corp., 5.75%, 12/01/28 |
United States | 2,300,000 | 1,772,437 | ||||||||||
a |
EquipmentShare.com, Inc., 9.00%, 5/15/28 |
United States | 1,600,000 | 1,540,000 | ||||||||||
a |
Everi Holdings, Inc., 5.00%, 7/15/29 |
United States | 1,100,000 | 948,068 | ||||||||||
Netflix, Inc., 6.375%, 5/15/29 |
United States | 600,000 | 620,164 | |||||||||||
a |
Northwest Fiber LLC/Northwest Fiber Finance Sub, Inc., senior note, 6.00%, 2/15/28 |
United States | 800,000 | 655,651 | ||||||||||
a |
Sirius XM Radio, Inc., 4.00%, 7/15/28 |
United States | 1,900,000 | 1,623,727 | ||||||||||
a |
Univision Communications, Inc., senior note, 6.625%, 6/01/27 |
United States | 900,000 | 839,153 | ||||||||||
a |
Virgin Media Secured Finance PLC, 4.50%, 8/15/30 |
United Kingdom | 1,400,000 | 1,158,317 | ||||||||||
|
|
|||||||||||||
18,190,955 | ||||||||||||||
|
|
|||||||||||||
Miscellaneous Manufacturing 0.7% | ||||||||||||||
a |
Calderys Financing LLC, 11.25%, 6/01/28 |
France | 1,600,000 | 1,640,891 | ||||||||||
|
|
|||||||||||||
Oil & Gas 3.6% | ||||||||||||||
a |
CITGO Petroleum Corp., 8.375%, 1/15/29 |
United States | 1,000,000 | 999,365 | ||||||||||
Civitas Resources, Inc., |
||||||||||||||
a |
8.75%, 7/01/31 |
United States | 900,000 | 920,447 | ||||||||||
a |
8.375%, 7/01/28 |
United States | 1,200,000 | 1,222,500 | ||||||||||
a |
Endeavor Energy Resources LP/EER Finance, Inc., 5.75%, 1/30/28 |
United States | 2,000,000 | 1,931,917 | ||||||||||
a |
PBF Holding Co. LLC/PBF Finance Corp., 7.875%, 9/15/30 |
United States | 500,000 | 498,485 | ||||||||||
a |
Transocean Titan Financing Ltd., 8.375%, 2/01/28 |
United States | 100,000 | 101,835 | ||||||||||
a |
Transocean, Inc., 8.75%, 2/15/30 |
United States | 855,000 | 874,998 | ||||||||||
Vital Energy, Inc., |
||||||||||||||
10.125%, 1/15/28 |
United States | 700,000 | 714,270 | |||||||||||
9.75%, 10/15/30 |
United States | 800,000 | 818,559 | |||||||||||
|
|
|||||||||||||
8,082,376 | ||||||||||||||
|
|
|||||||||||||
Oil & Gas Services 0.2% | ||||||||||||||
a |
Oceaneering International, Inc., 6.00%, 2/01/28 |
United States | 500,000 | 471,545 | ||||||||||
|
|
|||||||||||||
Packaging & Containers 2.1% | ||||||||||||||
a |
LABL, Inc., 9.50%, 11/01/28 |
United States | 600,000 | 615,750 | ||||||||||
Mauser Packaging Solutions Holding Co., |
||||||||||||||
a |
9.25%, 4/15/27 |
United States | 500,000 | 437,738 | ||||||||||
a |
7.875%, 8/15/26 |
United States | 2,100,000 | 2,028,350 | ||||||||||
a |
Owens-Brockway Glass Container, Inc., senior note, 7.25%, 5/15/31 |
United States | 1,000,000 | 978,750 | ||||||||||
a |
Sealed Air Corp./Sealed Air Corp. U.S., 6.125%, 2/01/28 |
United States | 600,000 | 581,751 | ||||||||||
|
|
|||||||||||||
4,642,339 | ||||||||||||||
|
|
104 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin High Yield Corporate ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) |
||||||||||||||
Pharmaceuticals 1.3% |
||||||||||||||
a |
1375209 BC Ltd., 9.00%, 1/30/28 |
Canada | 261,000 | $ | 258,302 | |||||||||
Bausch Health Cos., Inc., |
||||||||||||||
a |
14.00%, 10/15/30 |
Canada | 92,000 | 54,768 | ||||||||||
a |
11.00%, 9/30/28 |
Canada | 465,000 | 316,642 | ||||||||||
a |
BellRing Brands, Inc., 7.00%, 3/15/30 |
United States | 1,200,000 | 1,183,181 | ||||||||||
Teva Pharmaceutical Finance Netherlands III BV, |
||||||||||||||
7.875%, 9/15/29 |
Israel | 500,000 | 507,157 | |||||||||||
8.125%, 9/15/31 |
Israel | 600,000 | 621,481 | |||||||||||
|
|
|||||||||||||
2,941,531 | ||||||||||||||
|
|
|||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.8% | ||||||||||||||
a |
Bausch Health Cos., Inc., 4.875%, 6/01/28 |
United States | 1,000,000 | 570,371 | ||||||||||
a |
Kedrion SpA, 6.50%, 9/01/29 |
Italy | 2,200,000 | 1,897,500 | ||||||||||
a,b |
Par Pharmaceutical, Inc., senior secured note, 7.50%, 4/01/27 |
United States | 400,000 | 285,592 | ||||||||||
Teva Pharmaceutical Finance Netherlands III BV, 4.75%, 5/09/27 |
Israel | 1,300,000 | 1,194,418 | |||||||||||
|
|
|||||||||||||
3,947,881 | ||||||||||||||
|
|
|||||||||||||
Pipelines 1.8% |
||||||||||||||
a |
EnLink Midstream LLC, senior note, 6.50%, 9/01/30 |
United States | 700,000 | 679,764 | ||||||||||
a |
Martin Midstream Partners LP/Martin Midstream Finance Corp., 11.50%, 2/15/28 |
United States | 2,100,000 | 2,136,278 | ||||||||||
Venture Global LNG, Inc., |
||||||||||||||
a |
8.375%, 6/01/31 |
United States | 600,000 | 590,425 | ||||||||||
a |
8.125%, 6/01/28 |
United States | 700,000 | 693,611 | ||||||||||
|
|
|||||||||||||
4,100,078 | ||||||||||||||
|
|
|||||||||||||
Real Estate Management & Development 0.4% | ||||||||||||||
a |
Greystar Real Estate Partners LLC, 7.75%, 9/01/30 |
United States | 800,000 | 791,145 | ||||||||||
|
|
|||||||||||||
Retail 0.8% | ||||||||||||||
a |
Bausch & Lomb Escrow Corp., 8.375%, 10/01/28 |
United States | 800,000 | 803,376 | ||||||||||
a |
Evergreen Acqco 1 LP/TVI, Inc., 9.75%, 4/26/28 |
United States | 900,000 | 927,563 | ||||||||||
|
|
|||||||||||||
1,730,939 | ||||||||||||||
|
|
|||||||||||||
Software & Services 1.0% | ||||||||||||||
a |
Gartner, Inc., senior note, 4.50%, 7/01/28 |
United States | 1,800,000 | 1,644,298 | ||||||||||
a |
Rocket Software, Inc., 6.50%, 2/15/29 |
United States | 800,000 | 661,072 | ||||||||||
|
|
|||||||||||||
2,305,370 | ||||||||||||||
|
|
|||||||||||||
Technology Hardware & Equipment 0.3% |
||||||||||||||
a |
McAfee Corp., 7.375%, 2/15/30 |
United States | 800,000 | 670,690 | ||||||||||
|
|
|||||||||||||
Telecommunication Services 1.7% |
||||||||||||||
a |
Altice France Holding SA, senior note, 10.50%, 5/15/27 |
Luxembourg | 600,000 | 375,040 | ||||||||||
a |
Altice France SA, first lien, 8.125%, 2/01/27 |
France | 1,000,000 | 888,071 | ||||||||||
a |
CommScope Technologies LLC, 5.00%, 3/15/27 |
United States | 1,800,000 | 1,024,461 | ||||||||||
a |
Iliad Holding SASU, 6.50%, 10/15/26 |
France | 1,600,000 | 1,504,949 | ||||||||||
|
|
|||||||||||||
3,792,521 | ||||||||||||||
|
|
|||||||||||||
Telecommunications 0.1% | ||||||||||||||
a |
Viasat, Inc., 7.50%, 5/30/31 |
United States | 500,000 | 330,875 | ||||||||||
|
|
|||||||||||||
Transportation 0.5% | ||||||||||||||
a |
First Student Bidco, Inc./First Transit Parent, Inc., 4.00%, 7/31/29 |
United States | 1,200,000 | 1,016,814 | ||||||||||
|
|
|||||||||||||
Utilities 3.7% | ||||||||||||||
Calpine Corp., |
||||||||||||||
a |
senior note, 5.125%, 3/15/28 |
United States | 1,100,000 | 980,742 | ||||||||||
a |
first lien, 4.50%, 2/15/28 |
United States | 1,300,000 | 1,172,946 |
franklintempleton.com | Semiannual Report | 105 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin High Yield Corporate ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) |
||||||||||||||
Utilities (continued) | ||||||||||||||
a |
Leeward Renewable Energy Operations LLC, 4.25%, 7/01/29 |
United States | 1,900,000 | $ | 1,564,008 | |||||||||
a |
TTM Technologies, Inc., 4.00%, 3/01/29 |
United States | 1,900,000 | 1,577,653 | ||||||||||
a |
Vistra Operations Co. LLC, senior note, 5.50%, 9/01/26 |
United States | 3,100,000 | 2,959,247 | ||||||||||
|
|
|||||||||||||
8,254,596 | ||||||||||||||
|
|
|||||||||||||
Total Corporate Bonds & Notes (Cost $224,874,777) |
205,695,024 | |||||||||||||
|
|
|||||||||||||
Shares | ||||||||||||||
Common Stocks 0.7% |
||||||||||||||
Electric 0.7% | ||||||||||||||
d |
Talen Energy Corp. |
United States | 12,827 | 678,548 | ||||||||||
d |
Talen Energy Supply LLC |
United States | 18,208 | 963,203 | ||||||||||
|
|
|||||||||||||
1,641,751 | ||||||||||||||
|
|
|||||||||||||
Total Common Stocks (Cost $1,148,183) |
1,641,751 | |||||||||||||
|
|
|||||||||||||
Principal Amount | ||||||||||||||
Senior Floating Rate Interests 3.7% |
||||||||||||||
Materials 0.9% |
||||||||||||||
Hexion Holdings Corp., |
||||||||||||||
e |
2022 USD Term Loan, TBD, 3/15/29 |
United States | 1,086,250 | 1,035,403 | ||||||||||
e |
TBD, 3/15/30 |
United States | 1,186,047 | 977,006 | ||||||||||
|
|
|||||||||||||
2,012,409 | ||||||||||||||
|
|
|||||||||||||
Software & Services 1.3% |
||||||||||||||
Athenahealth Group, Inc., 2022 Term Loan B, 8.568%, 2/15/29 |
United States | 1,496,583 | 1,472,735 | |||||||||||
McAfee LLC, 2022 USD Term Loan B, 9.18%, 3/01/29 |
United States | 1,382,500 | 1,352,686 | |||||||||||
|
|
|||||||||||||
2,825,421 | ||||||||||||||
|
|
|||||||||||||
Chemicals 0.7% |
||||||||||||||
PMHC II, Inc., 2022 Term Loan B, 9.699%, 4/23/29 |
United States | 1,683,000 | 1,592,917 | |||||||||||
|
|
|||||||||||||
Media & Entertainment 0.8% | ||||||||||||||
e |
Diamond Sports Group LLC, TBD, zero cpn, 5/25/26 |
United States | 198,816 | 103,385 | ||||||||||
e |
Fertitta Entertainment LLC, 2022 Term Loan B, TBD, zero cpn, 1/27/29 |
United States | 1,674,500 | 1,660,459 | ||||||||||
|
|
|||||||||||||
1,763,844 | ||||||||||||||
|
|
|||||||||||||
Total Floating Rate Loans (Cost $8,626,299) |
8,194,591 | |||||||||||||
|
|
|||||||||||||
Total
Investments before Short-Term Investments |
215,531,366 | |||||||||||||
|
|
106 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin High Yield Corporate ETF (continued)
Country | Principal Amount | Value | ||||||||||||
Short-Term Investments 2.6% |
||||||||||||||
U.S. Government & Agency Securities 2.6% | ||||||||||||||
f |
Federal Home Loan Bank Discount Notes, 10/02/23 |
United States | 5,795,000 | $ | 5,795,000 | |||||||||
|
|
|||||||||||||
Total
Short-Term Investments |
5,795,000 | |||||||||||||
|
|
|||||||||||||
Total
Investments |
221,326,366 | |||||||||||||
Other Assets, less Liabilities 1.1% |
2,415,145 | |||||||||||||
|
|
|||||||||||||
Net Assets 100.0% |
$ | 223,741,511 | ||||||||||||
|
|
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2023, the value of was $177,288,984, representing 79.2% of net assets.
bSee Note 7 regarding defaulted securities.
cFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.
dNon-income producing.
eA portion or all of the security represents an unsettled loan commitment. The coupon rate is to-be determined (TBD) at the time of settlement and will be based upon a reference index/floor plus a spread.
fThe security was issued on a discount basis with no stated coupon rate.
See Abbreviations on page 220.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 107 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Income Focus ETF *
Period Ended September 30, 2023 | ||||
Per share operating performance (for a share outstanding throughout the period) |
||||
Net asset value, beginning of period |
$25.00 | |||
Income from investment operationsa: | ||||
Net investment incomeb |
0.43 | |||
Net realized and unrealized gains (losses) |
(0.85) | |||
Total from investment operations |
(0.42) | |||
Less distributions from net investment income |
(0.33) | |||
Net asset value, end of period |
$24.25 | |||
Total returnc |
(1.73)% | |||
Ratios to average net assetsd | ||||
Total expenses |
0.38% | |||
Net investment income |
5.48% | |||
Supplemental data | ||||
Net assets, end of period (000’s) |
$97,007 | |||
Portfolio turnover ratee |
9.11%f |
*For the period June 06, 2023 (commencement of operations) to September 30, 2023.
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
dRatios are annualized for periods less than one year.
ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
f Portfolio turnover rate excluding cash creations was as follows: | 9.11 | % |
108 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2023 (unaudited)
Franklin Income Focus ETF
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes 52.5% |
||||||||||||||
Advertising 0.5% | ||||||||||||||
a |
Clear Channel Outdoor Holdings, Inc., 5.125%, 8/15/27 |
United States | 545,000 | $ | 484,487 | |||||||||
|
|
|||||||||||||
Aerospace & Defense 1.0% | ||||||||||||||
Boeing Co., 5.15%, 5/01/30 |
United States | 500,000 | 477,905 | |||||||||||
TransDigm, Inc., 5.50%, 11/15/27 |
United States | 525,000 | 492,106 | |||||||||||
|
|
|||||||||||||
970,011 | ||||||||||||||
|
|
|||||||||||||
Agriculture 0.7% |
||||||||||||||
BAT Capital Corp., |
||||||||||||||
7.75%, 10/19/32 |
United Kingdom | 450,000 | 475,795 | |||||||||||
6.421%, 8/02/33 |
United Kingdom | 250,000 | 243,193 | |||||||||||
|
|
|||||||||||||
718,988 | ||||||||||||||
|
|
|||||||||||||
Airlines 2.2% | ||||||||||||||
a |
American Airlines, Inc., 11.75%, 7/15/25 |
United States | 650,000 | 699,278 | ||||||||||
a |
Delta Air Lines, Inc./SkyMiles IP Ltd., 4.75%, 10/20/28 |
United States | 775,000 | 736,802 | ||||||||||
a |
Mileage Plus Holdings LLC/Mileage Plus Intellectual Property Assets Ltd., 6.50%, 6/20/27 |
United States | 656,250 | 650,867 | ||||||||||
|
|
|||||||||||||
2,086,947 | ||||||||||||||
|
|
|||||||||||||
Auto Manufacturers 1.7% | ||||||||||||||
Ford Motor Credit Co. LLC, 7.35%, 3/06/30 |
United States | 960,000 | 973,232 | |||||||||||
General Motors Financial Co., Inc., 6.40%, 1/09/33 |
United States | 715,000 | 698,884 | |||||||||||
|
|
|||||||||||||
1,672,116 | ||||||||||||||
|
|
|||||||||||||
Banks 4.6% |
||||||||||||||
Barclays PLC, 7.437% to 11/02/32, FRN thereafter, 11/02/33 |
United Kingdom | 685,000 | 704,026 | |||||||||||
Citigroup, Inc., 6.174% to 5/25/33, FRN thereafter, 5/25/34 |
United States | 495,000 | 473,373 | |||||||||||
Fifth Third Bank NA, 5.852% to 10/27/24, FRN thereafter, 10/27/25 |
United States | 500,000 | 492,066 | |||||||||||
KeyBank NA, 4.90%, 8/08/32 |
United States | 615,000 | 495,445 | |||||||||||
Morgan Stanley, 6.342% to 10/18/32, FRN thereafter, 10/18/33 |
United States | 698,000 | 702,349 | |||||||||||
PNC Financial Services Group, Inc., 5.068% to 1/24/33, FRN thereafter, 1/24/34 |
United States | 510,000 | 462,828 | |||||||||||
Truist Financial Corp., 4.916% to 7/28/32, FRN thereafter, 7/28/33 |
United States | 540,000 | 458,476 | |||||||||||
Wells Fargo & Co., 5.389% to 4/24/33, FRN thereafter, 4/24/34 |
United States | 751,000 | 702,402 | |||||||||||
|
|
|||||||||||||
4,490,965 | ||||||||||||||
|
|
|||||||||||||
Biotechnology 0.5% | ||||||||||||||
Royalty Pharma PLC, 2.20%, 9/02/30 |
United Kingdom | 620,000 | 481,664 | |||||||||||
|
|
|||||||||||||
Chemicals 2.0% |
||||||||||||||
Celanese U.S. Holdings LLC, 6.379%, 7/15/32 |
United States | 725,000 | 699,358 | |||||||||||
a |
Rain Carbon, Inc., 12.25%, 9/01/29 |
United States | 500,000 | 525,000 | ||||||||||
a |
SCIH Salt Holdings, Inc., 4.875%, 5/01/28 |
United States | 830,000 | 733,381 | ||||||||||
|
|
|||||||||||||
1,957,739 | ||||||||||||||
|
|
|||||||||||||
Commercial Services & Supplies 1.5% | ||||||||||||||
a |
Ashtead Capital, Inc., 4.25%, 11/01/29 |
United Kingdom | 550,000 | 487,425 | ||||||||||
a |
MPH Acquisition Holdings LLC, 5.50%, 9/01/28 |
United States | 600,000 | 510,301 | ||||||||||
a |
United Rentals North America, Inc., 6.00%, 12/15/29 |
United States | 485,000 | 472,784 | ||||||||||
|
|
|||||||||||||
1,470,510 | ||||||||||||||
|
|
|||||||||||||
Construction Materials 1.2% | ||||||||||||||
Carrier Global Corp., 2.722%, 2/15/30 |
United States | 850,000 | 708,898 | |||||||||||
a |
Emerald Debt Merger Sub LLC, 6.625%, 12/15/30 |
United States | 500,000 | 481,962 | ||||||||||
|
|
|||||||||||||
1,190,860 | ||||||||||||||
|
|
franklintempleton.com | Semiannual Report | 109 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Income Focus ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) |
||||||||||||||
Electric 2.2% | ||||||||||||||
a |
NRG Energy, Inc., 3.625%, 2/15/31 |
United States | 945,000 | $ | 718,002 | |||||||||
Pacific Gas & Electric Co., 3.15%, 1/01/26 |
United States | 525,000 | 488,504 | |||||||||||
Southern Co., 5.70%, 10/15/32 |
United States | 480,000 | 472,004 | |||||||||||
a |
Vistra Operations Co. LLC, 3.70%, 1/30/27 |
United States | 535,000 | 488,398 | ||||||||||
|
|
|||||||||||||
2,166,908 | ||||||||||||||
|
|
|||||||||||||
Entertainment 0.5% | ||||||||||||||
a |
Caesars Entertainment, Inc., 8.125%, 7/01/27 |
United States | 475,000 | 477,625 | ||||||||||
|
|
|||||||||||||
Financial Services 1.7% | ||||||||||||||
AerCap Ireland Capital DAC/AerCap Global Aviation Trust, 5.75%, 6/06/28 |
Ireland | 500,000 | 488,859 | |||||||||||
Capital One Financial Corp., 5.817% to 2/01/33, FRN thereafter, 2/01/34 |
United States | 760,000 | 685,509 | |||||||||||
Charles Schwab Corp., 5.853% to 5/19/33, FRN thereafter, 5/19/34 |
United States | 490,000 | 466,438 | |||||||||||
|
|
|||||||||||||
1,640,806 | ||||||||||||||
|
|
|||||||||||||
Food 1.0% | ||||||||||||||
JBS USA LUX SA/JBS USA Food Co./JBS USA Finance, Inc., 5.75%, 4/01/33 |
United States | 530,000 | 485,381 | |||||||||||
Pilgrim’s Pride Corp., 6.25%, 7/01/33 |
United States | 500,000 | 470,520 | |||||||||||
|
|
|||||||||||||
955,901 | ||||||||||||||
|
|
|||||||||||||
Hand/Machine Tools 0.5% | ||||||||||||||
a |
Regal Rexnord Corp., 6.40%, 4/15/33 |
United States | 500,000 | 482,126 | ||||||||||
|
|
|||||||||||||
Health Care Providers & Services 5.7% | ||||||||||||||
Centene Corp., 2.50%, 3/01/31 |
United States | 930,000 | 715,531 | |||||||||||
a |
CHS/Community Health Systems, Inc., 8.00%, 3/15/26 |
United States | 1,500,000 | 1,431,324 | ||||||||||
a |
DaVita, Inc., 4.625%, 6/01/30 |
United States | 1,145,000 | 941,604 | ||||||||||
a |
Fresenius Medical Care U.S. Finance III, Inc., 2.375%, 2/16/31 |
Germany | 645,000 | 467,806 | ||||||||||
HCA, Inc., 5.625%, 9/01/28 |
United States | 735,000 | 717,112 | |||||||||||
Tenet Healthcare Corp., 6.125%, 10/01/28 |
United States | 1,290,000 | 1,212,187 | |||||||||||
|
|
|||||||||||||
5,485,564 | ||||||||||||||
|
|
|||||||||||||
Healthcare-Products 1.5% | ||||||||||||||
GE HealthCare Technologies, Inc., 5.905%, 11/22/32 |
United States | 475,000 | 471,574 | |||||||||||
a |
Medline Borrower LP, 3.875%, 4/01/29 |
United States | 1,135,000 | 960,565 | ||||||||||
|
|
|||||||||||||
1,432,139 | ||||||||||||||
|
|
|||||||||||||
Insurance 1.0% | ||||||||||||||
Brown & Brown, Inc., 2.375%, 3/15/31 |
United States | 615,000 | 475,821 | |||||||||||
a |
Five Corners Funding Trust III, 5.791%, 2/15/33 |
United States | 490,000 | 481,358 | ||||||||||
|
|
|||||||||||||
957,179 | ||||||||||||||
|
|
|||||||||||||
Internet 1.3% | ||||||||||||||
Expedia Group, Inc., 3.80%, 2/15/28 |
United States | 525,000 | 480,007 | |||||||||||
Netflix, Inc., 5.875%, 11/15/28 |
United States | 720,000 | 725,876 | |||||||||||
|
|
|||||||||||||
1,205,883 | ||||||||||||||
|
|
|||||||||||||
Iron/Steel 0.5% | ||||||||||||||
ArcelorMittal SA, 6.80%, 11/29/32 |
Luxembourg | 485,000 | 482,172 | |||||||||||
|
|
|||||||||||||
IT Services 1.0% | ||||||||||||||
HP, Inc., 5.50%, 1/15/33 |
United States | 500,000 | 469,089 | |||||||||||
a |
McAfee Corp., 7.375%, 2/15/30 |
United States | 565,000 | 473,675 | ||||||||||
|
|
|||||||||||||
942,764 | ||||||||||||||
|
|
|||||||||||||
Leisure Time 1.0% | ||||||||||||||
a |
Carnival Corp., 7.625%, 3/01/26 |
United States | 1,015,000 | 988,071 | ||||||||||
|
|
110 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Income Focus ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) |
||||||||||||||
Lodging 1.0% |
||||||||||||||
a |
Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., 5.25%, 5/15/27 |
United States | 525,000 | $ | 488,872 | |||||||||
a |
Wynn Macau Ltd., 5.50%, 1/15/26 |
Macau | 530,000 | 495,966 | ||||||||||
|
|
|||||||||||||
984,838 | ||||||||||||||
|
|
|||||||||||||
Media 0.5% | ||||||||||||||
a |
Univision Communications, Inc., senior note, 6.625%, 6/01/27 |
United States | 520,000 | 484,844 | ||||||||||
|
|
|||||||||||||
Mining 2.2% |
||||||||||||||
a |
Alcoa Nederland Holding BV, 4.125%, 3/31/29 |
United States | 550,000 | 487,225 | ||||||||||
a |
First Quantum Minerals Ltd., 8.625%, 6/01/31 |
Zambia | 500,000 | 498,216 | ||||||||||
a |
FMG Resources August 2006 Pty. Ltd., 6.125%, 4/15/32 |
Australia | 520,000 | 473,614 | ||||||||||
Freeport-McMoRan, Inc., 5.40%, 11/14/34 |
United States | 775,000 | 710,387 | |||||||||||
|
|
|||||||||||||
2,169,442 | ||||||||||||||
|
|
|||||||||||||
Oil & Gas 1.2% | ||||||||||||||
a |
Calumet Specialty Products Partners LP/Calumet Finance Corp., 8.125%, 1/15/27 |
United States | 500,000 | 479,618 | ||||||||||
Occidental Petroleum Corp., 6.625%, 9/01/30 |
United States | 700,000 | 710,038 | |||||||||||
|
|
|||||||||||||
1,189,656 | ||||||||||||||
|
|
|||||||||||||
Oil & Gas Services 0.8% |
||||||||||||||
a |
Weatherford International Ltd., 8.625%, 4/30/30 |
United States | 740,000 | 746,320 | ||||||||||
|
|
|||||||||||||
Packaging & Containers 2.0% | ||||||||||||||
a |
Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc., senior note, 5.25%, 8/15/27 |
Luxembourg | 885,000 | 739,701 | ||||||||||
Mauser Packaging Solutions Holding Co., |
||||||||||||||
a7.875%, 8/15/26 |
United States | 735,000 | 709,923 | |||||||||||
a9.25%, 4/15/27 |
United States | 525,000 | 459,624 | |||||||||||
|
|
|||||||||||||
1,909,248 | ||||||||||||||
|
|
|||||||||||||
Pharmaceuticals 2.0% | ||||||||||||||
a |
1375209 BC Ltd., 9.00%, 1/30/28 |
Canada | 725,000 | 717,506 | ||||||||||
AbbVie, Inc., 4.55%, 3/15/35 |
United States | 520,000 | 473,194 | |||||||||||
a |
Bausch Health Cos., Inc., 5.50%, 11/01/25 |
United States | 830,000 | 736,376 | ||||||||||
|
|
|||||||||||||
1,927,076 | ||||||||||||||
|
|
|||||||||||||
Pipelines 1.7% |
||||||||||||||
Kinder Morgan, Inc., 5.20%, 6/01/33 |
United States | 515,000 | 476,656 | |||||||||||
a |
Venture Global LNG, Inc., 8.125%, 6/01/28 |
United States | 740,000 | 733,246 | ||||||||||
Williams Cos., Inc., 3.50%, 11/15/30 |
United States | 550,000 | 474,576 | |||||||||||
|
|
|||||||||||||
1,684,478 | ||||||||||||||
|
|
|||||||||||||
Real Estate Management & Development 1.7% | ||||||||||||||
American Tower Corp., 5.55%, 7/15/33 |
United States | 495,000 | 472,220 | |||||||||||
Healthpeak OP LLC, 5.25%, 12/15/32 |
United States | 500,000 | 465,560 | |||||||||||
VICI Properties LP, 5.125%, 5/15/32 |
United States | 800,000 | 716,911 | |||||||||||
|
|
|||||||||||||
1,654,691 | ||||||||||||||
|
|
|||||||||||||
Retail 1.2% | ||||||||||||||
a |
Fertitta Entertainment LLC/Fertitta Entertainment Finance Co., Inc., 4.625%, 1/15/29 |
United States | 840,000 | 712,820 | ||||||||||
Lowe’s Cos., Inc., 5.00%, 4/15/33 |
United States | 500,000 | 470,936 | |||||||||||
|
|
|||||||||||||
1,183,756 | ||||||||||||||
|
|
|||||||||||||
Semiconductors 1.3% | ||||||||||||||
a |
Broadcom, Inc., 3.469%, 4/15/34 |
United States | 915,000 | 719,022 | ||||||||||
NXP BV/NXP Funding LLC, 5.55%, 12/01/28 |
China | 500,000 | 489,641 | |||||||||||
|
|
|||||||||||||
1,208,663 | ||||||||||||||
|
|
franklintempleton.com | Semiannual Report | 111 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Income Focus ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) |
||||||||||||||
Software 1.0% | ||||||||||||||
Oracle Corp., 6.25%, 11/09/32 |
United States | 470,000 | $ | 476,062 | ||||||||||
Workday, Inc., 3.80%, 4/01/32 |
United States | 550,000 | 471,772 | |||||||||||
|
|
|||||||||||||
947,834 | ||||||||||||||
|
|
|||||||||||||
Telecommunications 2.1% |
||||||||||||||
CommScope, Inc., |
||||||||||||||
a8.25%, 3/01/27 |
United States | 615,000 | 402,770 | |||||||||||
a6.00%, 3/01/26 |
United States | 775,000 | 724,314 | |||||||||||
Sprint LLC, 7.625%, 3/01/26 |
United States | 470,000 | 483,392 | |||||||||||
T-Mobile USA, Inc., 5.05%, 7/15/33 |
United States | 500,000 | 464,080 | |||||||||||
|
|
|||||||||||||
2,074,556 | ||||||||||||||
|
|
|||||||||||||
Total Corporate Bonds & Notes (Cost $52,614,785) |
50,906,827 | |||||||||||||
|
|
|||||||||||||
U.S. Government & Agency Securities 6.5% |
||||||||||||||
U.S. Treasury Bonds, 3.625%, 5/15/53 |
United States | 3,665,000 | 3,035,365 | |||||||||||
U.S. Treasury Notes, |
||||||||||||||
3.375%, 5/15/33 |
United States | 2,560,000 | 2,322,000 | |||||||||||
3.875%, 4/30/25 |
United States | 1,000,000 | 979,746 | |||||||||||
|
|
|||||||||||||
Total U.S. Government & Agency Securities (Cost $6,993,241) |
6,337,111 | |||||||||||||
|
|
|||||||||||||
Shares | ||||||||||||||
Common Stocks 19.2% |
||||||||||||||
Aerospace & Defense 0.8% | ||||||||||||||
Lockheed Martin Corp. |
United States | 1,040 | 425,318 | |||||||||||
RTX Corp. |
United States | 5,200 | 374,244 | |||||||||||
|
|
|||||||||||||
799,562 | ||||||||||||||
|
|
|||||||||||||
Air Freight & Logistics 0.5% |
||||||||||||||
United Parcel Service, Inc. Class B |
United States | 2,880 | 448,906 | |||||||||||
|
|
|||||||||||||
Banks 2.9% |
||||||||||||||
Bank of America Corp. |
United States | 31,800 | 870,684 | |||||||||||
Citigroup, Inc. |
United States | 10,720 | 440,913 | |||||||||||
JPMorgan Chase & Co. |
United States | 7,040 | 1,020,941 | |||||||||||
Truist Financial Corp. |
United States | 15,520 | 444,027 | |||||||||||
|
|
|||||||||||||
2,776,565 | ||||||||||||||
|
|
|||||||||||||
Biotechnology 1.7% |
||||||||||||||
AbbVie, Inc. |
United States | 6,780 | 1,010,627 | |||||||||||
Amgen, Inc. |
United States | 2,240 | 602,022 | |||||||||||
|
|
|||||||||||||
1,612,649 | ||||||||||||||
|
|
|||||||||||||
Capital Markets 0.9% |
||||||||||||||
Morgan Stanley |
United States | 11,000 | 898,370 | |||||||||||
|
|
|||||||||||||
Consumer Staples Distribution & Retail 0.4% |
||||||||||||||
Target Corp. |
United States | 3,680 | 406,898 | |||||||||||
|
|
|||||||||||||
Diversified Telecommunication Services 0.5% |
||||||||||||||
Verizon Communications, Inc. |
United States | 14,400 | 466,704 | |||||||||||
|
|
|||||||||||||
Electric Utilities 2.0% |
||||||||||||||
Duke Energy Corp. |
United States | 11,120 | 981,451 | |||||||||||
Southern Co. |
United States | 14,320 | 926,791 | |||||||||||
|
|
|||||||||||||
1,908,242 | ||||||||||||||
|
|
|||||||||||||
Household Products 0.5% |
||||||||||||||
Procter & Gamble Co. |
United States | 3,360 | 490,090 | |||||||||||
|
|
112 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Income Focus ETF (continued)
Country | Shares | Value | ||||||||||||
Common Stocks (continued) |
||||||||||||||
Industrial Conglomerates 0.5% | ||||||||||||||
Honeywell International, Inc. |
United States | 2,480 | $ | 458,155 | ||||||||||
|
|
|||||||||||||
Metals & Mining 1.0% | ||||||||||||||
Rio Tinto PLC ADR |
Australia | 15,760 | 1,002,966 | |||||||||||
|
|
|||||||||||||
Multi-Utilities 0.5% | ||||||||||||||
Dominion Energy, Inc. |
United States | 10,000 | 446,700 | |||||||||||
|
|
|||||||||||||
Oil, Gas & Consumable Fuels 3.3% | ||||||||||||||
Chevron Corp. |
United States | 12,720 | 2,144,846 | |||||||||||
Exxon Mobil Corp. |
United States | 4,720 | 554,978 | |||||||||||
TotalEnergies SE ADR |
France | 8,500 | 558,960 | |||||||||||
|
|
|||||||||||||
3,258,784 | ||||||||||||||
|
|
|||||||||||||
Pharmaceuticals 1.3% | ||||||||||||||
Bristol-Myers Squibb Co. |
United States | 15,200 | 882,208 | |||||||||||
Pfizer, Inc. |
United States | 12,960 | 429,883 | |||||||||||
|
|
|||||||||||||
1,312,091 | ||||||||||||||
|
|
|||||||||||||
Semiconductors & Semiconductor Equipment 1.4% | ||||||||||||||
Analog Devices, Inc. |
United States | 5,100 | 892,959 | |||||||||||
Texas Instruments, Inc. |
United States | 2,800 | 445,228 | |||||||||||
|
|
|||||||||||||
1,338,187 | ||||||||||||||
|
|
|||||||||||||
Specialty Retail 0.5% | ||||||||||||||
Home Depot, Inc. |
United States | 1,680 | 507,629 | |||||||||||
|
|
|||||||||||||
Tobacco 0.5% | ||||||||||||||
Philip Morris International, Inc. |
United States | 5,210 | 482,342 | |||||||||||
|
|
|||||||||||||
Total Common Stocks (Cost $19,066,985) |
18,614,840 | |||||||||||||
|
|
|||||||||||||
Equity-Linked Securities 20.5% |
||||||||||||||
Other 20.5% | ||||||||||||||
a |
BofA Finance LLC |
United States | 350 | 1,499,245 | ||||||||||
a |
BofA Finance LLC |
United States | 350 | 1,499,579 | ||||||||||
a |
Citigroup Global Markets Holdings, Inc. |
United States | 350 | 1,501,895 | ||||||||||
a |
GS Finance Corp. |
United States | 352 | 1,496,857 | ||||||||||
a |
GS Finance Corp. |
United States | 462 | 1,987,712 | ||||||||||
a |
JPMorgan Chase Financial Co. LLC |
United States | 350 | 1,504,361 | ||||||||||
a |
Morgan Stanley Finance LLC |
United States | 350 | 1,498,982 | ||||||||||
a |
Royal Bank of Canada |
Canada | 452 | 1,950,176 | ||||||||||
a |
Royal Bank of Canada |
Canada | 447 | 1,920,634 | ||||||||||
a |
UBS AG |
Switzerland | 350 | 1,503,547 | ||||||||||
a |
Wells Fargo Bank NA |
United States | 350 | 1,500,821 | ||||||||||
a |
Wells Fargo Bank NA |
United States | 465 | 1,996,682 | ||||||||||
|
|
|||||||||||||
19,860,491 | ||||||||||||||
|
|
|||||||||||||
Total Equity-Linked Securities (Cost $19,962,792) |
19,860,491 | |||||||||||||
|
|
|||||||||||||
Total Investments (Cost $98,637,803) 98.7% |
95,719,269 | |||||||||||||
Other Assets, less Liabilities 1.3% |
1,288,054 | |||||||||||||
|
|
|||||||||||||
Net Assets 100.0% |
$ | 97,007,323 | ||||||||||||
|
|
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2023, the value of was $44,363,309, representing 45.7% of net assets.
franklintempleton.com | Semiannual Report | 113 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Income Focus ETF (continued)
At September 30, 2023, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||||||
Description | Type | Number of Contracts |
Notional Amount* |
Expiration Date |
Value/Unrealized |
|||||||||||||||||||
Interest rate contracts |
||||||||||||||||||||||||
U.S. Treasury Bond Ultra |
Long | 40 | $ | 4,747,500 | 12/19/23 | $ | (259,005 | ) |
*As of period end.
The Fund had the following option written contracts open at September 30, 2023:
Written Options | ||||||||||||||||||||||||
Description | Strike Price |
Expiration Date |
Contracts | Notional Amount |
Value/Unrealized |
|||||||||||||||||||
Put Options Written |
||||||||||||||||||||||||
Exxon Mobil Corp. Oct23 100 Put |
$ | 100.00 | 10/20/23 | (10,000 | ) | $ | (12,282 | ) | $ | 11,682 | ||||||||||||||
Johnson Controls Internationals Oct23 55 Put |
55.00 | 10/20/23 | (10,000 | ) | (8,382 | ) | (11,618 | ) | ||||||||||||||||
Microsoft Corp. Oct23 285 Put |
285.00 | 10/20/23 | (3,000 | ) | (9,444 | ) | 7,464 | |||||||||||||||||
Texas Instruments, Inc. Oct23 155 Put |
155.00 | 10/20/23 | (3,000 | ) | (7,765 | ) | 1,405 | |||||||||||||||||
$ | 8,933 | |||||||||||||||||||||||
Call Options Written |
||||||||||||||||||||||||
AbbVie Inc. Oct23 160 Call |
$ | 160.00 | 10/20/23 | (6,700 | ) | $ | (10,909 | ) | $ | 10,105 | ||||||||||||||
Amgen, Inc. Oct23 280 Call |
280.00 | 10/20/23 | (2,200 | ) | (7,498 | ) | 5,188 | |||||||||||||||||
Chevron Corp. Oct23 175 Call |
175.00 | 10/20/23 | (12,700 | ) | (20,297 | ) | 8,994 | |||||||||||||||||
Home Depot, Inc. Oct23 350 Call |
350.00 | 10/20/23 | (1,600 | ) | (6,445 | ) | 6,381 | |||||||||||||||||
$ | 30,668 |
See Note 8 regarding other derivative information.
See Abbreviations on page 220.
114 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Intelligent Machines ETF
Six Months Ended (unaudited) |
Year Ended March 31, | |||||||||||||||||||
2023 | 2022 | 2021 | 2020a | |||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||
Net asset value, beginning of period |
$44.16 | $46.30 | $43.24 | $20.67 | $25.00 | |||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||
Net investment income (loss)c |
(0.03 | ) | — | (0.10 | ) | (0.06 | ) | — | ||||||||||||
Net realized and unrealized gains (losses) |
0.11 | (2.14 | ) | 3.25 | 22.63 | (4.33 | ) | |||||||||||||
Total from investment operations |
0.08 | (2.14 | ) | 3.15 | 22.57 | (4.33 | ) | |||||||||||||
Less distributions from: | ||||||||||||||||||||
Net investment income |
— | — | — | (— | )d | — | ||||||||||||||
Net realized gains |
— | — | (0.09 | ) | — | — | ||||||||||||||
Total distributions |
— | — | (0.09 | ) | — | — | ||||||||||||||
Net asset value, end of period |
$44.24 | $44.16 | $46.30 | $43.24 | $20.67 | |||||||||||||||
Total returne |
0.18% | (4.62)% | 7.27% | 109.21% | (17.32)% | |||||||||||||||
Ratios to average net assetsf | ||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.50% | 0.50% | 0.77% | 2.19% | 12.91% | |||||||||||||||
Expenses net of waiver and payments by affiliates |
0.50% | 0.50% | 0.50% | 0.50% | 0.50% | |||||||||||||||
Net investment income (loss) |
(0.11)% | —% | (0.21)% | (0.17)% | 0.20% | |||||||||||||||
Supplemental data | ||||||||||||||||||||
Net assets, end of period (000’s) |
$19,907 | $8,832 | $11,574 | $10,809 | $2,067 | |||||||||||||||
Portfolio turnover rateg |
19.99%h | 19.82%h | 35.98%h | 75.25%h | —%h |
aFor the period February 25, 2020 (commencement of operations) to March 31, 2020.
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.
dAmount rounds to less than $0.005 per share.
eTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
fRatios are annualized for periods less than one year.
gPortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
h Portfolio turnover rate excluding cash creations was as follows: | 19.71% | 19.38% | 35.98% | 75.25% | — |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 115 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2023 (unaudited)
Franklin Intelligent Machines ETF
Country | Shares | Value | ||||||||||||
Common Stocks 97.1% |
||||||||||||||
Aerospace & Defense 2.8% | ||||||||||||||
a |
Axon Enterprise, Inc. |
United States | 2,790 | $ | 555,182 | |||||||||
|
|
|||||||||||||
Automobiles 5.5% | ||||||||||||||
a |
Tesla, Inc. |
United States | 4,394 | 1,099,467 | ||||||||||
|
|
|||||||||||||
Computers & Peripherals 4.7% | ||||||||||||||
Apple, Inc. |
United States | 5,517 | 944,566 | |||||||||||
|
|
|||||||||||||
Construction & Engineering 3.0% | ||||||||||||||
Quanta Services, Inc. |
United States | 2,431 | 454,767 | |||||||||||
Valmont Industries, Inc. |
United States | 606 | 145,567 | |||||||||||
|
|
|||||||||||||
600,334 | ||||||||||||||
|
|
|||||||||||||
Electrical Equipment 1.1% | ||||||||||||||
Eaton Corp. PLC |
United States | 914 | 194,938 | |||||||||||
a |
Sunrun, Inc. |
United States | 2,217 | 27,845 | ||||||||||
|
|
|||||||||||||
222,783 | ||||||||||||||
|
|
|||||||||||||
Electronic Equipment, Instruments & Components 7.3% | ||||||||||||||
Amphenol Corp., Class A |
United States | 2,938 | 246,763 | |||||||||||
Keyence Corp. |
Japan | 1,405 | 522,550 | |||||||||||
a |
Keysight Technologies, Inc. |
United States | 1,506 | 199,259 | ||||||||||
Samsung SDI Co. Ltd. |
South Korea | 756 | 286,847 | |||||||||||
TE Connectivity Ltd. |
United States | 675 | 83,383 | |||||||||||
a |
Trimble, Inc. |
United States | 840 | 45,242 | ||||||||||
a |
Zebra Technologies Corp., Class A |
United States | 281 | 66,465 | ||||||||||
|
|
|||||||||||||
1,450,509 | ||||||||||||||
|
|
|||||||||||||
Ground Transportation 0.2% |
||||||||||||||
a |
Uber Technologies, Inc. |
United States | 1,075 | 49,439 | ||||||||||
|
|
|||||||||||||
Health Care Equipment & Supplies 9.6% | ||||||||||||||
a |
Align Technology, Inc. |
United States | 64 | 19,540 | ||||||||||
a |
Dexcom, Inc. |
United States | 3,699 | 345,117 | ||||||||||
a |
IDEXX Laboratories, Inc. |
United States | 702 | 306,964 | ||||||||||
a |
Inspire Medical Systems, Inc. |
United States | 1,290 | 255,988 | ||||||||||
a |
Insulet Corp. |
United States | 315 | 50,239 | ||||||||||
a |
Intuitive Surgical, Inc. |
United States | 3,213 | 939,128 | ||||||||||
|
|
|||||||||||||
1,916,976 | ||||||||||||||
|
|
|||||||||||||
Household Durables 0.6% |
||||||||||||||
Panasonic Holdings Corp. |
Japan | 10,140 | 114,294 | |||||||||||
|
|
|||||||||||||
Industrial Conglomerates 1.1% | ||||||||||||||
Honeywell International, Inc. |
United States | 496 | 91,631 | |||||||||||
Siemens AG |
Germany | 821 | 117,920 | |||||||||||
|
|
|||||||||||||
209,551 | ||||||||||||||
|
|
|||||||||||||
Semiconductors & Semiconductor Equipment 35.9% | ||||||||||||||
a |
Advanced Micro Devices, Inc. |
United States | 1,016 | 104,465 | ||||||||||
Analog Devices, Inc. |
United States | 2,241 | 392,377 | |||||||||||
Applied Materials, Inc. |
United States | 4,037 | 558,923 | |||||||||||
ASM International NV |
Netherlands | 1,251 | 526,487 | |||||||||||
ASML Holding NV |
Netherlands | 1,416 | 833,543 | |||||||||||
a |
Enphase Energy, Inc. |
United States | 346 | 41,572 | ||||||||||
Entegris, Inc. |
United States | 3,548 | 333,193 | |||||||||||
a |
First Solar, Inc. |
United States | 605 | 97,762 | ||||||||||
Infineon Technologies AG |
Germany | 6,806 | 225,939 | |||||||||||
Intel Corp. |
United States | 800 | 28,440 | |||||||||||
KLA Corp. |
United States | 496 | 227,495 |
116 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Intelligent Machines ETF (continued)
Country | Shares | Value | ||||||||||||
Common Stocks (continued) |
||||||||||||||
Semiconductors & Semiconductor Equipment (continued) | ||||||||||||||
Lam Research Corp. |
United States | 476 | $ | 298,342 | ||||||||||
Microchip Technology, Inc. |
United States | 1,371 | 107,006 | |||||||||||
NVIDIA Corp. |
United States | 4,541 | 1,975,290 | |||||||||||
NXP Semiconductors NV |
Netherlands | 513 | 102,559 | |||||||||||
a |
SiTime Corp. |
United States | 955 | 109,109 | ||||||||||
Taiwan Semiconductor Manufacturing Co. Ltd., ADR |
Taiwan | 6,382 | 554,596 | |||||||||||
Teradyne, Inc. |
United States | 4,059 | 407,767 | |||||||||||
Texas Instruments, Inc. |
United States | 1,002 | 159,328 | |||||||||||
a |
Wolfspeed, Inc. |
United States | 1,398 | 53,264 | ||||||||||
|
|
|||||||||||||
7,137,457 | ||||||||||||||
|
|
|||||||||||||
Software 25.3% | ||||||||||||||
a |
Altair Engineering, Inc., Class A |
United States | 3,504 | 219,210 | ||||||||||
a |
ANSYS, Inc. |
United States | 1,380 | 410,619 | ||||||||||
a |
Atlassian Corp., Class A |
United States | 693 | 139,646 | ||||||||||
a |
Autodesk, Inc. |
United States | 1,893 | 391,681 | ||||||||||
Bentley Systems, Inc., Class B |
United States | 2,414 | 121,086 | |||||||||||
a |
Cadence Design Systems, Inc. |
United States | 4,053 | 949,618 | ||||||||||
Constellation Software, Inc. |
Canada | 225 | 466,654 | |||||||||||
Dassault Systemes SE |
France | 4,582 | 171,223 | |||||||||||
a |
Descartes Systems Group, Inc. |
Canada | 7,437 | 548,369 | ||||||||||
a |
Lumine Group, Inc. |
Canada | 675 | 10,045 | ||||||||||
a |
PTC, Inc. |
United States | 2,901 | 411,014 | ||||||||||
Roper Technologies, Inc. |
United States | 450 | 217,926 | |||||||||||
a |
Synopsys, Inc. |
United States | 2,118 | 972,098 | ||||||||||
|
|
|||||||||||||
5,029,189 | ||||||||||||||
|
|
|||||||||||||
Total Common Stocks (Cost $19,532,102) |
19,329,747 | |||||||||||||
|
|
|||||||||||||
Warrant 0.0% |
||||||||||||||
Software 0.0% | ||||||||||||||
a,b |
Constellation Software, Inc. |
Canada | 225 | — | ||||||||||
|
|
|||||||||||||
Total Investments (Cost $19,532,102) 97.1% |
19,329,747 | |||||||||||||
Other Assets, less Liabilities 2.9% |
577,296 | |||||||||||||
|
|
|||||||||||||
Net Assets 100.0% |
$ | 19,907,043 | ||||||||||||
|
|
aNon-income producing.
bFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.
See Abbreviations on page 220.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 117 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin International Aggregate Bond ETF
Six Months Ended (unaudited) |
Year Ended March 31, | |||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019a | ||||||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||||||
Net asset value, beginning of period |
$19.59 | $23.65 | $25.02 | $24.95 | $24.56 | $25.00 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment income (loss)c |
0.21 | 0.19 | 0.05 | (0.01 | ) | 0.22 | 0.39 | |||||||||||||||||
Net realized and unrealized gains (losses) |
(0.41 | ) | (0.77 | ) | (0.87 | ) | 0.19 | 0.78 | (0.40 | ) | ||||||||||||||
Total from investment operations |
(0.20 | ) | (0.58 | ) | (0.82 | ) | 0.18 | 1.00 | (0.01 | ) | ||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income |
— | (3.48 | ) | (0.42 | ) | (0.11 | ) | (0.09 | ) | (0.43 | ) | |||||||||||||
Net realized gains |
— | — | (0.13 | ) | — | (0.52 | ) | — | ||||||||||||||||
Total distributions |
— | (3.48 | ) | (0.55 | ) | (0.11 | ) | (0.61 | ) | (0.43 | ) | |||||||||||||
Net asset value, end of period |
$19.39 | $19.59 | $23.65 | $25.02 | $24.95 | $24.56 | ||||||||||||||||||
Total returnd |
(1.02)% | (2.38)% | (3.35)% | 0.72% | 4.05% | 0.00% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.25% | 0.25% | 0.39% | 0.58% | 3.23% | 2.32% | ||||||||||||||||||
Expenses net of waiver and payments by affiliates |
0.25% | 0.25% | 0.25% | 0.25% | 0.28% | 0.35% | ||||||||||||||||||
Net investment income (loss) |
2.13% | 0.86% | 0.21% | (0.03)% | 0.87% | 1.91% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) |
$311,228 | $276,164 | $193,968 | $181,405 | $4,989 | $4,912 | ||||||||||||||||||
Portfolio turnover ratef |
12.80%g | 31.03%g | 24.12%g | 72.21%g | 66.78%g | 50.32% |
aFor the period May 30, 2018 (commencement of operations) to March 31, 2019.
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”).
g Portfolio turnover rate excluding cash creations was as follows: | 12.80% | 31.03% | 24.12% | 72.21% | 66.78% | — |
118 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2023 (unaudited)
Franklin International Aggregate Bond ETF
Principal Amount* | Value | |||||||||||||
Foreign Government and Agency Securities 81.6% |
||||||||||||||
Australia 3.1% | ||||||||||||||
a |
Australia Government Bonds, Series 149, 2.25%, 5/21/28 |
5,000,000 | AUD | $ | 2,964,020 | |||||||||
a |
New South Wales Treasury Corp., Series 27, 3.00%, 5/20/27 |
2,200,000 | AUD | 1,352,785 | ||||||||||
a,b |
Queensland Treasury Corp., 3.25%, 8/21/29 |
4,500,000 | AUD | 2,711,355 | ||||||||||
a |
Western Australian Treasury Corp., Series 26, 3.00%, 10/21/26 |
4,500,000 | AUD | 2,788,175 | ||||||||||
|
|
|||||||||||||
9,816,335 | ||||||||||||||
|
|
|||||||||||||
Austria 5.0% |
||||||||||||||
Republic of Austria Government Bonds, |
||||||||||||||
a,b 1.20%, 10/20/25 |
9,000,000 | EUR | 9,133,118 | |||||||||||
a,b 1.50%, 2/20/47 |
9,000,000 | EUR | 6,312,349 | |||||||||||
|
|
|||||||||||||
15,445,467 | ||||||||||||||
|
|
|||||||||||||
Belgium 3.2% |
||||||||||||||
a,b |
Kingdom of Belgium Government Bonds, Series 75, 1.00%, 6/22/31 |
11,000,000 | EUR | 9,825,058 | ||||||||||
|
|
|||||||||||||
Canada 4.7% |
||||||||||||||
Canada Government Bonds, |
||||||||||||||
1.25%, 3/01/25 |
10,000,000 | CAD | 6,994,073 | |||||||||||
5.00%, 6/01/37 |
5,500,000 | CAD | 4,455,597 | |||||||||||
2.00%, 12/01/51 |
6,500,000 | CAD | 3,280,413 | |||||||||||
|
|
|||||||||||||
14,730,083 | ||||||||||||||
|
|
|||||||||||||
China 5.0% |
||||||||||||||
Agricultural Development Bank of China, Series 2008, 3.45%, 9/23/25 |
13,000,000 | CNY | 1,813,230 | |||||||||||
China Development Bank, |
||||||||||||||
Series 2003, 3.23%, 1/10/25 |
24,000,000 | CNY | 3,320,532 | |||||||||||
Series 2004, 3.43%, 1/14/27 |
25,000,000 | CNY | 3,521,126 | |||||||||||
China Government Bonds, |
||||||||||||||
3.03%, 3/11/26 |
25,000,000 | CNY | 3,484,565 | |||||||||||
2.85%, 6/04/27 |
25,000,000 | CNY | 3,468,291 | |||||||||||
|
|
|||||||||||||
15,607,744 | ||||||||||||||
|
|
|||||||||||||
Cyprus 1.1% |
||||||||||||||
a |
Cyprus Government International Bonds, 1.50%, 4/16/27 |
3,500,000 | EUR | 3,446,955 | ||||||||||
|
|
|||||||||||||
France 8.0% |
||||||||||||||
French Republic Government Bonds OAT, |
||||||||||||||
a 2.00%, 11/25/32 |
14,500,000 | EUR | 13,741,251 | |||||||||||
a 0.75%, 5/25/52 |
7,500,000 | EUR | 3,747,455 | |||||||||||
a,c zero cpn., 11/25/29 |
8,500,000 | EUR | 7,425,318 | |||||||||||
|
|
|||||||||||||
24,914,024 | ||||||||||||||
|
|
|||||||||||||
Germany 9.4% |
||||||||||||||
a,c |
Bundesobligation, zero cpn., Series G, 10/10/25 |
8,000,000 | EUR | 7,954,930 | ||||||||||
a,c |
Bundesrepublik Deutschland Bundesanleihe, zero cpn., 8/15/26 |
22,000,000 | EUR | 21,417,675 | ||||||||||
|
|
|||||||||||||
29,372,605 | ||||||||||||||
|
|
|||||||||||||
Italy 3.6% |
||||||||||||||
Italy Buoni Poliennali Del Tesoro, |
||||||||||||||
a Series 10Y, 1.25%, 12/01/26 |
9,000,000 | EUR | 8,761,405 | |||||||||||
a,b 2.45%, 9/01/50 |
3,600,000 | EUR | 2,382,882 | |||||||||||
|
|
|||||||||||||
11,144,287 | ||||||||||||||
|
|
|||||||||||||
Japan 9.6% |
||||||||||||||
Development Bank of Japan, Inc., 2.30%, 3/19/26 |
1,000,000,000 | JPY | 7,014,026 | |||||||||||
Japan Government Five Year Bonds, Series 142, 0.10%, 12/20/24 |
1,600,000,000 | JPY | 10,724,207 | |||||||||||
Japan Government Thirty Year Bonds, Series 65, 0.40%, 12/20/49 |
700,000,000 | JPY | 3,479,939 | |||||||||||
Japan Government Twenty Year Bonds, 1.50%, 3/20/33 |
1,200,000,000 | JPY | 8,592,025 | |||||||||||
|
|
|||||||||||||
29,810,197 | ||||||||||||||
|
|
franklintempleton.com | Semiannual Report | 119 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Aggregate Bond ETF (continued)
Principal Amount* | Value | |||||||||||||
Foreign Government and Agency Securities (continued) |
||||||||||||||
Mexico 3.8% |
||||||||||||||
d |
Mexico Bonos, Series M, 8.00%, 11/07/47 |
250,000,000 | MXN | $ | 11,811,074 | |||||||||
|
|
|||||||||||||
Netherlands 2.8% |
||||||||||||||
Netherlands Government Bonds, |
||||||||||||||
a,b 0.50%, 7/15/26 |
6,000,000 | EUR | 5,912,719 | |||||||||||
a,b 0.50%, 1/15/40 |
4,000,000 | EUR | 2,763,222 | |||||||||||
|
|
|||||||||||||
8,675,941 | ||||||||||||||
|
|
|||||||||||||
Poland 3.5% |
||||||||||||||
Republic of Poland Government Bonds, Series 1029, 2.75%, 10/25/29 |
55,000,000 | PLN | 10,930,631 | |||||||||||
|
|
|||||||||||||
Romania 1.0% |
||||||||||||||
a |
Romania Government International Bonds, 2.00%, 1/28/32 |
4,000,000 | EUR | 3,053,063 | ||||||||||
|
|
|||||||||||||
Spain 6.1% |
||||||||||||||
Spain Government Bonds, |
||||||||||||||
a,b 1.25%, 10/31/30 |
12,000,000 | EUR | 10,827,835 | |||||||||||
c zero cpn., 1/31/25 |
8,000,000 | EUR | 8,064,848 | |||||||||||
|
|
|||||||||||||
18,892,683 | ||||||||||||||
|
|
|||||||||||||
Supranational 1.2% |
||||||||||||||
a |
European Union, 0.30%, 11/04/50 |
8,000,000 | EUR | 3,631,138 | ||||||||||
|
|
|||||||||||||
Sweden 3.1% |
||||||||||||||
Sweden Government Bonds, |
||||||||||||||
a Series 1057, 1.50%, 11/13/23 |
44,000,000 | SEK | 4,016,873 | |||||||||||
a Series 1060, 0.75%, 5/12/28 |
70,000,000 | SEK | 5,785,725 | |||||||||||
|
|
|||||||||||||
9,802,598 | ||||||||||||||
|
|
|||||||||||||
United Kingdom 7.4% |
||||||||||||||
U.K. Gilts, |
||||||||||||||
a 4.75%, 12/07/30 |
10,800,000 | GBP | 13,553,548 | |||||||||||
a 0.875%, 7/31/33 |
6,000,000 | GBP | 5,265,813 | |||||||||||
a 3.75%, 1/29/38 |
3,800,000 | GBP | 4,171,768 | |||||||||||
|
|
|||||||||||||
22,991,129 | ||||||||||||||
|
|
|||||||||||||
Total Foreign Government and Agency Securities (Cost $290,385,055) |
253,901,012 | |||||||||||||
|
|
|||||||||||||
Corporate Bonds & Notes 5.6% |
||||||||||||||
Denmark 0.0% |
||||||||||||||
a |
Nykredit Realkredit AS, Series CCE, 1.00%, 10/01/50 |
1,013,083 | DKK | 100,873 | ||||||||||
|
|
|||||||||||||
France 0.5% |
||||||||||||||
a |
Orange SA, 1.375%, 3/20/28 |
1,500,000 | EUR | 1,428,766 | ||||||||||
|
|
|||||||||||||
Germany 1.0% |
||||||||||||||
a |
Deutsche Telekom AG, 0.875%, 3/25/26 |
500,000 | EUR | 496,015 | ||||||||||
Kreditanstalt fuer Wiederaufbau, 2.05%, 2/16/26 |
300,000,000 | JPY | 2,095,839 | |||||||||||
a,c |
Siemens Financieringsmaatschappij NV, zero cpn., , 2/20/26 |
700,000 | EUR | 678,447 | ||||||||||
|
|
|||||||||||||
3,270,301 | ||||||||||||||
|
|
|||||||||||||
Supranational 1.3% |
||||||||||||||
Asian Development Bank, Series 339-00-1, 2.35%, 6/21/27 |
240,000,000 | JPY | 1,732,703 | |||||||||||
a |
European Investment Bank, 1.90%, 1/26/26 |
330,000,000 | JPY | 2,302,059 | ||||||||||
|
|
|||||||||||||
4,034,762 | ||||||||||||||
|
|
|||||||||||||
United Kingdom 0.4% |
||||||||||||||
a |
RELX Finance BV, 0.50%, 3/10/28 |
1,500,000 | EUR | 1,372,155 | ||||||||||
|
|
|||||||||||||
United States 2.4% |
||||||||||||||
AbbVie, Inc., 1.375%, 5/17/24 |
1,000,000 | EUR | 1,039,507 | |||||||||||
Apple, Inc., 1.625%, 11/10/26 |
1,000,000 | EUR | 999,638 | |||||||||||
AT&T, Inc., 0.25%, 3/04/26 |
1,200,000 | EUR | 1,156,401 |
120 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Aggregate Bond ETF (continued)
Principal Amount* | Value | |||||||||||||
Corporate Bonds & Notes (continued) |
||||||||||||||
United States (continued) | ||||||||||||||
Procter & Gamble Co., 0.50%, 10/25/24 |
1,200,000 | EUR | $ | 1,225,246 | ||||||||||
a |
Schlumberger Finance France SAS, 1.00%, 2/18/26 |
1,000,000 | EUR | 988,344 | ||||||||||
Stryker Corp., 0.25%, 12/03/24 |
1,000,000 | EUR | 1,011,340 | |||||||||||
Verizon Communications, Inc., 0.875%, 4/02/25 |
1,000,000 | EUR | 1,009,470 | |||||||||||
|
|
|||||||||||||
7,429,946 | ||||||||||||||
|
|
|||||||||||||
Total Corporate Bonds & Notes (Cost $21,216,170) |
17,636,803 | |||||||||||||
|
|
|||||||||||||
Total Investments before Short Term Investments ($311,601,225) |
271,537,815 | |||||||||||||
|
|
|||||||||||||
Short-Term Investments 4.6% |
||||||||||||||
U.S. Government & Agency Securities 4.6% |
||||||||||||||
c |
Federal Home Loan Bank Discount Notes, 10/02/23 |
14,210,000 | 14,210,000 | |||||||||||
|
|
|||||||||||||
Total Short-Term Investments (Cost $14,207,947) |
14,210,000 | |||||||||||||
|
|
|||||||||||||
Total Investments (Cost $325,809,172) 91.8% |
285,747,815 | |||||||||||||
Other Assets, less Liabilities 8.2% |
25,480,064 | |||||||||||||
|
|
|||||||||||||
Net Assets 100.0% |
$ | 311,227,879 | ||||||||||||
|
|
* The principal amount is stated in U.S. dollars unless otherwise indicated.
a Security 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 $170,313,094, representing 54.7% of net assets.
b Security 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 $49,868,538, representing 16.0% of net assets.
c The security was issued on a discount basis with no stated coupon rate.
d Principal amount is stated in 100 Mexican Peso Units.
At September 30, 2023, the Fund had the following forward exchange contracts outstanding. See Note 1(c).
Forward Exchange Contracts
Currency | Counterpartya | Type | Quantity | Contract Amount |
Settlement Date |
Unrealized Appreciation |
Unrealized Depreciation |
|||||||||||||||||||||
OTC Forward Exchange Contracts |
||||||||||||||||||||||||||||
Australian Dollar |
CITI | Sell | 1,400,000 | $ | 937,908 | 10/25/23 | $ | 34,244 | $ | — | ||||||||||||||||||
Australian Dollar |
CITI | Sell | 13,990,000 | 9,514,669 | 10/25/23 | 484,491 | — | |||||||||||||||||||||
Canadian Dollar |
CITI | Sell | 1,800,000 | 1,358,481 | 10/25/23 | 28,339 | — | |||||||||||||||||||||
Canadian Dollar |
CITI | Sell | 2,300,000 | 1,746,819 | 10/25/23 | 47,193 | — | |||||||||||||||||||||
Canadian Dollar |
CITI | Sell | 16,920,000 | 12,867,478 | 10/25/23 | 364,139 | — | |||||||||||||||||||||
Chinese Yuan |
CITI | Sell | 119,200,000 | 16,611,898 | 10/25/23 | 262,629 | — | |||||||||||||||||||||
Danish Krone |
CITI | Sell | 1,141,000 | 172,814 | 10/25/23 | 10,705 | — | |||||||||||||||||||||
Euro |
CITI | Sell | 2,600,000 | 2,919,906 | 10/25/23 | 165,713 | — | |||||||||||||||||||||
Euro |
CITI | Sell | 7,500,000 | 8,217,375 | 10/25/23 | 272,587 | — | |||||||||||||||||||||
Euro |
CITI | Sell | 5,500,000 | 6,207,233 | 10/25/23 | 381,056 | — | |||||||||||||||||||||
Euro |
CITI | Sell | 119,254,622 | 134,384,098 | 10/25/23 | 8,057,079 | — | |||||||||||||||||||||
Great British Pound |
CITI | Sell | 4,475,348 | 5,869,737 | 10/25/23 | 402,584 | — | |||||||||||||||||||||
Great British Pound |
CITI | Sell | 19,495,968 | 25,173,526 | 10/25/23 | 1,356,956 | — | |||||||||||||||||||||
Japanese Yen |
CITI | Buy | 1,600,000,000 | 11,604,883 | 10/25/23 | — | (860,231 | ) | ||||||||||||||||||||
Japanese Yen |
CITI | Sell | 7,049,000,000 | 51,126,762 | 10/25/23 | 3,789,853 | — | |||||||||||||||||||||
Mexican Peso |
CITI | Sell | 18,000,000 | 1,036,791 | 10/25/23 | 6,723 | — | |||||||||||||||||||||
Mexican Peso |
CITI | Sell | 90,000,000 | 5,224,607 | 10/25/23 | 74,269 | — | |||||||||||||||||||||
Mexican Peso |
CITI | Sell | 119,100,000 | 6,972,905 | 10/25/23 | 157,291 | — | |||||||||||||||||||||
Polish Zloty |
CITI | Sell | 4,500,000 | 1,095,652 | 10/25/23 | 65,807 | — | |||||||||||||||||||||
Polish Zloty |
CITI | Sell | 41,050,000 | 10,310,358 | 10/25/23 | 915,885 | — | |||||||||||||||||||||
Swedish Krona |
CITI | Sell | 4,000,000 | 370,281 | 10/25/23 | 2,836 | — |
franklintempleton.com | Semiannual Report | 121 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin International Aggregate Bond ETF (continued)
Forward Exchange Contracts (continued)
Currency | Counterpartya | Type | Quantity | Contract Amount |
Settlement Date |
Unrealized Appreciation |
Unrealized Depreciation |
|||||||||||||||||||||
OTC Forward Exchange Contracts (continued) |
| |||||||||||||||||||||||||||
Swedish Krona |
CITI | Sell | 4,000,000 | $ | 370,281 | 10/25/23 | $ | 2,836 | $ | — | ||||||||||||||||||
Swedish Krona |
CITI | Sell | 97,500,000 | 9,596,154 | 10/25/23 | 639,693 | — | |||||||||||||||||||||
|
|
|||||||||||||||||||||||||||
Total Forward Exchange Contracts |
$ | 17,522,908 | $ | (860,231 | ) | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||
Net unrealized appreciation (depreciation) |
|
$ | 16,662,677 | |||||||||||||||||||||||||
|
|
a May be comprised of multiple contracts with the same counterparty, currency and settlement date.
See Note 8 regarding other derivative information.
See Abbreviations on page 220.
122 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Investment Grade Corporate ETF
Six Months Ended (unaudited) |
Year Ended March 31, | |||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||||||
Net asset value, beginning of period |
$21.44 | $23.71 | $25.47 | $24.22 | $24.09 | $23.97 | ||||||||||||||||||
Income from investment operationsa: |
||||||||||||||||||||||||
Net investment incomeb |
0.39 | 0.68 | 0.58 | 0.60 | 0.73 | 0.82 | ||||||||||||||||||
Net realized and unrealized gains (losses) |
(1.09 | ) | (2.22 | ) | (1.63 | ) | 1.71 | 0.27 | 0.21 | |||||||||||||||
Total from investment operations |
(0.70 | ) | (1.54 | ) | (1.05 | ) | 2.31 | 1.00 | 1.03 | |||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(0.43 | ) | (0.73 | ) | (0.66 | ) | (0.83 | ) | (0.81 | ) | (0.91 | ) | ||||||||||||
Net realized gains |
— | — | (0.05 | ) | (0.23 | ) | (0.06 | ) | — | |||||||||||||||
Total distributions |
(0.43 | ) | (0.73 | ) | (0.71 | ) | (1.06 | ) | (0.87 | ) | (0.91 | ) | ||||||||||||
Net asset value, end of period |
$20.31 | $21.44 | $23.71 | $25.47 | $24.22 | $24.09 | ||||||||||||||||||
Total returnc |
(3.30)% | (6.46)% | (4.30)% | 9.43% | 4.02% | 4.46% | ||||||||||||||||||
Ratios to average net assetsd | ||||||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.35% | 0.35% | 0.42% | 0.50% | 0.58% | 1.07% | ||||||||||||||||||
Expenses net of waiver and payments by affiliates |
0.35% | 0.35% | 0.35% | 0.35% | 0.35% | 0.35% | ||||||||||||||||||
Net investment income |
3.74% | 3.13% | 2.27% | 2.27% | 2.86% | 3.49% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) |
$616,489 | $644,363 | $981,602 | $1,018,639 | $553,338 | $18,065 | ||||||||||||||||||
Portfolio turnover ratee |
10.54%f | 27.84%f | 36.76%f | 53.32%f | 52.17%f | 22.02% |
a The amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
b Based on average daily shares outstanding.
c Total return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
d Ratios are annualized for periods less than one year.
e Portfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
f Portfolio turnover rate excluding cash creations was as follows: | 10.54% | 27.84% | 36.76% | 53.32% | 52.17% |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 123 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2023 (unaudited)
Franklin Investment Grade Corporate ETF
`Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes 95.4% | ||||||||||||||
Aerospace & Defense 1.8% | ||||||||||||||
Boeing Co., |
||||||||||||||
5.15%, 5/01/30 |
United States | 2,000,000 | $ | 1,911,620 | ||||||||||
3.65%, 3/01/47 |
United States | 4,900,000 | 3,232,482 | |||||||||||
Lockheed Martin Corp., |
||||||||||||||
4.07%, 12/15/42 |
United States | 3,300,000 | 2,706,956 | |||||||||||
4.15%, 6/15/53 |
United States | 3,800,000 | 3,002,902 | |||||||||||
|
|
|||||||||||||
10,853,960 | ||||||||||||||
|
|
|||||||||||||
Agriculture 1.6% |
||||||||||||||
a |
JT International Financial Services BV, 6.875%, 10/24/32 |
Japan | 6,375,000 | 6,755,368 | ||||||||||
Philip Morris International, Inc., 5.375%, 2/15/33 |
United States | 3,100,000 | 2,940,432 | |||||||||||
|
|
|||||||||||||
9,695,800 | ||||||||||||||
|
|
|||||||||||||
Air Freight & Logistics 0.6% | ||||||||||||||
FedEx Corp., 4.75%, 11/15/45 |
United States | 4,600,000 | 3,761,322 | |||||||||||
|
|
|||||||||||||
Airlines 1.7% | ||||||||||||||
a |
Delta Air Lines, Inc./SkyMiles IP Ltd., first lien, 4.50%, 10/20/25 |
United States | 6,224,662 | 6,048,408 | ||||||||||
United Airlines Pass-Through Trust, |
||||||||||||||
Series 2016-1, Class A, 3.45%, 1/07/30 |
United States | 2,528,607 | 2,255,124 | |||||||||||
Series 2020-1, Class B, 4.875%, 7/15/27 |
United States | 2,170,300 | 2,102,666 | |||||||||||
|
|
|||||||||||||
10,406,198 | ||||||||||||||
|
|
|||||||||||||
Banks 21.6% | ||||||||||||||
Banco Santander SA, 2.749%, 12/03/30 |
Spain | 5,500,000 | 4,103,693 | |||||||||||
Bank of America Corp., |
||||||||||||||
2.592% to 4/29/30, FRN thereafter, 4/29/31 |
United States | 4,000,000 | 3,216,324 | |||||||||||
4.571% to 4/27/32, FRN thereafter, 4/27/33 |
United States | 5,400,000 | 4,796,983 | |||||||||||
5.202% to 4/25/28, FRN thereafter, 4/25/29 |
United States | 9,500,000 | 9,155,618 | |||||||||||
a |
BNP Paribas SA, 4.705% to 1/10/24, FRN thereafter, 1/10/25 |
France | 6,600,000 | 6,567,752 | ||||||||||
a |
BPCE SA, 5.70%, 10/22/23 |
France | 7,600,000 | 7,592,891 | ||||||||||
Citigroup, Inc., |
||||||||||||||
3.668% to 7/24/27, FRN thereafter, 7/24/28 |
United States | 5,200,000 | 4,772,623 | |||||||||||
3.057% to 1/25/32, FRN thereafter, 1/25/33 |
United States | 5,200,000 | 4,112,745 | |||||||||||
a |
Credit Agricole SA, 4.375%, 3/17/25 |
France | 2,700,000 | 2,610,089 | ||||||||||
Deutsche Bank AG, |
||||||||||||||
2.129% to 11/24/25, FRN thereafter, 11/24/26 |
Germany | 3,300,000 | 2,985,388 | |||||||||||
0.898%, 5/28/24 |
Germany | 3,500,000 | 3,378,505 | |||||||||||
Fifth Third Bancorp, 4.772% to 7/28/29, FRN thereafter, 7/28/30 |
United States | 4,135,000 | 3,755,712 | |||||||||||
Goldman Sachs Group, Inc., |
||||||||||||||
Series V, 4.125% to 12/31/99, FRN thereafter, 11/10/26 |
United States | 2,000,000 | 1,638,356 | |||||||||||
2.64% to 2/24/27, FRN thereafter, 2/24/28 |
United States | 9,700,000 | 8,652,964 | |||||||||||
4.387% to 6/15/26, FRN thereafter, 6/15/27 |
United States | 1,400,000 | 1,347,664 | |||||||||||
HSBC Holdings PLC, 1.645% to 4/18/25, FRN thereafter, 4/18/26 |
United Kingdom | 4,700,000 | 4,369,856 | |||||||||||
JPMorgan Chase & Co., |
||||||||||||||
2.522% to 4/22/30, FRN thereafter, 4/22/31 |
United States | 5,700,000 | 4,623,012 | |||||||||||
4.25%, 10/01/27 |
United States | 6,000,000 | 5,696,595 | |||||||||||
2.963% to 1/25/32, FRN thereafter, 1/25/33 |
United States | 4,550,000 | 3,623,749 | |||||||||||
4.851% to 7/25/27, FRN thereafter, 7/25/28 |
United States | 4,200,000 | 4,049,664 | |||||||||||
KeyBank NA, 4.15%, 8/08/25 |
United States | 2,000,000 | 1,884,251 | |||||||||||
Mizuho Financial Group, Inc., 5.778% to 7/06/28, FRN thereafter, 7/06/29 |
Japan | 1,900,000 | 1,874,554 | |||||||||||
Morgan Stanley, |
||||||||||||||
0.791% to 1/22/24, FRN thereafter, 1/22/25 |
United States | 3,300,000 | 3,236,504 | |||||||||||
5.25% to 4/21/33, FRN thereafter, 4/21/34 |
United States | 4,500,000 | 4,180,989 | |||||||||||
5.449% to 7/20/28, FRN thereafter, 7/20/29 |
United States | 1,700,000 | 1,657,288 | |||||||||||
a |
National Australia Bank Ltd., 2.332%, 8/21/30 |
Australia | 8,000,000 | 6,054,055 | ||||||||||
a |
Standard Chartered PLC, 1.456% to 1/14/26, FRN thereafter, 1/14/27 |
United Kingdom | 4,700,000 | 4,199,549 | ||||||||||
Truist Bank, 3.30%, 5/15/26 |
United States | 3,000,000 | 2,768,955 |
124 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Investment Grade Corporate ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) | ||||||||||||||
Banks (continued) | ||||||||||||||
a |
UniCredit SpA, 1.982% to 6/03/26, FRN thereafter, 6/03/27 |
Italy | 4,000,000 | $ | 3,535,481 | |||||||||
Wells Fargo & Co., |
||||||||||||||
4.808% to 7/25/27, FRN thereafter, 7/25/28 |
United States | 8,300,000 | 7,922,172 | |||||||||||
5.574% to 7/25/28, FRN thereafter, 7/25/29 |
United States | 4,000,000 | 3,903,971 | |||||||||||
|
|
|||||||||||||
133,203,241 | ||||||||||||||
|
|
|||||||||||||
Banks 0.0% |
||||||||||||||
Wells Fargo & Co., 5.389% to 4/24/33, FRN thereafter, 4/24/34 |
United States | 1,000,000 | 935,289 | |||||||||||
|
|
|||||||||||||
Beverages 2.1% |
||||||||||||||
Anheuser-Busch Cos. LLC/Anheuser-Busch InBev Worldwide, Inc., 4.90%, 2/01/46 |
United States | 3,500,000 | 3,052,609 | |||||||||||
Anheuser-Busch InBev Worldwide, Inc., 5.80%, 1/23/59 |
Belgium | 3,500,000 | 3,428,533 | |||||||||||
PepsiCo, Inc., 1.625%, 5/01/30 |
United States | 8,000,000 | 6,431,783 | |||||||||||
|
|
|||||||||||||
12,912,925 | ||||||||||||||
|
|
|||||||||||||
Biotechnology 3.7% |
||||||||||||||
Amgen, Inc., 5.60%, 3/02/43 |
United States | 9,000,000 | 8,372,741 | |||||||||||
Bio-Rad Laboratories, Inc., 3.30%, 3/15/27 |
United States | 5,250,000 | 4,840,902 | |||||||||||
a |
CSL Finance PLC, 4.25%, 4/27/32 |
Australia | 5,400,000 | 4,889,776 | ||||||||||
Illumina, Inc., 5.80%, 12/12/25 |
United States | 4,500,000 | 4,472,362 | |||||||||||
|
|
|||||||||||||
22,575,781 | ||||||||||||||
|
|
|||||||||||||
Capital Markets 1.4% |
||||||||||||||
Brixmor Operating Partnership LP, 4.125%, 5/15/29 |
United States | 2,400,000 | 2,139,944 | |||||||||||
Morgan Stanley, 1.794% to 2/13/31, FRN thereafter, 2/13/32 |
United States | 5,900,000 | 4,372,609 | |||||||||||
a |
UBS Group AG, 3.869% to 1/12/28, FRN thereafter, 1/12/29 |
Switzerland | 2,600,000 | 2,356,485 | ||||||||||
|
|
|||||||||||||
8,869,038 | ||||||||||||||
|
|
|||||||||||||
Chemicals 0.8% |
||||||||||||||
DuPont de Nemours, Inc., 5.419%, 11/15/48 |
United States | 5,400,000 | 4,957,777 | |||||||||||
|
|
|||||||||||||
Diversified REITs 2.0% |
||||||||||||||
Essex Portfolio LP, 2.65%, 3/15/32 |
United States | 8,000,000 | 6,165,352 | |||||||||||
a |
Global Net Lease, Inc./Global Net Lease Operating Partnership LP, seniornote, 3.75%, 12/15/27 |
United States | 2,200,000 | 1,705,233 | ||||||||||
Simon Property Group LP, 3.375%, 12/01/27 |
United States | 5,000,000 | 4,571,609 | |||||||||||
|
|
|||||||||||||
12,442,194 | ||||||||||||||
|
|
|||||||||||||
Diversified Telecommunication Services 1.6% |
||||||||||||||
Verizon Communications, Inc., 3.40%, 3/22/41 |
United States | 14,000,000 | 9,931,972 | |||||||||||
|
|
|||||||||||||
Electric 4.9% |
||||||||||||||
Baltimore Gas & Electric Co., 4.55%, 6/01/52 |
United States | 2,600,000 | 2,093,913 | |||||||||||
Constellation Energy Generation LLC, 6.125%, 1/15/34 |
United States | 1,000,000 | 999,289 | |||||||||||
DTE Electric Co., Series B, 3.65%, 3/01/52 |
United States | 7,700,000 | 5,424,833 | |||||||||||
a |
Electricite de France SA, 5.70%, 5/23/28 |
France | 2,600,000 | 2,576,496 | ||||||||||
NextEra Energy Capital Holdings, Inc., |
||||||||||||||
6.051%, 3/01/25 |
United States | 4,400,000 | 4,408,229 | |||||||||||
5.749%, 9/01/25 |
United States | 1,100,000 | 1,097,270 | |||||||||||
PacifiCorp, 5.35%, 12/01/53 |
United States | 6,600,000 | 5,493,128 | |||||||||||
Public Service Enterprise Group, Inc., 2.45%, 11/15/31 |
United States | 7,100,000 | 5,511,105 | |||||||||||
Virginia Electric & Power Co., Series D, 4.65%, 8/15/43 |
United States | 3,050,000 | 2,512,158 | |||||||||||
|
|
|||||||||||||
30,116,421 | ||||||||||||||
|
|
|||||||||||||
Electric Utilities 6.9% |
||||||||||||||
a |
Comision Federal de Electricidad, 3.348%, 2/09/31 |
Mexico | 1,100,000 | 862,238 | ||||||||||
Commonwealth Edison Co., 4.00%, 3/01/48 |
United States | 3,200,000 | 2,425,334 | |||||||||||
Duke Energy Progress LLC, 2.50%, 8/15/50 |
United States | 6,200,000 | 3,401,021 | |||||||||||
a |
EDP Finance BV, 1.71%, 1/24/28 |
Netherlands | 4,500,000 | 3,798,440 |
franklintempleton.com | Semiannual Report | 125 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Investment Grade Corporate ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) | ||||||||||||||
Electric Utilities (continued) | ||||||||||||||
a |
Enel Finance International NV, 3.625%, 5/25/27 |
Italy | 5,300,000 | $ | 4,926,520 | |||||||||
Exelon Corp., 4.05%, 4/15/30 |
United States | 6,000,000 | 5,404,562 | |||||||||||
Georgia Power Co., |
||||||||||||||
Series 2010-C, 4.75%, 9/01/40 |
United States | 6,000,000 | 5,107,196 | |||||||||||
4.30%, 3/15/42 |
United States | 2,400,000 | 1,923,120 | |||||||||||
Public Service Electric & Gas Co., 3.15%, 1/01/50 |
United States | 3,000,000 | 1,957,501 | |||||||||||
Virginia Electric & Power Co., Series A, 3.50%, 3/15/27 |
United States | 5,200,000 | 4,869,384 | |||||||||||
a |
Vistra Operations Co. LLC, 3.55%, 7/15/24 |
United States | 8,100,000 | 7,901,522 | ||||||||||
|
|
|||||||||||||
42,576,838 | ||||||||||||||
|
|
|||||||||||||
Electronic Equipment, Instruments & Components 0.6% |
||||||||||||||
Flex Ltd., 3.75%, 2/01/26 |
Singapore | 3,800,000 | 3,613,559 | |||||||||||
|
|
|||||||||||||
Energy Equipment & Services 1.3% |
||||||||||||||
Baker Hughes Holdings LLC/Baker Hughes Co.-Obligor, Inc., 4.08%, 12/15/47 |
United States | 1,000,000 | 748,503 | |||||||||||
Kinder Morgan, Inc., 2.00%, 2/15/31 |
United States | 4,400,000 | 3,362,381 | |||||||||||
a |
Schlumberger Holdings Corp., 4.30%, 5/01/29 |
United States | 4,150,000 | 3,894,312 | ||||||||||
|
|
|||||||||||||
8,005,196 | ||||||||||||||
|
|
|||||||||||||
Entertainment 1.1% |
||||||||||||||
Warnermedia Holdings, Inc., |
||||||||||||||
5.05%, 3/15/42 |
United States | 2,800,000 | 2,167,042 | |||||||||||
4.279%, 3/15/32 |
United States | 5,470,000 | 4,646,284 | |||||||||||
|
|
|||||||||||||
6,813,326 | ||||||||||||||
|
|
|||||||||||||
Environmental Control 0.6% |
||||||||||||||
Republic Services, Inc., 5.00%, 4/01/34 |
United States | 4,000,000 | 3,789,154 | |||||||||||
|
|
|||||||||||||
Financial Services 4.7% |
||||||||||||||
AerCap Ireland Capital DAC/AerCap Global Aviation Trust, 3.00%, 10/29/28 . |
Ireland | 5,250,000 | 4,504,022 | |||||||||||
Air Lease Corp., 0.80%, 8/18/24 |
United States | 5,000,000 | 4,768,974 | |||||||||||
American Express Co., 2.25%, 3/04/25 |
United States | 5,000,000 | 4,752,981 | |||||||||||
Aon Global Ltd., 4.60%, 6/14/44 |
Ireland | 8,000,000 | 6,467,710 | |||||||||||
Capital One Financial Corp., 4.985% to 7/24/25, FRN thereafter, 7/24/26 |
United States | 3,300,000 | 3,203,200 | |||||||||||
Mastercard, Inc., 4.85%, 3/09/33 |
United States | 5,500,000 | 5,316,746 | |||||||||||
|
|
|||||||||||||
29,013,633 | ||||||||||||||
|
|
|||||||||||||
Food 2.8% |
||||||||||||||
General Mills, Inc., 5.241%, 11/18/25 |
United States | 3,000,000 | 2,973,977 | |||||||||||
JBS USA LUX SA/JBS USA Food Co./JBS USA Finance, Inc., |
||||||||||||||
2.50%, 1/15/27 |
United States | 3,500,000 | 3,094,665 | |||||||||||
3.625%, 1/15/32 |
United States | 1,800,000 | 1,434,727 | |||||||||||
Kraft Heinz Foods Co., 5.00%, 6/04/42 |
United States | 5,000,000 | 4,334,414 | |||||||||||
a |
Nestle Holdings, Inc., 4.70%, 1/15/53 |
United States | 4,000,000 | 3,579,558 | ||||||||||
Sysco Corp., 3.30%, 7/15/26 |
United States | 2,000,000 | 1,878,487 | |||||||||||
|
|
|||||||||||||
17,295,828 | ||||||||||||||
|
|
|||||||||||||
Gas 0.4% |
||||||||||||||
Piedmont Natural Gas Co., Inc., 5.05%, 5/15/52 |
United States | 3,000,000 | 2,488,835 | |||||||||||
|
|
|||||||||||||
Ground Transportation 1.0% |
||||||||||||||
Burlington Northern Santa Fe LLC, 5.75%, 5/01/40 |
United States | 6,000,000 | 5,967,224 | |||||||||||
|
|
|||||||||||||
Health Care Providers & Services 4.0% |
||||||||||||||
CVS Health Corp., 5.30%, 12/05/43 |
United States | 3,000,000 | 2,621,338 | |||||||||||
Elevance Health, Inc., 4.10%, 5/15/32 |
United States | 8,100,000 | 7,219,464 | |||||||||||
HCA, Inc., 4.50%, 2/15/27 |
United States | 6,000,000 | 5,730,079 | |||||||||||
STERIS Irish FinCo UnLtd Co., 3.75%, 3/15/51 |
Ireland | 3,300,000 | 2,300,570 | |||||||||||
Sutter Health, 5.164%, 8/15/33 |
United States | 1,500,000 | 1,441,013 |
126 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Investment Grade Corporate ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) | ||||||||||||||
Health Care Providers & Services (continued) |
||||||||||||||
UnitedHealth Group, Inc., 3.05%, 5/15/41 |
United States | 8,000,000 | $ | 5,648,827 | ||||||||||
|
|
|||||||||||||
24,961,291 | ||||||||||||||
|
|
|||||||||||||
Healthcare-Products 1.4% |
||||||||||||||
Baxter International, Inc., 2.539%, 2/01/32 |
United States | 4,000,000 | 3,098,851 | |||||||||||
GE HealthCare Technologies, Inc., 5.55%, 11/15/24 |
United States | 5,450,000 | 5,425,016 | |||||||||||
|
|
|||||||||||||
8,523,867 | ||||||||||||||
|
|
|||||||||||||
Home Builders 0.2% |
||||||||||||||
MDC Holdings, Inc., 2.50%, 1/15/31 |
United States | 2,000,000 | 1,495,143 | |||||||||||
|
|
|||||||||||||
Hotels, Restaurants & Leisure 0.5% |
||||||||||||||
Las Vegas Sands Corp., 3.90%, 8/08/29 |
United States | 2,300,000 | 1,965,772 | |||||||||||
Marriott International, Inc., Series R, 3.125%, 6/15/26 |
United States | 1,500,000 | 1,402,996 | |||||||||||
|
|
|||||||||||||
3,368,768 | ||||||||||||||
|
|
|||||||||||||
Household Products 1.6% |
||||||||||||||
Haleon U.S. Capital LLC, 3.375%, 3/24/27 |
United States | 5,800,000 | 5,383,373 | |||||||||||
a |
Kimberly-Clark de Mexico SAB de CV, 2.431%, 7/01/31 |
Mexico | 5,500,000 | 4,493,378 | ||||||||||
|
|
|||||||||||||
9,876,751 | ||||||||||||||
|
|
|||||||||||||
Insurance 3.3% |
||||||||||||||
Aflac, Inc., 4.75%, 1/15/49 |
United States | 5,500,000 | 4,602,699 | |||||||||||
Allstate Corp., 4.20%, 12/15/46 |
United States | 3,000,000 | 2,225,375 | |||||||||||
Berkshire Hathaway Finance Corp., 3.85%, 3/15/52 |
United States | 1,500,000 | 1,119,857 | |||||||||||
Brown & Brown, Inc., 2.375%, 3/15/31 |
United States | 4,700,000 | 3,636,355 | |||||||||||
a |
MassMutual Global Funding II, 5.05%, 12/07/27 |
United States | 2,400,000 | 2,362,608 | ||||||||||
MetLife, Inc., 6.40%, 12/15/66 |
United States | 3,000,000 | 2,935,153 | |||||||||||
a |
Pricoa Global Funding I, 5.10%, 5/30/28 |
United States | 3,250,000 | 3,195,610 | ||||||||||
|
|
|||||||||||||
20,077,657 | ||||||||||||||
|
|
|||||||||||||
Internet 0.3% |
||||||||||||||
Meta Platforms, Inc., 4.45%, 8/15/52 |
United States | 2,200,000 | 1,742,976 | |||||||||||
|
|
|||||||||||||
IT Services 0.7% |
||||||||||||||
Apple, Inc., 2.80%, 2/08/61 |
United States | 7,500,000 | 4,408,275 | |||||||||||
|
|
|||||||||||||
Lodging 0.7% |
||||||||||||||
Las Vegas Sands Corp., 3.20%, 8/08/24 |
United States | 4,500,000 | 4,356,386 | |||||||||||
|
|
|||||||||||||
Media 2.2% |
||||||||||||||
Charter Communications Operating LLC/Charter Communications Operating Capital, |
||||||||||||||
2.80%, 4/01/31 |
United States | 5,900,000 | 4,604,066 | |||||||||||
3.50%, 3/01/42 |
United States | 3,200,000 | 1,979,573 | |||||||||||
Comcast Corp., |
||||||||||||||
4.95%, 10/15/58 |
United States | 5,000,000 | 4,307,892 | |||||||||||
5.25%, 11/07/25 |
United States | 1,750,000 | 1,742,429 | |||||||||||
Fox Corp., 5.476%, 1/25/39 |
United States | 1,000,000 | 864,943 | |||||||||||
|
|
|||||||||||||
13,498,903 | ||||||||||||||
|
|
|||||||||||||
Miscellaneous Manufacturing 0.2% |
||||||||||||||
Parker-Hannifin Corp., 4.25%, 9/15/27 |
United States | 1,200,000 | 1,146,985 | |||||||||||
|
|
|||||||||||||
Multi-Utilities 0.1% |
||||||||||||||
Berkshire Hathaway Energy Co., 5.15%, 11/15/43 |
United States | 1,000,000 | 880,585 | |||||||||||
|
|
|||||||||||||
Oil & Gas 1.4% |
||||||||||||||
Exxon Mobil Corp., 3.452%, 4/15/51 |
United States | 5,000,000 | 3,502,998 | |||||||||||
a |
Var Energi ASA, 7.50%, 1/15/28 |
Norway | 5,000,000 | 5,139,412 | ||||||||||
|
|
|||||||||||||
8,642,410 | ||||||||||||||
|
|
franklintempleton.com | Semiannual Report | 127 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Investment Grade Corporate ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) | ||||||||||||||
Oil, Gas & Consumable Fuels 3.1% | ||||||||||||||
Aker BP ASA, |
||||||||||||||
a 3.75%, 1/15/30 |
Norway | 3,050,000 | $ | 2,623,762 | ||||||||||
a 4.00%, 1/15/31 |
Norway | 2,200,000 | 1,891,301 | |||||||||||
Canadian Natural Resources Ltd., 3.85%, 6/01/27 |
Canada | 4,100,000 | 3,824,577 | |||||||||||
Chevron Corp., 3.078%, 5/11/50 |
United States | 1,000,000 | 671,862 | |||||||||||
Exxon Mobil Corp., 3.567%, 3/06/45 |
United States | 4,400,000 | 3,255,263 | |||||||||||
Sabine Pass Liquefaction LLC, 4.20%, 3/15/28 |
United States | 5,700,000 | 5,313,747 | |||||||||||
TransCanada PipeLines Ltd., 6.10%, 6/01/40 |
Canada | 1,500,000 | 1,450,454 | |||||||||||
|
|
|||||||||||||
19,030,966 | ||||||||||||||
|
|
|||||||||||||
Personal Products 1.5% |
||||||||||||||
Estee Lauder Cos., Inc., 4.65%, 5/15/33 |
United States | 3,700,000 | 3,453,259 | |||||||||||
a |
Kenvue, Inc., 4.90%, 3/22/33 |
United States | 5,875,000 | 5,618,055 | ||||||||||
|
|
|||||||||||||
9,071,314 | ||||||||||||||
|
|
|||||||||||||
Pharmaceuticals 3.0% |
||||||||||||||
a |
Bayer U.S. Finance II LLC, 4.375%, 12/15/28 |
Germany | 2,000,000 | 1,859,680 | ||||||||||
Bristol-Myers Squibb Co., |
||||||||||||||
4.125%, 6/15/39 |
United States | 3,500,000 | 2,921,083 | |||||||||||
5.00%, 8/15/45 |
United States | 2,400,000 | 2,158,044 | |||||||||||
3.70%, 3/15/52 |
United States | 2,000,000 | 1,437,236 | |||||||||||
CVS Health Corp., |
||||||||||||||
5.00%, 2/20/26 |
United States | 3,000,000 | 2,953,998 | |||||||||||
5.25%, 1/30/31 |
United States | 1,500,000 | 1,442,022 | |||||||||||
Pfizer Investment Enterprises Pte. Ltd., 5.30%, 5/19/53 |
United States | 5,980,000 | 5,560,752 | |||||||||||
|
|
|||||||||||||
18,332,815 | ||||||||||||||
|
|
|||||||||||||
Pipelines 1.4% |
||||||||||||||
Eastern Gas Transmission & Storage, Inc., 3.90%, 11/15/49 |
United States | 2,600,000 | 1,708,230 | |||||||||||
Energy Transfer LP, 5.15%, 3/15/45 |
United States | 3,200,000 | 2,582,273 | |||||||||||
Enterprise Products Operating LLC, 5.35%, 1/31/33 |
United States | 1,600,000 | 1,565,516 | |||||||||||
MPLX LP, 5.00%, 3/01/33 |
United States | 3,400,000 | 3,100,442 | |||||||||||
|
|
|||||||||||||
8,956,461 | ||||||||||||||
|
|
|||||||||||||
Real Estate Management & Development 0.8% |
||||||||||||||
Alexandria Real Estate Equities, Inc., 2.95%, 3/15/34 |
United States | 4,000,000 | 3,040,936 | |||||||||||
ERP Operating LP, 4.50%, 7/01/44 |
United States | 2,500,000 | 1,990,337 | |||||||||||
|
|
|||||||||||||
5,031,273 | ||||||||||||||
|
|
|||||||||||||
Retail 1.1% |
||||||||||||||
Home Depot, Inc., 3.625%, 4/15/52 |
United States | 4,000,000 | 2,865,698 | |||||||||||
Target Corp., 2.95%, 1/15/52 |
United States | 6,300,000 | 3,849,615 | |||||||||||
|
|
|||||||||||||
6,715,313 | ||||||||||||||
|
|
|||||||||||||
Software 1.8% |
||||||||||||||
Fiserv, Inc., 5.60%, 3/02/33 |
United States | 4,100,000 | 3,978,045 | |||||||||||
Microsoft Corp., 2.675%, 6/01/60 |
United States | 6,100,000 | 3,586,221 | |||||||||||
ServiceNow, Inc., 1.40%, 9/01/30 |
United States | 5,000,000 | 3,841,628 | |||||||||||
|
|
|||||||||||||
11,405,894 | ||||||||||||||
|
|
|||||||||||||
Telecommunications 2.0% |
||||||||||||||
AT&T, Inc., 3.50%, 6/01/41 |
United States | 1,900,000 | 1,320,954 | |||||||||||
Motorola Solutions, Inc., 5.60%, 6/01/32 |
United States | 3,250,000 | 3,111,329 | |||||||||||
T-Mobile USA, Inc., 2.875%, 2/15/31 |
United States | 9,600,000 | 7,792,106 | |||||||||||
|
|
|||||||||||||
12,224,389 | ||||||||||||||
|
|
|||||||||||||
Trucking & Leasing 0.3% |
||||||||||||||
a |
SMBC Aviation Capital Finance DAC, 1.90%, 10/15/26 |
Ireland | 2,000,000 | 1,764,740 |
128 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Investment Grade Corporate ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) |
||||||||||||||
Wireless Telecommunication Services 0.6% | ||||||||||||||
a |
Sprint Spectrum Co. LLC/Sprint Spectrum Co. II LLC/Sprint Spectrum Co. III LLC, 5.152%, 9/20/29 |
United States | 3,510,000 | $ | 3,449,314 | |||||||||
|
|
|||||||||||||
Total Corporate Bonds & Notes (Cost $686,505,227) |
588,252,698 | |||||||||||||
|
|
|||||||||||||
U.S. Government & Agency Securities 3.0% |
||||||||||||||
U.S. Treasury Bills, 0.000%, 10/24/23 |
United States | 1,500,000 | 1,495,168 | |||||||||||
U.S. Treasury Notes, |
||||||||||||||
0.125%, 10/15/23 |
United States | 2,000,000 | 1,996,256 | |||||||||||
4.375%, 8/31/28 |
United States | 8,500,000 | 8,416,328 | |||||||||||
5.00%, 8/31/25 |
United States | 6,300,000 | 6,287,696 | |||||||||||
|
|
|||||||||||||
Total
U.S. Government & Agency Securities |
18,195,448 | |||||||||||||
|
|
|||||||||||||
Total
Investments before Short-Term Investments |
606,448,146 | |||||||||||||
|
|
|||||||||||||
Short-Term Investments 0.6% |
||||||||||||||
U.S. Government & Agency Securities 0.6% |
||||||||||||||
b |
Federal Home Loan Bank Discount Notes, 10/2/23 |
United States | 3,580,000 | 3,580,000 | ||||||||||
|
|
|||||||||||||
Total Short-Term Investments (Cost $3,579,483) |
3,580,000 | |||||||||||||
|
|
|||||||||||||
Total Investments (Cost $708,415,757) 99.0% |
610,028,146 | |||||||||||||
Other Assets, less Liabilities 1.0% |
6,461,021 | |||||||||||||
|
|
|||||||||||||
Net Assets 100.0% |
$ | 616,489,167 | ||||||||||||
|
|
* The principal amount is stated in U.S. dollars unless otherwise indicated.
a Security 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 $112,252,033, representing 18.2% of net assets.
b The security was issued on a discount basis with no stated coupon rate.
See Abbreviations on page 220
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 129 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Municipal Green Bond ETF
Six Months Ended (unaudited) |
Year Ended March 31, | |||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||||||
Net asset value, beginning of period |
$23.90 | $24.99 | $26.86 | $26.07 | $25.20 | $24.34 | ||||||||||||||||||
Income from investment operationsa: |
||||||||||||||||||||||||
Net investment incomeb |
0.39 | 0.61 | 0.36 | 0.40 | 0.46 | 0.67 | ||||||||||||||||||
Net realized and unrealized gains (losses) |
(1.37 | ) | (1.05 | ) | (1.79 | ) | 0.94 | 1.02 | 0.85 | |||||||||||||||
Total from investment operations |
(0.98 | ) | (0.44 | ) | (1.43 | ) | 1.34 | 1.48 | 1.52 | |||||||||||||||
Less distributions from net investment income |
(0.43 | ) | (0.65 | ) | (0.44 | ) | (0.55 | ) | (0.61 | ) | (0.66 | ) | ||||||||||||
Net asset value, end of period |
$22.49 | $23.90 | $24.99 | $26.86 | $26.07 | $25.20 | ||||||||||||||||||
Total returnc |
(4.17)% | (1.68)% | (5.44)% | 5.16% | 5.92% | 6.38% | ||||||||||||||||||
Ratios to average net assetsd | ||||||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.30% | 0.60% | 0.66% | 0.78% | 1.00% | 2.05% | ||||||||||||||||||
Expenses net of waiver and payments by affiliates |
0.30% | 0.30% | 0.30% | 0.30% | 0.30% | 0.30% | ||||||||||||||||||
Net investment income |
3.30% | 2.57% | 1.34% | 1.50% | 1.77% | 2.74% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) |
$105,682 | $112,349 | $104,939 | $126,221 | $28,674 | $8,820 | ||||||||||||||||||
Portfolio turnover ratee |
16.59%f | 66.77%f | 48.41%f | 11.86%f | 17.21%f | 21.21% |
a The amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
b Based on average daily shares outstanding.
c Total return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
d Ratios are annualized for periods less than one year.
e Portfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
fPortfolio turnover rate excluding cash creations was as follows: | 16.59% | 66.77% | 48.41% | 11.86% | 17.21% |
130 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2023 (unaudited)
Franklin Municipal Green Bond ETF
Principal Amount | * | Value | ||||||||
Municipal Bonds 98.6% | ||||||||||
Alabama 0.3% | ||||||||||
a |
County of Mobile, Gomesa Projects, 4.00%, 11/01/45 |
400,000 | $ | 329,162 | ||||||
|
|
|||||||||
Arizona 0.9% | ||||||||||
b |
Arizona Health Facilities Authority, Banner Health Obligated Group, Revenue Bonds, 4.60%, 1/01/46 |
300,000 | 300,000 | |||||||
Arizona State University, Series B, 5.00%, 7/01/42 |
235,000 | 236,560 | ||||||||
City of Phoenix Civic Improvement Corp., 5.00%, 7/01/44 |
360,000 | 373,836 | ||||||||
|
|
|||||||||
910,396 | ||||||||||
|
|
|||||||||
Arkansas 0.6% | ||||||||||
Arkansas Development Finance Authority, 5.70%, 5/01/53 |
275,000 | 263,994 | ||||||||
Central Arkansas Water, 4.00%, 10/01/33 |
375,000 | 372,741 | ||||||||
|
|
|||||||||
636,735 | ||||||||||
|
|
|||||||||
California 30.7% | ||||||||||
Alameda Community Facilities District, 5.00%, 9/01/48 |
1,000,000 | 869,902 | ||||||||
California Community Choice Financing Authority, |
||||||||||
b 5.00%, 7/01/53 |
3,500,000 | 3,532,064 | ||||||||
b 5.00%, 12/01/53 |
2,500,000 | 2,519,113 | ||||||||
b 5.25%, 1/01/54 |
2,000,000 | 1,996,572 | ||||||||
b Green Bond, VRDN, 4.00%, 10/01/52 |
500,000 | 484,738 | ||||||||
California Housing Finance Agency, Lakeside Drive Senior Housing LP, Series 2019, 2.35%, 12/01/35 |
93,881 | 72,016 | ||||||||
California Infrastructure & Economic Development Bank, |
||||||||||
4.00%, 5/01/51 |
1,000,000 | 826,754 | ||||||||
b 4.33%, 8/01/47 |
3,100,000 | 3,070,808 | ||||||||
5.00%, 8/01/49 |
180,000 | 184,412 | ||||||||
California Science Center Foundation, 4.00%, 5/01/46 |
790,000 | 675,804 | ||||||||
California Municipal Finance Authority, |
||||||||||
4.00%, 5/15/39 |
3,445,000 | 3,102,518 | ||||||||
5.00%, 5/15/37 |
1,495,000 | 1,525,694 | ||||||||
5.00%, 5/15/51 |
1,000,000 | 975,092 | ||||||||
a |
California School Finance Authority, 5.75%, 7/01/42 |
250,000 | 243,270 | |||||||
California State Public Works Board, |
||||||||||
4.00%, 5/01/40 |
1,000,000 | 947,389 | ||||||||
4.00%, 5/01/47 |
1,500,000 | 1,364,687 | ||||||||
California Air Resources Board, Series 2022D, 4.00%, 5/01/44 |
1,000,000 | 921,926 | ||||||||
City of Foster City, 4.00%, 8/01/32 |
135,000 | 136,931 | ||||||||
City of Los Angeles Department of Airports Customer Facility Charge Revenue, Department of Airports Customer Facility Charge Revenue, 4.058%, 5/15/37 |
1,000,000 | 840,592 | ||||||||
City of San Francisco Public Utilities Commission Water Revenue, Series A, 4.00%, 11/01/50 |
100,000 | 91,906 | ||||||||
Los Angeles County Metropolitan Transportation Authority Sales Tax Revenue, 5.00%, 7/01/44 . |
150,000 | 155,984 | ||||||||
Peninsula Corridor Joint Powers Board Measure RR Sales Tax Revenue, 5.00%, 6/01/42 |
1,000,000 | 1,051,203 | ||||||||
Perris Joint Powers Authority, Refunding, Series 2017B, 5.00%, 9/01/37 |
100,000 | 100,682 | ||||||||
Port of Los Angeles, 5.00%, 8/01/25 |
95,000 | 96,594 | ||||||||
San Diego Association of Governments, Green Bond, 5.00%, 11/15/24 |
2,000,000 | 2,002,836 | ||||||||
San Diego County Regional Airport Authority, 5.00%, 7/01/51 |
2,000,000 | 1,962,949 | ||||||||
San Francisco Bay Area Rapid Transit District, 3.00%, 8/01/36 |
170,000 | 144,020 | ||||||||
Santa Cruz County Capital Financing Authority, 4.00%, 6/01/42 |
1,500,000 | 1,418,562 | ||||||||
Southern California Public Power Authority, 4.00%, 7/01/38 |
150,000 | 145,253 | ||||||||
Three Rivers Levee Improvement Authority, |
||||||||||
4.00%, 9/01/32 |
100,000 | 93,351 | ||||||||
Community Facilities District No 2006-1, Refunding, 4.00%, 9/01/27 |
250,000 | 243,801 | ||||||||
Refunding, 4.00%, 9/01/29 |
250,000 | 241,261 | ||||||||
Refunding, 4.00%, 9/01/31 |
200,000 | 188,568 |
franklintempleton.com | Semiannual Report | 131 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Municipal Green Bond ETF (continued)
Principal Amount | * | Value | ||||||||
Municipal Bonds (continued) | ||||||||||
California (continued) | ||||||||||
Transbay Joint Powers Authority, |
||||||||||
5.00%, 10/01/34 |
150,000 | $ | 153,627 | |||||||
Redevelopment Project Green Bond Subordinate Tax, 2.40%, 10/01/49 |
95,000 | 95,000 | ||||||||
|
|
|||||||||
32,475,879 | ||||||||||
|
|
|||||||||
Colorado 1.6% | ||||||||||
Board of Water Commissioners City & County of Denver, Series A, 5.00%, 9/15/47 |
150,000 | 153,201 | ||||||||
University of Colorado, |
||||||||||
5.00%, 6/01/27 |
150,000 | 157,286 | ||||||||
b Refunding, VRDN, 2.00%, 6/01/51 |
1,500,000 | 1,427,667 | ||||||||
|
|
|||||||||
1,738,154 | ||||||||||
|
|
|||||||||
Connecticut 1.6% | ||||||||||
Connecticut State Health & Educational Facilities Authority, |
||||||||||
3.95%, 7/01/36 |
800,000 | 800,000 | ||||||||
4.00%, 7/01/31 |
145,000 | 149,193 | ||||||||
Hartford County Metropolitan District Clean Water Project Revenue, Clean Water Project Revenue, Refunding, Series 2021A, 4.00%, 2/01/39 |
745,000 | 697,905 | ||||||||
|
|
|||||||||
1,647,098 | ||||||||||
|
|
|||||||||
District of Columbia 3.8% | ||||||||||
District of Columbia, |
||||||||||
5.50%, 8/31/33 |
595,000 | 643,443 | ||||||||
5.50%, 2/28/37 |
845,000 | 901,479 | ||||||||
District of Columbia Water & Sewer Authority, |
||||||||||
Series A, 5.00%, 10/01/44 |
340,000 | 349,493 | ||||||||
Sub Series 2019A, 4.00%, 10/01/49 |
1,515,000 | 1,352,546 | ||||||||
Sub Series 2022B, 5.00%, 10/01/34 |
715,000 | 791,805 | ||||||||
|
|
|||||||||
4,038,766 | ||||||||||
|
|
|||||||||
Florida 1.3% | ||||||||||
Babcock Ranch Community Independent Special District, 4.00%, 5/01/40 |
840,000 | 719,812 | ||||||||
City of Tampa, 5.00%, 5/01/36 |
135,000 | 141,761 | ||||||||
County of Palm Beach Water & Sewer Revenue, 4.00%, 10/01/31 |
100,000 | 101,980 | ||||||||
Somerset Community Development District, |
||||||||||
4.00%, 5/01/32 |
415,000 | 380,483 | ||||||||
4.20%, 5/01/37 |
50,000 | 43,750 | ||||||||
|
|
|||||||||
1,387,786 | ||||||||||
|
|
|||||||||
Georgia 1.1% | ||||||||||
City of Atlanta Airport Passenger Facility Charge, 5.25%, 7/01/43 |
1,000,000 | 1,037,757 | ||||||||
Private Colleges & Universities Authority, 5.00%, 9/01/48 |
100,000 | 102,299 | ||||||||
|
|
|||||||||
1,140,056 | ||||||||||
|
|
|||||||||
Illinois 4.5% | ||||||||||
Illinois Finance Authority, |
||||||||||
4.00%, 7/01/37 |
425,000 | 401,484 | ||||||||
5.00%, 10/01/43 |
1,000,000 | 1,022,886 | ||||||||
5.25%, 10/01/53 |
1,000,000 | 1,030,065 | ||||||||
State of Illinois Water Revolving Fund - Clean Water Program, 4.00%, 7/01/38 |
435,000 | 402,727 | ||||||||
Metropolitan Water Reclamation District of Greater Chicago, Green Bond, Series 2021B, 5.00%, 12/01/33 |
1,685,000 | 1,824,543 | ||||||||
a |
Upper Illinois River Valley Development Authority, Refunding, 3.50%, 12/01/32 |
142,539 | 118,737 | |||||||
|
|
|||||||||
4,800,442 | ||||||||||
|
|
132 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Municipal Green Bond ETF (continued)
Principal Amount | * | Value | ||||||||
Municipal Bonds (continued) | ||||||||||
Indiana 1.0% | ||||||||||
Indianapolis Local Public Improvement Bond Bank, |
||||||||||
5.00%, 1/15/27 |
610,000 | $ | 635,656 | |||||||
5.00%, 7/15/27 |
450,000 | 472,463 | ||||||||
|
|
|||||||||
1,108,119 | ||||||||||
|
|
|||||||||
Louisiana 2.9% | ||||||||||
Louisiana Local Government Environmental Facilities & Community Development Authority, |
||||||||||
a 3.90%, 11/01/44 |
480,000 | 395,288 | ||||||||
a 4.50%, 11/01/47 |
1,000,000 | 890,608 | ||||||||
a Parish of St Bernard LA, 4.00%, 11/01/45 |
1,000,000 | 834,257 | ||||||||
Terrebonne Levee & Conservation District Sales Tax Revenue, |
||||||||||
Series 2020B, 4.00%, 6/01/39 |
1,000,000 | 879,576 | ||||||||
Series B, 4.00%, 6/01/40 |
100,000 | 86,721 | ||||||||
|
|
|||||||||
3,086,450 | ||||||||||
|
|
|||||||||
Maine 0.2% | ||||||||||
City of Portland General Airport Revenue, 4.00%, 1/01/35 |
245,000 | 234,290 | ||||||||
|
|
|||||||||
Maryland 3.2% | ||||||||||
Maryland Economic Development Corp., |
||||||||||
5.00%, 6/30/40 |
1,000,000 | 972,039 | ||||||||
5.25%, 6/30/47 |
2,000,000 | 1,938,718 | ||||||||
Maryland Health & Higher Educational Facilities Authority, Adventist Healthcare Obligated Group, Refunding, 4.00%, 1/01/30 |
365,000 | 349,134 | ||||||||
Washington Suburban Sanitary Commission, 3.00%, 6/01/35 |
100,000 | 87,294 | ||||||||
|
|
|||||||||
3,347,185 | ||||||||||
|
|
|||||||||
Massachusetts 2.3% | ||||||||||
Massachusetts Development Finance Agency, |
||||||||||
4.00%, 7/01/47 |
135,000 | 103,693 | ||||||||
Springfield College, Green Bond, 5.00%, 6/01/26 |
420,000 | 420,178 | ||||||||
Springfield College, Green Bond, 5.00%, 6/01/27 |
440,000 | 441,410 | ||||||||
Massachusetts Housing Finance Agency, |
||||||||||
Series C-1, 2.65%, 12/01/34 |
100,000 | 82,495 | ||||||||
Sustainability Bond, Series 2021B-1, 2.60%, 12/01/41 |
2,000,000 | 1,370,977 | ||||||||
|
|
|||||||||
2,418,753 | ||||||||||
|
|
|||||||||
Minnesota 1.5% | ||||||||||
City of Minneapolis, 3.00%, 12/01/40 |
100,000 | 78,909 | ||||||||
Minnesota Higher Education Facilities Authority, Series A, 5.00%, 10/01/52 |
1,500,000 | 1,471,412 | ||||||||
|
|
|||||||||
1,550,321 | ||||||||||
|
|
|||||||||
Mississippi 0.6% | ||||||||||
a |
Mississippi Development Bank, County of Jackson Project, 3.625%, 11/01/36 |
500,000 | 432,822 | |||||||
a |
Mississippi Home Corp., Patriot Services Group Obligated Group, 5.20%, 6/01/36 |
280,000 | 211,061 | |||||||
|
|
|||||||||
643,883 | ||||||||||
|
|
|||||||||
New Jersey 3.1% | ||||||||||
City of Newark Mass Transit Access Tax Revenue, 6.00%, 11/15/62 |
1,000,000 | 1,096,486 | ||||||||
New Jersey Educational Facilities Authority, Series A, 5.00%, 7/01/32 |
645,000 | 659,758 | ||||||||
Newark Board of Education, |
||||||||||
5.00%, 7/15/30 |
620,000 | 659,648 | ||||||||
5.00%, 7/15/31 |
575,000 | 615,929 | ||||||||
Sustainability Bonds, 5.00%, 7/15/25 |
250,000 | 254,383 | ||||||||
|
|
|||||||||
3,286,204 | ||||||||||
|
|
franklintempleton.com | Semiannual Report | 133 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Municipal Green Bond ETF (continued)
Principal Amount | * | Value | ||||||||
Municipal Bonds (continued) | ||||||||||
New Mexico 0.2% | ||||||||||
City of Santa Fe Wastewater Utility System Revenue, |
||||||||||
5.00%, 6/01/29 |
100,000 | $ | 105,979 | |||||||
Wastewater Utility System Revenue, 4.00%, 6/01/35 |
100,000 | 100,440 | ||||||||
|
|
|||||||||
206,419 | ||||||||||
|
|
|||||||||
New York 8.9% | ||||||||||
Battery Park City Authority, 5.00%, 11/01/49 |
100,000 | 102,639 | ||||||||
Metropolitan Transportation Authority, |
||||||||||
5.00%, 11/15/50 |
2,010,000 | 1,960,351 | ||||||||
Climate Bond Certified, 5.00%, 11/15/32 |
605,000 | 635,580 | ||||||||
Refunding, Series 2017B, 5.00%, 11/15/28 |
430,000 | 444,725 | ||||||||
Series A-1-GROUP 1, 4.00%, 11/15/41 |
600,000 | 548,563 | ||||||||
Series B, 5.00%, 11/15/24 |
150,000 | 151,274 | ||||||||
Series B-2, 4.00%, 11/15/32 |
215,000 | 217,766 | ||||||||
New York Liberty Development Corp., |
||||||||||
7 World Trade Center II LLC, Refunding , Series 2022A1, 3.00%, 9/15/43 |
1,000,000 | 720,731 | ||||||||
Green Bonds- 4 World Trade, Refunding, 2.50%, 11/15/36 |
2,000,000 | 1,532,332 | ||||||||
New York Power Authority, 5.00%, 11/15/29 |
1,250,000 | 1,366,476 | ||||||||
New York State Dormitory Authority, 5.00%, 7/01/35 |
100,000 | 113,967 | ||||||||
New York State Housing Finance Agency, |
||||||||||
Series N, 2.60%, 11/01/34 |
100,000 | 81,846 | ||||||||
Series P, 2.00%, 5/01/28 |
100,000 | 90,194 | ||||||||
b Sustainability Bonds, Series 2022A, VRDN, 2.50%, 11/01/60 |
1,500,000 | 1,394,250 | ||||||||
|
|
|||||||||
9,360,694 | ||||||||||
|
|
|||||||||
North Carolina 0.3% | ||||||||||
b |
Charlotte-Mecklenburg Hospital Authority, 4.65%, 1/15/48 |
300,000 | 300,000 | |||||||
|
|
|||||||||
Ohio 5.0% | ||||||||||
American Municipal Power, Inc., |
||||||||||
4.00%, 2/15/41 |
1,380,000 | 1,206,491 | ||||||||
5.00%, 2/15/44 |
1,660,000 | 1,668,195 | ||||||||
Buckeye Tobacco Settlement Financing Authority, 5.00%, 6/01/55 |
1,000,000 | 862,671 | ||||||||
Ohio State University, 4.00%, 12/01/39 |
1,500,000 | 1,412,611 | ||||||||
State of Ohio, |
||||||||||
Series A, 4.00%, 3/01/30 |
100,000 | 102,412 | ||||||||
Series B, 4.00%, 3/01/24 |
50,000 | 50,032 | ||||||||
|
|
|||||||||
5,302,412 | ||||||||||
|
|
|||||||||
Oregon 2.7% | ||||||||||
Hospital Facilities Authority of Multnomah County Oregon, Terwilliger Plaza Inc Obligated Group, Refunding, 4.00%, 12/01/51 |
500,000 | 319,136 | ||||||||
b |
Oregon State Facilities Authority, PeaceHealth Obligated Group, Series 2018B, 4.55%, 8/01/34 . |
100,000 | 100,000 | |||||||
Port of Portland Airport Revenue, |
||||||||||
5.50%, 7/01/53 |
2,250,000 | 2,336,370 | ||||||||
Series 2020-27A, 5.00%, 7/01/36 |
150,000 | 154,622 | ||||||||
|
|
|||||||||
2,910,128 | ||||||||||
|
|
|||||||||
Pennsylvania 2.3% | ||||||||||
Philadelphia Energy Authority, 5.00%, 11/01/43 |
600,000 | 611,244 | ||||||||
School District of Philadelphia, |
||||||||||
Green Bond, Series 2019B, 5.00%, 9/01/29 |
1,600,000 | 1,679,726 | ||||||||
Series B, 5.00%, 9/01/31 |
100,000 | 105,685 | ||||||||
|
|
|||||||||
2,396,655 | ||||||||||
|
|
134 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Municipal Green Bond ETF (continued)
Principal Amount | * | Value | ||||||||
Municipal Bonds (continued) | ||||||||||
Puerto Rico 0.6% | ||||||||||
HTA TRRB Custodial Trust, 5.25%, 7/01/36 |
200,000 | $ | 200,795 | |||||||
Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue, 5.00%, 7/01/58 |
525,000 | 476,219 | ||||||||
|
|
|||||||||
677,014 | ||||||||||
|
|
|||||||||
Rhode Island 0.2% | ||||||||||
Rhode Island Housing & Mortgage Finance Corp., 2.75%, 10/01/34 |
150,000 | 121,547 | ||||||||
Rhode Island Infrastructure Bank, Series A, 4.00%, 10/01/27 |
50,000 | 50,477 | ||||||||
|
|
|||||||||
172,024 | ||||||||||
|
|
|||||||||
Tennessee 1.1% | ||||||||||
b |
Metropolitan Government Nashville & Davidson County Industrial Development Board, Waste Management, Inc. of Tennessee Project, VRDN, 0.58%, 8/01/31 |
1,200,000 | 1,162,373 | |||||||
|
|
|||||||||
Texas 0.9% | ||||||||||
Harris County Flood Control District, Series 2022A, 4.25%, 10/01/47 |
1,000,000 | 928,624 | ||||||||
|
|
|||||||||
Utah 5.6% | ||||||||||
Central Valley Water Reclamation Facility, Series C, 4.00%, 3/01/47 |
3,050,000 | 2,685,229 | ||||||||
City of Spanish Fork City Sewer Revenue, 5.00%, 9/01/26 |
175,000 | 180,716 | ||||||||
Intermountain Power Agency, Series A, 5.00%, 7/01/43 |
3,000,000 | 3,104,167 | ||||||||
|
|
|||||||||
5,970,112 | ||||||||||
|
|
|||||||||
Vermont 2.4% | ||||||||||
City of Burlington Electric System Revenue, Electric System Revenue, Series 2022A, 5.00%, 7/01/31 |
500,000 | 538,555 | ||||||||
Vermont Educational & Health Buildings Financing Agency, 5.00%, 12/01/38 |
2,005,000 | 1,999,452 | ||||||||
|
|
|||||||||
2,538,007 | ||||||||||
|
|
|||||||||
Virginia 1.3% | ||||||||||
Charles City County Economic Development Authority, Waste Management, Inc., AMT, 1.45%, 4/01/27 |
1,100,000 | 981,754 | ||||||||
City of Hampton, |
||||||||||
3.00%, 9/01/35 |
240,000 | 209,597 | ||||||||
4.00%, 9/01/31 |
100,000 | 103,126 | ||||||||
5.00%, 9/01/27 |
50,000 | 52,773 | ||||||||
|
|
|||||||||
1,347,250 | ||||||||||
|
|
|||||||||
Washington 2.0% | ||||||||||
Central Puget Sound Regional Transit Authority, |
||||||||||
4.00%, 11/01/46 |
2,000,000 | 1,776,880 | ||||||||
Series S-1, 5.00%, 11/01/32 |
150,000 | 153,609 | ||||||||
FYI Properties, 5.00%, 6/01/24 |
135,000 | 135,835 | ||||||||
|
|
|||||||||
2,066,324 | ||||||||||
|
|
|||||||||
Wisconsin 3.9% | ||||||||||
Milwaukee Metropolitan Sewerage District, |
||||||||||
3.00%, 10/01/32 |
1,000,000 | 897,014 | ||||||||
Series A, 3.00%, 10/01/35 |
150,000 | 128,954 | ||||||||
Public Finance Authority, |
||||||||||
RED River Valley Alliance LLC, AMT, 4.00%, 9/30/51 |
2,265,000 | 1,672,570 | ||||||||
RED River Valley Alliance LLC, AMT, 4.00%, 3/31/56 |
500,000 | 361,829 | ||||||||
a,b VRDN, 3.50%, 12/01/50 |
200,000 | 154,399 | ||||||||
University of Wisconsin Hospitals & Clinics, Obligated Group, Green Bond, 4.00%, 4/01/46 |
1,000,000 | 860,665 | ||||||||
|
|
|||||||||
4,075,431 | ||||||||||
|
|
|||||||||
Total Investments (Cost $112,740,613) 98.6% | 104,193,146 | |||||||||
Other Assets, less Liabilities 1.4% | 1,489,024 | |||||||||
|
|
|||||||||
Net Assets 100.0% | $ | 105,682,170 | ||||||||
|
|
franklintempleton.com | Semiannual Report | 135 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Municipal Green Bond ETF (continued)
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2023, the value of was $3,609,604, representing 3.4% of net assets.
bVariable rate security. The rate shown represents the yield at period end.
See Abbreviations on page 220.
136 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Senior Loan ETF
Six Months Ended September 30, 2023 (unaudited) |
Year Ended March 31, | |||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019a | ||||||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||||||
Net asset value, beginning of period |
$23.83 | $24.70 | $24.83 | $22.85 | $24.85 | $25.00 | ||||||||||||||||||
Income from investment operationsb: | ||||||||||||||||||||||||
Net investment incomec |
1.05 | 1.49 | 0.91 | 0.70 | 0.99 | 0.81 | ||||||||||||||||||
Net realized and unrealized gains (losses) |
0.36 | (0.92 | ) | (0.23 | ) | 1.99 | (1.90 | ) | (0.21 | ) | ||||||||||||||
Total from investment operations |
1.41 | 0.57 | 0.68 | 2.69 | (0.91 | ) | 0.60 | |||||||||||||||||
Less distributions from net investment income |
(1.08 | ) | (1.44 | ) | (0.81 | ) | (0.71 | ) | (1.09 | ) | (0.75 | ) | ||||||||||||
Net asset value, end of period |
$24.16 | $23.83 | $24.70 | $24.83 | $22.85 | $24.85 | ||||||||||||||||||
Total returnd |
6.07% | 2.53% | 2.76% | 11.91% | (3.92)% | 2.44% | ||||||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.45% | 0.45% | 0.58% | 0.92% | 0.97% | 1.00% | ||||||||||||||||||
Expenses net of waiver and payments by affiliates |
0.45% | 0.45% | 0.45% | 0.45% | 0.45% | 0.45% | ||||||||||||||||||
Net investment income |
8.76% | 6.28% | 3.72% | 2.88% | 4.02% | 3.90% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) |
$236,756 | $206,120 | $292,722 | $201,101 | $54,833 | $57,165 | ||||||||||||||||||
Portfolio turnover ratef |
6.52%g | 26.07%g | 35.67%g | 45.87%g | 51.48%g | 10.62% |
aFor the period May 30, 2018 (commencement of operations) to March 31, 2019.
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: | 6.52% | 26.08% | 35.67% | 45.87% | 51.48% | — |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 137 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2023 (unaudited)
Franklin Senior Loan ETF
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes 5.1% | ||||||||||||||
Airlines 0.8% | ||||||||||||||
a |
Air Canada, 3.875%, 8/15/26 |
Canada | 700,000 | $ | 635,970 | |||||||||
a |
American Airlines, Inc./AAdvantage Loyalty IP Ltd., 5.50%, 4/20/26 |
United States | 1,008,333 | 985,699 | ||||||||||
a |
Delta Air Lines, Inc./SkyMiles IP Ltd., first lien, 4.50%, 10/20/25 |
United States | 187,490 | 182,181 | ||||||||||
a |
United Airlines, Inc., 4.375%, 4/15/26 |
United States | 140,000 | 129,610 | ||||||||||
|
|
|||||||||||||
1,933,460 | ||||||||||||||
|
|
|||||||||||||
Chemicals 0.3% | ||||||||||||||
a |
ASP Unifrax Holdings, Inc., 5.25%, 9/30/28 |
United States | 419,400 | 299,330 | ||||||||||
a |
SCIH Salt Holdings, Inc., 4.875%, 5/01/28 |
United States | 500,000 | 441,796 | ||||||||||
|
|
|||||||||||||
741,126 | ||||||||||||||
|
|
|||||||||||||
Commercial Services & Supplies 0.1% | ||||||||||||||
a |
MPH Acquisition Holdings LLC, 5.50%, 9/01/28 |
United States | 213,000 | 181,157 | ||||||||||
|
|
|||||||||||||
Communications Equipment 0.1% | ||||||||||||||
a |
CommScope, Inc., 4.75%, 9/01/29 |
United States | 288,500 | 212,584 | ||||||||||
|
|
|||||||||||||
Construction Materials 0.4% | ||||||||||||||
a |
Cemex SAB de CV, 5.20%, 9/17/30 |
Mexico | 375,000 | 344,982 | ||||||||||
a |
Emerald Debt Merger Sub LLC, 6.625%, 12/15/30 |
United States | 700,000 | 674,747 | ||||||||||
|
|
|||||||||||||
1,019,729 | ||||||||||||||
|
|
|||||||||||||
Containers & Packaging 0.1% | ||||||||||||||
a |
Pactiv Evergreen Group Issuer, Inc./Pactiv Evergreen Group Issuer LLC, 4.00%, 10/15/27 |
United States | 400,000 | 355,440 | ||||||||||
|
|
|||||||||||||
Electric 0.3% | ||||||||||||||
a |
Calpine Corp., first lien, 4.50%, 2/15/28 |
United States | 800,000 | 721,813 | ||||||||||
|
|
|||||||||||||
Electric Utilities 0.2% | ||||||||||||||
a |
Talen Energy Supply LLC, 8.625%, 6/01/30 |
United States | 400,000 | 410,397 | ||||||||||
|
|
|||||||||||||
Entertainment 0.3% | ||||||||||||||
a |
International Game Technology PLC, first lien, 5.25%, 1/15/29 |
United Kingdom | 300,000 | 276,764 | ||||||||||
a |
Ontario Gaming GTA LP, 8.00%, 8/01/30 |
Canada | 500,000 | 500,470 | ||||||||||
|
|
|||||||||||||
777,234 | ||||||||||||||
|
|
|||||||||||||
Environmental Control 0.2% | ||||||||||||||
a |
GFL Environmental, Inc., 3.50%, 9/01/28 |
Canada | 600,000 | 517,083 | ||||||||||
|
|
|||||||||||||
Financial Services 0.3% | ||||||||||||||
a |
Altice France SA, 5.125%, 7/15/29 |
France | 500,000 | 356,203 | ||||||||||
a |
Jane Street Group/JSG Finance, Inc., 4.50%, 11/15/29 |
United States | 300,000 | 258,168 | ||||||||||
a |
Vmed O2 U.K. Financing I PLC, 4.25%, 1/31/31 |
United Kingdom | 210,000 | 167,429 | ||||||||||
|
|
|||||||||||||
781,800 | ||||||||||||||
|
|
|||||||||||||
Insurance 0.4% | ||||||||||||||
a |
Acrisure LLC/Acrisure Finance, Inc., 4.25%, 2/15/29 |
United States | 500,000 | 420,726 | ||||||||||
a |
Alliant Holdings Intermediate LLC/Alliant Holdings Co-Issuer, 6.75%, 4/15/28 |
United States | 600,000 | 579,620 | ||||||||||
|
|
|||||||||||||
1,000,346 | ||||||||||||||
|
|
|||||||||||||
Media 0.3% | ||||||||||||||
a |
Directv Financing LLC/Directv Financing Co.-Obligor, Inc., 5.875%, 8/15/27 . |
United States | 750,000 | 664,087 | ||||||||||
a |
Univision Communications, Inc., first lien, 5.125%, 2/15/25 |
United States | 31,444 | 30,683 | ||||||||||
|
|
|||||||||||||
694,770 | ||||||||||||||
|
|
|||||||||||||
Mining 0.3% | ||||||||||||||
a |
Arsenal AIC Parent LLC, 8.00%, 10/01/30 |
United States | 700,000 | 697,389 | ||||||||||
|
|
138 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Senior Loan ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) |
||||||||||||||
Oil, Gas & Consumable Fuels 0.1% | ||||||||||||||
Cheniere Energy, Inc., 4.625%, 10/15/28 |
United States | 150,000 | $ | 138,055 | ||||||||||
a |
Weatherford International Ltd., 6.50%, 9/15/28 |
United States | 44,600 | 44,648 | ||||||||||
|
|
|||||||||||||
182,703 | ||||||||||||||
|
|
|||||||||||||
Packaging & Containers 0.3% | ||||||||||||||
a |
Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc., 4.125%, 8/15/26 |
United States | 500,000 | 457,518 | ||||||||||
a |
Mauser Packaging Solutions Holding Co., 7.875%, 8/15/26 |
United States | 305,600 | 295,173 | ||||||||||
|
|
|||||||||||||
752,691 | ||||||||||||||
|
|
|||||||||||||
Pharmaceuticals 0.3% | ||||||||||||||
a,b |
Endo Luxembourg Finance Co. I Sarl/Endo U.S., Inc., 6.125%, 4/01/29 |
United States | 925,000 | 658,545 | ||||||||||
|
|
|||||||||||||
Retail 0.2% | ||||||||||||||
a |
Bausch & Lomb Escrow Corp., 8.375%, 10/01/28 |
United States | 360,000 | 361,519 | ||||||||||
|
|
|||||||||||||
Specialty Retail 0.1% | ||||||||||||||
a |
Staples, Inc., 7.50%, 4/15/26 |
United States | 161,000 | 132,650 | ||||||||||
|
|
|||||||||||||
Total Corporate Bonds & Notes (Cost $13,107,667) |
12,132,436 | |||||||||||||
|
|
|||||||||||||
c |
Senior Floating Rate Interests 86.1% |
|||||||||||||
Aerospace & Defense 2.2% | ||||||||||||||
Dynasty Acquisition Co., Inc., |
||||||||||||||
2023 Term Loan B1, 9.316%, 8/24/28 |
United States | 254,767 | 254,555 | |||||||||||
2023 Term Loan B2, 9.316%, 8/24/28 |
United States | 109,186 | 109,095 | |||||||||||
Madison IAQ LLC, Term Loan, 8.689%, 6/21/28 |
United States | 2,006,454 | 1,977,240 | |||||||||||
Peraton Corp., Term Loan B, 9.166%, 2/01/28 |
United States | 2,900,436 | 2,898,029 | |||||||||||
|
|
|||||||||||||
5,238,919 | ||||||||||||||
|
|
|||||||||||||
Air Freight & Logistics 1.4% |
||||||||||||||
First Student Bidco, Inc., |
||||||||||||||
Term Loan C, 8.652%, 7/21/28 |
United States | 460,338 | 449,692 | |||||||||||
Term Loan B, 8.655%, 7/21/28 |
United States | 1,228,095 | 1,199,695 | |||||||||||
Kenan Advantage Group, Inc., 2021 Term Loan B1, 9.477%, 3/24/26 |
United States | 1,740,468 | 1,738,415 | |||||||||||
|
|
|||||||||||||
3,387,802 | ||||||||||||||
|
|
|||||||||||||
Automobile Manufacturers 0.6% |
||||||||||||||
American Trailer World Corp., Term Loan B, 9.166%, 3/03/28 |
United States | 1,595,532 | 1,537,031 | |||||||||||
|
|
|||||||||||||
Automotive Parts & Equipment 3.6% |
||||||||||||||
Clarios Global LP, 2023 Incremental Term Loan, 9.066%, 5/06/30 |
United States | 936,543 | 936,107 | |||||||||||
DexKo Global, Inc., |
||||||||||||||
d2021 USD Term Loan B, TBD, 10/04/28 |
United States | 394,737 | 390,626 | |||||||||||
2021 USD Term Loan B, 9.402%, 10/04/28 |
United States | 1,282,733 | 1,254,673 | |||||||||||
First Brands Group LLC, |
||||||||||||||
2021 Term Loan, 10.881%, 3/30/27 |
United States | 2,299,663 | 2,274,746 | |||||||||||
2022 Incremental Term Loan, 10.881%, 3/30/27 |
United States | 1,146,235 | 1,134,063 | |||||||||||
RealTruck Group, Inc., 2021 Term Loan B, 9.181%, 1/31/28 |
United States | 2,208,441 | 2,117,928 | |||||||||||
d |
Tenneco, Inc., 2022 Term Loan B, TBD, 11/17/28 |
United States | 458,115 | 390,115 | ||||||||||
|
|
|||||||||||||
8,498,258 | ||||||||||||||
|
|
|||||||||||||
Building Products 1.9% |
||||||||||||||
Allied Universal Holdco LLC, |
||||||||||||||
2021 USD Incremental Term Loan B, 9.166%, 5/12/28 |
United States | 1,740,376 | 1,683,910 | |||||||||||
2023 Term Loan B, 10.066%, 5/12/28 |
United States | 800,000 | 790,000 | |||||||||||
Solis IV BV, USD Term Loan B1, 8.891%, 2/26/29 |
Netherlands | 1,088,234 | 1,062,388 | |||||||||||
White Cap Buyer LLC, Term Loan B, 9.066%, 10/19/27 |
United States | 966,988 | 966,326 | |||||||||||
|
|
|||||||||||||
4,502,624 | ||||||||||||||
|
|
franklintempleton.com | Semiannual Report | 139 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Senior Loan ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
c |
Senior Floating Rate Interests (continued) |
|||||||||||||
Capital Markets 1.9% | ||||||||||||||
Citadel Securities LP, 2023 Term Loan B, 7.90%, 7/29/30 |
United States | 1,615,875 | $ | 1,614,744 | ||||||||||
Edelman Financial Center LLC, 2021 Term Loan B, 8.931%, 4/07/28 |
United States | 1,468,334 | 1,455,302 | |||||||||||
Jane Street Group LLC, 2021 Term Loan, 8.181%, 1/26/28 |
United States | 1,406,085 | 1,404,419 | |||||||||||
|
|
|||||||||||||
4,474,465 | ||||||||||||||
|
|
|||||||||||||
Casinos & Gaming 2.8% |
||||||||||||||
Bally’s Corp., 2021 Term Loan B, 8.838%, 10/02/28 |
United States | 2,165,515 | 2,127,001 | |||||||||||
Caesars Entertainment Corp., Term Loan B, 8.666%, 2/06/30 |
United States | 1,069,451 | 1,071,125 | |||||||||||
Ontario Gaming GTA LP, Term Loan B, 9.64%, 8/01/30 |
Canada | 181,928 | 182,289 | |||||||||||
Scientific Games Holdings LP, 2022 USD Term Loan B, 8.768%, 4/04/29 |
United States | 1,767,836 | 1,760,101 | |||||||||||
Scientific Games International, Inc., 2022 USD Term Loan, 8.434%, 4/14/29 |
United States | 1,299,826 | 1,301,450 | |||||||||||
Stars Group Holdings BV, 2022 USD Term Loan B, 8.902%, 7/22/28 |
Ireland | 167,797 | 168,301 | |||||||||||
|
|
|||||||||||||
6,610,267 | ||||||||||||||
|
|
|||||||||||||
Chemicals 4.5% |
||||||||||||||
Arsenal AIC Parent LLC, Term Loan, 9.879%, 8/18/30 |
United States | 378,469 | 378,233 | |||||||||||
d |
Hexion Holdings Corp., 2022 USD Term Loan, TBD, 3/15/29 |
United States | 1,580,000 | 1,506,040 | ||||||||||
INEOS Styrolution U.S. Holding LLC, 2021 USD Term Loan B, 8.181%, 1/29/26 |
United States | 1,690,320 | 1,686,939 | |||||||||||
d |
LSF11 A5 Holdco LLC, Term Loan, TBD, 10/15/28 |
United States | 1,545,969 | 1,511,571 | ||||||||||
Nouryon Finance BV, 2023 USD Term Loan B, 9.427%, 4/03/28 |
United States | 1,220,750 | 1,208,030 | |||||||||||
PMHC II, Inc., 2022 Term Loan B, 9.699%, 4/23/29 |
United States | 2,416,045 | 2,286,727 | |||||||||||
SCIH Salt Holdings, Inc., 2021 Incremental Term Loan B, 9.631%, 3/16/27 |
United States | 1,573,495 | 1,566,398 | |||||||||||
Starfruit Finco BV, 2023 Term Loan B, 9.347%, 4/03/28 |
United States | 506,543 | 501,267 | |||||||||||
|
|
|||||||||||||
10,645,205 | ||||||||||||||
|
|
|||||||||||||
Commercial Services & Supplies 3.4% |
||||||||||||||
Amentum Government Services Holdings LLC, 2022 Term Loan, 9.331%, 2/15/29 |
United States | 2,602,456 | 2,573,191 | |||||||||||
d |
GTCR W Merger Sub LLC, USD Term Loan B, TBD, 9/20/30 |
United States | 521,739 | 521,930 | ||||||||||
MPH Acquisition Holdings LLC, 2021 Term Loan B, 9.916%, 9/01/28 |
United States | 889,933 | 840,987 | |||||||||||
PECF USS Intermediate Holding III Corp., Term Loan B, 9.568% - 9.881%, 12/15/28 |
United States | 1,614,972 | 1,302,361 | |||||||||||
SITEL Worldwide Corp., 2021 USD Term Loan, 9.181%, 8/28/28 |
France | 698,219 | 682,837 | |||||||||||
Spin Holdco, Inc., 2021 Term Loan, 9.664%, 3/04/28 |
United States | 2,446,676 | 2,124,216 | |||||||||||
|
|
|||||||||||||
8,045,522 | ||||||||||||||
|
|
|||||||||||||
Communications Equipment 0.6% |
||||||||||||||
CommScope, Inc., 2019 Term Loan B, 8.568%, 4/06/26 |
United States | 1,558,438 | 1,426,750 | |||||||||||
|
|
|||||||||||||
Computer & Electronics Retail 1.4% |
||||||||||||||
McAfee LLC, 2022 USD Term Loan B, 9.18%, 3/01/29 |
United States | 2,230,137 | 2,182,044 | |||||||||||
Vision Solutions, Inc., 2021 Incremental Term Loan, 9.613%, 4/24/28 |
United States | 1,072,417 | 1,042,143 | |||||||||||
|
|
|||||||||||||
3,224,187 | ||||||||||||||
|
|
|||||||||||||
Construction Materials 1.1% |
||||||||||||||
Cornerstone Building Brands, Inc., 2021 Term Loan B, 8.682%, 4/12/28 |
United States | 1,364,195 | 1,334,783 | |||||||||||
Quikrete Holdings, Inc., 2023 Term Loan B, 8.181%, 3/19/29 |
United States | 1,286,734 | 1,288,491 | |||||||||||
|
|
|||||||||||||
2,623,274 | ||||||||||||||
|
|
|||||||||||||
Containers & Packaging 3.0% |
||||||||||||||
Charter NEX U.S., Inc., 2021 Term Loan, 9.181%, 12/01/27 |
United States | 2,830,489 | 2,808,665 | |||||||||||
Klockner-Pentaplast of America, Inc., 2021 Term Loan B, 10.476%, 2/12/26 . |
Luxembourg | 1,961,538 | 1,894,111 | |||||||||||
Mauser Packaging Solutions Holding Co., Term Loan B, 9.33%, 8/14/26 |
United States | 698,250 | 698,774 | |||||||||||
d |
Proampac PG Borrower LLC, 2023 Term Loan, TBD, 9/26/28 |
United States | 240,741 | 239,958 | ||||||||||
Reynolds Group Holdings, Inc., 2021 Term Loan B, 8.681%, 9/24/28 |
United States | 1,474,425 | 1,474,808 | |||||||||||
|
|
|||||||||||||
7,116,316 | ||||||||||||||
|
|
140 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Senior Loan ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
c |
Senior Floating Rate Interests (continued) |
|||||||||||||
Diversified Banks 0.7% | ||||||||||||||
AqGen Island Holdings, Inc., Term Loan, 8.931%, 8/02/28 |
United States | 1,634,350 | $ | 1,623,122 | ||||||||||
|
|
|||||||||||||
Diversified Telecommunication Services 0.7% |
||||||||||||||
Altice France SA, 2023 USD Term Loan B14, 10.808%, 8/15/28 |
France | 1,167,533 | 1,060,266 | |||||||||||
Zayo Group Holdings, Inc., USD Term Loan, 8.431%, 3/09/27 |
United States | 708,194 | 580,400 | |||||||||||
|
|
|||||||||||||
1,640,666 | ||||||||||||||
|
|
|||||||||||||
Electric Utilities 0.4% | ||||||||||||||
Calpine Construction Finance Co. LP, 2023 Refinancing Term Loan B, 7.566%, 7/31/30 |
United States | 600,000 | 597,642 | |||||||||||
Talen Energy Supply LLC, |
||||||||||||||
2023 Term Loan C, 9.877%, 5/17/30 |
United States | 39,789 | 40,021 | |||||||||||
2023 Term Loan B, 9.877%, 5/17/30 |
United States | 282,435 | 284,083 | |||||||||||
|
|
|||||||||||||
921,746 | ||||||||||||||
|
|
|||||||||||||
Electronic Equipment & Instruments 0.4% | ||||||||||||||
Magenta Buyer LLC, 2021 USD 1st Lien Term Loan, 10.631%, 7/27/28 |
United States | 1,384,559 | 1,037,263 | |||||||||||
|
|
|||||||||||||
Financial Services 1.1% | ||||||||||||||
Asurion LLC, |
||||||||||||||
2020 Term Loan B8, 8.681%, 12/23/26 |
United States | 580,599 | 569,713 | |||||||||||
2021 Second Lien Term Loan B4, 10.681%, 1/20/29 |
United States | 1,997,666 | 1,779,341 | |||||||||||
Go Daddy Operating Co. LLC, 2022 Term Loan B5, 7.816%, 11/09/29 |
United States | 173,296 | 173,666 | |||||||||||
|
|
|||||||||||||
2,522,720 | ||||||||||||||
|
|
|||||||||||||
Food Products 0.6% | ||||||||||||||
Triton Water Holdings, Inc., Term Loan, 8.902%, 3/31/28 |
United States | 1,406,905 | 1,374,075 | |||||||||||
|
|
|||||||||||||
Health Care Providers & Services 6.6% | ||||||||||||||
ADMI Corp., |
||||||||||||||
2021 Term Loan B2, 8.806%, 12/23/27 |
United States | 747,935 | 695,205 | |||||||||||
2021 Incremental Term Loan B3, 9.181%, 12/23/27 |
United States | 1,051,424 | 983,455 | |||||||||||
Charlotte Buyer, Inc., 1st Lien Term Loan, 10.579%, 2/11/28 |
United States | 1,567,514 | 1,553,375 | |||||||||||
Gainwell Acquisition Corp., Term Loan B, 9.49%, 10/01/27 |
United States | 2,565,572 | 2,509,450 | |||||||||||
ICON Luxembourg Sarl, LUX Term Loan, 7.902%, 7/03/28 |
Luxembourg | 1,007,286 | 1,008,143 | |||||||||||
Medical Solutions Holdings, Inc., 2021 1st Lien Term Loan, 8.773%, 11/01/28 |
United States | 2,059,864 | 1,998,068 | |||||||||||
Medline Borrower LP, USD Term Loan B, 8.681%, 10/23/28 |
United States | 1,631,381 | 1,628,877 | |||||||||||
National Mentor Holdings, Inc., |
||||||||||||||
2021 Term Loan, 9.166% - 9.24%, 3/02/28 |
United States | 792,716 | 710,143 | |||||||||||
2021 Term Loan C, 9.24%, 3/02/28 |
United States | 29,688 | 26,595 | |||||||||||
PRA Health Sciences, Inc., US Term Loan, 7.902%, 7/03/28 |
United States | 250,966 | 251,179 | |||||||||||
Radiology Partners, Inc., 2018 1st Lien Term Loan B, 10.179%, 7/09/25 |
United States | 1,121,767 | 849,868 | |||||||||||
d |
Stars Group Holdings B.V, (The), 2022 USD Term Loan B, TBD, 9/19/30 |
United States | 466,667 | 456,976 | ||||||||||
U.S. Anesthesia Partners, Inc., 2021 Term Loan, 9.694%, 10/01/28 |
United States | 1,723,183 | 1,585,940 | |||||||||||
U.S. Radiology Specialists, Inc., 2020 Term Loan, 10.74%, 12/15/27 |
United States | 1,468,224 | 1,427,848 | |||||||||||
|
|
|||||||||||||
15,685,122 | ||||||||||||||
|
|
|||||||||||||
Health Care Services 1.3% | ||||||||||||||
CHG Healthcare Services, Inc., |
||||||||||||||
d2023 Incremental Term Loan, TBD, 9/29/28 |
United States | 292,683 | 292,866 | |||||||||||
2021 Term Loan, 8.681%, 9/29/28 |
United States | 1,388,825 | 1,384,805 | |||||||||||
MedAssets Software Intermediate Holdings, Inc., 2021 Term Loan, 9.431%, 12/18/28 |
United States | 1,689,738 | 1,387,697 | |||||||||||
|
|
|||||||||||||
3,065,368 | ||||||||||||||
|
|
|||||||||||||
Health Care Supplies 0.2% | ||||||||||||||
d |
Bausch & Lomb Corp., 2023 Incremental Term Loan, TBD, 9/14/28 |
United States | 500,000 | 494,375 | ||||||||||
|
|
franklintempleton.com | Semiannual Report | 141 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Senior Loan ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
c |
Senior Floating Rate Interests (continued) |
|||||||||||||
Home Furnishings 0.4% | ||||||||||||||
AI Aqua Merger Sub, Inc., 2021 1st Lien Term Loan B, 9.084%, 7/31/28 |
United States | 913,438 | $ | 905,660 | ||||||||||
|
|
|||||||||||||
Hotels Restaurants & Leisure 1.1% | ||||||||||||||
d |
Fertitta Entertainment LLC, 2022 Term Loan B, TBD, 1/27/29 |
United States | 1,344,919 | 1,333,642 | ||||||||||
Hilton Grand Vacations Borrower LLC, 2021 Term Loan B, 8.431%, 8/02/28 . |
United States | 1,347,328 | 1,350,905 | |||||||||||
|
|
|||||||||||||
2,684,547 | ||||||||||||||
|
|
|||||||||||||
Household Products 0.1% | ||||||||||||||
Energizer Holdings, Inc., 2020 Term Loan, 7.688%, 12/22/27 |
United States | 196,926 | 196,779 | |||||||||||
|
|
|||||||||||||
Insurance 2.1% | ||||||||||||||
Acrisure LLC, |
||||||||||||||
2020 Term Loan B, 8.931%, 2/15/27 |
United States | 1,505,900 | 1,487,882 | |||||||||||
2021 First Lien Term Loan B, 9.681%, 2/15/27 |
United States | 240,472 | 240,398 | |||||||||||
Alliant Holdings Intermediate LLC, 2021 Term Loan B4, 8.931%, 11/05/27 |
United States | 1,041,896 | 1,040,974 | |||||||||||
AssuredPartners, Inc., 2020 Term Loan B, 8.931%, 2/12/27 |
United States | 1,444,773 | 1,442,859 | |||||||||||
Asurion LLC, |
||||||||||||||
2022 Term Loan B10, 9.416%, 8/19/28 |
United States | 297,000 | 288,553 | |||||||||||
2023 Term Loan B11, 9.666%, 8/19/28 |
United States | 470,799 | 458,205 | |||||||||||
|
|
|||||||||||||
4,958,871 | ||||||||||||||
|
|
|||||||||||||
Insurance Brokers 1.6% | ||||||||||||||
AssuredPartners, Inc., 2022 Term Loan B4, 9.566%, 2/12/27 |
United States | 416,842 | 417,626 | |||||||||||
HUB International Ltd., |
||||||||||||||
2022 Term Loan B, 9.365% - 9.40%, 11/10/29 |
United States | 580,099 | 581,746 | |||||||||||
2023 Term Loan B, 9.584%, 6/20/30 |
United States | 818,182 | 821,336 | |||||||||||
Sedgwick Claims Management Services, Inc., 2023 Term Loan B, 9.066%, 2/24/28 |
United States | 1,964,665 | 1,963,319 | |||||||||||
|
|
|||||||||||||
3,784,027 | ||||||||||||||
|
|
|||||||||||||
Interactive Media & Services 1.8% |
||||||||||||||
Arches Buyer, Inc., 2021 Term Loan B, 8.666%, 12/06/27 |
United States | 1,370,256 | 1,344,351 | |||||||||||
Hunter Holdco 3 Ltd., USD Term Loan B, 9.74%, 8/19/28 |
United States | 995,152 | 994,530 | |||||||||||
MH Sub I LLC, 2023 Term Loan, 9.566%, 5/03/28 |
United States | 2,103,635 | 2,038,717 | |||||||||||
|
|
|||||||||||||
4,377,598 | ||||||||||||||
|
|
|||||||||||||
IT Services 2.4% |
||||||||||||||
Deerfield Dakota Holding LLC, 2020 USD Term Loan B, 9.14%, 4/09/27 |
United States | 1,147,494 | 1,121,440 | |||||||||||
Dun & Bradstreet Corp., 2023 Term Loan B, 8.168%, 2/06/26 |
United States | 945,385 | 945,087 | |||||||||||
Verscend Holding Corp., 2021 Term Loan B, 9.431%, 8/27/25 |
United States | 3,645,757 | 3,651,299 | |||||||||||
|
|
|||||||||||||
5,717,826 | ||||||||||||||
|
|
|||||||||||||
Leisure Equipment & Products 0.6% |
||||||||||||||
Playtika Holding Corp., 2021 Term Loan, 8.181%, 3/13/28 |
United States | 1,086,111 | 1,086,285 | |||||||||||
Varsity Brands, Inc., 2017 Term Loan B, 8.931%, 12/16/24 |
United States | 473,566 | 470,506 | |||||||||||
|
|
|||||||||||||
1,556,791 | ||||||||||||||
|
|
|||||||||||||
Machinery 0.7% |
||||||||||||||
Vertical U.S. Newco, Inc., Term Loan B, 9.381%, 7/30/27 |
Germany | 1,687,674 | 1,685,986 | |||||||||||
|
|
|||||||||||||
Media 6.5% |
||||||||||||||
AMC Entertainment Holdings, Inc., 2019 Term Loan B, 8.448%, 4/22/26 |
United States | 243,622 | 197,003 | |||||||||||
Cengage Learning, Inc., 2021 Term Loan B, 10.323%, 7/14/26 |
United States | 1,898,271 | 1,892,339 | |||||||||||
Clear Channel Outdoor Holdings, Inc., Term Loan B, 8.851% - 9.13%, 8/21/26 |
United States | 1,415,730 | 1,378,270 | |||||||||||
CSC Holdings LLC, 2017 Term Loan B1, 7.697%, 7/17/25 |
United States | 1,856,784 | 1,804,274 | |||||||||||
Gray Television, Inc., 2021 Term Loan D, 8.444%, 12/01/28 |
United States | 1,580,220 | 1,544,665 | |||||||||||
iHeartCommunications, Inc., 2020 Term Loan, 8.431%, 5/01/26 |
United States | 400,000 | 360,802 | |||||||||||
McGraw-Hill Global Education Holdings LLC, 2021 Term Loan, 9.985% - 10.181%, 7/28/28 |
United States | 1,277,113 | 1,255,695 |
142 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Senior Loan ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
c |
Senior Floating Rate Interests (continued) |
|||||||||||||
Media (continued) | ||||||||||||||
Nexstar Broadcasting, Inc., 2019 Term Loan B4, 7.931%, 9/18/26 |
United States | 891,792 | $ | 891,792 | ||||||||||
Radiate Holdco LLC, 2021 Term Loan B, 8.681%, 9/25/26 |
United States | 2,342,478 | 1,924,884 | |||||||||||
Univision Communications, Inc., 2021 First Lien Term Loan B, 8.681%, 3/15/26 |
United States | 1,640,518 | 1,639,288 | |||||||||||
Virgin Media Bristol LLC, 2020 USD Term Loan Q, 8.697%, 1/31/29 |
United States | 1,970,000 | 1,927,734 | |||||||||||
William Morris Endeavor Entertainment LLC, 2018 1st Lien Term Loan, 8.068% - 8.181%, 5/18/25 |
United States | 572,957 | 572,957 | |||||||||||
|
|
|||||||||||||
15,389,703 | ||||||||||||||
|
|
|||||||||||||
Office Services & Supplies 1.0% |
||||||||||||||
Prime Security Services Borrower LLC, 2021 Term Loan, 8.192%, 9/23/26 |
United States | 2,413,145 | 2,412,325 | |||||||||||
|
|
|||||||||||||
Packaged Foods & Meats 0.2% |
||||||||||||||
Shearer’s Foods, Inc., 2021 Term Loan, 8.931%, 9/23/27 |
United States | 398,974 | 399,058 | |||||||||||
|
|
|||||||||||||
Passenger Airlines 2.9% |
||||||||||||||
Air Canada, 2021 Term Loan B, 9.128%, 8/11/28 |
Canada | 1,940,552 | 1,944,599 | |||||||||||
American Airlines, Inc., 2021 Term Loan, 10.338%, 4/20/28 |
United States | 972,923 | 1,003,998 | |||||||||||
Kestrel Bidco, Inc., Term Loan B, 8.42%, 12/11/26 |
Canada | 2,031,866 | 1,993,768 | |||||||||||
United Airlines, Inc., 2021 Term Loan B, 9.182%, 4/21/28 |
United States | 1,951,329 | 1,957,427 | |||||||||||
|
|
|||||||||||||
6,899,792 | ||||||||||||||
|
|
|||||||||||||
Personal Care Products 1.7% |
||||||||||||||
Conair Holdings LLC, Term Loan B, 9.402%, 5/17/28 |
United States | 2,035,752 | 1,956,011 | |||||||||||
Sunshine Luxembourg VII Sarl, 2021 Term Loan B3, 9.24%, 10/01/26 |
Luxembourg | 2,005,228 | 2,004,396 | |||||||||||
|
|
|||||||||||||
3,960,407 | ||||||||||||||
|
|
|||||||||||||
Pharmaceuticals 3.0% |
||||||||||||||
eResearchTechnology, Inc., 2020 1st Lien Term Loan, 9.931%, 2/04/27 |
United States | 1,149,983 | 1,130,681 | |||||||||||
Grifols Worldwide Operations USA, Inc., USD 2019 Term Loan B, 7.416%, 11/15/27 |
United States | 1,100,000 | 1,082,950 | |||||||||||
Jazz Financing Lux Sarl, USD Term Loan, 8.931%, 5/05/28 |
United States | 1,955,264 | 1,955,949 | |||||||||||
Organon & Co., USD Term Loan, 8.442%, 6/02/28 |
United States | 1,282,196 | 1,281,875 | |||||||||||
Parexel International Corp., 2021 1st Lien Term Loan, 8.681%, 11/15/28 |
United States | 1,569,645 | 1,560,549 | |||||||||||
|
|
|||||||||||||
7,012,004 | ||||||||||||||
|
|
|||||||||||||
Real Estate Management & Development 0.7% |
||||||||||||||
Cushman & Wakefield U.S. Borrower LLC, |
||||||||||||||
2020 Term Loan B, 8.181%, 8/21/25 |
United States | 153,485 | 153,543 | |||||||||||
2023 Term Loan, 8.666%, 1/31/30 |
United States | 299,250 | 295,135 | |||||||||||
2023 Term Loan B, 9.316%, 1/31/30 |
United States | 1,159,888 | 1,152,639 | |||||||||||
|
|
|||||||||||||
1,601,317 | ||||||||||||||
|
|
|||||||||||||
Research & Consulting Services 0.7% |
||||||||||||||
KUEHG Corp., 2023 Term Loan, 10.39%, 6/12/30 |
United States | 1,600,000 | 1,605,248 | |||||||||||
|
|
|||||||||||||
Retail REITs 1.0% |
||||||||||||||
Great Outdoors Group LLC, 2021 Term Loan B1, 9.402%, 3/06/28 |
United States | 1,651,920 | 1,650,599 | |||||||||||
Petco Health & Wellness Co., Inc., 2021 Term Loan B, 8.902%, 3/03/28 |
United States | 758,289 | 751,062 | |||||||||||
|
|
|||||||||||||
2,401,661 | ||||||||||||||
|
|
|||||||||||||
Semiconductor Materials & Equipment 0.5% |
||||||||||||||
MKS Instruments, Inc., 2022 USD Term Loan B, 8.166%, 8/17/29 |
United States | 1,190,244 | 1,191,625 | |||||||||||
|
|
|||||||||||||
Soft Drinks & Non-alcoholic Beverages 0.2% |
||||||||||||||
d |
Naked Juice LLC, Term Loan, TBD, 1/24/29 |
United States | 552,600 | 526,852 | ||||||||||
|
|
|||||||||||||
Software 11.3% |
||||||||||||||
Athenahealth Group, Inc., 2022 Term Loan B, 8.568%, 2/15/29 |
United States | 2,464,621 | 2,425,347 | |||||||||||
CDK Global, Inc., 2022 USD Term Loan B, 9.64%, 7/06/29 |
United States | 953,455 | 954,814 |
franklintempleton.com | Semiannual Report | 143 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Senior Loan ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
c |
Senior Floating Rate Interests (continued) |
|||||||||||||
Software (continued) | ||||||||||||||
Cloudera, Inc., |
||||||||||||||
2021 Term Loan, 9.166%, 10/08/28 |
United States | 911,865 | $ | 895,907 | ||||||||||
2021 Second Lien Term Loan, 11.416%, 10/08/29 |
United States | 303,306 | 289,152 | |||||||||||
Cornerstone OnDemand, Inc., 2021 Term Loan, 9.181%, 10/16/28 |
United States | 1,441,689 | 1,372,986 | |||||||||||
DCert Buyer, Inc., |
||||||||||||||
2019 Term Loan B, 9.316%, 10/16/26 |
United States | 2,645,504 | 2,633,189 | |||||||||||
2021 2nd Lien Term Loan, 12.316%, 2/19/29 |
United States | 1,000,000 | 938,335 | |||||||||||
Epicor Software Corp., |
||||||||||||||
d2023 Incremental Term Loan, TBD, 7/30/27 |
United States | 465,116 | 466,279 | |||||||||||
2020 Term Loan, 8.681%, 7/30/27 |
United States | 1,686,064 | 1,685,887 | |||||||||||
GoTo Group, Inc., Term Loan B, 10.269%, 8/31/27 |
United States | 1,853,588 | 1,239,800 | |||||||||||
Idera, Inc., 2021 Term Loan, 9.272%, 3/02/28 |
United States | 1,573,834 | 1,563,997 | |||||||||||
Ivanti Software, Inc., |
||||||||||||||
2021 Add On Term Loan B, 9.538%, 12/01/27 |
United States | 137,883 | 119,182 | |||||||||||
2021 Term Loan B, 9.758%, 12/01/27 |
United States | 1,275,082 | 1,106,937 | |||||||||||
Mitchell International, Inc., 2021 Term Loan B, 9.181%, 10/15/28 |
United States | 875,392 | 862,515 | |||||||||||
Navicure, Inc., 2019 Term Loan B, 9.431%, 10/22/26 |
United States | 3,150,360 | 3,157,748 | |||||||||||
Polaris Newco LLC, USD Term Loan B, 9.431%, 6/02/28 |
United States | 1,569,505 | 1,506,725 | |||||||||||
d |
Quest Software US Holdings, Inc., 2022 Term Loan, TBD, 2/01/29 |
United States | 594,000 | 497,166 | ||||||||||
Roper Industrial Products Investment Co. LLC, USD Term Loan, 9.89%, 11/22/29 |
United States | 1,247,529 | 1,251,764 | |||||||||||
Sovos Compliance LLC, 2021 Term Loan, 9.931%, 8/11/28 |
United States | 1,722,371 | 1,698,008 | |||||||||||
Ultimate Software Group, Inc., |
||||||||||||||
2021 Term Loan, 8.618%, 5/04/26 |
United States | 852,637 | 851,183 | |||||||||||
Term Loan B, 9.219%, 5/04/26 |
United States | 593,850 | 593,945 | |||||||||||
2021 2nd Lien Term Loan, 10.618%, 5/03/27 |
United States | 570,096 | 570,655 | |||||||||||
|
|
|||||||||||||
26,681,521 | ||||||||||||||
|
|
|||||||||||||
Specialty Chemicals 0.2% |
||||||||||||||
Ineos U.S. Finance LLC, 2022 USD Term Loan B, 9.166%, 11/08/27 |
United States | 477,600 | 476,143 | |||||||||||
|
|
|||||||||||||
Specialty Retail 2.3% |
||||||||||||||
IRB Holding Corp., 2022 Term Loan B, 8.416%, 12/15/27 |
United States | 694,710 | 693,005 | |||||||||||
Michaels Cos., Inc., 2021 Term Loan B, 9.902%, 4/15/28 |
United States | 1,972,468 | 1,805,696 | |||||||||||
PetSmart, Inc., 2021 Term Loan B, 9.166%, 2/11/28 |
United States | 1,312,976 | 1,310,980 | |||||||||||
SRS Distribution, Inc., |
||||||||||||||
2022 Incremental Term Loan, 8.916%, 6/02/28 |
United States | 78,352 | 77,716 | |||||||||||
2021 Term Loan B, 8.931%, 6/02/28 |
United States | 369,059 | 365,887 | |||||||||||
Staples, Inc., 7 Year Term Loan, 10.634%, 4/16/26 |
United States | 825,524 | 710,157 | |||||||||||
Whatabrands LLC, 2021 Term Loan B, 8.431%, 8/03/28 |
United States | 398,985 | 397,987 | |||||||||||
|
|
|||||||||||||
5,361,428 | ||||||||||||||
|
|
|||||||||||||
Systems Software 0.5% |
||||||||||||||
Barracuda Networks, Inc., 2022 Term Loan, 9.869%, 8/15/29 |
United States | 1,095,496 | 1,086,875 | |||||||||||
|
|
|||||||||||||
Technology Hardware, Storage & Peripherals 1.5% |
||||||||||||||
Greeneden U.S. Holdings II LLC, 2020 USD Term Loan B4, 9.431%, 12/01/27 |
United States | 3,520,108 | 3,527,113 | |||||||||||
|
|
|||||||||||||
Wireless Telecommunication Services 0.7% |
||||||||||||||
CCI Buyer, Inc., Term Loan, 9.39%, 12/17/27 |
United States | 1,771,792 | 1,751,496 | |||||||||||
|
|
|||||||||||||
Total Floating Rate Loans (Cost $207,863,160) |
203,847,730 | |||||||||||||
|
|
144 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Senior Loan ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Asset-Backed Securities 0.8% | ||||||||||||||
a,e |
BlueMountain CLO Ltd., Series 2018-3A, Class C, 7.813%, 10/25/30 |
United States | 1,000,000 | $ | 974,476 | |||||||||
a,e |
LCM XVIII LP, Series 2018-A, Class CR, 7.438%, 4/20/31 |
United States | 1,000,000 | 971,671 | ||||||||||
|
|
|||||||||||||
Total Asset-Backed Securities (Cost $1,996,875) |
1,946,147 | |||||||||||||
|
|
|||||||||||||
Total
Investments before Short-Term Investments |
217,926,313 | |||||||||||||
|
|
|||||||||||||
Short-Term Investments 8.2% |
||||||||||||||
U.S. Government & Agency Securities 8.2% | ||||||||||||||
Federal Home Loan Bank Discount Notes, 10/2/23 |
United States | 19,405,000 | 19,405,000 | |||||||||||
|
|
|||||||||||||
Total Short-Term Investments (Cost $19,402,197) |
19,405,000 | |||||||||||||
|
|
|||||||||||||
Total Investments (Cost $242,369,899) 100.2% |
237,331,313 | |||||||||||||
Other Assets, less Liabilities (0.2)% |
(575,614 | ) | ||||||||||||
|
|
|||||||||||||
Net Assets 100.0% |
$ | 236,755,699 | ||||||||||||
|
|
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2023, the value of was $13,940,528, representing 5.9% of net assets.
bSee Note 7 regarding defaulted securities.
cThe coupon rate shown represents the rate at period end.
dA portion or all of the security represents an unsettled loan commitment. The coupon rate is to-be determined (TBD) at the time of settlement and will be based upon a reference index/floor plus a spread.
eThe coupon rate shown represents the rate inclusive of any caps or floors, if applicable, in effect at period end.
See Abbreviations on page 220.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 145 |
FRANKLIN TEMPLETON ETF TRUST
Consolidated Financial Highlights
Franklin Systematic Style Premia ETF
Six Months Ended (unaudited) |
Year Ended March 31, | |||||||||||||||||||
2023 | 2022 | 2021 | 2020a | |||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||
Net asset value, beginning of period |
$21.45 | $21.25 | $19.55 | $23.16 | $25.00 | |||||||||||||||
Income from investment operationsb: |
||||||||||||||||||||
Net investment incomec |
0.23 | 0.26 | 0.14 | 0.23 | 0.11 | |||||||||||||||
Net realized and unrealized gains (losses) |
0.88 | 0.40 | 1.82 | (2.25 | ) | (1.94 | ) | |||||||||||||
Total from investment operations |
1.11 | 0.66 | 1.96 | (2.02 | ) | (1.83 | ) | |||||||||||||
Less distributions from: |
||||||||||||||||||||
Net investment income |
— | (0.46 | ) | (0.26 | ) | (0.05 | ) | (0.01 | ) | |||||||||||
Net realized gains |
— | — | — | (1.54 | ) | — | ||||||||||||||
Total distributions |
— | (0.46 | ) | (0.26 | ) | (1.59 | ) | (0.01 | ) | |||||||||||
Net asset value, end of period |
$22.56 | $21.45 | $21.25 | $19.55 | $23.16 | |||||||||||||||
Total returnd |
5.22% | 3.13% | 10.09% | (8.70)% | (7.34)% | |||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.68% | 0.69% | 0.73% | 1.14% | 1.15% | |||||||||||||||
Expenses net of waiver and payments by affiliates |
0.65% | 0.65% | 0.63% | 0.65% | 0.65% | |||||||||||||||
Net investment income |
2.12% | 1.21% | 0.69% | 1.08% | 1.67% | |||||||||||||||
Supplemental data | ||||||||||||||||||||
Net assets, end of period (000’s) |
$107,161 | $91,146 | $55,258 | $46,927 | $50,948 | |||||||||||||||
Portfolio turnover ratef |
83.39%g | 188.38%g | 189.89%g | 171.16%g | 60.95%g |
aFor the period December 18, 2019 (commencement of operations) to March 31, 2020.
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”).
g Portfolio turnover rate excluding cash creations was as follows: | 83.39% | 188.38% | 189.89% | 171.16% | 60.95% |
146 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Consolidated Schedule of Investments, September 30, 2023 (unaudited)
Franklin Systematic Style Premia ETF
Country | Shares | Value | ||||||||||||
Common Stocks 53.7% |
||||||||||||||
Aerospace & Defense 0.2% | ||||||||||||||
a |
Rolls-Royce Holdings PLC |
United Kingdom | 19,150 | $ | 51,632 | |||||||||
Textron, Inc. |
United States | 1,505 | 117,601 | |||||||||||
|
|
|||||||||||||
169,233 | ||||||||||||||
|
|
|||||||||||||
Air Freight & Logistics 0.8% | ||||||||||||||
Deutsche Post AG |
Germany | 7,399 | 301,871 | |||||||||||
Expeditors International of Washington, Inc. |
United States | 1,131 | 129,647 | |||||||||||
FedEx Corp. |
United States | 1,486 | 393,671 | |||||||||||
|
|
|||||||||||||
825,189 | ||||||||||||||
|
|
|||||||||||||
Automobiles 0.6% |
||||||||||||||
General Motors Co. |
United States | 10,531 | 347,207 | |||||||||||
Stellantis NV |
United States | 16,235 | 313,008 | |||||||||||
|
|
|||||||||||||
660,215 | ||||||||||||||
|
|
|||||||||||||
Banks 1.8% |
||||||||||||||
Banco Bilbao Vizcaya Argentaria SA |
Spain | 44,111 | 360,076 | |||||||||||
Banco Santander SA |
Spain | 106,201 | 406,865 | |||||||||||
Barclays PLC |
United Kingdom | 114,491 | 222,106 | |||||||||||
Credit Agricole SA |
France | 3,489 | 43,190 | |||||||||||
First Citizens BancShares, Inc., Class A |
United States | 81 | 111,788 | |||||||||||
HSBC Holdings PLC |
United Kingdom | 12,255 | 96,463 | |||||||||||
Intesa Sanpaolo SpA |
Italy | 113,432 | 293,035 | |||||||||||
NatWest Group PLC |
United Kingdom | 41,382 | 119,049 | |||||||||||
UniCredit SpA |
Italy | 13,596 | 327,193 | |||||||||||
|
|
|||||||||||||
1,979,765 | ||||||||||||||
|
|
|||||||||||||
Beverages 0.2% |
||||||||||||||
Asahi Group Holdings Ltd. |
Japan | 3,600 | 134,857 | |||||||||||
Coca-Cola HBC AG |
Switzerland | 1,650 | 45,293 | |||||||||||
Molson Coors Beverage Co., Class B |
United States | 1,399 | 88,962 | |||||||||||
|
|
|||||||||||||
269,112 | ||||||||||||||
|
|
|||||||||||||
Biotechnology 4.1% |
||||||||||||||
AbbVie, Inc. |
United States | 6,991 | 1,042,079 | |||||||||||
Amgen, Inc. |
United States | 3,625 | 974,255 | |||||||||||
a |
Biogen, Inc. |
United States | 1,086 | 279,113 | ||||||||||
Gilead Sciences, Inc. |
United States | 9,228 | 691,546 | |||||||||||
a |
Regeneron Pharmaceuticals, Inc. |
United States | 806 | 663,306 | ||||||||||
a |
United Therapeutics Corp. |
United States | 351 | 79,280 | ||||||||||
a |
Vertex Pharmaceuticals, Inc. |
United States | 1,908 | 663,488 | ||||||||||
|
|
|||||||||||||
4,393,067 | ||||||||||||||
|
|
|||||||||||||
Broadline Retail 0.4% |
||||||||||||||
a |
Amazon.com, Inc. |
United States | 577 | 73,348 | ||||||||||
Canadian Tire Corp. Ltd., Class A |
Canada | 300 | 32,407 | |||||||||||
eBay, Inc. |
United States | 3,822 | 168,512 | |||||||||||
Next PLC |
United Kingdom | 899 | 80,057 | |||||||||||
Wesfarmers Ltd. |
Australia | 3,450 | 117,700 | |||||||||||
|
|
|||||||||||||
472,024 | ||||||||||||||
|
|
|||||||||||||
Building Products 0.5% | ||||||||||||||
a |
Builders FirstSource, Inc. |
United States | 947 | 117,892 | ||||||||||
Cie de Saint-Gobain SA |
France | 3,469 | 208,909 | |||||||||||
Masco Corp. |
United States | 1,676 | 89,582 | |||||||||||
Owens Corning |
United States | 672 | 91,668 | |||||||||||
|
|
|||||||||||||
508,051 | ||||||||||||||
|
|
franklintempleton.com | Semiannual Report | 147 |
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||||
Common Stocks (continued) |
||||||||||||||
Capital Markets 1.6% | ||||||||||||||
3i Group PLC |
United Kingdom | 7,215 | $ | 182,554 | ||||||||||
Ameriprise Financial, Inc. |
United States | 785 | 258,799 | |||||||||||
Bank of New York Mellon Corp. |
United States | 4,980 | 212,397 | |||||||||||
Julius Baer Group Ltd. |
Switzerland | 1,436 | 92,395 | |||||||||||
SEI Investments Co. |
United States | 853 | 51,376 | |||||||||||
State Street Corp. |
United States | 2,375 | 159,030 | |||||||||||
T Rowe Price Group, Inc. |
United States | 1,604 | 168,211 | |||||||||||
UBS Group AG |
Switzerland | 24,563 | 609,242 | |||||||||||
|
|
|||||||||||||
1,734,004 | ||||||||||||||
|
|
|||||||||||||
Chemicals 1.3% | ||||||||||||||
Linde PLC |
United States | 1,700 | 632,995 | |||||||||||
LyondellBasell Industries NV, Class A |
United States | 1,933 | 183,055 | |||||||||||
Nitto Denko Corp. |
Japan | 1,100 | 72,299 | |||||||||||
Shin-Etsu Chemical Co. Ltd. |
Japan | 13,700 | 398,721 | |||||||||||
Solvay SA |
Belgium | 533 | 59,168 | |||||||||||
|
|
|||||||||||||
1,346,238 | ||||||||||||||
|
|
|||||||||||||
Commercial Services & Supplies 0.6% |
||||||||||||||
Brambles Ltd. |
Australia | 10,400 | 96,118 | |||||||||||
Cintas Corp. |
United States | 520 | 250,125 | |||||||||||
a |
Copart, Inc. |
United States | 6,111 | 263,323 | ||||||||||
TOPPAN, Inc. |
Japan | 1,800 | 43,123 | |||||||||||
|
|
|||||||||||||
652,689 | ||||||||||||||
|
|
|||||||||||||
Communications Equipment 1.0% |
||||||||||||||
Cisco Systems, Inc. |
United States | 17,911 | 962,895 | |||||||||||
a |
F5, Inc. |
United States | 453 | 72,997 | ||||||||||
|
|
|||||||||||||
1,035,892 | ||||||||||||||
|
|
|||||||||||||
Construction Materials 0.3% |
||||||||||||||
Heidelberg Materials AG |
Germany | 1,078 | 83,911 | |||||||||||
Holcim AG, Class B |
United States | 3,511 | 225,597 | |||||||||||
|
|
|||||||||||||
309,508 | ||||||||||||||
|
|
|||||||||||||
Consumer Staples Distribution & Retail 1.9% |
||||||||||||||
Albertsons Cos., Inc., Class A |
United States | 2,374 | 54,009 | |||||||||||
Alimentation Couche-Tard, Inc. |
Canada | 5,700 | 290,818 | |||||||||||
Carrefour SA |
France | 4,464 | 76,967 | |||||||||||
Koninklijke Ahold Delhaize NV |
Netherlands | 7,290 | 220,126 | |||||||||||
Kroger Co. |
United States | 5,283 | 236,414 | |||||||||||
Tesco PLC |
United Kingdom | 53,613 | 172,885 | |||||||||||
Walmart, Inc. |
United States | 6,248 | 999,243 | |||||||||||
|
|
|||||||||||||
2,050,462 | ||||||||||||||
|
|
|||||||||||||
Containers & Packaging 0.1% |
||||||||||||||
Packaging Corp. of America |
United States | 676 | 103,800 | |||||||||||
|
|
|||||||||||||
Distributors 0.1% |
||||||||||||||
LKQ Corp. |
United States | 1,739 | 86,098 | |||||||||||
|
|
|||||||||||||
Diversified REITs 0.0%† |
||||||||||||||
Stockland |
Australia | 17,557 | 44,419 | |||||||||||
|
|
|||||||||||||
Diversified Telecommunication Services 0.9% |
||||||||||||||
AT&T, Inc. |
United States | 36,937 | 554,793 | |||||||||||
BT Group PLC |
United Kingdom | 48,093 | 68,503 | |||||||||||
Deutsche Telekom AG |
Germany | 11,214 | 235,889 | |||||||||||
Verizon Communications, Inc. |
United States | 4,197 | 136,025 | |||||||||||
|
|
|||||||||||||
995,210 | ||||||||||||||
|
|
148 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||||
Common Stocks (continued) |
||||||||||||||
Electric Utilities 0.8% | ||||||||||||||
Chubu Electric Power Co., Inc. |
Japan | 4,800 | $ | 61,341 | ||||||||||
CLP Holdings Ltd. |
Hong Kong | 12,000 | 88,791 | |||||||||||
Endesa SA |
Spain | 2,377 | 48,508 | |||||||||||
Enel SpA |
Italy | 60,815 | 374,738 | |||||||||||
Kansai Electric Power Co., Inc. |
Japan | 5,100 | 71,002 | |||||||||||
Origin Energy Ltd. |
Australia | 12,443 | 70,510 | |||||||||||
a |
PG&E Corp. |
United States | 9,268 | 149,493 | ||||||||||
Power Assets Holdings Ltd. |
Hong Kong | 10,000 | 48,392 | |||||||||||
|
|
|||||||||||||
912,775 | ||||||||||||||
|
|
|||||||||||||
Electrical Equipment 0.2% | ||||||||||||||
Fuji Electric Co. Ltd. |
Japan | 1,000 | 45,207 | |||||||||||
Mitsubishi Electric Corp. |
Japan | 14,600 | 180,904 | |||||||||||
|
|
|||||||||||||
226,111 | ||||||||||||||
|
|
|||||||||||||
Electronic Equipment, Instruments & Components 0.2% | ||||||||||||||
a |
Arrow Electronics, Inc. |
United States | 430 | 53,853 | ||||||||||
Jabil, Inc. |
United States | 979 | 124,225 | |||||||||||
TDK Corp. |
Japan | 2,300 | 85,419 | |||||||||||
|
|
|||||||||||||
263,497 | ||||||||||||||
|
|
|||||||||||||
Entertainment 0.8% |
||||||||||||||
a |
Netflix, Inc. |
United States | 2,189 | 826,566 | ||||||||||
|
|
|||||||||||||
Financial Services 3.7% |
||||||||||||||
a |
Berkshire Hathaway, Inc., Class B |
United States | 3,277 | 1,147,933 | ||||||||||
Equitable Holdings, Inc. |
United States | 2,575 | 73,104 | |||||||||||
a |
Fiserv, Inc. |
United States | 4,418 | 499,057 | ||||||||||
a |
FleetCor Technologies, Inc. |
United States | 504 | 128,692 | ||||||||||
Mastercard, Inc., Class A |
United States | 2,659 | 1,052,725 | |||||||||||
Visa, Inc., Class A |
United States | 4,631 | 1,065,176 | |||||||||||
|
|
|||||||||||||
3,966,687 | ||||||||||||||
|
|
|||||||||||||
Food Products 0.2% |
||||||||||||||
Archer-Daniels-Midland Co. |
United States | 1,652 | 124,594 | |||||||||||
Lamb Weston Holdings, Inc. |
United States | 1,041 | 96,251 | |||||||||||
|
|
|||||||||||||
220,845 | ||||||||||||||
|
|
|||||||||||||
Gas Utilities 0.1% |
||||||||||||||
Tokyo Gas Co. Ltd. |
Japan | 2,900 | 65,900 | |||||||||||
|
|
|||||||||||||
Ground Transportation 1.1% |
||||||||||||||
Canadian National Railway Co. |
Canada | 2,300 | 250,227 | |||||||||||
CSX Corp. |
United States | 13,313 | 409,375 | |||||||||||
JB Hunt Transport Services, Inc. |
United States | 542 | 102,178 | |||||||||||
Knight-Swift Transportation Holdings, Inc. |
United States | 1,073 | 53,811 | |||||||||||
MTR Corp. Ltd. |
Hong Kong | 11,000 | 43,540 | |||||||||||
Old Dominion Freight Line, Inc. |
United States | 704 | 288,034 | |||||||||||
TFI International, Inc. |
Canada | 600 | 77,414 | |||||||||||
|
|
|||||||||||||
1,224,579 | ||||||||||||||
|
|
|||||||||||||
Health Care Equipment & Supplies 0.4% |
||||||||||||||
a |
Align Technology, Inc. |
United States | 526 | 160,598 | ||||||||||
a |
IDEXX Laboratories, Inc. |
United States | 615 | 268,921 | ||||||||||
|
|
|||||||||||||
429,519 | ||||||||||||||
|
|
|||||||||||||
Health Care Providers & Services 1.2% |
||||||||||||||
Cardinal Health, Inc. |
United States | 1,832 | 159,054 | |||||||||||
a |
Centene Corp. |
United States | 4,052 | 279,102 | ||||||||||
HCA Healthcare, Inc. |
United States | 1,494 | 367,494 |
franklintempleton.com | Semiannual Report | 149 |
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||||
Common Stocks (continued) |
||||||||||||||
Health Care Providers & Services (continued) | ||||||||||||||
Humana, Inc. |
United States | 939 | $ | 456,842 | ||||||||||
|
|
|||||||||||||
1,262,492 | ||||||||||||||
|
|
|||||||||||||
Health Care Technology 0.2% |
||||||||||||||
a |
Veeva Systems, Inc., Class A |
United States | 817 | 166,219 | ||||||||||
|
|
|||||||||||||
Hotels, Restaurants & Leisure 1.4% |
||||||||||||||
a |
Booking Holdings, Inc. |
United States | 274 | 845,002 | ||||||||||
Domino’s Pizza, Inc. |
United States | 260 | 98,485 | |||||||||||
a |
Expedia Group, Inc. |
United States | 1,082 | 111,522 | ||||||||||
McDonald’s Corp. |
United States | 349 | 91,940 | |||||||||||
a |
MGM Resorts International |
United States | 1,346 | 49,479 | ||||||||||
a |
Royal Caribbean Cruises Ltd. |
United States | 1,721 | 158,573 | ||||||||||
Yum! Brands, Inc. |
United States | 1,557 | 194,532 | |||||||||||
|
|
|||||||||||||
1,549,533 | ||||||||||||||
|
|
|||||||||||||
Household Durables 0.8% |
||||||||||||||
DR Horton, Inc. |
United States | 2,203 | 236,756 | |||||||||||
Lennar Corp., Class A |
United States | 1,876 | 210,544 | |||||||||||
a |
NVR, Inc. |
United States | 21 | 125,229 | ||||||||||
Panasonic Holdings Corp. |
Japan | 16,700 | 188,235 | |||||||||||
PulteGroup, Inc. |
United States | 1,654 | 122,479 | |||||||||||
|
|
|||||||||||||
883,243 | ||||||||||||||
|
|
|||||||||||||
Household Products 0.2% |
||||||||||||||
Kimberly-Clark Corp. |
United States | 2,172 | 262,486 | |||||||||||
|
|
|||||||||||||
Independent Power Producers & Energy Traders 0.1% |
||||||||||||||
RWE AG |
Germany | 1,073 | 39,932 | |||||||||||
Vistra Corp. |
United States | 2,545 | 84,443 | |||||||||||
|
|
|||||||||||||
124,375 | ||||||||||||||
|
|
|||||||||||||
Industrial Conglomerates 0.2% |
||||||||||||||
CK Hutchison Holdings Ltd., Class A |
United Kingdom | 20,000 | 106,999 | |||||||||||
Jardine Matheson Holdings Ltd. |
Hong Kong | 1,200 | 55,704 | |||||||||||
|
|
|||||||||||||
162,703 | ||||||||||||||
|
|
|||||||||||||
Industrial REITs 0.2% |
||||||||||||||
Goodman Group |
Australia | 12,744 | 176,426 | |||||||||||
|
|
|||||||||||||
Insurance 2.4% |
||||||||||||||
Aflac, Inc. |
United States | 4,261 | 327,032 | |||||||||||
American International Group, Inc. |
United States | 5,425 | 328,755 | |||||||||||
a |
Arch Capital Group Ltd. |
United States | 2,305 | 183,731 | ||||||||||
Assicurazioni Generali SpA |
Italy | 7,499 | 153,750 | |||||||||||
Everest Group Ltd. |
United States | 302 | 112,244 | |||||||||||
Fairfax Financial Holdings Ltd. |
Canada | 200 | 164,019 | |||||||||||
Great-West Lifeco, Inc. |
Canada | 2,000 | 57,485 | |||||||||||
Hartford Financial Services Group, Inc. |
United States | 2,243 | 159,051 | |||||||||||
iA Financial Corp., Inc. |
Canada | 800 | 50,414 | |||||||||||
Manulife Financial Corp. |
Canada | 13,500 | 247,833 | |||||||||||
MetLife, Inc. |
United States | 2,936 | 184,704 | |||||||||||
MS&AD Insurance Group Holdings, Inc. |
Japan | 3,100 | 114,153 | |||||||||||
b |
Poste Italiane SpA |
Italy | 3,909 | 41,254 | ||||||||||
Power Corp. of Canada |
Canada | 4,300 | 109,981 | |||||||||||
Sompo Holdings, Inc. |
Japan | 2,000 | 86,219 | |||||||||||
Sun Life Financial, Inc. |
Canada | 4,300 | 210,770 | |||||||||||
Swiss Life Holding AG |
Switzerland | 68 | 42,489 | |||||||||||
|
|
|||||||||||||
2,573,884 | ||||||||||||||
|
|
150 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||||
Common Stocks (continued) |
||||||||||||||
Interactive Media & Services 2.0% | ||||||||||||||
a |
Alphabet, Inc., Class C |
United States | 5,773 | $ | 761,170 | |||||||||
b |
Auto Trader Group PLC |
United Kingdom | 6,722 | 50,671 | ||||||||||
a |
Meta Platforms, Inc., Class A |
United States | 4,354 | 1,307,115 | ||||||||||
|
|
|||||||||||||
2,118,956 | ||||||||||||||
|
|
|||||||||||||
IT Services 1.0% |
||||||||||||||
Accenture PLC, Class A |
United States | 1,078 | 331,064 | |||||||||||
a |
CGI, Inc., Class A |
Canada | 1,600 | 158,438 | ||||||||||
Cognizant Technology Solutions Corp., Class A |
United States | 3,807 | 257,886 | |||||||||||
a |
Gartner, Inc. |
United States | 467 | 160,466 | ||||||||||
NEC Corp. |
Japan | 1,800 | 99,647 | |||||||||||
a |
VeriSign, Inc. |
United States | 500 | 101,265 | ||||||||||
|
|
|||||||||||||
1,108,766 | ||||||||||||||
|
|
|||||||||||||
Life Sciences Tools & Services 1.2% |
||||||||||||||
Agilent Technologies, Inc. |
United States | 897 | 100,302 | |||||||||||
a |
Charles River Laboratories International, Inc. |
United States | 384 | 75,256 | ||||||||||
a |
IQVIA Holdings, Inc. |
United States | 1,325 | 260,694 | ||||||||||
a |
Mettler-Toledo International, Inc. |
United States | 165 | 182,832 | ||||||||||
Thermo Fisher Scientific, Inc. |
United States | 911 | 461,121 | |||||||||||
West Pharmaceutical Services, Inc. |
United States | 551 | 206,741 | |||||||||||
|
|
|||||||||||||
1,286,946 | ||||||||||||||
|
|
|||||||||||||
Machinery 0.6% |
||||||||||||||
Komatsu Ltd. |
Japan | 6,800 | 184,234 | |||||||||||
PACCAR, Inc. |
United States | 3,338 | 283,797 | |||||||||||
Snap-on, Inc. |
United States | 394 | 100,494 | |||||||||||
Techtronic Industries Co. Ltd. |
Hong Kong | 4,500 | 43,668 | |||||||||||
|
|
|||||||||||||
612,193 | ||||||||||||||
|
|
|||||||||||||
Metals & Mining 1.1% |
||||||||||||||
ArcelorMittal SA |
Luxembourg | 3,818 | 96,106 | |||||||||||
BlueScope Steel Ltd. |
Australia | 3,442 | 43,185 | |||||||||||
Fortescue Metals Group Ltd. |
Australia | 12,504 | 168,826 | |||||||||||
JFE Holdings, Inc. |
Japan | 3,600 | 52,857 | |||||||||||
Kinross Gold Corp. |
Canada | 9,000 | 41,206 | |||||||||||
Nippon Steel Corp. |
Japan | 6,400 | 150,323 | |||||||||||
Nucor Corp. |
United States | 1,904 | 297,690 | |||||||||||
Pilbara Minerals Ltd. |
Australia | 20,616 | 57,214 | |||||||||||
Reliance Steel & Aluminum Co. |
United States | 455 | 119,315 | |||||||||||
Steel Dynamics, Inc. |
United States | 1,236 | 132,524 | |||||||||||
|
|
|||||||||||||
1,159,246 | ||||||||||||||
|
|
|||||||||||||
Multi-Utilities 0.4% |
||||||||||||||
Centrica PLC |
United Kingdom | 41,652 | 78,520 | |||||||||||
E.ON SE |
Germany | 16,679 | 197,779 | |||||||||||
Engie SA |
France | 13,072 | 201,095 | |||||||||||
|
|
|||||||||||||
477,394 | ||||||||||||||
|
|
|||||||||||||
Oil, Gas & Consumable Fuels 3.4% |
||||||||||||||
ARC Resources Ltd. |
Canada | 4,600 | 73,763 | |||||||||||
BP PLC |
United Kingdom | 82,277 | 533,649 | |||||||||||
Cheniere Energy, Inc. |
United States | 1,794 | 297,732 | |||||||||||
Eni SpA |
Italy | 17,426 | 281,470 | |||||||||||
EOG Resources, Inc. |
United States | 3,826 | 484,984 | |||||||||||
HF Sinclair Corp. |
United States | 1,149 | 65,412 | |||||||||||
Imperial Oil Ltd. |
Canada | 1,600 | 99,006 | |||||||||||
Marathon Petroleum Corp. |
United States | 3,207 | 485,347 | |||||||||||
OMV AG |
Austria | 1,107 | 53,117 |
franklintempleton.com | Semiannual Report | 151 |
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||||
Common Stocks (continued) |
||||||||||||||
Oil, Gas & Consumable Fuels (continued) | ||||||||||||||
Phillips 66 |
United States | 3,438 | $ | 413,076 | ||||||||||
Repsol SA |
Spain | 9,470 | 156,110 | |||||||||||
Shell PLC |
Netherlands | 8,817 | 280,447 | |||||||||||
Valero Energy Corp. |
United States | 2,680 | 379,783 | |||||||||||
|
|
|||||||||||||
3,603,896 | ||||||||||||||
|
|
|||||||||||||
Personal Care Products 0.7% | ||||||||||||||
Beiersdorf AG |
Germany | 738 | 95,443 | |||||||||||
L’Oreal SA |
France | 1,489 | 619,871 | |||||||||||
|
|
|||||||||||||
715,314 | ||||||||||||||
|
|
|||||||||||||
Pharmaceuticals 0.2% | ||||||||||||||
Otsuka Holdings Co. Ltd. |
Japan | 2,900 | 103,251 | |||||||||||
Viatris, Inc. |
United States | 9,082 | 89,549 | |||||||||||
|
|
|||||||||||||
192,800 | ||||||||||||||
|
|
|||||||||||||
Professional Services 0.8% | ||||||||||||||
Adecco Group AG |
Switzerland | 1,197 | 49,408 | |||||||||||
Randstad NV |
Netherlands | 827 | 45,863 | |||||||||||
Recruit Holdings Co. Ltd. |
Japan | 11,100 | 342,838 | |||||||||||
Robert Half, Inc. |
United States | 818 | 59,943 | |||||||||||
SS&C Technologies Holdings, Inc. |
United States | 1,626 | 85,430 | |||||||||||
Verisk Analytics, Inc. |
United States | 957 | 226,082 | |||||||||||
|
|
|||||||||||||
809,564 | ||||||||||||||
|
|
|||||||||||||
Real Estate Management & Development 0.3% | ||||||||||||||
CK Asset Holdings Ltd. |
Hong Kong | 15,000 | 79,004 | |||||||||||
Daiwa House Industry Co. Ltd. |
Japan | 4,500 | 121,076 | |||||||||||
Sun Hung Kai Properties Ltd. |
Hong Kong | 12,000 | 128,399 | |||||||||||
|
|
|||||||||||||
328,479 | ||||||||||||||
|
|
|||||||||||||
Residential REITs 0.2% | ||||||||||||||
AvalonBay Communities, Inc. |
United States | 1,000 | 171,740 | |||||||||||
|
|
|||||||||||||
Retail REITs 0.2% | ||||||||||||||
Simon Property Group, Inc. |
United States | 1,964 | 212,171 | |||||||||||
|
|
|||||||||||||
Semiconductors & Semiconductor Equipment 1.1% | ||||||||||||||
Infineon Technologies AG |
Germany | 7,701 | 255,651 | |||||||||||
Microchip Technology, Inc. |
United States | 2,966 | 231,496 | |||||||||||
a |
ON Semiconductor Corp. |
United States | 2,546 | 236,651 | ||||||||||
a |
Renesas Electronics Corp. |
Japan | 9,900 | 151,626 | ||||||||||
Skyworks Solutions, Inc. |
United States | 1,208 | 119,097 | |||||||||||
STMicroelectronics NV |
Switzerland | 5,164 | 224,081 | |||||||||||
|
|
|||||||||||||
1,218,602 | ||||||||||||||
|
|
|||||||||||||
Software 6.0% | ||||||||||||||
a |
Adobe, Inc. |
United States | 1,836 | 936,177 | ||||||||||
a |
ANSYS, Inc. |
United States | 502 | 149,370 | ||||||||||
a |
Autodesk, Inc. |
United States | 1,606 | 332,298 | ||||||||||
a |
Cadence Design Systems, Inc. |
United States | 2,000 | 468,600 | ||||||||||
Constellation Software, Inc. |
Canada | 200 | 414,803 | |||||||||||
a |
Dropbox, Inc., Class A |
United States | 1,940 | 52,826 | ||||||||||
a |
Fair Isaac Corp. |
United States | 187 | 162,415 | ||||||||||
Intuit, Inc. |
United States | 1,749 | 893,634 | |||||||||||
a |
Manhattan Associates, Inc. |
United States | 460 | 90,924 | ||||||||||
Microsoft Corp. |
United States | 3,441 | 1,086,496 | |||||||||||
Open Text Corp. |
Canada | 2,000 | 70,518 | |||||||||||
Oracle Corp. |
United States | 7,885 | 835,179 | |||||||||||
Sage Group PLC |
United Kingdom | 7,680 | 92,707 |
152 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||||
Common Stocks (continued) |
||||||||||||||
Software (continued) | ||||||||||||||
a |
Synopsys, Inc. |
United States | 1,124 | $ | 515,882 | |||||||||
a |
VMware, Inc., Class A |
United States | 1,780 | 296,334 | ||||||||||
|
|
|||||||||||||
6,398,163 | ||||||||||||||
|
|
|||||||||||||
Specialized REITs 0.8% | ||||||||||||||
Gaming & Leisure Properties, Inc. |
United States | 1,980 | 90,189 | |||||||||||
Iron Mountain, Inc. |
United States | 2,175 | 129,304 | |||||||||||
Public Storage |
United States | 1,121 | 295,406 | |||||||||||
VICI Properties, Inc. |
United States | 7,499 | 218,221 | |||||||||||
Weyerhaeuser Co. |
United States | 5,502 | 168,691 | |||||||||||
|
|
|||||||||||||
901,811 | ||||||||||||||
|
|
|||||||||||||
Specialty Retail 1.3% |
||||||||||||||
Best Buy Co., Inc. |
United States | 1,485 | 103,163 | |||||||||||
Lowe’s Cos., Inc. |
United States | 2,533 | 526,459 | |||||||||||
TJX Cos., Inc. |
United States | 8,606 | 764,901 | |||||||||||
|
|
|||||||||||||
1,394,523 | ||||||||||||||
|
|
|||||||||||||
Technology Hardware, Storage & Peripherals 0.3% |
||||||||||||||
Dell Technologies, Inc., Class C |
United States | 1,781 | 122,711 | |||||||||||
Hewlett Packard Enterprise Co. |
United States | 9,748 | 169,323 | |||||||||||
|
|
|||||||||||||
292,034 | ||||||||||||||
|
|
|||||||||||||
Textiles, Apparel & Luxury Goods 0.1% |
||||||||||||||
a |
Deckers Outdoor Corp. |
United States | 192 | 98,705 | ||||||||||
|
|
|||||||||||||
Trading Companies & Distributors 1.4% |
||||||||||||||
ITOCHU Corp. |
Japan | 8,900 | 322,422 | |||||||||||
Marubeni Corp. |
Japan | 10,700 | 167,213 | |||||||||||
Mitsubishi Corp. |
Japan | 8,500 | 406,018 | |||||||||||
Mitsui & Co. Ltd. |
Japan | 9,700 | 352,509 | |||||||||||
Sumitomo Corp. |
Japan | 7,800 | 155,974 | |||||||||||
Toyota Tsusho Corp. |
Japan | 1,600 | 94,300 | |||||||||||
|
|
|||||||||||||
1,498,436 | ||||||||||||||
|
|
|||||||||||||
Water Utilities 0.0%† |
||||||||||||||
Essential Utilities, Inc. |
United States | 1,139 | 39,102 | |||||||||||
|
|
|||||||||||||
Total Common Stocks (Cost $52,191,851) |
57,571,657 | |||||||||||||
|
|
|||||||||||||
Warrant 0.0%† |
||||||||||||||
Software 0.0%† |
||||||||||||||
a,c |
Constellation Software, Inc. |
Canada | 100 | — | ||||||||||
|
|
|||||||||||||
Total
Investments before Short-Term Investments |
57,571,657 | |||||||||||||
|
|
franklintempleton.com | Semiannual Report | 153 |
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||||
Short-Term Investments 14.7% |
||||||||||||||
Money Market Funds 14.7% | ||||||||||||||
d |
State Street Institutional U.S. Government Money Market Fund, 5.30% |
United States | 15,682,398 | $ | 15,682,398 | |||||||||
|
|
|||||||||||||
Total Short-Term Investments (Cost $15,682,398) |
15,682,398 | |||||||||||||
|
|
|||||||||||||
Total Investments (Cost $67,874,249) 68.4% |
73,254,055 | |||||||||||||
Other Assets, less Liabilities 31.6% |
33,906,956 | |||||||||||||
|
|
|||||||||||||
Net Assets 100.0% |
$ | 107,161,011 | ||||||||||||
|
|
†Rounds to less than 0.1% of net assets.
aNon-income producing.
bSecurity 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 $91,925, representing 0.1% of net assets.
cFair valued using significant unobservable inputs. See Note 9 regarding fair value measurements.
dRate shown is one-day yield as of the end of the reporting period.
At September 30, 2023, the Fund had the following total return equity swap contracts outstanding. See Note 1(c).
Swaps
Underlying Instrument | Financing Rate |
Payment Frequency |
Counterparty |
Maturity Date |
Notional Value (000)s |
Value/Unrealized Appreciation (Depreciation) |
||||||||||||||||||
OTC Swap Contracts | ||||||||||||||||||||||||
Equity Contracts - Short | ||||||||||||||||||||||||
MSFTLSSP |
1-month USD LIBOR | At Maturity | MSCS | October 12, 2023 | 45,145 | 1,918,599 |
At September 30, 2023, the Fund had the following forward exchange contracts outstanding.
Forward Exchange Contracts
Currency | Counterpartya | Type | Quantity |
Contract Amount |
Settlement Date |
Unrealized Appreciation |
Unrealized Depreciation |
|||||||||||||||||||||
OTC Forward Exchange Contracts | ||||||||||||||||||||||||||||
Australian Dollar |
MSCO | Sell | 2,364,749 | $ | 1,526,628 | 12/20/23 | $ | — | $ | (3,707 | ) | |||||||||||||||||
Brazilian Real |
MSCO | Buy | 10,717,845 | 2,158,680 | 12/20/23 | — | (38,086 | ) | ||||||||||||||||||||
Czech Koruna |
MSCO | Sell | 12,951,325 | 565,143 | 12/20/23 | 3,345 | — | |||||||||||||||||||||
Euro |
MSCO | Sell | 1,393,710 | 1,502,782 | 12/20/23 | 21,788 | — | |||||||||||||||||||||
Great British Pound |
MSCO | Buy | 4,825,922 | 6,025,308 | 12/20/23 | — | (131,809 | ) | ||||||||||||||||||||
Hungarian Forint |
MSCO | Buy | 1,089,521,969 | 2,999,942 | 12/20/23 | — | (67,151 | ) | ||||||||||||||||||||
Israeli Shekel |
MSCO | Sell | 16,180,902 | 4,258,282 | 12/20/23 | — | (8,601 | ) | ||||||||||||||||||||
Japanese Yen |
MSCO | Buy | 16,670,113 | 114,932 | 12/20/23 | — | (1,779 | ) | ||||||||||||||||||||
Mexican Peso |
MSCO | Buy | 44,751,381 | 2,568,385 | 12/20/23 | — | (26,652 | ) | ||||||||||||||||||||
New Zealand Dollar |
MSCO | Sell | 8,081,311 | 4,786,148 | 12/20/23 | — | (69,605 | ) | ||||||||||||||||||||
Norwegian Krone |
MSCO | Sell | 49,217,206 | 4,606,229 | 12/20/23 | — | (29,071 | ) | ||||||||||||||||||||
Polish Zloty |
MSCO | Buy | 10,903,433 | 2,519,451 | 12/20/23 | — | (28,853 | ) | ||||||||||||||||||||
South African Rand |
MSCO | Buy | 43,464,123 | 2,287,108 | 12/20/23 | 4,086 | — | |||||||||||||||||||||
South Korean Won |
MSCO | Buy | 1,828,342,344 | 1,386,684 | 12/20/23 | — | (25,626 | ) | ||||||||||||||||||||
Swedish Krona |
MSCO | Sell | 17,002,478 | 1,534,008 | 12/20/23 | — | (37,119 | ) | ||||||||||||||||||||
Swiss Franc |
MSCO | Buy | 2,950,654 | 3,331,550 | 12/20/23 | — | (77,818 | ) | ||||||||||||||||||||
|
|
|||||||||||||||||||||||||||
Total Forward Exchange Contracts |
$ | 29,219 | $ | (545,877 | ) | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||
Net unrealized appreciation (depreciation) |
|
$ | (516,658 | ) | ||||||||||||||||||||||||
|
|
aMay be comprised of multiple contracts with the same counterparty, currency and settlement date.
154 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
At September 30, 2023, the Fund had the following futures contracts outstanding. See Note 1(c).
Futures Contracts | ||||||||||||||||||||||||
Description | Type |
Number of Contracts |
Notional Amount* |
Expiration Date |
Value/Unrealized Appreciation (Depreciation) |
|||||||||||||||||||
Commodity Contracts |
||||||||||||||||||||||||
Brent Crude, October |
Long | 15 | $ | 1,383,000 | 10/31/23 | $ | (5,476 | ) | ||||||||||||||||
Cocoa, December |
Long | 49 | 1,674,820 | 12/13/23 | 40,564 | |||||||||||||||||||
Cotton No. 2, December |
Long | 15 | 653,625 | 12/06/23 | (1,121 | ) | ||||||||||||||||||
Gasoline Rbob, October |
Long | 11 | 1,108,569 | 10/31/23 | (136,278 | ) | ||||||||||||||||||
Low Sulphur Gasoil, November |
Long | 21 | 2,029,125 | 11/10/23 | 8,964 | |||||||||||||||||||
Natural Gas, October |
Long | 3 | 87,870 | 10/27/23 | (3,607 | ) | ||||||||||||||||||
NY Harbor ULSD, October |
Long | 14 | 1,940,753 | 10/31/23 | (35,557 | ) | ||||||||||||||||||
Soybean Meal, December |
Long | 11 | 419,320 | 12/14/23 | (16,261 | ) | ||||||||||||||||||
Soybean Oil, December |
Long | 16 | 535,968 | 12/14/23 | (57,688 | ) | ||||||||||||||||||
Soybean, November |
Long | 9 | 573,750 | 11/14/23 | (34,646 | ) | ||||||||||||||||||
Sugar No. 11, February |
Long | 71 | 2,105,689 | 2/29/24 | (61,473 | ) | ||||||||||||||||||
WTI Crude, October |
Long | 22 | 1,997,380 | 10/20/23 | 33,148 | |||||||||||||||||||
Coffee ‘C’, December |
Short | 36 | 1,973,025 | 12/18/23 | 124,618 | |||||||||||||||||||
Copper, December |
Short | 18 | 1,681,875 | 12/27/23 | 34,744 | |||||||||||||||||||
Corn, December |
Short | 45 | 1,072,688 | 12/14/23 | 38,679 | |||||||||||||||||||
Lean Hog, December |
Short | 39 | 1,119,690 | 12/14/23 | 63,024 | |||||||||||||||||||
Live Cattle, December |
Short | 2 | 150,340 | 12/29/23 | 314 | |||||||||||||||||||
Platinum, January |
Short | 23 | 1,053,285 | 1/29/24 | (721 | ) | ||||||||||||||||||
Silver, December |
Short | 6 | 673,500 | 12/27/23 | 22,185 | |||||||||||||||||||
Wheat, December |
Short | 61 | 1,651,575 | 12/14/23 | 371,514 | |||||||||||||||||||
Index Contracts |
||||||||||||||||||||||||
Australian 10 Year Bond |
Long | 86 | 6,214,981 | 12/15/23 | (164,148 | ) | ||||||||||||||||||
Canada 10 Year Bond |
Long | 128 | 10,899,882 | 12/18/23 | (301,119 | ) | ||||||||||||||||||
DAX Index |
Long | 6 | 2,465,723 | 12/15/23 | (41,858 | ) | ||||||||||||||||||
EURO STOXX 50 Index |
Long | 47 | 2,091,963 | 12/15/23 | (26,679 | ) | ||||||||||||||||||
Euro-BTP |
Long | 31 | 3,601,476 | 12/07/23 | (144,447 | ) | ||||||||||||||||||
FTSE/MIB Index |
Long | 41 | 6,138,649 | 12/15/23 | (34,175 | ) | ||||||||||||||||||
IFSC Nifty 50 |
Long | 45 | 1,773,945 | 10/26/23 | (11,613 | ) | ||||||||||||||||||
Mex Bolsa Index |
Long | 83 | 2,458,741 | 12/15/23 | (39,239 | ) | ||||||||||||||||||
OMXS30 Index |
Long | 190 | 3,777,544 | 10/20/23 | (15,550 | ) | ||||||||||||||||||
S&P/TSX 60 Index |
Long | 8 | 1,392,071 | 12/14/23 | (47,304 | ) | ||||||||||||||||||
U.S. Treasury 10 Year Note |
Long | 33 | 3,566,062 | 12/19/23 | (66,010 | ) | ||||||||||||||||||
CAC 40 10 Euro |
Short | 16 | 1,211,464 | 10/20/23 | 15,735 | |||||||||||||||||||
Euro-Bund |
Short | 88 | 11,985,389 | 12/07/23 | 261,713 | |||||||||||||||||||
Euro-OAT |
Short | 62 | 8,087,156 | 12/07/23 | 150,425 | |||||||||||||||||||
FTSE 100 Index |
Short | 67 | 6,273,101 | 12/15/23 | (59,034 | ) | ||||||||||||||||||
FTSE/JSE Africa Top40 Index |
Short | 82 | 2,935,815 | 12/21/23 | 89,398 | |||||||||||||||||||
Long Gilt |
Short | 67 | 7,700,106 | 12/27/23 | 35,082 | |||||||||||||||||||
Nikkei 225 Mini |
Short | 13 | 2,775,540 | 12/07/23 | 87,547 | |||||||||||||||||||
SPI 200 Index |
Short | 54 | 6,173,960 | 12/21/23 | 117,212 | |||||||||||||||||||
|
|
|||||||||||||||||||||||
Total Futures Contracts |
$ | 190,862 | ||||||||||||||||||||||
|
|
*As of period end.
The following table represents the individual short positions and related values of the equity securities underlying the total return swap with Morgan Stanley Capital Services LLC as of September 30, 2023, expiration date 10/12/23:
Country | Shares | Value | ||||||||||
Reference Entity – Short 100.00% |
||||||||||||
Automobiles & Components 2.66% |
||||||||||||
Aptiv PLC |
United States | (2,447 | ) | $ | (241,250 | ) | ||||||
Lear Corp. |
United States | (506 | ) | (67,905 | ) |
franklintempleton.com | Semiannual Report | 155 |
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||
Reference Entity – Short (continued) |
||||||||||||
Automobiles & Components (continued) |
||||||||||||
Porsche Automobil Holding SE |
Germany | (1,305 | ) | $ | (64,455 | ) | ||||||
Renault SA |
France | (1,626 | ) | (66,924 | ) | |||||||
Rivian Automotive, Inc. |
United States | (5,527 | ) | (134,196 | ) | |||||||
Tesla, Inc. |
United States | (2,298 | ) | (575,005 | ) | |||||||
|
|
|||||||||||
(1,149,735 | ) | |||||||||||
|
|
|||||||||||
Banks 12.18% |
||||||||||||
Bank of America Corp. |
United States | (18,767 | ) | (513,840 | ) | |||||||
Bank of Ireland Group PLC |
Ireland | (8,958 | ) | (88,109 | ) | |||||||
Bank of Montreal |
Canada | (6,100 | ) | (516,966 | ) | |||||||
Citizens Financial Group, Inc. |
United States | (4,120 | ) | (110,416 | ) | |||||||
Commonwealth Bank of Australia |
Australia | (9,609 | ) | (619,979 | ) | |||||||
Fifth Third Bancorp |
United States | (5,828 | ) | (147,623 | ) | |||||||
FinecoBank Banca Fineco SpA |
Italy | (5,191 | ) | (63,286 | ) | |||||||
First Horizon Corp. |
United States | (4,579 | ) | (50,461 | ) | |||||||
Hang Seng Bank Ltd. |
Hong Kong | (6,700 | ) | (83,367 | ) | |||||||
Huntington Bancshares, Inc. |
United States | (12,542 | ) | (130,437 | ) | |||||||
KeyCorp |
United States | (8,064 | ) | (86,769 | ) | |||||||
M&T Bank Corp. |
United States | (1,375 | ) | (173,869 | ) | |||||||
National Australia Bank Ltd. |
Australia | (26,505 | ) | (497,281 | ) | |||||||
Nordea Bank |
Finland | (27,685 | ) | (306,099 | ) | |||||||
PNC Financial Services Group, Inc. |
United States | (3,396 | ) | (416,927 | ) | |||||||
Regions Financial Corp. |
United States | (8,039 | ) | (138,271 | ) | |||||||
Resona Holdings, Inc. |
Japan | (17,200 | ) | (95,472 | ) | |||||||
Skandinaviska Enskilda Banken AB, A |
Sweden | (13,648 | ) | (164,127 | ) | |||||||
Svenska Handelsbanken AB, A |
Sweden | (12,506 | ) | (112,303 | ) | |||||||
Swedbank AB |
Sweden | (7,265 | ) | (134,611 | ) | |||||||
Truist Financial Corp. |
United States | (11,318 | ) | (323,808 | ) | |||||||
US Bancorp |
United States | (13,139 | ) | (434,375 | ) | |||||||
Webster Financial Corp. |
United States | (1,494 | ) | (60,223 | ) | |||||||
|
|
|||||||||||
(5,268,619 | ) | |||||||||||
|
|
|||||||||||
Capital Goods 10.69% |
||||||||||||
3M Co. |
United States | (2,386 | ) | (223,377 | ) | |||||||
AECOM |
United States | (1,128 | ) | (93,669 | ) | |||||||
Alfa Laval AB |
Sweden | (2,544 | ) | (87,999 | ) | |||||||
Alstom SA |
France | (2,414 | ) | (57,762 | ) | |||||||
Ashtead Group PLC |
United Kingdom | (1,931 | ) | (117,891 | ) | |||||||
Assa Abloy AB, B |
Sweden | (8,619 | ) | (188,974 | ) | |||||||
Atlas Copco AB |
Sweden | (13,281 | ) | (156,719 | ) | |||||||
Atlas Copco AB, A |
Sweden | (22,705 | ) | (307,737 | ) | |||||||
Carlisle Cos., Inc. |
United States | (395 | ) | (102,408 | ) | |||||||
CNH Industrial NV |
United Kingdom | (8,783 | ) | (107,310 | ) | |||||||
Epiroc AB, A |
Sweden | (5,640 | ) | (107,980 | ) | |||||||
Epiroc AB, B |
Sweden | (3,348 | ) | (53,991 | ) | |||||||
FANUC Corp. |
Japan | (8,200 | ) | (213,923 | ) | |||||||
Ferrovial SE |
United States | (4,354 | ) | (133,546 | ) | |||||||
Generac Holdings, Inc. |
United States | (530 | ) | (57,749 | ) | |||||||
Honeywell International, Inc. |
United States | (3,379 | ) | (624,236 | ) | |||||||
IDEX Corp. |
United States | (651 | ) | (135,421 | ) | |||||||
IMCD NV |
Netherlands | (496 | ) | (63,017 | ) | |||||||
L3Harris Technologies, Inc. |
United States | (1,618 | ) | (281,726 | ) | |||||||
Nibe Industrier AB |
Sweden | (13,488 | ) | (89,140 | ) | |||||||
NIDEC Corp. |
Japan | (3,600 | ) | (167,208 | ) | |||||||
Northrop Grumman Corp. |
United States | (1,233 | ) | (542,754 | ) | |||||||
Sandvik AB |
Sweden | (9,074 | ) | (168,380 | ) | |||||||
Siemens Energy AG |
Germany | (4,401 | ) | (57,685 | ) | |||||||
Spirax-Sarco Engineering PLC |
United Kingdom | (641 | ) | (74,529 | ) |
156 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||
Reference Entity – Short (continued) |
||||||||||||
Capital Goods (continued) | ||||||||||||
Stanley Black & Decker, Inc. |
United States | (1,316 | ) | $ | (109,991 | ) | ||||||
Toshiba Corp. |
Japan | (3,600 | ) | (111,046 | ) | |||||||
Vestas Wind Systems A/S |
Denmark | (8,727 | ) | (187,793 | ) | |||||||
|
|
|||||||||||
(4,623,961 | ) | |||||||||||
|
|
|||||||||||
Commercial & Professional Services 1.54% |
||||||||||||
Computershare Ltd. |
Australia | (4,793 | ) | (80,305 | ) | |||||||
Equifax, Inc. |
United States | (1,045 | ) | (191,423 | ) | |||||||
Leidos Holdings, Inc. |
United States | (1,117 | ) | (102,943 | ) | |||||||
Teleperformance |
France | (509 | ) | (64,345 | ) | |||||||
Waste Connections, Inc. |
Canada | (1,700 | ) | (228,310 | ) | |||||||
|
|
|||||||||||
(667,326 | ) | |||||||||||
|
|
|||||||||||
Consumer Discretionary Distribution & Retail 1.55% |
||||||||||||
Burlington Stores Inc. |
United States | (563 | ) | (76,174 | ) | |||||||
CarMax, Inc. |
United States | (1,360 | ) | (96,193 | ) | |||||||
Etsy, Inc. |
United States | (1,097 | ) | (70,844 | ) | |||||||
Prosus NV |
China | (11,214 | ) | (331,489 | ) | |||||||
Rakuten Group, Inc. |
Japan | (12,600 | ) | (51,768 | ) | |||||||
Zalando SE |
Germany | (1,900 | ) | (42,506 | ) | |||||||
|
|
|||||||||||
(668,974 | ) | |||||||||||
|
|
|||||||||||
Consumer Durables & Apparel 1.25% |
||||||||||||
Hasbro, Inc. |
United States | (1,134 | ) | (75,003 | ) | |||||||
Kering SA |
France | (641 | ) | (293,113 | ) | |||||||
Puma SE |
Germany | (895 | ) | (55,718 | ) | |||||||
VF Corp. |
United States | (3,020 | ) | (53,363 | ) | |||||||
Whirlpool Corp. |
United States | (468 | ) | (62,571 | ) | |||||||
|
|
|||||||||||
(539,768 | ) | |||||||||||
|
|
|||||||||||
Consumer Services 1.17% |
||||||||||||
Aramark |
United States | (2,146 | ) | (74,466 | ) | |||||||
Caesars Entertainment, Inc. |
United States | (1,900 | ) | (88,065 | ) | |||||||
Delivery Hero SE |
South Korea | (1,507 | ) | (43,351 | ) | |||||||
Entain PLC |
United Kingdom | (5,549 | ) | (63,177 | ) | |||||||
Evolution AB |
Sweden | (1,595 | ) | (162,433 | ) | |||||||
Vail Resorts, Inc. |
United States | (345 | ) | (76,552 | ) | |||||||
|
|
|||||||||||
(508,044 | ) | |||||||||||
|
|
|||||||||||
Consumer Staples Distribution & Retail 1.90% |
||||||||||||
Dollar General Corp. |
United States | (1,892 | ) | (200,174 | ) | |||||||
Ocado Group PLC |
United Kingdom | (5,097 | ) | (37,352 | ) | |||||||
Target Corp. |
United States | (3,998 | ) | (442,059 | ) | |||||||
Walgreens Boots Alliance, Inc. |
United States | (6,468 | ) | (143,848 | ) | |||||||
|
|
|||||||||||
(823,433 | ) | |||||||||||
|
|
|||||||||||
Energy 7.12% |
||||||||||||
Aker BP ASA |
Norway | (2,711 | ) | (75,413 | ) | |||||||
Baker Hughes Co., A |
United States | (8,748 | ) | (308,979 | ) | |||||||
Enbridge, Inc. |
Canada | (17,300 | ) | (576,453 | ) | |||||||
Equinor ASA |
Norway | (7,736 | ) | (255,289 | ) | |||||||
Halliburton Co. |
United States | (7,743 | ) | (313,592 | ) | |||||||
Kinder Morgan, Inc. |
United States | (17,467 | ) | (289,603 | ) | |||||||
Neste Oyj |
Finland | (3,404 | ) | (115,796 | ) | |||||||
ONEOK, Inc. |
United States | (3,858 | ) | (244,713 | ) | |||||||
Pembina Pipeline Corp. |
Canada | (4,800 | ) | (144,994 | ) | |||||||
TC Energy Corp. |
Canada | (8,700 | ) | (300,575 | ) | |||||||
Texas Pacific Land Corp. |
United States | (55 | ) | (100,296 | ) |
franklintempleton.com | Semiannual Report | 157 |
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||
Reference Entity – Short (continued) |
||||||||||||
Energy (continued) |
||||||||||||
The Williams Cos., Inc. |
United States | (10,506 | ) | $ | (353,947 | ) | ||||||
|
|
|||||||||||
(3,079,650 | ) | |||||||||||
|
|
|||||||||||
Equity Real Estate Investment Trusts (REITs) 6.27% |
||||||||||||
Alexandria Real Estate Equities, Inc. |
United States | (1,440 | ) | (144,144 | ) | |||||||
Boston Properties, Inc. |
United States | (1,287 | ) | (76,551 | ) | |||||||
Camden Property Trust |
United States | (896 | ) | (84,744 | ) | |||||||
Digital Realty Trust, Inc. |
United States | (2,481 | ) | (300,251 | ) | |||||||
Essex Property Trust, Inc. |
United States | (554 | ) | (117,498 | ) | |||||||
Extra Space Storage Inc. |
United States | (1,808 | ) | (219,817 | ) | |||||||
Healthcare Realty Trust, Inc., A |
United States | (3,319 | ) | (50,681 | ) | |||||||
Healthpeak Properties, Inc. |
United States | (4,761 | ) | (87,412 | ) | |||||||
Invitation Homes, Inc. |
United States | (5,228 | ) | (165,675 | ) | |||||||
Kimco Realty Corp. |
United States | (5,329 | ) | (93,737 | ) | |||||||
Realty Income Corp. |
United States | (5,799 | ) | (289,602 | ) | |||||||
SBA Communications Corp., A |
United States | (938 | ) | (187,759 | ) | |||||||
Segro PLC |
United Kingdom | (9,966 | ) | (87,508 | ) | |||||||
Sun Communities, Inc. |
United States | (1,051 | ) | (124,375 | ) | |||||||
UDR, Inc. |
United States | (2,695 | ) | (96,131 | ) | |||||||
Ventas, Inc. |
United States | (3,386 | ) | (142,652 | ) | |||||||
Welltower, Inc. |
United States | (4,212 | ) | (345,047 | ) | |||||||
WP Carey, Inc. |
United States | (1,852 | ) | (100,156 | ) | |||||||
|
|
|||||||||||
(2,713,740 | ) | |||||||||||
|
|
|||||||||||
Financial Services 6.54% |
||||||||||||
Adyen NV |
Netherlands | (190 | ) | (141,960 | ) | |||||||
Ally Financial, Inc. |
United States | (2,294 | ) | (61,204 | ) | |||||||
Annaly Capital Management, Inc. |
United States | (4,184 | ) | (78,701 | ) | |||||||
Apollo Global Management, Inc. |
United States | (3,383 | ) | (303,658 | ) | |||||||
ASX Ltd. |
Australia | (1,641 | ) | (60,496 | ) | |||||||
Charles Schwab Corp. |
United States | (10,517 | ) | (577,383 | ) | |||||||
Coinebase Global, Inc., A |
United States | (1,470 | ) | (110,368 | ) | |||||||
EQT AB |
Sweden | (3,051 | ) | (60,912 | ) | |||||||
Euronext NV |
Netherlands | (741 | ) | (51,779 | ) | |||||||
Fidelity National Information Services, Inc. |
United States | (5,072 | ) | (280,329 | ) | |||||||
Groupe Bruxelles Lambert SA |
Belgium | (808 | ) | (60,362 | ) | |||||||
Jack Henry & Associates, Inc. |
United States | (625 | ) | (94,463 | ) | |||||||
S&P Global, Inc. |
United States | (1,615 | ) | (590,137 | ) | |||||||
Square, Inc., A |
United States | (4,601 | ) | (203,640 | ) | |||||||
St James’s Place PLC |
United Kingdom | (4,634 | ) | (47,070 | ) | |||||||
Toast, Inc. |
United States | (2,596 | ) | (48,623 | ) | |||||||
Worldline SA |
France | (2,071 | ) | (58,435 | ) | |||||||
|
|
|||||||||||
(2,829,520 | ) | |||||||||||
|
|
|||||||||||
Food, Beverage & Tobacco 2.17% |
||||||||||||
Barry Callebaut AG |
Switzerland | (30 | ) | (47,814 | ) | |||||||
Darling Ingredients, Inc. |
United States | (1,276 | ) | (66,607 | ) | |||||||
Heineken NV |
Netherlands | (1,483 | ) | (131,043 | ) | |||||||
Hormel Foods Corp. |
United States | (2,565 | ) | (97,547 | ) | |||||||
Kerry Group PLC |
Ireland | (1,354 | ) | (113,508 | ) | |||||||
Keurig Dr Pepper, Inc. |
United States | (7,799 | ) | (246,215 | ) | |||||||
Mowi ASA |
Norway | (3,751 | ) | (66,818 | ) | |||||||
Orkla ASA |
Norway | (6,386 | ) | (47,999 | ) | |||||||
Tyson Foods, Inc., A |
United States | (2,429 | ) | (122,640 | ) | |||||||
|
|
|||||||||||
(940,191 | ) | |||||||||||
|
|
158 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||
Reference Entity – Short (continued) | ||||||||||||
Health Care Equipment & Services 5.31% |
||||||||||||
Alcon, Inc. |
Switzerland | (813 | ) | $ | (63,046 | ) | ||||||
Baxter International, Inc. |
United States | (4,340 | ) | (163,792 | ) | |||||||
Coloplast A/S |
Denmark | (1,196 | ) | (126,949 | ) | |||||||
Fisher & Paykel Healthcare Corp. Ltd. |
New Zealand | (5,029 | ) | (65,208 | ) | |||||||
Fresenius SE & Co. KGaA |
Germany | (3,591 | ) | (112,006 | ) | |||||||
Henry Schein, Inc. |
United States | (1,118 | ) | (83,011 | ) | |||||||
Insulet Corp. |
United States | (586 | ) | (93,461 | ) | |||||||
Laboratory Corp of America Holdings |
United States | (765 | ) | (153,803 | ) | |||||||
Medtronic PLC |
United States | (7,700 | ) | (603,372 | ) | |||||||
Quest Diagnostics, Inc. |
United States | (964 | ) | (117,473 | ) | |||||||
Ramsay Health Care Ltd. |
Australia | (1,557 | ) | (52,124 | ) | |||||||
UnitedHealth Group, Inc. |
United States | (1,312 | ) | (661,497 | ) | |||||||
|
|
|||||||||||
(2,295,742 | ) | |||||||||||
|
|
|||||||||||
Household & Personal Products 0.26% |
||||||||||||
Essity AB, B |
Sweden | (5,228 | ) | (113,518 | ) | |||||||
|
|
|||||||||||
Insurance 4.01% |
||||||||||||
Aegon NV |
Netherlands | (14,238 | ) | (69,071 | ) | |||||||
Ageas SA/NV |
Belgium | (1,337 | ) | (55,249 | ) | |||||||
Assurant, Inc. |
United States | (452 | ) | (64,898 | ) | |||||||
Cincinnati Financial Corp. |
United States | (1,338 | ) | (136,864 | ) | |||||||
Markel Corp. |
United States | (107 | ) | (157,557 | ) | |||||||
NN Group NV |
Netherlands | (2,143 | ) | (69,066 | ) | |||||||
Progressive Corp. |
United States | (4,584 | ) | (638,551 | ) | |||||||
Sampo Oyj |
Finland | (3,940 | ) | (170,947 | ) | |||||||
T&D Holdings, Inc. |
Japan | (4,200 | ) | (69,463 | ) | |||||||
The Allstate Corp. |
United States | (2,225 | ) | (247,887 | ) | |||||||
Tryg A/S |
Denmark | (2,971 | ) | (54,563 | ) | |||||||
|
|
|||||||||||
(1,734,116 | ) | |||||||||||
|
|
|||||||||||
Materials 6.07% |
||||||||||||
Anglo American PLC |
United Kingdom | (10,679 | ) | (295,291 | ) | |||||||
Antofagasta PLC |
United Kingdom | (3,297 | ) | (57,505 | ) | |||||||
Ball Corp. |
United States | (2,706 | ) | (134,705 | ) | |||||||
Boliden AB |
Sweden | (2,291 | ) | (66,310 | ) | |||||||
Chr. Hansen Holding A/S |
Denmark | (906 | ) | (55,622 | ) | |||||||
Covestro AG |
Germany | (1,597 | ) | (86,334 | ) | |||||||
Croda International PLC |
United Kingdom | (1,224 | ) | (73,428 | ) | |||||||
Freeport-McMoRan, Inc. |
United States | (8,057 | ) | (300,446 | ) | |||||||
Givaudan SA |
Switzerland | (79 | ) | (258,555 | ) | |||||||
IGO Ltd. |
Australia | (5,945 | ) | (48,575 | ) | |||||||
International Flavors & Fragrances, Inc. |
United States | (2,203 | ) | (150,179 | ) | |||||||
Mineral Resources Ltd. |
Australia | (1,507 | ) | (65,778 | ) | |||||||
Newmont Corp. |
United States | (6,796 | ) | (251,112 | ) | |||||||
Norsk Hydro ASA |
Norway | (11,042 | ) | (69,733 | ) | |||||||
Novozymes A/S |
Denmark | (1,747 | ) | (70,617 | ) | |||||||
Pan American Silver Corp. |
Canada | (3,100 | ) | (45,078 | ) | |||||||
Stora Enso Oyj |
Finland | (4,870 | ) | (61,306 | ) | |||||||
Sumitomo Metal Mining Co. Ltd. |
Japan | (2,100 | ) | (61,906 | ) | |||||||
Svenska Cellulosa AB |
Sweden | (5,180 | ) | (71,495 | ) | |||||||
Symrise AG |
Germany | (1,154 | ) | (110,353 | ) | |||||||
UPM-Kymmene OYJ |
Finland | (4,529 | ) | (155,696 | ) | |||||||
Westrock Co. |
United States | (2,233 | ) | (79,941 | ) | |||||||
Yara International ASA |
Norway | (1,414 | ) | (53,858 | ) | |||||||
|
|
|||||||||||
(2,623,823 | ) | |||||||||||
|
|
franklintempleton.com | Semiannual Report | 159 |
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||
Reference Entity – Short (continued) | ||||||||||||
Media & Entertainment 4.72% |
||||||||||||
Charter Communications, Inc., A |
United States | (814 | ) | $ | (358,013 | ) | ||||||
Liberty Broadband Corp. |
United States | (1,004 | ) | (91,685 | ) | |||||||
Match Group, Inc. |
United States | (2,421 | ) | (94,843 | ) | |||||||
News Corp., A |
United States | (3,066 | ) | (61,504 | ) | |||||||
Paramount Global, B |
United States | (4,232 | ) | (54,593 | ) | |||||||
ROBLOX Corp., A |
United States | (3,670 | ) | (106,283 | ) | |||||||
Sea Ltd. ADR |
Singapore | (3,100 | ) | (136,245 | ) | |||||||
Snap, Inc. |
United States | (8,682 | ) | (77,357 | ) | |||||||
The Walt Disney Co. |
United States | (7,625 | ) | (618,006 | ) | |||||||
Universal Music Group NV |
Netherlands | (6,920 | ) | (181,186 | ) | |||||||
Vivendi SA |
France | (5,782 | ) | (50,786 | ) | |||||||
Warner Bros Discovery Inc. |
United States | (19,439 | ) | (211,107 | ) | |||||||
|
|
|||||||||||
(2,041,608 | ) | |||||||||||
|
|
|||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 7.18% |
||||||||||||
Alnylam Pharmaceuticals, Inc. |
United States | (1,057 | ) | (187,195 | ) | |||||||
AstraZeneca PLC |
United Kingdom | (4,720 | ) | (639,586 | ) | |||||||
Bayer AG |
Germany | (1,304 | ) | (62,749 | ) | |||||||
BioMarin Pharmaceutical, Inc. |
United States | (1,600 | ) | (141,568 | ) | |||||||
Catalent, Inc. |
United States | (1,531 | ) | (69,706 | ) | |||||||
Daiichi Sankyo Co. Ltd. |
Japan | (16,000 | ) | (440,248 | ) | |||||||
Eurofins Scientific SE |
Luxembourg | (1,159 | ) | (65,649 | ) | |||||||
Illumina, Inc. |
United States | (1,389 | ) | (190,682 | ) | |||||||
Johnson & Johnson |
United States | (3,867 | ) | (602,285 | ) | |||||||
Merck KGaA |
Germany | (1,108 | ) | (185,525 | ) | |||||||
Moderna Inc. |
United States | (2,832 | ) | (292,517 | ) | |||||||
Roche Holding AG |
Switzerland | (275 | ) | (80,985 | ) | |||||||
Sartorius Stedim Biotech |
France | (240 | ) | (57,427 | ) | |||||||
UCB SA |
Belgium | (1,086 | ) | (89,156 | ) | |||||||
|
|
|||||||||||
(3,105,278 | ) | |||||||||||
|
|
|||||||||||
Real Estate Management & Development 0.59% |
||||||||||||
CapitaLand Investment Ltd. |
Singapore | (22,200 | ) | (50,421 | ) | |||||||
Swiss Prime Site AG |
Switzerland | (653 | ) | (59,925 | ) | |||||||
Vonovia SE |
Germany | (6,045 | ) | (145,987 | ) | |||||||
|
|
|||||||||||
(256,333 | ) | |||||||||||
|
|
|||||||||||
Semiconductors & Semiconductor Equipment 4.61% |
||||||||||||
ASML Holding NV |
Netherlands | (1,016 | ) | (601,418 | ) | |||||||
Enphase Energy, Inc. |
United States | (1,158 | ) | (139,134 | ) | |||||||
Entegris, Inc. |
United States | (1,293 | ) | (121,426 | ) | |||||||
First Solar, Inc. |
United States | (890 | ) | (143,815 | ) | |||||||
Lasertec Corp. |
Japan | (700 | ) | (109,157 | ) | |||||||
Micron Technology, Inc. |
United States | (8,984 | ) | (611,181 | ) | |||||||
Monolithic Power Systems, Inc. |
United States | (284 | ) | (131,208 | ) | |||||||
Qorvo, Inc. |
United States | (799 | ) | (76,281 | ) | |||||||
SolarEdge Technologies, Inc. |
United States | (485 | ) | (62,812 | ) | |||||||
|
|
|||||||||||
(1,996,432 | ) | |||||||||||
|
|
|||||||||||
Software & Services 4.05% |
||||||||||||
BILL Holdings, Inc. |
United States | (818 | ) | (88,810 | ) | |||||||
Cloudflare, Inc., A |
United States | (2,262 | ) | (142,597 | ) | |||||||
Dassault Systemes SE |
France | (5,770 | ) | (215,617 | ) | |||||||
EPAM Systems, Inc. |
United States | (495 | ) | (126,567 | ) | |||||||
NortonLifeLock, Inc. |
United States | (5,129 | ) | (90,681 | ) | |||||||
Okta Inc., A |
United States | (1,292 | ) | (105,311 | ) | |||||||
Shopify Inc., A |
Canada | (1,000 | ) | (54,837 | ) | |||||||
Snowflake, Inc. |
United States | (2,183 | ) | (333,497 | ) |
160 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
CONSOLIDATED SCHEDULE OF INVESTMENTS
Franklin Systematic Style Premia ETF (continued)
Country | Shares | Value | ||||||||||
Reference Entity – Short (continued) | ||||||||||||
Software & Services (continued) | ||||||||||||
Splunk, Inc. |
United States | (1,353 | ) | $ | (197,876 | ) | ||||||
Twilio, Inc., A |
United States | (1,449 | ) | (84,810 | ) | |||||||
Unity Software, Inc. |
United States | (1,934 | ) | (60,708 | ) | |||||||
Zoom Video Communications, Inc., A |
United States | (1,944 | ) | (135,963 | ) | |||||||
Zscaler, Inc. |
United States | (732 | ) | (113,892 | ) | |||||||
|
|
|||||||||||
(1,751,166 | ) | |||||||||||
|
|
|||||||||||
Technology Hardware & Equipment 3.71% |
||||||||||||
Cognex Corp. |
United States | (1,494 | ) | (63,405 | ) | |||||||
Halma PLC |
United Kingdom | (3,293 | ) | (77,914 | ) | |||||||
Hexagon AB |
Sweden | (17,804 | ) | (153,029 | ) | |||||||
Keyence Corp. |
Japan | (1,700 | ) | (632,267 | ) | |||||||
Logitech International SA |
Switzerland | (1,413 | ) | (97,742 | ) | |||||||
Seagate Technology Holdings PLC |
United States | (1,700 | ) | (112,115 | ) | |||||||
Telefonaktiebolaget LM Ericsson |
Sweden | (25,058 | ) | (123,004 | ) | |||||||
Trimble, Inc. |
United States | (2,136 | ) | (115,045 | ) | |||||||
Western Digital Corp. |
United States | (2,784 | ) | (127,034 | ) | |||||||
Zebra Technologies Corp. |
United States | (443 | ) | (104,783 | ) | |||||||
|
|
|||||||||||
(1,606,338 | ) | |||||||||||
|
|
|||||||||||
Telecommunication Services 1.39% |
||||||||||||
Cellnex Telecom SA |
Spain | (4,794 | ) | (167,344 | ) | |||||||
Elisa Oyj |
Finland | (1,229 | ) | (57,110 | ) | |||||||
Rogers Communications, Inc. |
Canada | (3,000 | ) | (115,718 | ) | |||||||
Singapore Telecommunications Ltd. |
Singapore | (70,200 | ) | (124,466 | ) | |||||||
Telenor ASA |
Norway | (6,066 | ) | (69,263 | ) | |||||||
TELUS Corp. |
Canada | (4,000 | ) | (65,621 | ) | |||||||
|
|
|||||||||||
(599,522 | ) | |||||||||||
|
|
|||||||||||
Transportation 0.24% |
||||||||||||
Getlink SE |
France | (3,074 | ) | (49,177 | ) | |||||||
Grab Holdings Ltd. A |
Singapore | (16,012 | ) | (56,682 | ) | |||||||
|
|
|||||||||||
(105,859 | ) | |||||||||||
|
|
|||||||||||
Utilities 2.82% |
||||||||||||
Alliant Energy Corp. |
United States | (2,157 | ) | (104,506 | ) | |||||||
APA Group |
Australia | (10,717 | ) | (57,409 | ) | |||||||
Dominion Energy, Inc. |
United States | (7,155 | ) | (319,614 | ) | |||||||
DTE Energy Co. |
United States | (1,764 | ) | (175,130 | ) | |||||||
EDP - Energias de Portugal SA |
Portugal | (27,254 | ) | (113,574 | ) | |||||||
Fortum OYJ |
Finland | (3,825 | ) | (44,527 | ) | |||||||
NRG Energy, Inc. |
United States | (1,900 | ) | (73,188 | ) | |||||||
Orsted AS |
Denmark | (1,634 | ) | (89,342 | ) | |||||||
Public Service Enterprise Group, Inc. |
United States | (4,285 | ) | (243,859 | ) | |||||||
|
|
|||||||||||
(1,221,149 | ) | |||||||||||
|
|
|||||||||||
Total Value of Reference Entity — Morgan Stanley Capital Services LLC |
$ | (43,263,845 | ) | |||||||||
|
|
See Note 8 regarding other derivative information.
See Abbreviations on page 220.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 161 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Core Bond ETF
Six Months Ended (unaudited) |
Year Ended March 31, | |||||||||||||||||||
2023 | 2022 | 2021 | 2020a | |||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||
Net asset value, beginning of period |
$21.74 | $23.43 | $25.14 | $25.44 | $25.00 | |||||||||||||||
Income from investment operationsb: |
||||||||||||||||||||
Net investment incomec |
0.34 | 0.55 | 0.45 | 0.51 | 0.29 | |||||||||||||||
Net realized and unrealized gains (losses) |
(1.20 | ) | (1.70 | ) | (1.61 | ) | 0.03 | 0.49 | ||||||||||||
Total from investment operations |
(0.86 | ) | (1.15 | ) | (1.16 | ) | 0.54 | 0.78 | ||||||||||||
Less distributions from: |
||||||||||||||||||||
Net investment income |
(0.36 | ) | (0.54 | ) | (0.50 | ) | (0.65 | ) | (0.31 | ) | ||||||||||
Net realized gains |
— | — | (0.05 | ) | (0.19 | ) | (0.03 | ) | ||||||||||||
Total distributions |
(0.36 | ) | (0.54 | ) | (0.55 | ) | (0.84 | ) | (0.34 | ) | ||||||||||
Net asset value, end of period |
$20.52 | $21.74 | $23.43 | $25.14 | $25.44 | |||||||||||||||
Total returnd |
(4.02)% | (4.88)% | (4.72)% | 2.07% | 3.12% | |||||||||||||||
Ratios to average net assetse | ||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.15% | 0.15% | 0.16% | 0.17% | 0.19% | |||||||||||||||
Expenses net of waiver and payments by affiliates |
0.15% | 0.14% | 0.15% | 0.15% | 0.15% | |||||||||||||||
Net investment income |
3.23% | 2.51% | 1.80% | 1.95% | 2.14% | |||||||||||||||
Supplemental data | ||||||||||||||||||||
Net assets, end of period (000’s) |
$1,564,895 | $1,511,691 | $1,509,961 | $1,460,597 | $853,532 | |||||||||||||||
Portfolio turnover ratef |
10.55% | g | 68.70% | g | 69.88% | g | 90.99% | g | 126.68% | g |
aFor the period September 17, 2019 (commencement of operations) to March 31, 2020.
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: | 10.55% | 68.70% | 69.88% | 90.99% | 126.68% |
162 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2023 (unaudited)
Franklin U.S. Core Bond ETF
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes 28.6% | ||||||||||||||
Aerospace & Defense 0.6% | ||||||||||||||
Boeing Co., 3.50%, 3/01/39 |
United States | 5,000,000 | $ | 3,572,985 | ||||||||||
Northrop Grumman Corp., 4.03%, 10/15/47 |
United States | 7,400,000 | 5,672,568 | |||||||||||
|
|
|||||||||||||
9,245,553 | ||||||||||||||
|
|
|||||||||||||
Agriculture 0.8% | ||||||||||||||
Altria Group, Inc., 3.40%, 5/06/30 |
United States | 5,000,000 | 4,277,854 | |||||||||||
a |
Cargill, Inc., 2.125%, 11/10/31 |
United States | 2,000,000 | 1,558,864 | ||||||||||
a |
Imperial Brands Finance PLC, 3.50%, 7/26/26 |
United Kingdom | 4,000,000 | 3,745,183 | ||||||||||
Philip Morris International, Inc., 5.375%, 2/15/33 |
United States | 3,600,000 | 3,414,695 | |||||||||||
|
|
|||||||||||||
12,996,596 | ||||||||||||||
|
|
|||||||||||||
Airlines 0.7% | ||||||||||||||
American Airlines 2016-3 Class A Pass Through Trust, Series 2016-3, Class A, 3.25%, 4/15/30 |
United States | 4,110,920 | 3,525,015 | |||||||||||
a |
Delta Air Lines, Inc./SkyMiles IP Ltd., first lien, 4.50%, 10/20/25 |
United States | 5,774,687 | 5,611,174 | ||||||||||
United Airlines Pass-Through Trust, |
||||||||||||||
Series 2019-2, Class A, 2.90%, 11/01/29 |
United States | 853,283 | 737,787 | |||||||||||
Series 2020-1, Class A, 5.875%, 4/15/29 |
United States | 68,283 | 67,781 | |||||||||||
Series 2020-1, Class B, 4.875%, 7/15/27 |
United States | 1,551,600 | 1,503,247 | |||||||||||
|
|
|||||||||||||
11,445,004 | ||||||||||||||
|
|
|||||||||||||
Banks 6.9% | ||||||||||||||
Bank of America Corp., |
||||||||||||||
1.922% to 10/24/30, FRN thereafter, 10/24/31 |
United States | 2,800,000 | 2,113,489 | |||||||||||
2.592% to 4/29/30, FRN thereafter, 4/29/31 |
United States | 3,000,000 | 2,412,243 | |||||||||||
3.974% to 2/07/29, FRN thereafter, 2/07/30 |
United States | 8,200,000 | 7,368,171 | |||||||||||
4.948% to 7/22/27, FRN thereafter, 7/22/28 |
United States | 2,700,000 | 2,595,297 | |||||||||||
a |
BNP Paribas SA, 2.819% to 11/19/24, FRN thereafter, 11/19/25 |
France | 2,200,000 | 2,113,591 | ||||||||||
a |
BPCE SA, 2.045% to 10/19/26, FRN thereafter, 10/19/27 |
France | 3,700,000 | 3,261,027 | ||||||||||
Citigroup, Inc., |
||||||||||||||
4.45%, 9/29/27 |
United States | 1,500,000 | 1,408,857 | |||||||||||
4.125%, 7/25/28 |
United States | 2,300,000 | 2,094,128 | |||||||||||
3.057% to 1/25/32, FRN thereafter, 1/25/33 |
United States | 1,800,000 | 1,423,642 | |||||||||||
Deutsche Bank AG, 5.371%, 9/09/27 |
Germany | 3,700,000 | 3,615,548 | |||||||||||
Fifth Third Bancorp, 2.375%, 1/28/25 |
United States | 4,400,000 | 4,179,683 | |||||||||||
Goldman Sachs Group, Inc., |
||||||||||||||
1.948% to 10/21/26, FRN thereafter, 10/21/27 |
United States | 5,200,000 | 4,593,035 | |||||||||||
3.691% to 6/05/27, FRN thereafter, 6/05/28 |
United States | 2,500,000 | 2,305,226 | |||||||||||
2.64% to 2/24/27, FRN thereafter, 2/24/28 |
United States | 5,200,000 | 4,638,703 | |||||||||||
HSBC Holdings PLC, |
||||||||||||||
2.013% to 9/22/27, FRN thereafter, 9/22/28 |
United Kingdom | 4,100,000 | 3,481,802 | |||||||||||
2.357% to 8/18/30, FRN thereafter, 8/18/31 |
United Kingdom | 1,300,000 | 999,341 | |||||||||||
0.976% to 5/24/24, FRN thereafter, 5/24/25 |
United Kingdom | 4,800,000 | 4,625,291 | |||||||||||
JPMorgan Chase & Co., |
||||||||||||||
2.956% to 5/13/30, FRN thereafter, 5/13/31 |
United States | 5,000,000 | 4,109,946 | |||||||||||
2.522% to 4/22/30, FRN thereafter, 4/22/31 |
United States | 2,000,000 | 1,622,109 | |||||||||||
1.953% to 2/04/31, FRN thereafter, 2/04/32 |
United States | 2,000,000 | 1,517,730 | |||||||||||
KeyBank NA, 4.15%, 8/08/25 |
United States | 2,500,000 | 2,355,314 | |||||||||||
Mitsubishi UFJ Financial Group, Inc., 5.063% to 9/12/24, FRN thereafter, 9/12/25 |
Japan | 4,500,000 | 4,452,242 | |||||||||||
Mizuho Financial Group, Inc., 5.778% to 7/06/28, FRN thereafter, 7/06/29 |
Japan | 2,700,000 | 2,663,841 | |||||||||||
Morgan Stanley, |
||||||||||||||
3.622% to 4/01/30, FRN thereafter, 4/01/31 |
United States | 4,300,000 | 3,706,259 | |||||||||||
3.95%, 4/23/27 |
United States | 3,600,000 | 3,345,679 | |||||||||||
a |
Nordea Bank Abp, 4.75%, 9/22/25 |
Finland | 2,200,000 | 2,154,648 | ||||||||||
Santander U.K. Group Holdings PLC, 1.673% to 6/14/26, FRN thereafter, 6/14/27 |
United Kingdom | 3,200,000 | 2,800,860 | |||||||||||
a |
Societe Generale SA, 1.792% to 6/09/26, FRN thereafter, 6/09/27 |
France | 4,300,000 | 3,793,004 |
franklintempleton.com | Semiannual Report | 163 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Bond ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) |
||||||||||||||
Banks (continued) | ||||||||||||||
Toronto-Dominion Bank, 4.693%, 9/15/27 |
Canada | 4,700,000 | $ | 4,522,323 | ||||||||||
Truist Bank, 2.25%, 3/11/30 |
United States | 4,300,000 | 3,294,549 | |||||||||||
Truist Financial Corp., 5.90% to 10/28/25, FRN thereafter, 10/28/26 |
United States | 3,850,000 | 3,808,747 | |||||||||||
a |
UBS Group AG, 6.373% to 7/15/25, FRN thereafter, 7/15/26 |
Switzerland | 550,000 | 548,198 | ||||||||||
Wells Fargo & Co., |
||||||||||||||
2.879% to 10/30/29, FRN thereafter, 10/30/30 |
United States | 10,300,000 | 8,579,334 | |||||||||||
4.54% to 8/15/25, FRN thereafter, 8/15/26 |
United States | 1,600,000 | 1,554,393 | |||||||||||
|
|
|||||||||||||
108,058,250 | ||||||||||||||
|
|
|||||||||||||
Banks 0.2% |
||||||||||||||
a |
ABN AMRO Bank NV, 6.339% to 9/18/26, FRN thereafter, 9/18/27 |
Netherlands | 1,100,000 | 1,097,721 | ||||||||||
U.S. Bancorp, 5.727% to 10/21/25, FRN thereafter, 10/21/26 |
United States | 1,700,000 | 1,686,279 | |||||||||||
UBS Group AG, 4.55%, 4/17/26 |
Switzerland | 950,000 | 912,623 | |||||||||||
|
|
|||||||||||||
3,696,623 | ||||||||||||||
|
|
|||||||||||||
Beverages 0.7% |
||||||||||||||
Anheuser-Busch Cos. LLC/Anheuser-Busch InBev Worldwide, Inc., 4.70%, 2/01/36 |
Belgium | 1,800,000 | 1,650,861 | |||||||||||
Anheuser-Busch InBev Worldwide, Inc., 3.50%, 6/01/30 |
United States | 3,900,000 | 3,472,389 | |||||||||||
PepsiCo, Inc., 3.90%, 7/18/32 |
United States | 6,000,000 | 5,471,163 | |||||||||||
|
|
|||||||||||||
10,594,413 | ||||||||||||||
|
|
|||||||||||||
Biotechnology 0.7% |
||||||||||||||
Amgen, Inc., 5.25%, 3/02/33 |
United States | 3,400,000 | 3,251,764 | |||||||||||
Bio-Rad Laboratories, Inc., 3.30%, 3/15/27 |
United States | 500,000 | 461,038 | |||||||||||
Illumina, Inc., 5.80%, 12/12/25 |
United States | 3,000,000 | 2,981,575 | |||||||||||
Royalty Pharma PLC, 2.20%, 9/02/30 |
United Kingdom | 5,000,000 | 3,884,387 | |||||||||||
|
|
|||||||||||||
10,578,764 | ||||||||||||||
|
|
|||||||||||||
Building Products 0.1% |
||||||||||||||
NVR, Inc., 3.00%, 5/15/30 |
United States | 2,500,000 | 2,084,962 | |||||||||||
|
|
|||||||||||||
Commercial Services & Supplies 0.6% |
||||||||||||||
Boardwalk Pipelines LP, 4.80%, 5/03/29 |
United States | 3,950,000 | 3,687,554 | |||||||||||
Rockefeller University, Series 2020, 3.75%, 7/01/51 |
United States | 7,000,000 | 5,196,116 | |||||||||||
|
|
|||||||||||||
8,883,670 | ||||||||||||||
|
|
|||||||||||||
Diversified Telecommunication Services 0.8% |
||||||||||||||
America Movil SAB de CV, 2.875%, 5/07/30 |
Mexico | 3,800,000 | 3,184,988 | |||||||||||
Orange SA, 9.00%, 3/01/31 |
France | 3,000,000 | 3,545,315 | |||||||||||
Verizon Communications, Inc., |
||||||||||||||
1.75%, 1/20/31 |
United States | 5,000,000 | 3,769,856 | |||||||||||
2.85%, 9/03/41 |
United States | 3,900,000 | 2,523,959 | |||||||||||
|
|
|||||||||||||
13,024,118 | ||||||||||||||
|
|
|||||||||||||
Electric 1.3% |
||||||||||||||
Constellation Energy Generation LLC, 6.125%, 1/15/34 |
United States | 1,050,000 | 1,049,253 | |||||||||||
DTE Energy Co., 4.875%, 6/01/28 |
United States | 2,800,000 | 2,707,990 | |||||||||||
Duke Energy Corp., 2.45%, 6/01/30 |
United States | 3,900,000 | 3,170,338 | |||||||||||
Duke Energy Ohio, Inc., 5.25%, 4/01/33 |
United States | 500,000 | 483,309 | |||||||||||
a |
Electricite de France SA, 5.70%, 5/23/28 |
France | 600,000 | 594,576 | ||||||||||
Florida Power & Light Co., 4.625%, 5/15/30 |
United States | 1,465,000 | 1,398,834 | |||||||||||
NextEra Energy Capital Holdings, Inc., 6.051%, 3/01/25 |
United States | 1,500,000 | 1,502,805 | |||||||||||
Public Service Enterprise Group, Inc., 2.45%, 11/15/31 |
United States | 5,000,000 | 3,881,060 | |||||||||||
Southern Co., 5.50%, 3/15/29 |
United States | 3,100,000 | 3,082,458 | |||||||||||
Xcel Energy, Inc., 5.45%, 8/15/33 |
United States | 3,300,000 | 3,152,401 | |||||||||||
|
|
|||||||||||||
21,023,024 | ||||||||||||||
|
|
164 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Bond ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) |
||||||||||||||
Electric Utilities 2.0% |
||||||||||||||
Baltimore Gas & Electric Co., 3.50%, 8/15/46 |
United States | 1,400,000 | $ | 958,310 | ||||||||||
a |
Comision Federal de Electricidad, 3.348%, 2/09/31 |
Mexico | 3,800,000 | 2,978,642 | ||||||||||
Duke Energy Corp., 3.75%, 9/01/46 |
United States | 5,000,000 | 3,462,031 | |||||||||||
a |
EDP Finance BV, 1.71%, 1/24/28 |
Netherlands | 4,500,000 | 3,798,440 | ||||||||||
Enel Finance International NV, |
||||||||||||||
a 3.50%, 4/06/28 |
Netherlands | 2,700,000 | 2,428,298 | |||||||||||
a 2.25%, 7/12/31 |
Netherlands | 3,500,000 | 2,647,569 | |||||||||||
Exelon Corp., 4.05%, 4/15/30 |
United States | 4,500,000 | 4,053,422 | |||||||||||
Georgia Power Co., Series 2010-C, , 4.75%, 9/01/40 |
United States | 1,400,000 | 1,191,679 | |||||||||||
MidAmerican Energy Co., 3.65%, 8/01/48 |
United States | 1,100,000 | 786,032 | |||||||||||
a |
Perusahaan Perseroan Persero PT Perusahaan Listrik Negara, 4.875%, 7/17/49 |
Indonesia | 750,000 | 559,039 | ||||||||||
Southern Co., Series A, 3.70%, 4/30/30 |
United States | 6,000,000 | 5,319,395 | |||||||||||
Virginia Electric & Power Co., Series B, 3.80%, 9/15/47 |
United States | 5,100,000 | 3,627,144 | |||||||||||
|
|
|||||||||||||
31,810,001 | ||||||||||||||
|
|
|||||||||||||
Electronic Equipment, Instruments & Components 0.3% |
||||||||||||||
Flex Ltd., 4.875%, 5/12/30 |
Singapore | 3,000,000 | 2,802,088 | |||||||||||
Teledyne FLIR LLC, 2.50%, 8/01/30 |
United States | 3,000,000 | 2,410,837 | |||||||||||
|
|
|||||||||||||
5,212,925 | ||||||||||||||
|
|
|||||||||||||
Energy Equipment & Services 0.4% |
||||||||||||||
Kinder Morgan, Inc., 2.00%, 2/15/31 |
United States | 4,100,000 | 3,133,128 | |||||||||||
MPLX LP, 2.65%, 8/15/30 |
United States | 2,500,000 | 2,020,165 | |||||||||||
a |
Schlumberger Holdings Corp., 3.90%, 5/17/28 |
United States | 1,950,000 | 1,812,721 | ||||||||||
|
|
|||||||||||||
6,966,014 | ||||||||||||||
|
|
|||||||||||||
Entertainment 0.1% |
||||||||||||||
Warnermedia Holdings, Inc., 4.054%, 3/15/29 |
United States | 900,000 | 802,294 | |||||||||||
|
|
|||||||||||||
Financial Services 0.4% |
||||||||||||||
AerCap Ireland Capital DAC/AerCap Global Aviation Trust, 3.40%, 10/29/33 |
Ireland | 3,500,000 | 2,709,113 | |||||||||||
Capital One Financial Corp., 4.985% to 7/24/25, FRN thereafter, 7/24/26 |
United States | 4,000,000 | 3,882,667 | |||||||||||
|
|
|||||||||||||
6,591,780 | ||||||||||||||
|
|
|||||||||||||
Food 0.0%† |
||||||||||||||
General Mills, Inc., 5.241%, 11/18/25 |
United States | 800,000 | 793,061 | |||||||||||
|
|
|||||||||||||
Food Products 0.4% |
||||||||||||||
Kraft Heinz Foods Co., |
||||||||||||||
3.00%, 6/01/26 |
United States | 4,100,000 | 3,845,066 | |||||||||||
3.75%, 4/01/30 |
United States | 2,000,000 | 1,786,491 | |||||||||||
|
|
|||||||||||||
5,631,557 | ||||||||||||||
|
|
|||||||||||||
Ground Transportation 0.2% |
||||||||||||||
Burlington Northern Santa Fe LLC, |
||||||||||||||
4.90%, 4/01/44 |
United States | 1,100,000 | 975,228 | |||||||||||
4.15%, 4/01/45 |
United States | 2,300,000 | 1,829,728 | |||||||||||
CSX Corp., 4.25%, 11/01/66 |
United States | 1,000,000 | 747,815 | |||||||||||
|
|
|||||||||||||
3,552,771 | ||||||||||||||
|
|
|||||||||||||
Health Care Providers & Services 1.0% |
||||||||||||||
CVS Health Corp., |
||||||||||||||
4.875%, 7/20/35 |
United States | 1,400,000 | 1,252,784 | |||||||||||
4.30%, 3/25/28 |
United States | 1,117,000 | 1,057,477 | |||||||||||
Elevance Health, Inc., 5.10%, 1/15/44 |
United States | 2,000,000 | 1,758,735 | |||||||||||
Quest Diagnostics, Inc., 2.80%, 6/30/31 |
United States | 6,800,000 | 5,592,798 | |||||||||||
STERIS Irish FinCo UnLtd Co., 2.70%, 3/15/31 |
Ireland | 5,000,000 | 4,058,187 |
franklintempleton.com | Semiannual Report | 165 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Bond ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) |
||||||||||||||
Health Care Providers & Services (continued) |
||||||||||||||
UnitedHealth Group, Inc., 3.05%, 5/15/41 |
United States | 2,500,000 | $ | 1,765,258 | ||||||||||
|
|
|||||||||||||
15,485,239 | ||||||||||||||
|
|
|||||||||||||
Health Care Services 0.3% |
||||||||||||||
Elevance Health, Inc., 2.55%, 3/15/31 |
United States | 5,000,000 | 4,055,171 | |||||||||||
|
|
|||||||||||||
Healthcare-Products 0.7% |
||||||||||||||
Baxter International, Inc., 2.539%, 2/01/32 |
United States | 6,400,000 | 4,958,161 | |||||||||||
GE HealthCare Technologies, Inc., |
||||||||||||||
5.905%, 11/22/32 |
United States | 4,200,000 | 4,169,709 | |||||||||||
5.60%, 11/15/25 |
United States | 2,300,000 | 2,287,172 | |||||||||||
|
|
|||||||||||||
11,415,042 | ||||||||||||||
|
|
|||||||||||||
Insurance 2.2% |
||||||||||||||
a |
AIA Group Ltd., 4.95%, 4/04/33 |
Hong Kong | 1,600,000 | 1,521,155 | ||||||||||
Aon Corp., 2.80%, 5/15/30 |
United States | 7,000,000 | 5,831,334 | |||||||||||
Aon Corp./Aon Global Holdings PLC, 5.35%, 2/28/33 |
United States | 2,000,000 | 1,919,398 | |||||||||||
Berkshire Hathaway Finance Corp., 3.85%, 3/15/52 |
United States | 1,200,000 | 895,886 | |||||||||||
a |
Corebridge Financial, Inc., 6.05%, 9/15/33 |
United States | 2,400,000 | 2,334,815 | ||||||||||
a |
Corebridge Global Funding, 5.90%, 9/19/28 |
United States | 2,000,000 | 1,994,832 | ||||||||||
a |
Five Corners Funding Trust II, 2.85%, 5/15/30 |
United States | 4,000,000 | 3,338,383 | ||||||||||
a |
MassMutual Global Funding II, 5.05%, 12/07/27 |
United States | 5,100,000 | 5,020,541 | ||||||||||
MetLife, Inc., 5.875%, 2/06/41 |
United States | 1,100,000 | 1,074,246 | |||||||||||
Metropolitan Life Global Funding I, |
||||||||||||||
a 4.30%, 8/25/29 |
United States | 1,400,000 | 1,310,468 | |||||||||||
a 5.05%, 1/06/28 |
United States | 2,500,000 | 2,447,033 | |||||||||||
a |
New York Life Global Funding, 4.85%, 1/09/28 |
United States | 5,200,000 | 5,082,497 | ||||||||||
Reinsurance Group of America, Inc., 3.90%, 5/15/29 |
United States | 2,250,000 | 2,017,680 | |||||||||||
|
|
|||||||||||||
34,788,268 | ||||||||||||||
|
|
|||||||||||||
Internet 0.3% |
||||||||||||||
Meta Platforms, Inc., 4.95%, 5/15/33 |
United States | 4,400,000 | 4,219,159 | |||||||||||
|
|
|||||||||||||
Internet Software & Services 0.1% |
||||||||||||||
a,b |
Tencent Holdings Ltd., 3.925%, 1/19/38 |
Cayman Islands | 2,000,000 | 1,516,258 | ||||||||||
|
|
|||||||||||||
IT Services 0.8% |
||||||||||||||
Apple, Inc., 2.65%, 5/11/50 |
United States | 2,000,000 | 1,225,990 | |||||||||||
Fidelity National Information Services, Inc., 2.25%, 3/01/31 |
United States | 4,500,000 | 3,523,135 | |||||||||||
Fiserv, Inc., 2.65%, 6/01/30 |
United States | 4,700,000 | 3,864,289 | |||||||||||
Hewlett Packard Enterprise Co., 5.90%, 10/01/24 |
United States | 3,300,000 | 3,298,231 | |||||||||||
|
|
|||||||||||||
11,911,645 | ||||||||||||||
|
|
|||||||||||||
Media 0.8% |
||||||||||||||
Charter Communications Operating LLC/Charter Communications Operating Capital, |
||||||||||||||
2.80%, 4/01/31 |
United States | 5,000,000 | 3,901,751 | |||||||||||
3.50%, 3/01/42 |
United States | 1,500,000 | 927,925 | |||||||||||
Comcast Corp., 4.25%, 1/15/33 |
United States | 4,000,000 | 3,599,875 | |||||||||||
NBCUniversal Media LLC, 4.45%, 1/15/43 |
United States | 1,100,000 | 905,581 | |||||||||||
Walt Disney Co., 2.75%, 9/01/49 |
United States | 5,000,000 | 2,962,147 | |||||||||||
|
|
|||||||||||||
12,297,279 | ||||||||||||||
|
|
|||||||||||||
Metals & Mining 0.1% |
||||||||||||||
a |
Corp. Nacional del Cobre de Chile, 4.50%, 8/01/47 |
Chile | 1,160,000 | 874,369 | ||||||||||
|
|
|||||||||||||
Oil & Gas 0.3% |
||||||||||||||
BP Capital Markets America, Inc., 4.893%, 9/11/33 |
United States | 5,300,000 | 4,978,578 | |||||||||||
|
|
166 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Bond ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes (continued) |
||||||||||||||
Oil, Gas & Consumable Fuels 1.0% |
||||||||||||||
a |
Aker BP ASA, 3.10%, 7/15/31 |
Norway | 4,700,000 | $ | 3,764,370 | |||||||||
Canadian Natural Resources Ltd., 3.85%, 6/01/27 |
Canada | 600,000 | 559,694 | |||||||||||
Cheniere Corpus Christi Holdings LLC, 5.875%, 3/31/25 |
United States | 2,200,000 | 2,184,304 | |||||||||||
Equinor ASA, 2.375%, 5/22/30 |
Norway | 3,000,000 | 2,521,100 | |||||||||||
Exxon Mobil Corp., 2.61%, 10/15/30 |
United States | 3,000,000 | 2,534,357 | |||||||||||
a |
Pertamina Persero PT, 4.70%, 7/30/49 |
Indonesia | 1,000,000 | 763,049 | ||||||||||
Sabine Pass Liquefaction LLC, 4.20%, 3/15/28 |
United States | 4,000,000 | 3,728,945 | |||||||||||
|
|
|||||||||||||
16,055,819 | ||||||||||||||
|
|
|||||||||||||
Packaging & Containers 0.2% |
||||||||||||||
Amcor Flexibles North America, Inc., 2.63%, 6/19/30 |
United States | 3,500,000 | 2,830,367 | |||||||||||
|
|
|||||||||||||
Paper & Forest Products 0.1% |
||||||||||||||
Suzano Austria GmbH, 3.125%, 1/15/32 |
Austria | 1,300,000 | 999,637 | |||||||||||
|
|
|||||||||||||
Personal Products 0.6% |
||||||||||||||
Estee Lauder Cos., Inc., 4.65%, 5/15/33 |
United States | 4,500,000 | 4,199,910 | |||||||||||
a |
Kenvue, Inc., 5.05%, 3/22/28 |
United States | 4,500,000 | 4,443,218 | ||||||||||
|
|
|||||||||||||
8,643,128 | ||||||||||||||
|
|
|||||||||||||
Pharmaceuticals 1.2% |
||||||||||||||
AbbVie, Inc., 4.75%, 3/15/45 |
United States | 1,000,000 | 859,345 | |||||||||||
a |
Bayer U.S. Finance II LLC, 4.375%, 12/15/28 |
Germany | 5,500,000 | 5,114,120 | ||||||||||
Bristol-Myers Squibb Co., 4.125%, 6/15/39 |
United States | 3,200,000 | 2,670,704 | |||||||||||
CVS Health Corp., 1.875%, 2/28/31 |
United States | 6,000,000 | 4,579,243 | |||||||||||
Pfizer Investment Enterprises Pte. Ltd., 4.75%, 5/19/33 |
United States | 1,700,000 | 1,607,654 | |||||||||||
Takeda Pharmaceutical Co. Ltd., |
||||||||||||||
2.05%, 3/31/30 |
Japan | 2,600,000 | 2,091,925 | |||||||||||
5.00%, 11/26/28 |
Japan | 2,500,000 | 2,447,737 | |||||||||||
|
|
|||||||||||||
19,370,728 | ||||||||||||||
|
|
|||||||||||||
Pipelines 0.2% |
||||||||||||||
Energy Transfer LP, 3.90%, 5/15/24 |
United States | 2,650,000 | 2,615,291 | |||||||||||
|
|
|||||||||||||
Real Estate Management & Development 0.1% |
||||||||||||||
Simon Property Group LP, 2.20%, 2/01/31 |
United States | 2,000,000 | 1,547,828 | |||||||||||
|
|
|||||||||||||
Retail 0.2% |
||||||||||||||
Advance Auto Parts, Inc., |
||||||||||||||
5.90%, 3/09/26 |
United States | 350,000 | 338,157 | |||||||||||
5.95%, 3/09/28 |
United States | 300,000 | 283,740 | |||||||||||
Target Corp., 4.40%, 1/15/33 |
United States | 2,000,000 | 1,845,225 | |||||||||||
|
|
|||||||||||||
2,467,122 | ||||||||||||||
|
|
|||||||||||||
Software 0.4% |
||||||||||||||
Salesforce, Inc., 1.95%, 7/15/31 |
United States | 2,000,000 | 1,584,820 | |||||||||||
ServiceNow, Inc., 1.40%, 9/01/30 |
United States | 6,000,000 | 4,609,953 | |||||||||||
|
|
|||||||||||||
6,194,773 | ||||||||||||||
|
|
|||||||||||||
Telecommunications 0.4% |
||||||||||||||
AT&T, Inc., 2.55%, 12/01/33 |
United States | 7,500,000 | 5,511,054 | |||||||||||
|
|
|||||||||||||
Wireless Telecommunication Services 0.4% |
||||||||||||||
T-Mobile USA, Inc., |
||||||||||||||
3.75%, 4/15/27 |
United States | 5,000,000 | 4,673,778 | |||||||||||
3.875%, 4/15/30 |
United States | 1,000,000 | 886,349 | |||||||||||
Vodafone Group PLC, 4.875%, 6/19/49 |
United Kingdom | 1,000,000 | 799,111 | |||||||||||
|
|
|||||||||||||
6,359,238 | ||||||||||||||
|
|
|||||||||||||
Total Corporate Bonds & Notes (Cost $507,865,495) |
447,127,373 | |||||||||||||
|
|
franklintempleton.com | Semiannual Report | 167 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Bond ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
U.S. Government & Agency Securities 46.0% |
||||||||||||||
Federal Farm Credit Banks Funding Corp., 2.10%, 2/25/36 |
United States | 4,000,000 | $ | 2,797,351 | ||||||||||
Federal Home Loan Mortgage Corp., |
||||||||||||||
2.00%, 4/01/52 |
United States | 5,033,378 | 3,836,077 | |||||||||||
2.50%, 4/01/37 |
United States | 4,637,567 | 4,096,236 | |||||||||||
2.50%, 12/01/51 |
United States | 747,847 | 594,660 | |||||||||||
2.50%, 4/01/52 |
United States | 21,313,240 | 16,960,017 | |||||||||||
3.00%, 4/01/37 |
United States | 482,292 | 436,591 | |||||||||||
3.00%, 7/01/37 |
United States | 678,331 | 614,871 | |||||||||||
3.00%, 8/01/37 |
United States | 521,815 | 472,357 | |||||||||||
3.00%, 9/01/37 |
United States | 689,195 | 623,887 | |||||||||||
3.50%, 4/01/52 |
United States | 3,084,872 | 2,655,988 | |||||||||||
3.50%, 5/01/52 |
United States | 7,000,582 | 6,028,369 | |||||||||||
3.50%, 6/01/52 |
United States | 4,945,761 | 4,259,868 | |||||||||||
3.50%, 12/01/52 |
United States | 3,171,394 | 2,730,463 | |||||||||||
4.00%, 11/01/37 |
United States | 5,446,929 | 5,148,302 | |||||||||||
4.00%, 10/01/53 |
United States | 2,982,000 | 2,657,293 | |||||||||||
6.00%, 4/01/53 |
United States | 999,700 | 987,393 | |||||||||||
6.00%, 10/01/53 |
United States | 1,640,000 | 1,619,805 | |||||||||||
Federal National Mortgage Association, |
||||||||||||||
1.50%, 9/01/51 |
United States | 4,241,583 | 3,061,071 | |||||||||||
2.00%, 4/01/37 |
United States | 446,511 | 383,425 | |||||||||||
2.50%, 7/01/37 |
United States | 4,396,899 | 3,888,186 | |||||||||||
3.00%, 9/01/37 |
United States | 4,298,766 | 3,898,353 | |||||||||||
3.00%, 10/01/37 |
United States | 4,509,592 | 4,082,067 | |||||||||||
3.00%, 12/01/51 |
United States | 2,545,309 | 2,108,550 | |||||||||||
3.00%, 5/01/52 |
United States | 4,221,299 | 3,498,298 | |||||||||||
3.00%, 11/01/52 |
United States | 1,073,313 | 889,117 | |||||||||||
3.50%, 6/01/49 |
United States | 593,696 | 520,142 | |||||||||||
3.50%, 11/01/52 |
United States | 4,606,124 | 3,966,681 | |||||||||||
5.00%, 2/01/53 |
United States | 8,050,987 | 7,606,166 | |||||||||||
5.00%, 8/01/53 |
United States | 4,594,121 | 4,338,561 | |||||||||||
5.50%, 5/01/53 |
United States | 11,598,595 | 11,218,560 | |||||||||||
6.00%, 8/01/53 |
United States | 14,998,932 | 14,814,233 | |||||||||||
Government National Mortgage Association, |
||||||||||||||
4.00%, 6/20/52 |
United States | 7,111,528 | 6,412,848 | |||||||||||
5.00%, 6/20/53 |
United States | 1,866,469 | 1,770,258 | |||||||||||
5.50%, 7/20/53 |
United States | 715,795 | 695,013 | |||||||||||
U.S. Treasury Bonds, |
||||||||||||||
1.125%, 8/15/40 |
United States | 8,700,000 | 4,949,144 | |||||||||||
1.25%, 5/15/50 |
United States | 22,465,000 | 10,604,621 | |||||||||||
1.375%, 8/15/50 |
United States | 50,750,000 | 24,780,273 | |||||||||||
2.00%, 11/15/41 |
United States | 31,050,000 | 20,161,274 | |||||||||||
2.00%, 2/15/50 |
United States | 11,100,000 | 6,480,059 | |||||||||||
2.25%, 8/15/46 |
United States | 23,854,000 | 15,132,381 | |||||||||||
2.25%, 8/15/49 |
United States | 2,050,000 | 1,276,726 | |||||||||||
2.75%, 8/15/42 |
United States | 16,450,000 | 12,064,726 | |||||||||||
2.75%, 11/15/42 |
United States | 18,900,000 | 13,804,014 | |||||||||||
3.00%, 11/15/44 |
United States | 12,595,000 | 9,403,693 | |||||||||||
3.00%, 2/15/49 |
United States | 7,293,000 | 5,332,152 | |||||||||||
3.625%, 2/15/53 |
United States | 10,600,000 | 8,769,016 | |||||||||||
3.625%, 5/15/53 |
United States | 6,150,000 | 5,093,449 | |||||||||||
U.S. Treasury Notes, |
||||||||||||||
0.375%, 11/30/25 |
United States | 66,250,000 | 60,036,475 | |||||||||||
0.375%, 1/31/26 |
United States | 54,000,000 | 48,618,984 | |||||||||||
0.875%, 6/30/26 |
United States | 24,500,000 | 22,048,086 | |||||||||||
1.25%, 12/31/26 |
United States | 80,900,000 | 72,481,344 | |||||||||||
1.25%, 8/15/31 |
United States | 3,800,000 | 2,970,977 | |||||||||||
2.125%, 2/29/24 |
United States | 42,500,000 | 41,931,413 |
168 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Bond ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
U.S. Government & Agency Securities (continued) | ||||||||||||||
2.125%, 3/31/24 |
United States | 58,000,000 | $ | 57,052,076 | ||||||||||
2.75%, 8/15/32 |
United States | 17,700,000 | 15,329,859 | |||||||||||
3.25%, 6/30/27 |
United States | 104,400,000 | 99,208,547 | |||||||||||
3.50%, 4/30/28 |
United States | 5,500,000 | 5,242,832 | |||||||||||
3.75%, 5/31/30 |
United States | 1,100,000 | 1,044,484 | |||||||||||
4.00%, 10/31/29 |
United States | 22,100,000 | 21,341,176 | |||||||||||
4.125%, 7/31/28 |
United States | 5,700,000 | 5,577,539 | |||||||||||
|
|
|||||||||||||
Total
U.S. Government & Agency Securities |
720,406,377 | |||||||||||||
|
|
|||||||||||||
Municipal Bonds 2.0% |
||||||||||||||
California 1.9% |
||||||||||||||
California Health Facilities Financing Authority, State of California Personal Income Tax Revenue, 2.934%, 6/01/32 |
United States | 530,000 | 440,749 | |||||||||||
Clovis Unified School District, Refunding, Series 2021B, 3.067%, 8/01/39 |
United States | 12,580,000 | 9,141,233 | |||||||||||
Contra Costa Community College District, Refunding, 2.926%, 8/01/38 |
United States | 4,000,000 | 2,986,930 | |||||||||||
Golden
State Tobacco Securitization Corp., Subordinate Bond, Refunding, |
United States | 6,500,000 | 5,907,956 | |||||||||||
San Bernardino Community College District, |
||||||||||||||
Refunding, 2.686%,8/01/41 |
United States | 6,140,000 | 4,105,252 | |||||||||||
Refunding, 2.856%,8/01/49 |
United States | 3,575,000 | 2,155,286 | |||||||||||
Whittier City School District, Refunding, 3.306%, 8/01/43 |
United States | 7,500,000 | 5,380,618 | |||||||||||
|
|
|||||||||||||
30,118,024 | ||||||||||||||
|
|
|||||||||||||
Ohio 0.1% |
||||||||||||||
Greenville City School District, Refunding, 3.541%, 1/01/51 |
United States | 1,295,000 | 904,534 | |||||||||||
|
|
|||||||||||||
Total Municipals (Cost $41,957,687) |
31,022,558 | |||||||||||||
|
|
|||||||||||||
Mortgage-Backed Securities 18.2% |
||||||||||||||
Fannie Mae 5.8% |
||||||||||||||
Federal Home Loan Mortgage Corp., |
||||||||||||||
2.00%, 4/1/37 |
United States | 4,820,390 | 4,139,450 | |||||||||||
2.00%, 1/1/52 |
United States | 12,606,077 | 9,632,931 | |||||||||||
2.00%, 2/1/52 |
United States | 558,175 | 425,871 | |||||||||||
2.50%, 4/1/37 |
United States | 4,558,386 | 4,020,835 | |||||||||||
2.50%, 5/1/37 |
United States | 3,888,600 | 3,429,741 | |||||||||||
2.50%, 1/1/52 |
United States | 1,278,585 | 1,016,696 | |||||||||||
2.50%, 3/1/52 |
United States | 6,790,527 | 5,398,866 | |||||||||||
2.50%, 8/1/52 |
United States | 1,035,962 | 823,615 | |||||||||||
3.00%, 6/1/37 |
United States | 4,099,833 | 3,711,288 | |||||||||||
3.00%, 3/1/50 |
United States | 14,015,201 | 11,745,719 | |||||||||||
3.00%, 3/1/50 |
United States | 5,419,099 | 4,557,154 | |||||||||||
3.00%, 7/1/52 |
United States | 8,695,618 | 7,200,107 | |||||||||||
3.50%, 2/1/47 |
United States | 1,392,079 | 1,228,623 | |||||||||||
3.50%, 2/1/47 |
United States | 2,629,436 | 2,306,990 | |||||||||||
3.50%, 3/1/48 |
United States | 1,684,721 | 1,475,818 | |||||||||||
3.50%, 3/1/48 |
United States | 3,430,271 | 3,004,945 | |||||||||||
3.50%, 8/1/52 |
United States | 2,015,484 | 1,735,262 | |||||||||||
4.00%, 11/1/45 |
United States | 2,390,971 | 2,185,039 | |||||||||||
4.00%, 6/1/48 |
United States | 4,995,681 | 4,552,454 | |||||||||||
4.00%, 5/1/50 |
United States | 5,394,568 | 4,888,625 | |||||||||||
4.00%, 9/1/52 |
United States | 4,616,592 | 4,114,674 | |||||||||||
4.00%, 10/1/52 |
United States | 3,564,063 | 3,176,940 | |||||||||||
4.50%, 8/1/52 |
United States | 692,572 | 636,645 | |||||||||||
4.50%, 10/1/52 |
United States | 6,005,773 | 5,520,316 | |||||||||||
|
|
|||||||||||||
90,928,604 | ||||||||||||||
|
|
franklintempleton.com | Semiannual Report | 169 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Bond ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Mortgage-Backed Securities (continued) | ||||||||||||||
Freddie Mac 10.5% |
||||||||||||||
Federal National Mortgage Association, |
||||||||||||||
2.00%, 5/1/36 |
United States | 10,255,154 | $ | 8,817,024 | ||||||||||
2.00%, 4/1/37 |
United States | 4,652,775 | 3,994,646 | |||||||||||
2.00%, 7/1/51 |
United States | 21,372,171 | 16,347,019 | |||||||||||
2.00%, 8/1/51 |
United States | 14,050,668 | 10,746,223 | |||||||||||
2.00%, 2/1/52 |
United States | 5,452,996 | 4,163,477 | |||||||||||
2.00%, 2/1/52 |
United States | 5,447,027 | 4,156,224 | |||||||||||
2.00%, 3/1/52 |
United States | 19,345,820 | 14,752,789 | |||||||||||
2.50%, 7/1/51 |
United States | 7,017,671 | 5,602,364 | |||||||||||
2.50%, 8/1/51 |
United States | 4,387,402 | 3,499,663 | |||||||||||
2.50%, 12/1/51 |
United States | 15,570,312 | 12,387,280 | |||||||||||
2.50%, 2/1/52 |
United States | 1,585,197 | 1,261,939 | |||||||||||
2.50%, 3/1/52 |
United States | 11,364,788 | 9,037,810 | |||||||||||
2.50%, 4/1/52 |
United States | 5,093,899 | 4,047,799 | |||||||||||
3.00%, 9/1/37 |
United States | 531,302 | 480,937 | |||||||||||
3.00%, 4/1/50 |
United States | 5,807,351 | 4,885,042 | |||||||||||
3.00%, 9/1/50 |
United States | 4,696,493 | 3,930,747 | |||||||||||
3.00%, 11/1/51 |
United States | 5,319,948 | 4,416,164 | |||||||||||
3.00%, 4/1/52 |
United States | 5,192,249 | 4,302,285 | |||||||||||
3.00%, 5/1/52 |
United States | 10,205,082 | 8,457,343 | |||||||||||
3.00%, 7/1/52 |
United States | 1,836,778 | 1,521,841 | |||||||||||
3.50%, 8/1/49 |
United States | 9,516,207 | 8,335,433 | |||||||||||
3.50%, 6/1/52 |
United States | 5,024,160 | 4,326,239 | |||||||||||
3.50%, 8/1/52 |
United States | 1,008,652 | 868,749 | |||||||||||
4.00%, 2/1/49 |
United States | 394,102 | 358,714 | |||||||||||
4.00%, 3/1/53 |
United States | 3,505,644 | 3,124,302 | |||||||||||
4.50%, 7/1/47 |
United States | 5,084,092 | 4,785,078 | |||||||||||
4.50%, 5/1/48 |
United States | 2,596,886 | 2,432,648 | |||||||||||
4.50%, 12/1/48 |
United States | 3,660,655 | 3,426,280 | |||||||||||
4.50%, 2/1/50 |
United States | 1,549,988 | 1,447,546 | |||||||||||
4.50%, 11/1/52 |
United States | 6,691,802 | 6,150,908 | |||||||||||
5.00%, 10/1/52 |
United States | 3,479,620 | 3,287,496 | |||||||||||
|
|
|||||||||||||
165,352,009 | ||||||||||||||
|
|
|||||||||||||
Ginnie Mae 1.9% |
||||||||||||||
Government National Mortgage Association, |
||||||||||||||
2.00%, 4/20/52 |
United States | 5,160,450 | 4,088,135 | |||||||||||
2.00%, 5/20/52 |
United States | 10,800,886 | 8,548,243 | |||||||||||
2.00%, 6/20/52 |
United States | 5,219,516 | 4,131,172 | |||||||||||
2.50%, 4/20/52 |
United States | 9,119,777 | 7,462,873 | |||||||||||
2.50%, 6/20/52 |
United States | 5,204,307 | 4,260,531 | |||||||||||
6.00%, 1/20/53 |
United States | 960,276 | 952,778 | |||||||||||
|
|
|||||||||||||
29,443,732 | ||||||||||||||
|
|
|||||||||||||
Total Mortgage-Backed Securities (Cost $329,165,293) |
. | 285,724,345 | ||||||||||||
|
|
|||||||||||||
Foreign Government and Agency Securities 1.0% |
||||||||||||||
Chile Government International Bonds, 3.500%, 1/25/50 |
Chile | 1,100,000 | 735,363 | |||||||||||
Peruvian Government International Bonds, 2.783%, 1/23/31 |
Peru | 5,850,000 | 4,805,093 | |||||||||||
a |
Korea Electric Power Corp., 5.375%, 4/06/26 |
South Korea | 1,600,000 | 1,592,868 | ||||||||||
a |
African Export-Import Bank, 3.994%, 9/21/29 |
Supranational | 6,100,000 | 5,017,616 | ||||||||||
a |
Banque Ouest Africaine de Developpement, 5.000%, 7/27/27 |
Supranational | 3,800,000 | 3,384,975 | ||||||||||
|
|
|||||||||||||
8,402,591 | ||||||||||||||
|
|
|||||||||||||
Total Foreign Government and Agency
Securities |
15,535,915 | |||||||||||||
|
|
170 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Core Bond ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Asset-Backed Securities 2.4% |
||||||||||||||
Bank, |
||||||||||||||
Series 2021-BN33, Class A5, 2.556%,5/15/64 |
United States | 2,780,000 | $ | 2,212,694 | ||||||||||
c Series 2022-BN40, Class A4, 3.507%,3/15/64 |
United States | 2,800,000 | 2,341,523 | |||||||||||
Benchmark Mortgage Trust, |
||||||||||||||
Series 2021-B31, Class A5, 2.669%,12/15/54 |
United States | 2,780,000 | 2,198,543 | |||||||||||
c Series 2022-B32, Class A5, 3.002%,1/15/55 |
United States | 5,560,000 | 4,295,400 | |||||||||||
c ,Series 2023-V3, Class A3, 6.363%,7/15/56 |
United States | 540,000 | 546,594 | |||||||||||
BX Commercial Mortgage Trust, |
||||||||||||||
a,c Series 2021-VOLT, Class B, 6.397%,9/15/36 |
United States | 3,190,000 | 3,087,573 | |||||||||||
a,c Series 2022-LP2, Class A, 6.345%,2/15/39 |
United States | 2,592,222 | 2,533,035 | |||||||||||
a,c |
BX Mortgage Trust, Series 2021-PAC, Class A, 6.136%, 10/15/36 |
United States | 3,090,000 | 3,023,545 | ||||||||||
a,c |
BX Trust, Series 2022-IND, Class A, 6.823%, 4/15/37 |
United States | 4,098,918 | 4,073,068 | ||||||||||
a,c |
DBCG Mortgage Trust, Series 2017-BBG, Class A, 8.50%, 6/15/34 |
United States | 7,190,000 | 7,116,288 | ||||||||||
a |
New Economy Assets Phase 1 Sponsor LLC, Series 2021-1, Class A1, 1.91%, 10/20/61 |
United States | 6,660,000 | 5,739,356 | ||||||||||
|
|
|||||||||||||
Total Asset-Backed Securities (Cost $40,932,209) |
37,167,619 | |||||||||||||
|
|
|||||||||||||
Total
Investments before Short-Term Investments |
1,536,984,187 | |||||||||||||
|
|
|||||||||||||
Short-Term Investments 0.9% |
||||||||||||||
Money Market Funds 0.9% |
||||||||||||||
d,e |
Institutional Fiduciary Trust - Money Market Portfolio, 5.15% |
United States | 14,340,724 | 14,340,724 | ||||||||||
|
|
|||||||||||||
Total Short-Term Investments (Cost $14,340,724) |
14,340,724 | |||||||||||||
|
|
|||||||||||||
Total Investments (Cost $1,755,957,053) 99.1% |
1,551,324,911 | |||||||||||||
|
|
|||||||||||||
Other Assets, less Liabilities 0.9% |
13,570,455 | |||||||||||||
|
|
|||||||||||||
Net Assets 100.0% |
$ | 1,564,895,366 | ||||||||||||
|
|
*The principal amount is stated in U.S. dollars unless otherwise indicated.
†Rounds to less than 0.1% of net assets.
a Security 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 $113,796,128, representing 7.3% of net assets.
b Variable interest entity (VIE). See the Fund’s statement of additional information and/or notes to financial statements regarding investments made through a VIE structure. At September 30, 2023, the aggregate value of these securities was $1,516,258, representing 0.1% of net assets.
c Variable rate security. The rate shown represents the yield at period end.
d The rate shown is the annualized seven-day effective yield at period end.
e See Note 3(d) regarding investments in affiliated management investment companies.
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 |
||||||||||||||||||||||||
U.S. Treasury 2 Yr. Note |
Long | 46 | $ | 9,324,703 | 12/29/23 | $ | (22,205 | ) | ||||||||||||||||
U.S. Treasury 5 Yr. Note |
Long | 368 | 38,772,250 | 12/29/23 | (193,193 | ) | ||||||||||||||||||
U.S. Treasury Ultra 10 Yr. (CBT) |
Long | 37 | 4,127,813 | 12/19/23 | (111,053 | ) | ||||||||||||||||||
|
|
|||||||||||||||||||||||
Total Futures Contracts |
$ | (326,451 | ) | |||||||||||||||||||||
|
|
*As of period end.
See Note 8 regarding other derivative information.
See Abbreviations on page 220.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 171 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Low Volatility ETF
Six Months Ended (unaudited) |
Year Ended March 31, | |||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||||||||||
Net asset value, beginning of period |
$ | 47.16 | $ | 49.07 | $ | 43.69 | $ | 30.93 | $ | 33.61 | $ | 30.03 | ||||||||||||
Income from investment operationsa: |
||||||||||||||||||||||||
Net investment incomeb |
0.42 | 0.76 | 0.70 | 0.67 | 0.64 | 0.52 | ||||||||||||||||||
Net realized and unrealized gains (losses) |
0.23 | (1.89 | ) | 5.39 | 12.73 | (2.84 | ) | 3.88 | ||||||||||||||||
Total from investment operations |
0.65 | (1.13 | ) | 6.09 | 13.40 | (2.20 | ) | 4.40 | ||||||||||||||||
Less distributions from: |
||||||||||||||||||||||||
Net investment income |
(0.38 | ) | (0.78 | ) | (0.71 | ) | (0.64 | ) | (0.48 | ) | (0.47 | ) | ||||||||||||
Net realized gains |
— | — | — | — | — | (0.35 | ) | |||||||||||||||||
Total distributions |
(0.38 | ) | (0.78 | ) | (0.71 | ) | (0.64 | ) | (0.48 | ) | (0.82 | ) | ||||||||||||
Net asset value, end of period |
$ | 47.43 | $ | 47.16 | $ | 49.07 | $ | 43.69 | $ | 30.93 | $ | 33.61 | ||||||||||||
Total returnc |
1.36% | (2.22 | )% | 13.98% | 43.52% | (6.74 | )% | 14.98% | ||||||||||||||||
Ratios to average net assetsd |
||||||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.29% | 0.29% | 0.33% | 0.37% | 0.57% | 1.12% | ||||||||||||||||||
Expenses net of waiver and payments by affiliates |
0.29% | 0.29% | 0.29% | 0.29% | 0.33% | 0.50% | ||||||||||||||||||
Net investment income |
1.76% | 1.66% | 1.47% | 1.71% | 1.75% | 1.64% | ||||||||||||||||||
Supplemental data |
||||||||||||||||||||||||
Net assets, end of period (000’s) |
$ | 142,295 | $ | 155,613 | $ | 134,935 | $ | 139,822 | $ | 74,223 | $ | 13,443 | ||||||||||||
Portfolio turnover ratee |
14.72% | f | 32.13% | f | 21.90% | f | 40.54% | f | 32.61% | f | 46.90% |
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of Creation Unit Fund shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year. Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period.
dRatios are annualized for periods less than one year.
ePortfolio turnover rate includes portfolio transactions that are executed as a result of the Fund offering and redeeming Creation Units solely for cash (“Cash creations”).
fPortfolio turnover rate excluding cash creations was as follows: | 14.72% | 32.13% | 21.90% | 40.54% | 32.61% | — |
172 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2023 (unaudited)
Franklin U.S. Low Volatility ETF
Shares | Value | |||||||||
Common Stocks 99.3% | ||||||||||
Communication Services 8.4% | ||||||||||
a |
Alphabet, Inc., Class A |
15,509 | $ | 2,029,508 | ||||||
Comcast Corp., Class A |
44,593 | 1,977,254 | ||||||||
a |
Liberty Broadband Corp., Class C |
21,834 | 1,993,881 | |||||||
New York Times Co., Class A |
48,841 | 2,012,249 | ||||||||
TELUS Corp. |
118,969 | 1,943,953 | ||||||||
Verizon Communications, Inc. |
60,700 | 1,967,287 | ||||||||
|
|
|||||||||
11,924,132 | ||||||||||
|
|
|||||||||
Consumer Discretionary 10.9% | ||||||||||
a |
Amazon.com, Inc. |
15,381 | 1,955,233 | |||||||
a |
AutoZone, Inc. |
769 | 1,953,252 | |||||||
Home Depot, Inc. |
6,421 | 1,940,169 | ||||||||
McDonald’s Corp. |
7,261 | 1,912,838 | ||||||||
a |
NVR, Inc. |
326 | 1,944,036 | |||||||
Starbucks Corp. |
21,101 | 1,925,888 | ||||||||
TJX Cos., Inc. |
22,171 | 1,970,559 | ||||||||
Tractor Supply Co. |
9,640 | 1,957,402 | ||||||||
|
|
|||||||||
15,559,377 | ||||||||||
|
|
|||||||||
Consumer Staples 6.2% | ||||||||||
Coca-Cola Co. |
26,303 | 1,472,442 | ||||||||
Colgate-Palmolive Co. |
20,912 | 1,487,052 | ||||||||
Mondelez International, Inc., Class A |
21,511 | 1,492,864 | ||||||||
PepsiCo, Inc. |
8,644 | 1,464,639 | ||||||||
Procter & Gamble Co. |
9,995 | 1,457,871 | ||||||||
Target Corp. |
13,455 | 1,487,719 | ||||||||
|
|
|||||||||
8,862,587 | ||||||||||
|
|
|||||||||
Energy 4.7% | ||||||||||
Chevron Corp. |
9,892 | 1,667,989 | ||||||||
DT Midstream, Inc. |
30,861 | 1,633,164 | ||||||||
Exxon Mobil Corp. |
14,341 | 1,686,215 | ||||||||
Williams Cos., Inc. |
48,927 | 1,648,351 | ||||||||
|
|
|||||||||
6,635,719 | ||||||||||
|
|
|||||||||
Financials 13.2% | ||||||||||
Arthur J Gallagher & Co. |
6,314 | 1,439,150 | ||||||||
BlackRock, Inc. |
2,229 | 1,441,026 | ||||||||
a |
Fiserv, Inc. |
12,679 | 1,432,220 | |||||||
Intercontinental Exchange, Inc. |
13,359 | 1,469,757 | ||||||||
JPMorgan Chase & Co. |
10,099 | 1,464,557 | ||||||||
Mastercard, Inc., Class A |
3,659 | 1,448,635 | ||||||||
MetLife, Inc. |
22,846 | 1,437,242 | ||||||||
Morgan Stanley |
17,670 | 1,443,109 | ||||||||
Nasdaq, Inc. |
30,240 | 1,469,361 | ||||||||
Progressive Corp. |
10,273 | 1,431,029 | ||||||||
S&P Global, Inc. |
3,959 | 1,446,658 | ||||||||
Travelers Cos., Inc. |
8,769 | 1,432,065 | ||||||||
Visa, Inc., Class A |
6,260 | 1,439,863 | ||||||||
|
|
|||||||||
18,794,672 | ||||||||||
|
|
|||||||||
Health Care 13.0% | ||||||||||
Abbott Laboratories |
17,347 | 1,680,057 | ||||||||
AbbVie, Inc. |
11,147 | 1,661,572 | ||||||||
Amgen, Inc. |
6,360 | 1,709,314 | ||||||||
Becton Dickinson & Co. |
6,420 | 1,659,763 | ||||||||
Bristol-Myers Squibb Co. |
28,907 | 1,677,762 | ||||||||
CVS Health Corp. |
23,930 | 1,670,793 |
franklintempleton.com | Semiannual Report | 173 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Low Volatility ETF (continued)
Shares | Value | |||||||||
Health Care (continued) |
||||||||||
Johnson & Johnson |
10,608 | $ | 1,652,196 | |||||||
Medtronic PLC |
21,211 | 1,662,094 | ||||||||
Merck & Co., Inc. |
16,011 | 1,648,332 | ||||||||
Pfizer, Inc. |
52,084 | 1,727,626 | ||||||||
UnitedHealth Group, Inc. |
3,364 | 1,696,095 | ||||||||
|
|
|||||||||
18,445,604 | ||||||||||
|
|
|||||||||
Industrials 9.3% | ||||||||||
AMETEK, Inc. |
8,740 | 1,291,422 | ||||||||
Fastenal Co. |
24,754 | 1,352,558 | ||||||||
General Dynamics Corp. |
6,146 | 1,358,082 | ||||||||
Honeywell International, Inc. |
7,070 | 1,306,112 | ||||||||
IDEX Corp. |
6,478 | 1,347,554 | ||||||||
Illinois Tool Works, Inc. |
5,746 | 1,323,361 | ||||||||
Lockheed Martin Corp. |
3,244 | 1,326,666 | ||||||||
Northrop Grumman Corp. |
3,158 | 1,390,120 | ||||||||
Republic Services, Inc. |
9,168 | 1,306,532 | ||||||||
Verisk Analytics, Inc. |
5,546 | 1,310,187 | ||||||||
|
|
|||||||||
13,312,594 | ||||||||||
|
|
|||||||||
Information Technology 25.8% | ||||||||||
Accenture PLC, Class A |
7,303 | 2,242,824 | ||||||||
a |
Adobe, Inc. |
4,501 | 2,295,060 | |||||||
Amphenol Corp., Class A |
27,705 | 2,326,943 | ||||||||
Analog Devices, Inc. |
13,156 | 2,303,484 | ||||||||
a |
ANSYS, Inc. |
7,621 | 2,267,629 | |||||||
Apple, Inc. |
13,193 | 2,258,773 | ||||||||
Cisco Systems, Inc. |
43,096 | 2,316,841 | ||||||||
International Business Machines Corp. |
15,714 | 2,204,674 | ||||||||
Intuit, Inc. |
4,539 | 2,319,157 | ||||||||
a |
Keysight Technologies, Inc. |
17,626 | 2,332,096 | |||||||
Microsoft Corp. |
7,282 | 2,299,291 | ||||||||
Oracle Corp. |
21,174 | 2,242,750 | ||||||||
Roper Technologies, Inc. |
4,664 | 2,258,682 | ||||||||
a |
Synopsys, Inc. |
5,166 | 2,371,039 | |||||||
Texas Instruments, Inc. |
14,401 | 2,289,903 | ||||||||
Vontier Corp. |
76,093 | 2,352,796 | ||||||||
|
|
|||||||||
36,681,942 | ||||||||||
|
|
|||||||||
Materials 2.6% | ||||||||||
Air Products & Chemicals, Inc. |
4,392 | 1,244,693 | ||||||||
Ecolab, Inc. |
7,299 | 1,236,450 | ||||||||
Linde PLC |
3,366 | 1,253,330 | ||||||||
|
|
|||||||||
3,734,473 | ||||||||||
|
|
|||||||||
Real Estate 2.8% | ||||||||||
First Industrial Realty Trust, Inc. |
27,064 | 1,287,976 | ||||||||
Mid-America Apartment Communities, Inc. |
10,195 | 1,311,587 | ||||||||
Public Storage |
5,028 | 1,324,978 | ||||||||
|
|
|||||||||
3,924,541 | ||||||||||
|
|
|||||||||
Utilities 2.4% | ||||||||||
American Electric Power Co., Inc. |
11,846 | 891,056 | ||||||||
Duke Energy Corp. |
10,049 | 886,925 | ||||||||
NextEra Energy, Inc. |
13,853 | 793,638 |
174 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Low Volatility ETF (continued)
Shares | Value | |||||||
Utilities (continued) | ||||||||
Southern Co. |
13,520 | $ | 875,015 | |||||
|
|
|||||||
3,446,634 | ||||||||
|
|
|||||||
Total Common Stocks (Cost $129,203,448) |
141,322,275 | |||||||
|
|
|||||||
Total Investments before Short-Term Investments (Cost $129,203,448) |
141,322,275 | |||||||
|
|
Country | Principal Amount* | |||||||||||||
Short-Term Investments 0.6% | ||||||||||||||
U.S. Government & Agency Securities 0.6% | ||||||||||||||
b | Federal Home Loan Bank Discount Notes, 10/02/23 | United States | $ | 865,000 | 865,000 | |||||||||
|
|
|||||||||||||
Total Short-Term Investments (Cost $864,875) | 865,000 | |||||||||||||
|
|
|||||||||||||
Total Investments (Cost $130,068,323) 99.9% | 142,187,275 | |||||||||||||
Other Assets, less Liabilities 0.1% | 107,576 | |||||||||||||
|
|
|||||||||||||
Net Assets 100.0% | $ | 142,294,851 | ||||||||||||
|
|
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aNon-income producing.
bThe security was issued on a discount basis with no stated coupon rate.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 175 |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin U.S. Treasury Bond ETF
Six Months Ended (unaudited) |
Year Ended March 31, | |||||||||||||||
2023 | 2022 | 2021a | ||||||||||||||
Per share operating performance |
||||||||||||||||
(for a share outstanding throughout the period) |
||||||||||||||||
Net asset value, beginning of period |
$21.23 | $22.67 | $23.83 | $25.00 | ||||||||||||
Income from investment operationsb: |
||||||||||||||||
Net investment incomec |
0.34 | 0.46 | 0.18 | 0.11 | ||||||||||||
Net realized and unrealized gains (losses) |
(1.21 | ) | (1.36 | ) | (0.96 | ) | (0.94 | ) | ||||||||
Total from investment operations |
(0.87 | ) | (0.90 | ) | (0.78 | ) | (0.83 | ) | ||||||||
Less distributions from net investment income |
(0.37 | ) | (0.54 | ) | (0.38 | ) | (0.34 | ) | ||||||||
Net asset value, end of period |
$19.99 | $21.23 | $22.67 | $23.83 | ||||||||||||
Total returnd |
(4.21)% | (3.95)% | (3.35)% | (3.36)% | ||||||||||||
Ratios to average net assetse |
||||||||||||||||
Expenses before waiver and payments by affiliates |
0.09% | 0.09% | 0.28% | 0.50% | ||||||||||||
Expenses net of waiver and payments by affiliates |
0.09% | 0.08% | 0.09% | 0.09% | ||||||||||||
Net investment income |
3.33% | 2.16% | 0.77% | 0.54% | ||||||||||||
Supplemental data |
||||||||||||||||
Net assets, end of period (000’s) |
$459,666 | $428,756 | $403,543 | $418,199 | ||||||||||||
Portfolio turnover ratef |
10.80% | g | 148.40% | g | 13.86% | g | 102.09% | g |
aFor the period June 9, 2020 (commencement of operations) to March 31, 2021.
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: | 10.80% | 148.40% | 13.86% | 102.09% |
176 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2023 (unaudited)
Franklin U.S. Treasury Bond ETF
Country | Principal Amount* | Value | ||||||||||||
|
U.S. Government & Agency Securities 99.2% | |||||||||||||
U.S. Treasury Bonds, |
||||||||||||||
1.125%, 8/15/40 |
United States | 1,200,000 | $ | 682,641 | ||||||||||
1.875%, 11/15/51 |
United States | 44,510,000 | 24,823,018 | |||||||||||
2.375%, 5/15/51 |
United States | 6,000,000 | 3,806,719 | |||||||||||
3.00%, 5/15/42 |
United States | 20,024,000 | 15,331,657 | |||||||||||
3.125%, 11/15/41 |
United States | 21,900,000 | 17,224,863 | |||||||||||
3.125%, 8/15/44 |
United States | 14,601,000 | 11,160,639 | |||||||||||
3.625%, 2/15/44 |
United States | 6,380,000 | 5,306,989 | |||||||||||
3.625%, 5/15/53 |
United States | 6,500,000 | 5,383,320 | |||||||||||
U.S. Treasury Inflation-Indexed Notes, |
||||||||||||||
0.125%, 1/15/32 |
United States | 1,654,050 | 1,386,752 | |||||||||||
0.50%, 1/15/28 |
United States | 9,349,840 | 8,620,532 | |||||||||||
U.S. Treasury Notes, |
||||||||||||||
0.25%, 7/31/25 |
United States | 45,383,000 | 41,559,128 | |||||||||||
0.375%, 1/31/26 |
United States | 15,900,000 | 14,315,590 | |||||||||||
0.375%, 9/30/27 |
United States | 16,151,000 | 13,635,608 | |||||||||||
0.50%, 6/30/27 |
United States | 19,675,000 | 16,858,247 | |||||||||||
0.625%, 12/31/27 |
United States | 11,300,000 | 9,556,445 | |||||||||||
0.625%, 8/15/30 |
United States | 8,000,000 | 6,141,563 | |||||||||||
0.75%, 5/31/26 |
United States | 37,590,000 | 33,764,924 | |||||||||||
0.75%, 8/31/26 |
United States | 3,395,000 | 3,023,805 | |||||||||||
0.75%, 1/31/28 |
United States | 10,000,000 | 8,480,469 | |||||||||||
1.125%, 2/29/28 |
United States | 10,553,000 | 9,081,351 | |||||||||||
1.125%, 2/15/31 |
United States | 10,875,000 | 8,580,205 | |||||||||||
1.25%, 8/31/24 |
United States | 2,670,000 | 2,569,780 | |||||||||||
1.25%, 8/15/31 |
United States | 5,900,000 | 4,612,832 | |||||||||||
1.375%, 11/15/31 |
United States | 10,330,000 | 8,098,559 | |||||||||||
1.50%, 9/30/24 |
United States | 41,500,000 | 39,926,222 | |||||||||||
1.50%, 11/30/24 |
United States | 14,600,000 | 13,970,945 | |||||||||||
1.625%, 8/15/29 |
United States | 7,100,000 | 6,026,680 | |||||||||||
1.75%, 7/31/24 |
United States | 4,080,000 | 3,956,962 | |||||||||||
1.875%, 7/31/26 |
United States | 6,500,000 | 5,997,646 | |||||||||||
1.875%, 2/15/32 |
United States | 13,184,000 | 10,711,485 | |||||||||||
2.125%, 9/30/24 |
United States | 9,390,000 | 9,089,664 | |||||||||||
2.25%, 10/31/24 |
United States | 10,600,000 | 10,249,082 | |||||||||||
2.375%, 5/15/27 |
United States | 11,000,000 | 10,146,211 | |||||||||||
2.75%, 5/31/29 |
United States | 8,180,000 | 7,411,847 | |||||||||||
2.875%, 8/15/28 |
United States | 11,684,000 | 10,790,813 | |||||||||||
2.875%, 4/30/29 |
United States | 13,250,000 | 12,102,529 | |||||||||||
3.25%, 6/30/29 |
United States | 9,350,000 | 8,690,387 | |||||||||||
3.375%, 5/15/33 |
United States | 7,500,000 | 6,802,734 | |||||||||||
4.125%, 7/31/28 |
United States | 7,500,000 | 7,338,867 | |||||||||||
4.125%, 11/15/32 |
United States | 6,770,000 | 6,530,406 | |||||||||||
4.625%, 9/30/30 |
United States | 12,000,000 | 12,005,625 | |||||||||||
|
|
|||||||||||||
Total U.S. Government & Agency Securities (Cost $487,023,995) |
455,753,741 | |||||||||||||
|
|
|||||||||||||
Total Investments before Short-Term Investments (Cost $487,023,995) |
455,753,741 | |||||||||||||
|
|
franklintempleton.com | Semiannual Report | 177 |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin U.S. Treasury Bond ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Short-Term Investments 0.1% | ||||||||||||||
Money Market Funds 0.1% | ||||||||||||||
United States 0.1% | ||||||||||||||
a,b | Institutional Fiduciary Trust - Money Market Portfolio, 5.15% | United States | 595,240 | $ | 595,240 | |||||||||
|
|
|||||||||||||
Total Short-Term Investments (Cost $595,240) | 595,240 | |||||||||||||
|
|
|||||||||||||
Total Investments (Cost $487,619,235) 99.3% | 456,348,981 | |||||||||||||
Other Assets, less Liabilities 0.7% | 3,317,482 | |||||||||||||
|
|
|||||||||||||
Net Assets 100.0% | $ | 459,666,463 | ||||||||||||
|
|
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aThe rate shown is the annualized seven-day effective yield at period end.
bSee Note 3(d) regarding investments in affiliated management investment companies.
See Abbreviations on page 220.
178 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Financial Highlights
Franklin Ultra Short Bond ETF
Six Months Ended (unaudited) |
Year Ended March 31, | |||||||||||||||
2023 | 2022 | 2021a | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) |
||||||||||||||||
Net asset value, beginning of period |
$24.58 | $24.55 | $24.88 | $25.00 | ||||||||||||
|
|
|||||||||||||||
Income from investment operationsb: |
||||||||||||||||
Net investment incomec |
0.56 | 0.61 | 0.14 | 0.10 | ||||||||||||
Net realized and unrealized gains (losses) |
0.18 | (0.12 | ) | (0.33 | ) | 0.13 | ||||||||||
|
|
|||||||||||||||
Total from investment operations |
0.74 | 0.49 | (0.19 | ) | 0.23 | |||||||||||
|
|
|||||||||||||||
Less distributions from: |
||||||||||||||||
Net investment income |
(0.59 | ) | (0.46 | ) | (0.14 | ) | (0.33 | ) | ||||||||
Net realized gains |
— | — | — | (0.02 | ) | |||||||||||
|
|
|||||||||||||||
Total distributions |
(0.59 | ) | (0.46 | ) | (0.14 | ) | (0.35 | ) | ||||||||
|
|
|||||||||||||||
Net asset value, end of period |
$24.73 | $24.58 | $24.55 | $24.88 | ||||||||||||
|
|
|||||||||||||||
Total returnd |
3.09% | 2.00% | (0.78)% | 0.91% | ||||||||||||
Ratios to average net assetse |
||||||||||||||||
Expenses before waiver and payments by affiliates |
0.15% | 0.15% | 1.71% | 4.17% | ||||||||||||
Expenses net of waiver and payments by affiliates |
0.04% | 0.10% | 0.15% | 0.15% | ||||||||||||
Net investment income |
4.52% | 2.47% | 0.55% | 0.58% | ||||||||||||
Supplemental data |
||||||||||||||||
Net assets, end of period (000’s) |
$2,473 | $2,458 | $3,682 | $2,488 | ||||||||||||
Portfolio turnover ratef |
20.39% | g | 48.71% | g | 24.71% | g | 10.49% | g |
aFor the period July 14, 2020 (commencement of operations) to March 31, 2021.
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: |
20.39 | % | 48.71 | % | 24.17 | % | 10.49 | % |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 179 |
FRANKLIN TEMPLETON ETF TRUST
Schedule of Investments, September 30, 2023 (unaudited)
Franklin Ultra Short Bond ETF
Country | Principal Amount* | Value | ||||||||||||
Corporate Bonds & Notes 64.4% | ||||||||||||||
Banks 24.1% | ||||||||||||||
Bank of America Corp., 6.022%, 4/22/25 | United States | 150,000 | $ | 149,871 | ||||||||||
Goldman Sachs Group, Inc., 6.796%, 5/15/26 | United States | 100,000 | 100,654 | |||||||||||
Toronto-Dominion Bank, 4.285%, 9/13/24 | Canada | 100,000 | 98,420 | |||||||||||
Truist Financial Corp., 5.744%, 6/09/25 | United States | 100,000 | 97,809 | |||||||||||
Westpac Banking Corp., 6.436%, 2/26/24 | Australia | 150,000 | 150,308 | |||||||||||
|
|
|||||||||||||
597,062 | ||||||||||||||
|
|
|||||||||||||
Electric Utilities 2.0% | ||||||||||||||
Vistra Operations Co. LLC, 3.55%, 7/15/24 | United States | 50,000 | 48,775 | |||||||||||
|
|
|||||||||||||
Financial Services 8.0% | ||||||||||||||
Capital One Financial Corp., 6.034%, 12/06/24 | United States | 100,000 | 98,893 | |||||||||||
Charles Schwab Corp., 5.861%, 5/13/26 | United States | 100,000 | 98,392 | |||||||||||
|
|
|||||||||||||
197,285 | ||||||||||||||
|
|
|||||||||||||
Healthcare-Products 4.0% | ||||||||||||||
Thermo Fisher Scientific, Inc., 0.797%, 10/18/23 | United States | 100,000 | 99,785 | |||||||||||
|
|
|||||||||||||
Insurance 8.1% | ||||||||||||||
a |
Brighthouse Financial Global Funding, secured note, 1.20%, 12/15/23 |
United States | 100,000 | 99,037 | ||||||||||
a |
Pacific Life Global Funding II, 6.145%, 3/30/25 |
United States | 100,000 | 100,101 | ||||||||||
|
|
|||||||||||||
199,138 | ||||||||||||||
|
|
|||||||||||||
Miscellaneous Manufacturing 4.0% | ||||||||||||||
Parker-Hannifin Corp., 3.65%, 6/15/24 | United States | 100,000 | 98,470 | |||||||||||
|
|
|||||||||||||
Pipelines 2.0% | ||||||||||||||
a |
Kinder Morgan, Inc., 5.625%, 11/15/23 |
United States | 50,000 | 49,967 | ||||||||||
|
|
|||||||||||||
Retail 2.0% | ||||||||||||||
Walgreens Boots Alliance, Inc., 0.95%, 11/17/23 | United States | 50,000 | 49,680 | |||||||||||
|
|
|||||||||||||
Telecommunications 10.2% | ||||||||||||||
AT&T, Inc., 6.852%, 6/12/24 | United States | 100,000 | 100,593 | |||||||||||
Verizon Communications, Inc., 6.726%, 5/15/25 | United States | 150,000 | 151,598 | |||||||||||
|
|
|||||||||||||
252,191 | ||||||||||||||
|
|
|||||||||||||
Total Corporate Bonds & Notes (Cost $1,597,250) | 1,592,353 | |||||||||||||
|
|
|||||||||||||
Asset-Backed Securities 8.1% | ||||||||||||||
Citibank Credit Card Issuance Trust, Series 2017-A5, Class A5, 6.058%, 4/22/26 | United States | 100,000 | 100,259 | |||||||||||
Discover Card Execution Note Trust, Series 2017-A5, Class A5, 6.047%, 12/15/26 | United States | 100,000 | 100,102 | |||||||||||
|
|
|||||||||||||
Total Asset-Backed Securities (Cost $200,922) | 200,361 | |||||||||||||
|
|
|||||||||||||
Total Investments
before Short-Term Investments (Cost $1,798,172) |
1,792,714 | |||||||||||||
|
|
180 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
SCHEDULE OF INVESTMENTS
Franklin Ultra Short Bond ETF (continued)
Country | Principal Amount* | Value | ||||||||||||
Short-Term Investments 27.0% | ||||||||||||||
Money Market Funds 27.0% | ||||||||||||||
United States 27.0% | ||||||||||||||
b,c | Institutional Fiduciary Trust - Money Market Portfolio, 5.15% | United States | 667,662 | $ | 667,662 | |||||||||
|
|
|||||||||||||
Total Short-Term Investments (Cost $667,662) | 667,662 | |||||||||||||
|
|
|||||||||||||
Total Investments (Cost $2,465,834) 99.5% | 2,460,376 | |||||||||||||
Other Assets, less Liabilities 0.5% | 12,188 | |||||||||||||
|
|
|||||||||||||
Net Assets 100.0% | $ | 2,472,564 | ||||||||||||
|
|
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. At September 30, 2023, the value of was $297,880, representing 12.0% of net assets.
bThe rate shown is the annualized seven-day effective yield at period end.
cSee Note 3(d) regarding investments in affiliated management investment companies.
See Abbreviations on page 220.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 181 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities
September 30, 2023 (unaudited)
Franklin ETF |
Franklin Bond ETF |
Franklin Data ETF |
Franklin Genomic ETF |
|||||||||||||||||||||
|
||||||||||||||||||||||||
Assets: |
||||||||||||||||||||||||
Investments in securities: |
||||||||||||||||||||||||
Cost – Unaffiliated issuers |
$ | 10,214,671 | $ | 136,693,505 | $ | 3,351,143 | $ | 11,134,926 | ||||||||||||||||
Cost – Non-controlled affiliates (Note 3d) |
— | — | 102,704 | — | ||||||||||||||||||||
Value – Unaffiliated issuers |
$ | 9,675,102 | $ | 129,195,124 | $ | 3,488,337 | $ | 8,266,236 | ||||||||||||||||
Value – Non-controlled affiliates (Note 3d) |
— | — | 102,704 | — | ||||||||||||||||||||
Cash |
140,607 | 67,358 | 1,063 | 242,233 | ||||||||||||||||||||
Foreign currency, at value (cost $1,848) |
— | — | 1,774 | — | ||||||||||||||||||||
Receivables: |
||||||||||||||||||||||||
Capital shares sold |
— | 1,147,257 | — | — | ||||||||||||||||||||
Dividends and interest |
1,263 | 1,563,876 | 575 | 2,140 | ||||||||||||||||||||
Investment securities sold |
— | 1,875,629 | — | — | ||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total assets |
9,816,972 | 133,849,244 | 3,594,453 | 8,510,609 | ||||||||||||||||||||
|
|
|||||||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||
Payables: |
||||||||||||||||||||||||
Investment securities purchased |
— | 6,473,457 | 575 | — | ||||||||||||||||||||
Management fees |
4,151 | 29,917 | 1,474 | 3,629 | ||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total liabilities |
4,151 | 6,503,374 | 2,049 | 3,629 | ||||||||||||||||||||
|
|
|||||||||||||||||||||||
Net assets, at value |
$ | 9,812,821 | $ | 127,345,870 | $ | 3,592,404 | $ | 8,506,980 | ||||||||||||||||
|
|
|||||||||||||||||||||||
Net assets consist of: |
||||||||||||||||||||||||
Paid-in capital |
$ | 21,047,819 | $ | 138,766,078 | $ | 4,576,263 | $ | 20,124,934 | ||||||||||||||||
Total distributable earnings (loss) |
(11,234,998 | ) | (11,420,208 | ) | (983,859 | ) | (11,617,954 | ) | ||||||||||||||||
|
|
|||||||||||||||||||||||
Net assets, at value |
$ | 9,812,821 | $ | 127,345,870 | $ | 3,592,404 | $ | 8,506,980 | ||||||||||||||||
|
|
|||||||||||||||||||||||
Shares outstanding |
400,000 | 5,550,000 | 200,000 | 300,000 | ||||||||||||||||||||
|
|
|||||||||||||||||||||||
Net asset value per share |
$ | 24.53 | $ | 22.95 | $ | 17.96 | $ | 28.36 | ||||||||||||||||
|
|
182 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
September 30, 2023 (unaudited)
Franklin High Yield Corporate ETF |
Franklin Income Focus ETF |
Franklin Intelligent Machines ETF |
Franklin International Aggregate Bond ETF |
Franklin Investment Grade Corporate ETF |
||||||||||||||||
|
||||||||||||||||||||
Assets: |
||||||||||||||||||||
Investments in securities: |
||||||||||||||||||||
Cost – Unaffiliated issuers |
$ | 240,443,422 | $ | 98,637,802 | $ | 19,532,102 | $ | 325,809,172 | $ | 708,415,757 | ||||||||||
Value – Unaffiliated issuers |
$ | 221,326,366 | $ | 95,719,269 | $ | 19,329,747 | $ | 285,747,815 | $ | 610,028,146 | ||||||||||
Cash |
— | 91,076 | 578,040 | 139,023 | 37,798 | |||||||||||||||
Foreign currency, at value (cost $4,990,051) |
— | — | — | 6,332,259 | — | |||||||||||||||
Receivables: |
||||||||||||||||||||
Dividends and interest |
3,532,269 | 1,016,145 | 7,648 | 2,410,007 | 6,602,660 | |||||||||||||||
Investment securities sold |
2,458,360 | — | — | — | — | |||||||||||||||
Variation margin on futures contracts |
— | 15,000 | — | — | — | |||||||||||||||
Deposits with brokers for: |
||||||||||||||||||||
Futures contracts |
— | 240,000 | — | — | — | |||||||||||||||
Unrealized appreciation on OTC forward exchange contracts |
— | — | — | 17,522,908 | — | |||||||||||||||
Other assets |
14,648 | — | — | — | — | |||||||||||||||
|
|
|||||||||||||||||||
Total assets |
227,331,643 | 97,081,490 | 19,915,435 | 312,152,012 | 616,668,604 | |||||||||||||||
|
|
|||||||||||||||||||
Liabilities: |
||||||||||||||||||||
Due to Custodian |
— | — | — | — | 29 | |||||||||||||||
Payables: |
||||||||||||||||||||
Investment securities purchased |
3,401,061 | — | — | — | — | |||||||||||||||
Management fees |
74,474 | 30,746 | 8,392 | 63,902 | 179,408 | |||||||||||||||
Funds advanced by custodian |
114,597 | — | — | — | — | |||||||||||||||
Options written, at value (premiums received $83,022) |
— | 43,421 | — | — | — | |||||||||||||||
Unrealized depreciation on OTC forward exchange contracts |
— | — | — | 860,231 | — | |||||||||||||||
|
|
|||||||||||||||||||
Total liabilities |
3,590,132 | 74,167 | 8,392 | 924,133 | 179,437 | |||||||||||||||
|
|
|||||||||||||||||||
Net assets, at value |
$ | 223,741,511 | $ | 97,007,323 | $ | 19,907,043 | $ | 311,227,879 | $ | 616,489,167 | ||||||||||
|
|
|||||||||||||||||||
Net assets consist of: |
||||||||||||||||||||
Paid-in capital |
$ | 249,859,643 | $ | 100,000,000 | $ | 20,738,510 | $ | 363,301,776 | $ | 765,982,290 | ||||||||||
Total distributable earnings (loss) |
(26,118,132 | ) | (2,992,677 | ) | (831,467 | ) | (52,073,897 | ) | (149,493,123 | ) | ||||||||||
|
|
|||||||||||||||||||
Net assets, at value |
$ | 223,741,511 | $ | 97,007,323 | $ | 19,907,043 | $ | 311,227,879 | $ | 616,489,167 | ||||||||||
|
|
|||||||||||||||||||
Shares outstanding |
9,950,000 | 4,000,000 | 450,000 | 16,050,000 | 30,350,000 | |||||||||||||||
|
|
|||||||||||||||||||
Net asset value per share |
$ | 22.49 | $ | 24.25 | $ | 44.24 | $ | 19.39 | $ | 20.31 | ||||||||||
|
|
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
183 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
September 30, 2023 (unaudited)
Franklin Municipal Green Bond ETF |
Franklin Senior Loan ETF |
Franklin Systematic Style Premia ETF* |
Franklin U.S. Core Bond ETF |
|||||||||||||
|
||||||||||||||||
Assets: |
||||||||||||||||
Investments in securities: |
||||||||||||||||
Cost – Unaffiliated issuers |
$112,740,613 | $242,369,899 | $67,874,249 | $1,741,616,329 | ||||||||||||
Cost – Non-controlled affiliates (Note 3d) |
— | — | — | 14,340,724 | ||||||||||||
Value – Unaffiliated issuers |
$104,193,146 | $237,331,313 | $73,254,055 | $1,536,984,187 | ||||||||||||
Value – Non-controlled affiliates (Note 3d) |
— | — | — | 14,340,724 | ||||||||||||
Cash |
92,609 | 548,551 | 2,198,131 | 3,139 | ||||||||||||
Foreign currency, at value (cost $276,099) |
— | — | 273,518 | — | ||||||||||||
Receivables: |
||||||||||||||||
Capital shares sold |
— | — | 23,688,106 | 3,078,480 | ||||||||||||
Dividends and interest |
1,422,840 | 2,212,095 | 198,922 | 10,172,707 | ||||||||||||
Investment securities sold |
— | 1,253,797 | — | — | ||||||||||||
Deposits with brokers for: |
||||||||||||||||
Futures contracts |
— | — | 6,063,276 | 644,082 | ||||||||||||
Swap contracts |
— | — | 350,000 | — | ||||||||||||
Unrealized appreciation on OTC forward exchange contracts |
— | — | 29,219 | — | ||||||||||||
Unrealized appreciation on OTC swap contracts |
— | — | 1,918,599 | — | ||||||||||||
|
|
|||||||||||||||
Total assets |
105,708,595 | 241,345,756 | 107,973,826 | 1,565,223,319 | ||||||||||||
|
|
|||||||||||||||
Liabilities: |
||||||||||||||||
Payables: |
||||||||||||||||
Investment securities purchased |
— | 4,502,796 | 67 | 56,621 | ||||||||||||
Management fees |
26,425 | 87,261 | 43,063 | 190,247 | ||||||||||||
Transfer agent fees |
— | — | 3,749 | — | ||||||||||||
Custodian fees |
— | — | 591 | — | ||||||||||||
Professional fees |
— | — | 333 | — | ||||||||||||
Variation margin on futures contracts |
— | — | 218,364 | 81,085 | ||||||||||||
Unrealized depreciation on OTC forward exchange contracts |
— | — | 545,877 | — | ||||||||||||
Accrued expenses and other liabilities |
— | — | 771 | — | ||||||||||||
|
|
|||||||||||||||
Total liabilities |
26,425 | 4,590,057 | 812,815 | 327,953 | ||||||||||||
|
|
|||||||||||||||
Net assets, at value |
$105,682,170 | $236,755,699 | $107,161,011 | $1,564,895,366 | ||||||||||||
|
|
|||||||||||||||
Net assets consist of: |
||||||||||||||||
Paid-in capital |
$124,513,167 | $248,643,653 | $109,561,624 | $1,894,364,616 | ||||||||||||
Total distributable earnings (loss) |
(18,830,997 | ) | (11,887,954 | ) | (2,400,613 | ) | (329,469,250 | ) | ||||||||
|
|
|||||||||||||||
Net assets, at value |
$105,682,170 | $236,755,699 | $107,161,011 | $1,564,895,366 | ||||||||||||
|
|
|||||||||||||||
Shares outstanding |
4,700,000 | 9,800,000 | 4,750,000 | 76,250,000 | ||||||||||||
|
|
|||||||||||||||
Net asset value per share |
$ 22.49 | $24.16 | $ 22.56 | $ 20.52 | ||||||||||||
|
|
184 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Assets and Liabilities (continued)
September 30, 2023 (unaudited)
Franklin U.S. Low Volatility ETF |
Franklin U.S. Treasury Bond ETF |
Franklin Ultra Short Bond ETF |
||||||||||||||||||
|
||||||||||||||||||||
Assets: |
||||||||||||||||||||
Investments in securities: |
||||||||||||||||||||
Cost – Unaffiliated issuers |
$ | 130,068,323 | $ | 487,619,235 | $ | 1,798,172 | ||||||||||||||
Cost – Non-controlled affiliates (Note 3d) |
— | — | 667,662 | |||||||||||||||||
Value – Unaffiliated issuers |
$ | 142,187,275 | $ | 456,348,981 | $ | 1,792,714 | ||||||||||||||
Value – Non-controlled affiliates (Note 3d) |
— | — | 667,662 | |||||||||||||||||
Cash |
14,664 | — | 3 | |||||||||||||||||
Receivables: |
||||||||||||||||||||
Capital shares sold |
— | 29,976,425 | — | |||||||||||||||||
Dividends and interest |
127,823 | 2,736,182 | 15,001 | |||||||||||||||||
Investment securities sold |
— | 973,001 | — | |||||||||||||||||
|
|
|||||||||||||||||||
Total assets |
142,329,762 | 490,034,589 | 2,475,380 | |||||||||||||||||
|
|
|||||||||||||||||||
Liabilities: |
||||||||||||||||||||
Payables: |
||||||||||||||||||||
Investment securities purchased |
— | 30,336,277 | 2,706 | |||||||||||||||||
Management fees |
34,911 | 31,849 | 110 | |||||||||||||||||
|
|
|||||||||||||||||||
Total liabilities |
34,911 | 30,368,126 | 2,816 | |||||||||||||||||
|
|
|||||||||||||||||||
Net assets, at value |
$ | 142,294,851 | $ | 459,666,463 | $ | 2,472,564 | ||||||||||||||
|
|
|||||||||||||||||||
Net assets consist of: |
||||||||||||||||||||
Paid-in capital |
$ | 128,406,867 | $ | 551,688,541 | $ | 2,514,957 | ||||||||||||||
Total distributable earnings (loss) |
13,887,984 | (92,022,078 | ) | (42,393 | ) | |||||||||||||||
|
|
|||||||||||||||||||
Net assets, at value |
$ | 142,294,851 | $ | 459,666,463 | $ | 2,472,564 | ||||||||||||||
|
|
|||||||||||||||||||
Shares outstanding |
3,000,000 | 23,000,000 | 100,000 | |||||||||||||||||
|
|
|||||||||||||||||||
Net asset value per share |
$ | 47.43 | $ | 19.99 | $ | 24.73 | ||||||||||||||
|
|
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
185 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations
for the period ended September 30, 2023 (unaudited)
Franklin Disruptive Commerce ETF |
Franklin Dynamic Municipal Bond ETF |
Franklin Exponential Data ETF |
Franklin Genomic Advancements ETF |
|||||||||||||||||||||
|
||||||||||||||||||||||||
Investment income: |
||||||||||||||||||||||||
Dividends: (net of foreign taxes)a |
||||||||||||||||||||||||
Unaffiliated issuers |
$ | 22,597 | $ | — | $ | 10,675 | $ | 12,589 | ||||||||||||||||
Interest: |
||||||||||||||||||||||||
Unaffiliated issuers |
— | 2,238,569 | — | — | ||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total investment income |
22,597 | 2,238,569 | 10,675 | 12,589 | ||||||||||||||||||||
|
|
|||||||||||||||||||||||
Expenses: |
||||||||||||||||||||||||
Management fees (Note 3a) |
25,150 | 163,763 | 9,006 | 25,808 | ||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total expenses |
25,150 | 163,763 | 9,006 | 25,808 | ||||||||||||||||||||
Expenses waived/paid by affiliates (Note 3d) |
— | — | (282 | ) | — | |||||||||||||||||||
|
|
|||||||||||||||||||||||
Net expenses |
25,150 | 163,763 | 8,724 | 25,808 | ||||||||||||||||||||
|
|
|||||||||||||||||||||||
Net investment income |
(2,553 | ) | 2,074,806 | 1,951 | (13,219 | ) | ||||||||||||||||||
|
|
|||||||||||||||||||||||
Realized and unrealized gains (losses): |
||||||||||||||||||||||||
Net realized gain (loss) from: |
||||||||||||||||||||||||
Investments: |
||||||||||||||||||||||||
Unaffiliated issuers |
(690,358 | ) | (610,140 | ) | (204,744 | ) | (298,894 | ) | ||||||||||||||||
In-kind redemptions |
— | — | — | (192,382 | ) | |||||||||||||||||||
Foreign currency transactions |
256 | — | (78 | ) | 1 | |||||||||||||||||||
|
|
|||||||||||||||||||||||
Net realized gain (loss) |
(690,102 | ) | (610,140 | ) | (204,822 | ) | (491,275 | ) | ||||||||||||||||
|
|
|||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||||||||||
Investments: |
||||||||||||||||||||||||
Unaffiliated issuers |
886,421 | (4,152,207 | ) | 423,256 | (113,560 | ) | ||||||||||||||||||
Translation of other assets and liabilities denominated in foreign currencies |
(20 | ) | — | (117 | ) | (8 | ) | |||||||||||||||||
|
|
|||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) |
886,401 | (4,152,207 | ) | 423,139 | (113,568 | ) | ||||||||||||||||||
|
|
|||||||||||||||||||||||
Net realized and unrealized gain (loss) |
196,299 | (4,762,347 | ) | 218,317 | (604,843 | ) | ||||||||||||||||||
|
|
|||||||||||||||||||||||
Net increase (decrease) in net assets resulting from operations |
$ | 193,746 | $ | (2,687,541 | ) | $ | 220,268 | $ | (618,062 | ) | ||||||||||||||
|
|
|||||||||||||||||||||||
aForeign taxes withheld on dividends |
$9 | $— | $55 | $128 | ||||||||||||||||||||
|
|
186 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the period ended September 30, 2023 (unaudited)
Franklin High Yield |
Franklin Income Focus ETF* |
Franklin Intelligent Machines ETF |
Franklin International Aggregate Bond ETF |
|||||||||||||||||
|
||||||||||||||||||||
Investment income: |
||||||||||||||||||||
Dividends: (net of foreign taxes)a |
||||||||||||||||||||
Unaffiliated issuers |
$ — | $ 220,948 | $ 29,448 | $ | — | |||||||||||||||
Interest: (net of foreign taxes)b |
||||||||||||||||||||
Unaffiliated issuers |
7,124,052 | 1,633,852 | — | 3,568,588 | ||||||||||||||||
|
|
|||||||||||||||||||
Total investment income |
7,124,052 | 1,854,800 | 29,448 | 3,568,588 | ||||||||||||||||
|
|
|||||||||||||||||||
Expenses: |
| |||||||||||||||||||
Management fees (Note 3a) |
431,483 | 120,337 | 37,664 | 374,916 | ||||||||||||||||
|
|
|||||||||||||||||||
Total expenses |
431,483 | 120,337 | 37,664 | 374,916 | ||||||||||||||||
|
|
|||||||||||||||||||
Net investment income |
6,692,569 | 1,734,463 | (8,216 | ) | 3,193,672 | |||||||||||||||
|
|
|||||||||||||||||||
Realized and unrealized gains (losses): |
||||||||||||||||||||
Net realized gain (loss) from: |
||||||||||||||||||||
Investments: |
||||||||||||||||||||
Unaffiliated issuers |
(1,412,338 | ) | 125,473 | (299,902 | ) | (6,011,003 | ) | |||||||||||||
In-kind redemptions |
(108,201 | ) | — | 795,970 | — | |||||||||||||||
Foreign currency transactions |
— | — | (1,873 | ) | 689,026 | |||||||||||||||
Forward exchange contracts |
— | — | — | (616,370 | ) | |||||||||||||||
Futures contracts |
— | (412,500 | ) | — | — | |||||||||||||||
|
|
|||||||||||||||||||
Net realized gain (loss) |
(1,520,539 | ) | (287,027 | ) | 494,195 | (5,938,347 | ) | |||||||||||||
|
|
|||||||||||||||||||
Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||||||
Investments: |
||||||||||||||||||||
Unaffiliated issuers |
823,691 | (2,918,533 | ) | (1,489,325 | ) | (15,582,528 | ) | |||||||||||||
Translation of other assets and liabilities denominated in foreign currencies |
— | — | (12 | ) | 502,877 | |||||||||||||||
Written options |
— | 39,601 | — | — | ||||||||||||||||
Futures contracts |
— | (259,005 | ) | — | — | |||||||||||||||
Forward exchange contracts |
— | — | — | 14,550,445 | ||||||||||||||||
|
|
|||||||||||||||||||
Net change in unrealized appreciation (depreciation) |
823,691 | (3,137,937 | ) | (1,489,337 | ) | (529,206 | ) | |||||||||||||
|
|
|||||||||||||||||||
Net realized and unrealized gain (loss) |
(696,848 | ) | (3,424,964 | ) | (995,142 | ) | (6,467,553 | ) | ||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) in net assets resulting from operations |
$ 5,995,721 | $(1,690,501 | ) | $ (1,003,358 | ) | $(3,273,881 | ) | |||||||||||||
|
|
|||||||||||||||||||
aForeign taxes withheld on dividends |
$— | $2,053 | $2,263 | $ — | ||||||||||||||||
bForeign taxes withheld on interest |
$— | $ — | $ — | $88 | ||||||||||||||||
|
|
*For the period June 06, 2023 (commencement of operations) to September 30, 2023.
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
187 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the period ended September 30, 2023 (unaudited)
Franklin Investment Grade Corporate ETF |
Franklin Municipal Green Bond ETF |
Franklin Senior Loan ETF |
Franklin Systematic Style Premia ETF* |
|||||||||||||||||
|
||||||||||||||||||||
Investment income: |
||||||||||||||||||||
Dividends: (net of foreign taxes)a |
||||||||||||||||||||
Unaffiliated issuers |
$ — | $ — | $ — | $736,009 | ||||||||||||||||
Interest: (net of foreign taxes)b |
||||||||||||||||||||
Unaffiliated issuers |
13,032,276 | 1,980,781 | 9,992,269 | 471,504 | ||||||||||||||||
|
|
|||||||||||||||||||
Total investment income |
13,032,276 | 1,980,781 | 9,992,269 | 1,207,513 | ||||||||||||||||
|
|
|||||||||||||||||||
Expenses: |
| |||||||||||||||||||
Management fees (Note 3a) |
1,115,618 | 164,989 | 488,156 | 290,765 | ||||||||||||||||
Transfer agent fees |
— | — | — | 3,750 | ||||||||||||||||
Custodian fees |
— | — | — | 601 | ||||||||||||||||
|
|
|||||||||||||||||||
Total expenses |
1,115,618 | 164,989 | 488,156 | 295,116 | ||||||||||||||||
Expenses waived/paid by affiliates (Note 3c) |
— | — | — | (11,629 | ) | |||||||||||||||
|
|
|||||||||||||||||||
Net expenses |
1,115,618 | 164,989 | 488,156 | 283,487 | ||||||||||||||||
|
|
|||||||||||||||||||
Net investment income |
11,916,658 | 1,815,792 | 9,504,113 | 924,026 | ||||||||||||||||
|
|
|||||||||||||||||||
Realized and unrealized gains (losses): |
||||||||||||||||||||
Net realized gain (loss) from: |
||||||||||||||||||||
Investments: |
||||||||||||||||||||
Unaffiliated issuers |
(4,507,179 | ) | (1,128,095 | ) | (229,952 | ) | 1,972,320 | |||||||||||||
In-kind redemptions |
(1,499,869 | ) | — | — | — | |||||||||||||||
Foreign currency transactions |
— | — | — | 2,207,625 | ||||||||||||||||
Forward exchange contracts |
— | — | — | (1,104,665 | ) | |||||||||||||||
Futures contracts |
(476,974 | ) | — | — | 1,458,889 | |||||||||||||||
|
|
|||||||||||||||||||
Net realized gain (loss) |
(6,484,022 | ) | (1,128,095 | ) | (229,952 | ) | 4,534,169 | |||||||||||||
|
|
|||||||||||||||||||
Net change in unrealized appreciation |
||||||||||||||||||||
(depreciation) on: |
||||||||||||||||||||
Investments: |
||||||||||||||||||||
Unaffiliated issuers |
(27,111,708 | ) | (5,299,040 | ) | 3,273,788 | (1,353,283 | ) | |||||||||||||
Translation of other assets and liabilities denominated in foreign currencies |
— | — | — | (30,578 | ) | |||||||||||||||
Futures contracts |
492,300 | — | — | (876,790 | ) | |||||||||||||||
Swap contracts |
— | — | — | 1,918,599 | ||||||||||||||||
Forward exchange contracts |
— | — | — | (863,644 | ) | |||||||||||||||
|
|
|||||||||||||||||||
Net change in unrealized appreciation (depreciation) |
(26,619,408 | ) | (5,299,040 | ) | 3,273,788 | (1,205,696 | ) | |||||||||||||
|
|
|||||||||||||||||||
Net realized and unrealized gain (loss) |
(33,103,430 | ) | (6,427,135 | ) | 3,043,836 | 3,328,473 | ||||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) in net assets resulting from operations |
$(21,186,772 | ) | $(4,611,343 | ) | $12,547,949 | $4,252,499 | ||||||||||||||
|
|
|||||||||||||||||||
aForeign taxes withheld on dividends |
$ — | $— | $— | $38,087 | ||||||||||||||||
bForeign taxes withheld on interest |
$(670 | ) | $— | $— | $ — | |||||||||||||||
|
|
*Consolidated financial statements. Note 10.
188 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Operations (continued)
for the period ended September 30, 2023 (unaudited)
Franklin U.S. Core Bond ETF |
Franklin U.S. Low Volatility ETF |
Franklin U.S. Treasury Bond ETF |
Franklin Ultra Short Bond ETF |
|||||||||||||||||
|
||||||||||||||||||||
Investment income: |
||||||||||||||||||||
Dividends: (net of foreign taxes)a |
||||||||||||||||||||
Unaffiliated issuers |
$ | 332,851 | $ | 1,574,159 | $ | 29,966 | $ | 13,127 | ||||||||||||
Interest: (net of foreign taxes)b |
||||||||||||||||||||
Unaffiliated issuers |
25,758,987 | 28,355 | 7,252,974 | 43,005 | ||||||||||||||||
Inflation principle adjustments |
— | — | 236,745 | — | ||||||||||||||||
|
|
|||||||||||||||||||
Total investment income |
26,091,838 | 1,602,514 | 7,519,685 | 56,132 | ||||||||||||||||
|
|
|||||||||||||||||||
Expenses: |
||||||||||||||||||||
Management fees (Note 3a) |
1,159,713 | 227,232 | 198,101 | 1,845 | ||||||||||||||||
|
|
|||||||||||||||||||
Total expenses |
1,159,713 | 227,232 | 198,101 | 1,845 | ||||||||||||||||
Expenses waived/paid by affiliates (Note 3d) |
(29,581 | ) | — | (2,709 | ) | (1,310 | ) | |||||||||||||
|
|
|||||||||||||||||||
Net expenses |
1,130,132 | 227,232 | 195,392 | 535 | ||||||||||||||||
|
|
|||||||||||||||||||
Net investment income |
24,961,706 | 1,375,282 | 7,324,293 | 55,597 | ||||||||||||||||
|
|
|||||||||||||||||||
Realized and unrealized gains (losses): |
||||||||||||||||||||
Net realized gain (loss) from: |
||||||||||||||||||||
Investments: |
||||||||||||||||||||
Unaffiliated issuers |
(8,132,704 | ) | (1,825,937 | ) | (1,149,531 | ) | 178 | |||||||||||||
In-kind redemptions |
— | 6,353,666 | — | — | ||||||||||||||||
Foreign currency transactions |
— | 564 | — | — | ||||||||||||||||
Futures contracts |
(875,810 | ) | — | — | — | |||||||||||||||
Swap contracts |
73,750 | — | — | — | ||||||||||||||||
|
|
|||||||||||||||||||
Net realized gain (loss) |
(8,934,764 | ) | 4,528,293 | (1,149,531 | ) | 178 | ||||||||||||||
|
|
|||||||||||||||||||
Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||||||
Investments: |
||||||||||||||||||||
Unaffiliated issuers |
(78,284,759 | ) | (2,698,976 | ) | (24,882,739 | ) | 17,980 | |||||||||||||
Translation of other assets and liabilities denominated in foreign currencies |
— | (50 | ) | — | — | |||||||||||||||
Futures contracts |
(1,087,964 | ) | — | — | — | |||||||||||||||
Swap contracts |
(77,367 | ) | — | — | — | |||||||||||||||
|
|
|||||||||||||||||||
Net change in unrealized appreciation (depreciation) |
(79,450,090 | ) | (2,699,026 | ) | (24,882,739 | ) | 17,980 | |||||||||||||
|
|
|||||||||||||||||||
Net realized and unrealized gain (loss) |
(88,384,854 | ) | 1,829,267 | (26,032,270 | ) | 18,158 | ||||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) in net assets resulting from operations |
$ | (63,423,148 | ) | $ | 3,204,549 | $ | (18,707,977 | ) | $ | 73,755 | ||||||||||
|
|
|||||||||||||||||||
aForeign taxes withheld on dividends |
$ | — | $ | 8,343 | $ | — | $ | — | ||||||||||||
bForeign taxes withheld on interest |
$ | (446 | ) | $ | — | $ | — | $ | — | |||||||||||
|
|
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
189 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
Franklin Disruptive Commerce ETF |
Franklin Dynamic Municipal Bond ETF |
|||||||||||||||||||
|
|
|||||||||||||||||||
Six Months Ended September 30, 2023 (unaudited) |
Year
Ended March 31, 2023 |
Six Months Ended September 30, 2023 (unaudited) |
Year
Ended March 31, 2023 |
|||||||||||||||||
|
||||||||||||||||||||
Increase (decrease) in net assets: |
||||||||||||||||||||
Operations: |
||||||||||||||||||||
Net investment income (loss) |
$ (2,553 | ) | $ 7,480 | $ 2,074,806 | $ 2,845,335 | |||||||||||||||
Net realized loss |
(690,102 | ) | (5,390,659 | ) | (610,140 | ) | (3,251,657 | ) | ||||||||||||
Net change in unrealized appreciation (depreciation) |
886,401 | 731,180 | (4,152,207 | ) | 334,040 | |||||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) in net assets resulting from operations |
193,746 | (4,651,999 | ) | (2,687,541 | ) | (72,282 | ) | |||||||||||||
|
|
|||||||||||||||||||
Distributions to shareholders (Note 1g) |
— | — | (2,084,014 | ) | (2,738,207 | ) | ||||||||||||||
|
|
|||||||||||||||||||
Capital share transactions: (Note 2) |
— | (4,312,705 | ) | 30,620,185 | 27,399,308 | |||||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) in net assets |
193,746 | (8,964,704 | ) | 25,848,630 | 24,588,819 | |||||||||||||||
Net assets: |
||||||||||||||||||||
Beginning of period |
9,619,075 | 18,583,779 | 101,497,240 | 76,908,421 | ||||||||||||||||
|
|
|||||||||||||||||||
End of period |
$9,812,821 | $9,619,075 | $127,345,870 | $101,497,240 | ||||||||||||||||
|
|
190 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin Exponential Data ETF | Franklin Genomic Advancements ETF | |||||||||||||||||||
|
|
|||||||||||||||||||
Six Months Ended September 30, 2023 (unaudited) |
Year Ended March 31, 2023 |
Six Months Ended September 30, 2023 (unaudited) |
Year
Ended March 31, 2023 |
|||||||||||||||||
|
||||||||||||||||||||
Increase (decrease) in net assets: |
||||||||||||||||||||
Operations: |
||||||||||||||||||||
Net investment income (loss) |
$ 1,951 | $ (1,842 | ) | $ (13,219 | ) | $ (18,455 | ) | |||||||||||||
Net realized loss |
(204,822 | ) | (367,090 | ) | (491,275 | ) | (2,624,513 | ) | ||||||||||||
Net change in unrealized appreciation (depreciation) |
423,139 | (476,109 | ) | (113,568 | ) | 41,315 | ||||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) in net assets resulting from operations |
220,268 | (845,041 | ) | (618,062 | ) | (2,601,653 | ) | |||||||||||||
|
|
|||||||||||||||||||
Capital share transactions: (Note 2) |
— | 800,051 | (1,516,432 | ) | (1,555,550 | ) | ||||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) in net assets |
220,268 | (44,990 | ) | (2,134,494 | ) | (4,157,203 | ) | |||||||||||||
Net assets: |
||||||||||||||||||||
Beginning of period |
3,372,136 | 3,417,126 | 10,641,474 | 14,798,677 | ||||||||||||||||
|
|
|||||||||||||||||||
End of period |
$3,592,404 | $3,372,136 | $8,506,980 | $10,641,474 | ||||||||||||||||
|
|
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
191 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin High Yield Corporate ETF |
Franklin Income Focus ETF | |||||||||||||||
|
|
|||||||||||||||
Six Months Ended September 30, 2023 (unaudited) |
Year
Ended March 31, 2023 |
Period
Ended September 30, 2023 (unaudited)* |
||||||||||||||
|
||||||||||||||||
Increase (decrease) in net assets: |
||||||||||||||||
Operations: |
||||||||||||||||
Net investment income |
$ 6,692,569 | $ 12,584,791 | $ 1,734,463 | |||||||||||||
Net realized loss |
(1,520,539 | ) | (20,068,381 | ) | (287,027 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) |
823,691 | (3,626,857 | ) | (3,137,937 | ) | |||||||||||
|
|
|||||||||||||||
Net increase (decrease) in net assets resulting from operations |
5,995,721 | (11,110,447 | ) | (1,690,501 | ) | |||||||||||
|
|
|||||||||||||||
Distributions to shareholders (Note 1g) |
(7,401,698 | ) | (14,565,851 | ) | (1,302,176 | ) | ||||||||||
|
|
|||||||||||||||
Capital share transactions: (Note 2) |
16,980,124 | (100,442,169 | ) | 100,000,000 | ||||||||||||
|
|
|||||||||||||||
Net increase (decrease) in net assets |
15,574,147 | (126,118,467 | ) | 97,007,323 | ||||||||||||
Net assets: |
||||||||||||||||
Beginning of period |
208,167,364 | 334,285,831 | — | |||||||||||||
|
|
|||||||||||||||
End of period |
$223,741,511 | $208,167,364 | $97,007,323 | |||||||||||||
|
|
*For the period June 06, 2023 (commencement of operations) to September 30, 2023.
192 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin Intelligent Machines ETF |
Franklin International Aggregate Bond ETF |
|||||||||||||||||||
|
|
|||||||||||||||||||
Six Months Ended September 30, 2023 (unaudited) |
Year
Ended March 31, 2023 |
Six Months Ended September 30, 2023 (unaudited) |
Year
Ended March 31, 2023 |
|||||||||||||||||
|
||||||||||||||||||||
Increase (decrease) in net assets: |
||||||||||||||||||||
Operations: |
||||||||||||||||||||
Net investment income (loss) |
$ (8,216 | ) | $ 166 | $ 3,193,672 | $ 1,741,480 | |||||||||||||||
Net realized gain (loss) |
494,195 | 3,004 | (5,938,347 | ) | 3,830,774 | |||||||||||||||
Net change in unrealized appreciation (depreciation) |
(1,489,337 | ) | (810,953 | ) | (529,206 | ) | (10,098,488 | ) | ||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) in net assets resulting from operations |
(1,003,358 | ) | (807,783 | ) | (3,273,881 | ) | (4,526,234 | ) | ||||||||||||
|
|
|||||||||||||||||||
Distributions to shareholders (Note 1g) |
— | — | — | (30,078,202 | ) | |||||||||||||||
|
|
|||||||||||||||||||
Capital share transactions: (Note 2) |
12,078,203 | (1,933,835 | ) | 38,338,016 | 116,800,375 | |||||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) in net assets |
11,074,845 | (2,741,618 | ) | 35,064,135 | 82,195,939 | |||||||||||||||
Net assets: |
||||||||||||||||||||
Beginning of period |
8,832,198 | 11,573,816 | 276,163,744 | 193,967,805 | ||||||||||||||||
|
|
|||||||||||||||||||
End of period |
$19,907,043 | $8,832,198 | $311,227,879 | $276,163,744 | ||||||||||||||||
|
|
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
193 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin Investment Grade Corporate ETF |
Franklin Municipal Green Bond ETF | |||||||||||||||||||
|
|
|||||||||||||||||||
Six Months Ended September 30, 2023 (unaudited) |
Year Ended March 31, 2023 |
Six Months
Ended September 30, 2023 (unaudited) |
Year
Ended March 31, 2023 |
|||||||||||||||||
|
||||||||||||||||||||
Increase (decrease) in net assets: |
||||||||||||||||||||
Operations: |
||||||||||||||||||||
Net investment income |
$ 11,916,658 | $ 22,025,022 | $ 1,815,792 | $ 2,746,059 | ||||||||||||||||
Net realized loss |
(6,484,022 | ) | (84,970,442 | ) | (1,128,095 | ) | (6,701,880 | ) | ||||||||||||
Net change in unrealized appreciation (depreciation) |
(26,619,408 | ) | (683,135 | ) | (5,299,040 | ) | 2,723,264 | |||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) in net assets resulting from operations |
(21,186,772 | ) | (63,628,555 | ) | (4,611,343 | ) | (1,232,557 | ) | ||||||||||||
|
|
|||||||||||||||||||
Distributions to shareholders (Note 1g) |
(13,165,542 | ) | (24,150,574 | ) | (2,010,148 | ) | (2,942,579 | ) | ||||||||||||
|
|
|||||||||||||||||||
Capital share transactions: (Note 2) |
6,478,892 | (249,460,109 | ) | (45,269 | ) | 11,585,524 | ||||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) in net assets |
(27,873,422 | ) | (337,239,238 | ) | (6,666,760 | ) | 7,410,388 | |||||||||||||
Net assets: |
||||||||||||||||||||
Beginning of period |
644,362,589 | 981,601,827 | 112,348,930 | 104,938,542 | ||||||||||||||||
|
|
|||||||||||||||||||
End of period |
$616,489,167 | $644,362,589 | $105,682,170 | $112,348,930 | ||||||||||||||||
|
|
194 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin Senior Loan ETF |
Franklin Systematic Style Premia ETF |
|||||||||||||||||||
|
|
|||||||||||||||||||
Six Months Ended September 30, 2023 (unaudited) |
Year
Ended March 31, 2023 |
Six Months
Ended September 30, 2023 (unaudited) |
Year
Ended March 31, 2023 |
|||||||||||||||||
|
||||||||||||||||||||
Increase (decrease) in net assets: |
||||||||||||||||||||
Operations: |
||||||||||||||||||||
Net investment income |
$ 9,504,113 | $ 14,352,567 | $ 924,026 | $ 1,063,910 | ||||||||||||||||
Net realized gain (loss) |
(229,952 | ) | (6,257,273 | ) | 4,534,169 | (3,934,690 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) |
3,273,788 | (5,069,428 | ) | (1,205,696 | ) | 4,772,274 | ||||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) in net assets resulting from operations |
12,547,949 | 3,025,866 | 4,252,499 | 1,901,494 | ||||||||||||||||
|
|
|||||||||||||||||||
Distributions to shareholders (Note 1g) |
(9,722,539 | ) | (13,839,060 | ) | — | (2,011,501 | ) | |||||||||||||
|
|
|||||||||||||||||||
Capital share transactions: (Note 2) |
27,810,018 | (75,788,778 | ) | 11,762,572 | 35,997,633 | |||||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) in net assets |
30,635,428 | (86,601,972 | ) | 16,015,071 | 35,887,626 | |||||||||||||||
Net assets: |
||||||||||||||||||||
Beginning of period |
206,120,271 | 292,722,243 | 91,145,940 | 55,258,314 | ||||||||||||||||
|
|
|||||||||||||||||||
End of period |
$236,755,699 | $206,120,271 | $107,161,011 | $91,145,940 | ||||||||||||||||
|
|
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
195 |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin U.S. Core Bond ETF | Franklin U.S. Low Volatility ETF | |||||||||||||||||||
|
|
|||||||||||||||||||
Six Months
Ended September 30, 2023 (unaudited) |
Year
Ended March 31, 2023 |
Six Months
Ended September 30, 2023 (unaudited) |
Year
Ended March 31, 2023 |
|||||||||||||||||
|
||||||||||||||||||||
Increase (decrease) in net assets: |
||||||||||||||||||||
Operations: |
||||||||||||||||||||
Net investment income |
$ 24,961,706 | $ 37,200,280 | $ 1,375,282 | $ 2,208,643 | ||||||||||||||||
Net realized gain (loss) |
(8,934,764 | ) | (77,224,065 | ) | 4,528,293 | (1,776,637 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) |
(79,450,090 | ) | (34,675,111 | ) | (2,699,026 | ) | (3,376,894 | ) | ||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) in net assets resulting from operations |
(63,423,148 | ) | (74,698,896 | ) | 3,204,549 | (2,944,888 | ) | |||||||||||||
|
|
|||||||||||||||||||
Distributions to shareholders (Note 1g) |
(25,873,697 | ) | (36,861,021 | ) | (1,216,811 | ) | (2,283,102 | ) | ||||||||||||
|
|
|||||||||||||||||||
Capital share transactions: (Note 2) |
142,501,354 | 113,289,466 | (15,305,556 | ) | 25,905,244 | |||||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) in net assets |
53,204,509 | 1,729,549 | (13,317,818 | ) | 20,677,254 | |||||||||||||||
Net assets: |
||||||||||||||||||||
Beginning of period |
1,511,690,857 | 1,509,961,308 | 155,612,669 | 134,935,415 | ||||||||||||||||
|
|
|||||||||||||||||||
End of period |
$1,564,895,366 | $1,511,690,857 | $142,294,851 | $155,612,669 | ||||||||||||||||
|
|
196 |
Semiannual Report | The accompanying notes are an integral part of these financial statements. |
franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
FINANCIAL STATEMENTS
Statements of Changes in Net Assets (continued)
Franklin U.S. Treasury Bond ETF | Franklin Ultra Short Bond ETF | |||||||||||||||||||
|
|
|||||||||||||||||||
Six Months Ended September 30, 2023 (unaudited) |
Year
Ended March 31, 2023 |
Six Months
Ended September 30, 2023 (unaudited) |
Year
Ended March 31, 2023 |
|||||||||||||||||
|
||||||||||||||||||||
Increase (decrease) in net assets: |
||||||||||||||||||||
Operations: |
||||||||||||||||||||
Net investment income |
$ 7,324,293 | $ 8,132,461 | $ 55,597 | $ 75,527 | ||||||||||||||||
Net realized gain (loss) |
(1,149,531 | ) | (45,689,019 | ) | 178 | (23,277 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) |
(24,882,739 | ) | 24,120,884 | 17,980 | 18,440 | |||||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) in net assets resulting from operations |
(18,707,977 | ) | (13,435,674 | ) | 73,755 | 70,690 | ||||||||||||||
|
|
|||||||||||||||||||
Distributions to shareholders (Note 1g) |
(7,779,179 | ) | (9,684,869 | ) | (58,837 | ) | (62,292 | ) | ||||||||||||
|
|
|||||||||||||||||||
Capital share transactions: (Note 2) |
57,397,664 | 48,333,781 | — | (1,232,733 | ) | |||||||||||||||
|
|
|||||||||||||||||||
Net increase (decrease) in net assets |
30,910,508 | 25,213,238 | 14,918 | (1,224,335 | ) | |||||||||||||||
Net assets: |
||||||||||||||||||||
Beginning of period |
428,755,955 | 403,542,717 | 2,457,646 | 3,681,981 | ||||||||||||||||
|
|
|||||||||||||||||||
End of period |
$459,666,463 | $428,755,955 | $2,472,564 | $2,457,646 | ||||||||||||||||
|
|
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | Semiannual Report |
197 |
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, sixteen of which are included in this report (Funds). The Funds follow the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946, Financial Services - Investment Companies (“ASC 946”), and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP), including, but not limited to, ASC 946. The Funds are exchange traded funds (ETF) and are actively managed, thus they are not designed to track an index.
Effective June 6, 2023, the Trust began offering shares of Franklin Income Focus ETF. Each of the Funds are an exchange traded fund (ETF) and are actively managed, thus they are not designed to track an index.
The following summarizes the 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 Trust’s Board of Trustees (the Board), the Board has designated the Fund’s investment manager as the valuation designee and has responsibility for oversight of valuation. The investment manager is assisted by the Fund’s administrator in performing this responsibility, including leading the cross-functional Valuation Committee (VC).
The Funds may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.
Equity securities and exchange traded funds 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.
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.
Debt securities generally trade in the over-the-counter (OTC) market rather than on a securities exchange. The Funds’ pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value. Securities denominated in a foreign currency are converted into their U.S. dollar equivalent at the foreign exchange rate in effect at 4 p.m. Eastern time on the date that the values of the foreign debt securities are determined.
The Funds have procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Funds primarily employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, As per standards minutes, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
a. Financial Instrument Valuation (continued)
the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.
Trading in securities on foreign securities stock exchanges and OTC markets may be completed before 4 p.m. Eastern time. In addition, trading in certain foreign markets may not take place on every Funds’ business day. Occasionally, events occur between the time at which trading in a foreign security is completed and 4 p.m. Eastern time that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Funds’ portfolio securities as determined at the foreign market close and the latest indications of value at 4 p.m. Eastern time. The VC monitors price movements for significant events following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Funds. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.
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 Funds may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.
The Funds 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
Certain or all Funds invested in derivative financial instruments in order to manage risk or gain exposure to various other investments or markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown in the 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. Certain or all Funds attempt to reduce their exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
c. Derivative Financial Instruments (continued)
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.
Certain or all Funds 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 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-the-counter 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. Upfront payments and receipts are reflected in the Statements of Assets and Liabilities and represent compensating factors between stated terms of the credit default swap agreement and prevailing market conditions (credit spreads and other relevant factors). These upfront payments and receipts are amortized over the term of the contract as a realized gain or loss in the Statements of Operations.
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.
Certain or all Funds entered into exchange traded futures contracts primarily to manage and/or gain exposure to equity price risk. A futures contract is an agreement between the Fund and a counterparty to buy or sell an asset at a specified price on a future date. Required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Statements of Assets and Liabilities.
Certain or all Funds entered into OTC forward exchange contracts primarily to manage and/or gain exposure to certain foreign currencies. A forward exchange contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency at a specific exchange rate on a future date.
Certain or all Funds entered into OTC total return swap contracts primarily to manage and/or gain exposure to equity price risk of an underlying instrument such as a stock, bond, index or basket of securities or indices. A total return swap is
200 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
c. Derivative Financial Instruments (continued)
an agreement between the Fund and a counterparty to exchange a return linked to an underlying instrument for a floating or fixed rate payment, both based upon a notional amount. Over the term of the contract, contractually required payments to be paid or received are accrued daily and recorded as unrealized appreciation or depreciation until the payments are made, at which time they are recognized as realized gain or loss.
Certain or all Funds purchased or wrote option contracts primarily to manage and/or gain exposure to equity price risk. An option is a contract entitling the holder to purchase or sell a specific amount of shares or units of an asset or notional amount of a swap (swaption), at a specified price. When an option is purchased or written, an amount equal to the premium paid or received is recorded as an asset or liability, respectively. Upon exercise of an option, the acquisition cost or sales proceeds of the underlying investment is adjusted by any premium received or paid. Upon expiration of an option, any premium received or paid is recorded as a realized gain or loss. Upon closing an option other than through expiration or exercise, the difference between the premium received or paid and the cost to close the position is recorded as a realized gain or loss.
See Note 8 regarding other derivative information.
d. Securities Purchased on a When-Issued and Delayed Delivery Basis
Certain or all Funds purchase securities on a when-issued and delayed delivery basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Funds will generally purchase these securities with the intention of holding the securities, they may sell the securities before the settlement date.
e. Senior Floating Rate Interests
Certain or all Funds invest in senior secured corporate loans that pay interest at rates which are periodically reset by reference to a base lending rate plus a spread. These base lending rates are generally the prime rate offered by a designated U.S. bank, the Secured Overnight Financing Rate (SOFR) or the London Interbank Offered Rate (LIBOR). Senior secured corporate loans often require prepayment of principal from excess cash flows or at the discretion of the
borrower. As a result, actual maturity may be substantially less than the stated maturity. Senior secured corporate loans in which the Funds invest are generally readily marketable, but may be subject to certain restrictions on resale.
f. Income and Deferred Taxes
It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
The Funds may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which the 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 invest. 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.
Each Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of March 31, 2023, each Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.
g. 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. Certain or all Funds may receive other income from investments in senior secured corporate loans or unfunded commitments, including amendment fees, consent fees or commitment fees. These fees are recorded as income when received by the Funds. 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
franklintempleton.com | Semiannual Report | 201 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting Policies (continued)
g. Security Transactions, Investment Income, Expenses and Distributions (continued)
recorded as soon as the information is received by the Funds. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.
Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Funds 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.
h. Insurance
The scheduled payments of interest and principal for each insured municipal security in the Trust are insured by either a new issue insurance policy or a secondary insurance policy. Some municipal securities in the Funds are secured by collateral guaranteed by an agency of the U.S. government. Depending on the type of coverage, premiums for insurance
are either added the cost basis of the security or paid by a third party.
Insurance companies typically insure municipal bonds that tend to be of very high quality, with the majority of underlying municipal bonds rated A or better. However, an event involving an insurer could have an adverse effect on the value of the securities insured by that insurance company. There can be no assurance the insurer will be able to fulfill its obligations under the terms of the policy.
i. Accounting Estimates
The preparation of financial statement in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
j. 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 Fund, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.
2. Shares of Beneficial Interest
Shares of the Funds are issued and redeemed at their respective NAV only in aggregations of a specific number of shares or multiples thereof (Creation Units). Only certain large institutional investors (Authorized Participants) may engage in creation or redemption transactions directly with the Funds. Once created, shares of the Funds generally trade in the secondary market in amounts less than one Creation Unit. The market price of the Funds’ shares will be based on the price in the secondary market which may be at, above or below the most recent NAV. Creation Units may be issued and redeemed in exchange for a designated portfolio of securities and/or cash (which may include cash in lieu of certain securities).
Authorized Participants pay a standard transaction fee to the shareholder servicing agent when purchasing or redeeming Creation Units of the Funds regardless of the number of Creation Units that are being created or redeemed on the same day by the Authorized Participant. The standard transaction fee is imposed to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units and is not charged to or paid by the Funds.
In addition, for cash Creation Unit transactions, a variable fee for creation transactions and redemption transactions may be charged to the Authorized Participant to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades. Variable fees, if any, are included in capital share transactions in the Statements of Changes in Net Assets.
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest (continued)
At September 30, 2023, there were an unlimited number of shares authorized (without par value). Transactions in the Funds’ shares were as follows:
Franklin Disruptive Commerce ETF | ||||||||||||||||
Six Months Ended | Year Ended | |||||||||||||||
September 30, 2023 | March 31, 2023 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold |
— | $ | — | — | $ | 5 | ||||||||||
Shares redeemed |
— | — | (200,000 | ) | (4,312,710 | ) | ||||||||||
Net increase (decrease) |
— | $ | — | (200,000 | ) | $ | (4,312,705 | ) | ||||||||
Franklin Dynamic Municipal Bond ETF | ||||||||||||||||
Six Months Ended | Year Ended | |||||||||||||||
September 30, 2023 | March 31, 2023 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold |
1,350,000 | $ | 31,813,846 | 2,300,000 | $ | 54,522,182 | ||||||||||
Shares redeemed |
(50,000 | ) | (1,193,661 | ) | (1,150,000 | ) | (27,122,874 | ) | ||||||||
Net increase (decrease) |
1,300,000 | $ | 30,620,185 | 1,150,000 | $ | 27,399,308 | ||||||||||
Franklin Exponential Data ETF | ||||||||||||||||
Six Months Ended | Year Ended | |||||||||||||||
September 30, 2023 | March 31, 2023 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold |
— | $ | — | 50,000 | $ | 800,051 | ||||||||||
Net increase (decrease) |
— | $ | — | 50,000 | $ | 800,051 | ||||||||||
Franklin Genomic Advancements ETF | ||||||||||||||||
Six Months Ended | Year Ended | |||||||||||||||
September 30, 2023 | March 31, 2023 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold |
— | $ | 43 | 50,000 | $ | 1,681,091 | ||||||||||
Shares redeemed |
(50,000 | ) | (1,516,475 | ) | (100,000 | ) | (3,236,641 | ) | ||||||||
Net increase (decrease) |
(50,000 | ) | $ | (1,516,432 | ) | (50,000 | ) | $ | (1,555,550 | ) | ||||||
Franklin High Yield Corporate ETF | ||||||||||||||||
Six Months Ended | Year Ended | |||||||||||||||
September 30, 2023 | March 31, 2023 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold |
1,050,000 | $ | 23,777,605 | 4,100,000 | $ | 91,766,853 | ||||||||||
Shares redeemed |
(300,000 | ) | (6,797,481 | ) | (8,400,000 | ) | (192,209,022 | ) | ||||||||
Net increase (decrease) |
750,000 | $ | 16,980,124 | (4,300,000 | ) | $ | (100,442,169 | ) |
franklintempleton.com | Semiannual Report | 203 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest (continued)
Franklin Income Focus ETF | ||||||||||||||||
Period Ended | ||||||||||||||||
September 30, 2023* | ||||||||||||||||
Shares | Amount | |||||||||||||||
Shares sold |
4,000,001 | $ | 100,000,025 | |||||||||||||
Shares redeemed |
(1 | ) | (25 | ) | ||||||||||||
Net increase (decrease) |
4,000,000 | $ | 100,000,000 | |||||||||||||
Franklin Intelligent Machines ETF | ||||||||||||||||
Six Months Ended | Year Ended | |||||||||||||||
September 30, 2023 | March 31, 2023 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold |
300,000 | $ | 14,472,965 | — | $ | 9 | ||||||||||
Shares redeemed |
(50,000 | ) | (2,394,762 | ) | (50,000 | ) | (1,933,844 | ) | ||||||||
Net increase (decrease) |
250,000 | $ | 12,078,203 | (50,000 | ) | $ | (1,933,835 | ) | ||||||||
Franklin International Aggregate Bond ETF |
||||||||||||||||
Six Months Ended | Year Ended | |||||||||||||||
September 30, 2023 | March 31, 2023 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold |
1,950,000 | $ | 38,338,016 | 6,650,000 | $ | 133,652,517 | ||||||||||
Shares redeemed |
— | — | (750,000 | ) | (16,852,142 | ) | ||||||||||
Net increase (decrease) |
1,950,000 | $ | 38,338,016 | 5,900,000 | $ | 116,800,375 | ||||||||||
Franklin Investment Grade Corporate ETF |
||||||||||||||||
Six Months Ended | Year Ended | |||||||||||||||
September 30, 2023 | March 31, 2023 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold |
900,000 | $ | 18,910,827 | 5,450,000 | $ | 117,743,152 | ||||||||||
Shares redeemed |
(600,000 | ) | (12,431,935 | ) | (16,800,000 | ) | (367,203,261 | ) | ||||||||
Net increase (decrease) |
300,000 | $ | 6,478,892 | (11,350,000 | ) | $ | (249,460,109 | ) | ||||||||
Franklin Municipal Green Bond ETF |
||||||||||||||||
Six Months Ended | Year Ended | |||||||||||||||
September 30, 2023 | March 31, 2023 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold |
100,000 | $ | 2,334,710 | 1,150,000 | $ | 27,070,685 | ||||||||||
Shares redeemed |
(100,000 | ) | (2,379,979 | ) | (650,000 | ) | (15,485,161 | ) | ||||||||
Net increase (decrease) |
— | $ | (45,269 | ) | 500,000 | $ | 11,585,524 |
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FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest (continued)
Franklin Senior Loan ETF | ||||||||||||||||
Six Months Ended | Year Ended | |||||||||||||||
September 30, 2023 | March 31, 2023 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold |
1,400,000 | $ | 33,709,191 | 2,200,000 | $ | 54,475,982 | ||||||||||
Shares redeemed |
(250,000 | ) | (5,899,173 | ) | (5,400,000 | ) | (130,264,760 | ) | ||||||||
Net increase (decrease) |
1,150,000 | $ | 27,810,018 | (3,200,000 | ) | $ | (75,788,778 | ) | ||||||||
Franklin Systematic Style Premia ETF | ||||||||||||||||
Six Months Ended | Year Ended | |||||||||||||||
September 30, 2023 | March 31, 2023 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold |
1,400,000 | $ | 31,616,747 | 2,350,000 | $ | 50,962,500 | ||||||||||
Shares redeemed |
(900,000 | ) | (19,854,175 | ) | (700,000 | ) | (14,964,867 | ) | ||||||||
Net increase (decrease) |
500,000 | $ | 11,762,572 | 1,650,000 | $ | 35,997,633 | ||||||||||
Franklin U.S. Core Bond ETF | ||||||||||||||||
Six Months Ended | Year Ended | |||||||||||||||
September 30, 2023 | March 31, 2023 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold |
8,300,000 | $ | 176,606,253 | 13,950,000 | $ | 306,613,085 | ||||||||||
Shares redeemed |
(1,600,000 | ) | (34,104,899 | ) | (8,850,000 | ) | (193,323,619 | ) | ||||||||
Net increase (decrease) |
6,700,000 | $ | 142,501,354 | 5,100,000 | $ | 113,289,466 | ||||||||||
Franklin U.S. Low Volatility ETF | ||||||||||||||||
Six Months Ended | Year Ended | |||||||||||||||
September 30, 2023 | March 31, 2023 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold |
200,000 | $ | 9,499,038 | 650,000 | $ | 30,177,151 | ||||||||||
Shares redeemed |
(500,000 | ) | (24,804,594 | ) | (100,000 | ) | (4,271,907 | ) | ||||||||
Net increase (decrease) |
(300,000 | ) | $ | (15,305,556 | ) | 550,000 | $ | 25,905,244 | ||||||||
Franklin U.S. Treasury Bond ETF | ||||||||||||||||
Six Months Ended | Year Ended | |||||||||||||||
September 30, 2023 | March 31, 2023 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold |
3,950,000 | $ | 81,175,543 | 9,700,000 | $ | 206,895,275 | ||||||||||
Shares redeemed |
(1,150,000 | ) | (23,777,879 | ) | (7,300,000 | ) | (158,561,494 | ) | ||||||||
Net increase (decrease) |
2,800,000 | $ | 57,397,664 | 2,400,000 | $ | 48,333,781 |
franklintempleton.com | Semiannual Report | 205 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest (continued)
Franklin Ultra Short Bond ETF | ||||||||||||||||
Six Months Ended | Year Ended | |||||||||||||||
September 30, 2023 | March 31, 2023 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Shares sold |
— | $ | — | 50,000 | $ | 1,219,162 | ||||||||||
Shares redeemed |
— | — | (100,000 | ) | (2,451,895 | ) | ||||||||||
Net increase (decrease) |
— | $ | — | (50,000 | ) | $ | (1,232,733 | ) |
*For the period June 06, 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 Institutional, LLC (FT Institutional) |
Investment manager | |
Franklin Templeton Investimentos (Brasil) Ltda. (FTI Brasil) |
Investment manager | |
Franklin Templeton Investment Management Limited (FTIML) |
Investment manager | |
Franklin Templeton Investment Trust Management Co., Ltd. (FT Korea) |
Investment manager | |
Franklin Templeton Investments (ME) Limited (FTIME) |
Investment manager | |
Franklin Templeton Investments Corp. (FTIC) |
Investment manager | |
Franklin Advisory Services, LLC (FASL) |
Investment manager | |
Templeton Asset Management Ltd. (TAML) |
Investment manager | |
Franklin Templeton Services, LLC (FT Services) |
Administrative manager | |
Franklin Distributors, LLC (Distributors) |
Principal underwriter |
a. Management Fees
The Funds pay a unified management fee to Advisers whereby Advisers has agreed to reimburse the Funds’ acquired fund fees and expenses (if any) and pay all of the ordinary operating expenses of the Funds, including custody, transfer agency, and Trustee fees and expenses, among others, but excluding payments under the Funds’ Rule 12b-1 plan (if any), brokerage expenses (including any costs incidental to transactions in portfolio securities or instruments), taxes, interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), litigation expenses (including litigation to which the Trust or a Fund may be a party and indemnification of the Trustees and officers with respect thereto), and other non-routine or extraordinary expenses. The fee is calculated daily and paid monthly according to the terms of the management agreement. The gross effective investment management fees are based on the average daily net assets of each of the Funds as follows:
206 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates (continued)
a. Management Fees (continued)
Gross Effective Investment Management Fee Rate | ||
Franklin Disruptive Commerce ETF |
0.50% | |
Franklin Dynamic Municipal Bond ETF |
0.30% | |
Franklin Exponential Data ETF |
0.50% | |
Franklin Genomic Advancements ETF |
0.50% | |
Franklin High Yield Corporate ETF |
0.40% | |
Franklin Income Focus ETF |
0.38% | |
Franklin Intelligent Machines ETF |
0.50% | |
Franklin International Aggregate Bond ETF |
0.25% | |
Franklin Investment Grade Corporate ETF |
0.35% | |
Franklin Municipal Green Bond ETF |
0.30% | |
Franklin Senior Loan ETF |
0.45% | |
Franklin Systematic Style Premia ETF |
0.65% | |
Franklin U.S. Core Bond ETF |
0.15% | |
Franklin U.S. Low Volatility ETF |
0.29% | |
Franklin U.S. Treasury Bond ETF |
0.09% | |
Franklin Ultra Short Bond ETF |
0.15% |
b. Administrative Fees
Under an agreement with Advisers and FTIML, FT Services provides administrative services to the Funds. The fee is paid by Advisers and FTIML based on the Funds’ average daily net assets, and is not an additional expense of the Funds.
c. Waiver and Expense Reimbursements
For Franklin Systematic Style Premia ETF, pursuant to the terms of the Fund’s Investment Management Agreement, the investment manager reimburses the Fund for all acquired fund fees as well as all expenses related to the Fund’s investment in a Cayman Islands-based company that is wholly owned by the Fund (the “Subsidiary”). Thus, expenses incurred in connection with the Fund’s investment in the Subsidiary are not separately disclosed because they are paid/reimbursed by the investment manager under the unitary management fee structure. Total expenses waived or paid are not subject to recapture subsequent to the Funds’ fiscal year end.
franklintempleton.com | Semiannual Report | 207 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates (continued)
d. Investments in Affiliated Management Investment Companies
Certain or all Funds invest in one or more affiliated management investment companies. As defined in the 1940 Act, an investment is deemed to be a “Controlled Affiliate” of a fund when a fund owns, either directly or indirectly, 25% or more of the affiliated fund’s outstanding shares or has the power to exercise control over management or policies of such fund. The Funds do not invest for purposes of exercising a controlling influence over the management or policies. Management fees paid by the Funds are waived on assets invested in the affiliated management investment companies, as noted in the Statements of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended September 30, 2023, investments in affiliated management investment companies were as follows:
Value at Beginning of Period |
Purchases | Sales |
Realized Gain (Loss) |
Net Change in Unrealized Appreciation (Depreciation) |
Value at End of Period |
Number of Shares Held at End of Period |
Investment Income |
|||||||||||||||||||||||||
Franklin Exponential Data ETF | ||||||||||||||||||||||||||||||||
Non-Controlled Affiliates | |
Dividend Income |
| |||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Institutional Fiduciary Trust - Money Market Portfolio, 5.15% |
$ | 38,455 | $ | 214,728 | $ | (150,479 | ) | $ | — | $ | — | $ | 102,704 | 102,704 | $ | — | ||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Franklin U.S. Core Bond ETF | ||||||||||||||||||||||||||||||||
Non-Controlled Affiliates | |
Dividend Income |
| |||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Institutional Fiduciary Trust - Money Market Portfolio, 5.15% |
$ | 17,621,864 | $ | 218,755,650 | $ | (222,036,790 | ) | $ | — | $ | — | $ | 14,340,724 | 14,340,724 | $ | — | ||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Franklin U.S. Treasury Bond ETF | ||||||||||||||||||||||||||||||||
Non-Controlled Affiliates | |
Dividend Income |
| |||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Institutional Fiduciary Trust - Money Market Portfolio, 5.15% |
$ | 4,054,622 | $ | 17,507,493 | $ | (20,966,875 | ) | $ | — | $ | — | $ | 595,240 | 595,240 | $ | — | ||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Franklin Ultra Short Bond ETF | ||||||||||||||||||||||||||||||||
Non-Controlled Affiliates | |
Dividend Income |
| |||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Institutional Fiduciary Trust - Money Market Portfolio, 5.15% |
$ | 187,218 | $ | 940,305 | $ | (459,861 | ) | $ | — | $ | — | $ | 667,662 | 667,662 | $ | — | ||||||||||||||||
|
|
e. Other Affiliated Transactions
At September 30, 2023, the shares of the funds were owned by the following investment entities:
Funds | Shares |
Percentage of Outstanding Sharesa |
||||||
Franklin Disruptive Commerce ETF | ||||||||
Franklin Resources Inc. |
25,000 | 6.3 | % |
208 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates (continued)
e. Other Affiliated Transactions (continued)
Funds | Shares |
Percentage of Outstanding Sharesa |
||||||
Franklin High Yield Corporate ETF | ||||||||
Franklin Conservative Allocation Fund |
857,958 | 8.6 | % | |||||
Franklin Moderate Allocation Fund |
1,001,545 | 10.1 | % | |||||
Franklin 529 Portfolios |
3,305,646 | 33.2 | % | |||||
|
|
|||||||
5,165,149 | 51.9 | % | ||||||
|
|
|||||||
Franklin International Aggregate Bond ETF | ||||||||
Franklin Conservative Allocation Fund |
922,641 | 5.7 | % | |||||
Franklin Moderate Allocation Fund |
969,263 | 6.0 | % | |||||
Franklin 529 Portfolios |
6,618,903 | 41.2 | % | |||||
|
|
|||||||
8,510,807 | 52.9 | % | ||||||
|
|
|||||||
Franklin Investment Grade Corporate ETF | ||||||||
Franklin Total Return Fund |
16,060,000 | 52.9 | % | |||||
Franklin 529 Portfolios |
4,595,582 | 15.1 | % | |||||
|
|
|||||||
20,655,582 | 68.0 | % | ||||||
|
|
|||||||
Franklin Municipal Green Bond ETF | ||||||||
Franklin Federal Limited-Term Tax-Free Income Fund |
1,550,000 | 33.0 | % | |||||
|
|
|||||||
Franklin Senior Loan ETF | ||||||||
Franklin Total Return Fund |
1,737,400 | 17.7 | % | |||||
|
|
|||||||
Franklin Systematic Style Premia ETF | ||||||||
Franklin Conservative Allocation Fund |
398,901 | 8.4 | % | |||||
Franklin Moderate Allocation Fund |
698,498 | 14.7 | % | |||||
Franklin Growth Allocation Fund |
538,357 | 11.3 | % | |||||
Franklin LifeSmart™ 2020 – 2055 Retirement Target Funds |
236,445 | 5.0 | % | |||||
|
|
|||||||
1,872,201 | 39.4 | % | ||||||
|
|
|||||||
Franklin U.S. Core Bond ETF | ||||||||
Franklin Conservative Allocation Fund |
9,078,216 | 11.9 | % | |||||
Franklin Moderate Allocation Fund |
10,596,466 | 13.9 | % | |||||
Franklin Growth Allocation Fund |
3,856,713 | 5.1 | % | |||||
Franklin 529 Portfolios |
34,975,976 | 45.9 | % | |||||
|
|
|||||||
58,507,371 | 76.8 | % | ||||||
|
|
|||||||
Franklin U.S. Low Volatility ETF | ||||||||
Franklin Managed Income Fund |
780,000 | 26.0 | % | |||||
|
|
|||||||
Franklin U.S. Treasury Bond ETF | ||||||||
Franklin Conservative Allocation Fund |
2,638,012 | 11.5 | % | |||||
Franklin Moderate Allocation Fund |
3,079,197 | 13.4 | % | |||||
Franklin Growth Allocation Fund |
1,120,743 | 4.9 | % | |||||
Franklin 529 Portfolios |
10,097,758 | 43.9 | % | |||||
|
|
|||||||
16,935,710 | 73.7 | % | ||||||
|
|
aInvestment activities of significant shareholders could have a material impact on the Funds.
4. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains. At March 31, 2023, the capital loss carryforwards were as follows:
franklintempleton.com | Semiannual Report | 209 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
4. Income Taxes (continued)
Franklin Disruptive Commerce ETF |
Franklin Dynamic Municipal Bond ETF |
Franklin Exponential Data ETF |
Franklin Genomic Advancements ETF |
|||||||||||||
Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term |
$ 1,307,460 | $1,815,701 | $ 233,288 | $ 1,530,395 | ||||||||||||
Short term |
8,555,411 | 1,849,778 | 646,629 | 6,702,473 | ||||||||||||
|
|
|||||||||||||||
Total capital loss carryforwards |
$ 9,862,871 | $3,665,479 | $ 879,917 | $ 8,232,868 | ||||||||||||
|
|
|||||||||||||||
Franklin High Yield Corporate ETF |
Franklin Income Focus ETF |
Franklin Intelligent Machines ETF |
Franklin International Aggregate Bond ETF |
|||||||||||||
Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term |
$ 3,817,363 | $ — | $ 276,820 | $ 4,975,582 | ||||||||||||
Short term |
1,526,464 | — | 841,327 | 1,744,765 | ||||||||||||
|
|
|||||||||||||||
Total capital loss carryforwards |
$ 5,343,827 | $ — | $ 1,118,147 | $ 6,720,347 | ||||||||||||
|
|
|||||||||||||||
Franklin Investment Grade Corporate ETF |
Franklin Municipal Green Bond ETF |
Franklin Senior Loan ETF |
Franklin Systematic Style Premia ETF |
|||||||||||||
Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term |
$ 31,860,991 | $6,754,006 | $ 5,689,793 | $ — | ||||||||||||
Short term |
7,812,255 | 2,361,637 | 2,348,730 | 12,545,844 | ||||||||||||
|
|
|||||||||||||||
Total capital loss carryforwards |
$ 39,673,246 | $9,115,643 | $ 8,038,523 | $12,545,844 | ||||||||||||
|
|
|||||||||||||||
Franklin U.S. Core Bond ETF |
Franklin U.S. Low Volatility ETF |
Franklin U.S. Treasury Bond ETF |
Franklin Ultra Short Bond ETF |
|||||||||||||
Capital loss carryforwards not subject to expiration: | ||||||||||||||||
Long term |
$ 59,494,905 | $1,297,978 | $46,176,769 | $ 11,610 | ||||||||||||
Short term |
42,337,283 | 1,732,318 | 11,995,030 | 35,267 | ||||||||||||
|
|
|||||||||||||||
Total capital loss carryforwards |
$101,832,188 | $3,030,296 | $58,171,799 | $ 46,877 | ||||||||||||
|
|
At September 30, 2023, the cost of investments, net unrealized appreciation (depreciation) and undistributed ordinary income for income tax purposes were as follows:
Franklin Disruptive Commerce ETF |
Franklin Dynamic Municipal Bond ETF |
Franklin Exponential Data ETF |
Franklin Genomic Advancements ETF |
|||||||||||||
Cost of investments |
$10,214,671 | $136,693,505 | $3,453,847 | $11,134,926 | ||||||||||||
Unrealized appreciation |
$ 1,077,409 | $214,957 | $464,346 | $525,630 | ||||||||||||
Unrealized depreciation |
(1,616,978 | ) | (7,713,338 | ) | (327,152 | ) | (3,394,320 | ) | ||||||||
|
|
|||||||||||||||
Net unrealized appreciation (depreciation) |
$ (539,569 | ) | $ (7,498,381 | ) | $ 137,194 | $ (2,868,690 | ) | |||||||||
|
|
210 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
4. Income Taxes (continued)
Franklin High Yield Corporate ETF |
Franklin Income Focus ETF |
Franklin Intelligent Machines ETF |
Franklin International ETF |
|||||||||||||
Cost of investments |
$ | 240,443,422 | $ | 98,637,802 | $ | 19,532,102 | $ | 325,809,172 | ||||||||
Unrealized appreciation |
$ | 1,407,482 | $ | 602,696 | $ | 1,231,597 | $ | 644,307 | ||||||||
Unrealized depreciation |
(20,524,538 | ) | (3,521,229 | ) | (1,433,952 | ) | (40,705,664 | ) | ||||||||
Net unrealized appreciation (depreciation) |
$ | (19,117,056 | ) | $ | (2,918,533 | ) | $ | (202,355 | ) | $ | (40,061,357 | ) | ||||
Franklin Investment Grade Corporate ETF |
Franklin Municipal ETF |
Franklin Senior Loan ETF |
Franklin ETF |
|||||||||||||
Cost of investments |
$ | 708,415,757 | $ | 112,740,613 | $ | 242,369,899 | $ | 67,874,249 | ||||||||
Unrealized appreciation |
$ | 529,702 | $ | 85,282 | $ | 829,121 | $ | 6,721,140 | ||||||||
Unrealized depreciation |
(98,917,313 | ) | (8,632,749 | ) | (5,867,707 | ) | (1,341,334 | ) | ||||||||
Net unrealized appreciation (depreciation) |
$ | (98,387,611 | ) | $ | (8,547,467 | ) | $ | (5,038,586 | ) | $ | 5,379,806 | |||||
Franklin U.S. Core Bond ETF |
Franklin U.S. Low |
Franklin U.S. Treasury Bond ETF |
Franklin Ultra Short Bond ETF |
|||||||||||||
Cost of investments |
$ | 1,755,957,053 | $ | 130,068,323 | $ | 487,619,235 | $ | 2,465,834 | ||||||||
Unrealized appreciation |
$ | 114,215 | $ | 16,890,237 | $ | 4,639 | $ | 2,467 | ||||||||
Unrealized depreciation |
(204,746,357 | ) | (4,771,285 | ) | (31,274,893 | ) | (7,925 | ) | ||||||||
Net unrealized appreciation (depreciation) |
$ | (204,632,142 | ) | $ | 12,118,952 | $ | (31,270,254 | ) | $ | (5,458 | ) |
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of foreign currency transactions, passive foreign investment company shares and in-kind transactions, bond discounts and premiums and investments in FLSP Holdings Corporation.
5. Investment Transactions
Purchases and sales of investments (excluding short term securities and in-kind transactions, if any) for the period ended September 30, 2023, were as follows:
Franklin Disruptive Commerce ETF |
Franklin Dynamic Municipal Bond ETF |
Franklin Exponential |
Franklin Genomic Advancements ETF |
|||||||||||||
Purchases |
$ | 967,953 | $ | 75,720,867 | $ | 188,823 | $ | 272,576 | ||||||||
Sales |
$ | 868,152 | $ | 41,244,496 | $ | 250,710 | $ | 1,897,881 | ||||||||
Franklin High Yield |
Franklin Income Focus ETF |
Franklin Intelligent Machines ETF |
Franklin International |
|||||||||||||
Purchases |
$ | 38,001,024 | $ | 107,432,727 | $ | 14,608,072 | $ | 78,797,505 | ||||||||
Sales |
$ | 24,844,999 | $ | 8,966,361 | $ | 2,996,279 | $ | 33,341,291 |
franklintempleton.com | Semiannual Report | 211 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
5. Investment Transactions (continued)
Franklin Investment Grade Corporate ETF |
Franklin Municipal ETF |
Franklin Senior Loan ETF |
Franklin Systematic Style Premia ETF |
|||||||||||||
Purchases |
$ | 78,216,233 | $ | 18,013,035 | $ | 33,582,117 | $ | 46,672,315 | ||||||||
Sales |
$ | 65,589,659 | $ | 18,366,632 | $ | 13,262,242 | $ | 47,685,277 | ||||||||
Franklin U.S. Core Bond ETF |
Franklin U.S. Low |
Franklin U.S. Treasury Bond ETF |
Franklin Ultra Short Bond ETF |
|||||||||||||
Purchases |
$ | 274,638,897 | $ | 26,215,394 | $ | 103,291,271 | $ | 397,340 | ||||||||
Sales |
$ | 159,901,204 | $ | 22,659,893 | $ | 47,639,073 | $ | 727,340 |
In-kind transactions associated with creation and redemptions for the period ended September 30, 2023, were as follows:
Franklin Disruptive Commerce ETF |
Franklin Dynamic Bond ETF |
Franklin Data ETF |
Franklin Genomic Advancements ETF |
|||||||||||||
Cost of Securities Received |
$ | — | $ | — | $ | — | $ | — | ||||||||
Value of Securities Delivereda |
$ | — | $ | — | $ | — | $ | 1,442,257 | ||||||||
Franklin High Yield |
Franklin Income Focus ETF |
Franklin Intelligent Machines ETF |
Franklin International Aggregate Bond ETF |
|||||||||||||
Cost of Securities Received |
$ | 11,593,414 | $ | — | $ | 13,872,710 | $ | — | ||||||||
Value of Securities Delivereda |
$ | 3,341,276 | $ | — | $ | 2,295,237 | $ | — | ||||||||
Franklin Investment Grade Corporate ETF |
Franklin Municipal ETF |
Franklin Senior Loan ETF |
Franklin ETF |
|||||||||||||
Cost of Securities Received |
$ | 12,868,840 | $ | — | $ | — | $ | — | ||||||||
Value of Securities Delivereda |
$ | 9,948,748 | $ | — | $ | — | $ | — | ||||||||
Franklin U.S. Core Bond ETF |
Franklin U.S. Low Volatility ETF |
Franklin U.S. Treasury Bond ETF |
Franklin Ultra Short Bond ETF |
|||||||||||||
Cost of Securities Received |
$ | — | $ | 9,383,895 | $ | — | $ | — | ||||||||
Value of Securities Delivereda |
$ | — | $ | 24,578,802 | $ | — | $ | — |
a Realized gains and losses from in-kind redemptions, as shown on the Statement of Operations, are not recognized by the Funds for tax purposes.
6. Global Credit Facility
The Funds, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2.675 billion (Global Credit Facility) which matures on February 2, 2024. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests.
Under the terms of the Global Credit Facility, the Funds shall, in addition to interest charged on any borrowings made by the Funds and other costs incurred by the Funds, pay its/their share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon their relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statement of Operations. At September 30, 2023, the Funds did not utilize the Global Credit Facility.
212 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
7. Credit Risk and Defaulted Securities
At September 30, 2023, Franklin Dynamic Municipal Bond ETF, Franklin Municipal Green Bond ETF, Franklin High Yield Corporate ETF, Franklin Investment Grade Corporate ETF and Franklin Senior Loan ETF had 34.17%, 8.15%, 90.17%, 1.57% and 91.31%, respectively, of their portfolio invested in high yield securities, senior secured floating rate notes, or other securities rated below investment grade and unrated securities, if any. These securities may be more sensitive to economic conditions causing greater price volatility and are potentially subject to a greater risk of loss due to default than higher rated securities.
The Fund may purchase the pre-default or defaulted debt of distressed companies. Distressed companies are financially troubled and could be or are already involved in financial restructuring or bankruptcy. Risks associated with purchasing these securities include the possibility that the bankruptcy or other restructuring process takes longer than expected, or that distributions in restructuring are less than anticipated, either or both of which may result in unfavorable consequences to the Fund. If it becomes probable that the income on debt securities, including those distressed companies, will not be collected, the Fund discontinues accruing income and recognizes an adjustment for uncollectible interest. At September 30, 2023, Franklin Dynamic Municipal Bond ETF, Franklin High Yield Corporate ETF, and Franklin Senior Loan ETF the aggregate long value of distressed company securities for which interest recognition has been discontinued representing 0.06%, 0.14% and 0.28% of the Fund’s net assets respectively. For information as to specific securities, see the accompanying Schedule of Investments.
8. Other Derivative Information
At September 30, 2023, the Funds’ investments in derivative contracts are reflected in the Statements of Asset and Liabilities as follows:
Asset Derivatives |
Liability Derivatives |
|||||||||||
Statements
of Assets and Liabilities Location |
Fair Value | Statements
of Assets and Liabilities Location |
Fair Value |
|||||||||
Franklin Income Focus ETF |
||||||||||||
Interest rate contracts |
Variation margin on futures contracts |
$ — |
Variation margin on futures contracts |
$259,005 | a | |||||||
|
|
|
|
|||||||||
Franklin International Aggregate Bond ETF |
||||||||||||
Foreign exchange contracts |
Unrealized appreciation on OTC forward exchange contracts |
$17,522,908 |
Unrealized depreciation on OTC forward exchange contracts |
$860,231 | ||||||||
|
|
|
|
|||||||||
Franklin Systematic Style Premia ETF |
||||||||||||
Foreign exchange contracts |
Unrealized appreciation on OTC forward exchange contracts |
$29,219 |
Unrealized depreciation on OTC forward exchange contracts |
$545,877 | ||||||||
Equity contracts |
Variation margin on futures contracts |
6,063,276a |
Variation margin on futures contracts |
218,364 | a | |||||||
Equity contracts |
Swap contracts |
1,918,599 |
Swap contracts |
— | ||||||||
|
|
|
|
|||||||||
Totals |
$ 8,011,094 | $764,241 | ||||||||||
|
|
|
|
|||||||||
Franklin U.S. Core Bond ETF |
||||||||||||
Interest rate contracts |
Variation margin on futures contracts |
$ — |
Variation margin on futures contracts |
$326,451 | a | |||||||
|
|
|
|
a This amount reflects the cumulative appreciation (depreciation) of future contracts as reported in the Schedule of Investments. Only the variation margin receivable/payable at year end is separately reported within the Statements of Assets and Liabilities. Prior variation margin movements were recorded to cash upon receipt or payment.
For the period ended September 30, 2023, the effect of derivative contracts in the Funds’ Statements of Operations was as follows:
franklintempleton.com | Semiannual Report | 213 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
8. Other Derivative Information (continued)
Derivative Contracts Not Accounted for as Hedging Instruments |
Statements of Operations Locations |
Net Realized Gain (Loss) for the Period |
Statements of Operations Locations |
Net Change
in Unrealized Appreciation (Depreciation) for the Period |
||||||||||||||||
Franklin Income Focus ETF |
||||||||||||||||||||
Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
| ||||||||||||||||||
Written Options |
$ (412,500 | ) | $ (259,005 | ) | ||||||||||||||||
|
|
|
|
|||||||||||||||||
Franklin International Aggregate Bond ETF |
||||||||||||||||||||
Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
| ||||||||||||||||||
Foreign exchange contracts |
Forward exchange contracts |
$ (616,370 | ) |
Forward exchange contracts |
$14,550,445 | |||||||||||||||
|
|
|
|
|||||||||||||||||
Franklin Investment Grade Corporate ETF |
||||||||||||||||||||
Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
| ||||||||||||||||||
Interest rate contracts |
Futures contracts |
$ (476,974 | ) |
Futures contracts |
$ 492,300 | |||||||||||||||
|
|
|
|
|||||||||||||||||
Franklin Systematic Style Premia ETF |
||||||||||||||||||||
Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
| ||||||||||||||||||
Foreign exchange contracts |
Forward exchange contracts |
$1,104,665 |
Forward exchange contracts |
$ (863,644 | ) | |||||||||||||||
Equity contracts |
Futures contracts |
1,458,889 |
Futures contracts |
(876,790 | ) | |||||||||||||||
Equity contracts |
Swap contracts |
— |
Swap contracts |
1,918,599 | ||||||||||||||||
|
|
|
|
|||||||||||||||||
Totals |
$2,563,554 | $ 178,165 | ||||||||||||||||||
|
|
|
|
|||||||||||||||||
Franklin U.S. Core Bond ETF |
||||||||||||||||||||
Net realized gain (loss) from: |
Net change in unrealized appreciation (depreciation) on: |
| ||||||||||||||||||
Interest rate contracts |
Futures contracts |
$ (875,810 | ) |
Futures contracts |
$(1,087,964 | ) | ||||||||||||||
Credit contracts |
Swap contracts |
73,750 |
Swap Contracts |
(77,367 | ) | |||||||||||||||
|
|
|
|
|||||||||||||||||
Totals |
$ (802,060 | ) | $(1,165,331 | ) | ||||||||||||||||
|
|
|
|
For the period ended September 30, 2023, the average month end notional amount of futures contracts, swap contracts, options and average month end contract value for forward exchange contracts were as follows:
Franklin Income Focus ETF |
Franklin Aggregate Bond |
Franklin Investment Grade |
||||||||||
Futures contracts |
$ | 4,459,789 | $ | — | $ | 10,844,555 | ||||||
Forward exchange contracts |
$ | — | $ | 286,945,979 | $ | — | ||||||
Written Options |
$ | 14,057 | $ | — | $ | — | ||||||
Franklin Systematic Style Premia ETF |
||||||||||||
Total Return Swaps |
$ | 44,737,478 | ||||||||||
Futures contracts |
$ | 138,639,851 | ||||||||||
Forward exchange contracts |
$ | 74,854,624 |
214 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
8. Other Derivative Information (continued)
Franklin U.S. Core Bond ETF |
||||||||||||
Credit default contracts |
$12,857,143 | |||||||||||
Futures contracts |
$42,886,723 |
At September 30, 2023, the Funds’ OTC derivative assets and liabilities are as follows:
Gross and Net Amounts of Assets and Liabilities Presented in the Statements of Assets and Liabilities |
||||||||
Assetsa | Liabilitiesa | |||||||
Franklin International Aggregate Bond ETF |
||||||||
Foreign exchange contracts |
$17,522,908 | $860,231 | ||||||
Franklin Systematic Style Premia ETF |
||||||||
Equity contracts |
$1,918,599 | $— | ||||||
Foreign exchange contracts |
$29,219 | $545,877 |
a Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statements of Assets and Liabilities.
At September 30, 2023, the Funds’ OTC derivative assets, which may be offset against the Funds’ OTC derivative liabilities and collateral received from the counterparty, are as follows:
Amounts Not Offset in the Statements of Assets and Liabilities |
||||||||||||||||||||
Gross and Net Amounts of Assets Presented in the Statements of Assets and Liabilities |
Financial Instruments Available for Offset |
Financial Instruments Collateral Received |
Cash Collateral Received |
Net Amount (Not less than zero) |
||||||||||||||||
Franklin International Aggregate Bond ETF |
||||||||||||||||||||
Counterparty | ||||||||||||||||||||
CITI |
$17,522,908 | $(860,231) | $ — | $ — | $16,662,677 | |||||||||||||||
Franklin Systematic Style Premia ETF |
||||||||||||||||||||
Counterparty | ||||||||||||||||||||
MSCO |
$ 29,219 | $ (29,219) | $ — | $ — | $ — | |||||||||||||||
MSCS |
1,918,599 | — | — | — | 1,918,599 | |||||||||||||||
Total |
$ 1,947,818 | $ (29,219) | $ — | $ — | $ 1,918,599 |
At September 30, 2023, the Funds’ OTC derivative liabilities, which may be offset against the Funds’ OTC derivative assets and collateral pledged to the counterparty, are as follows:
franklintempleton.com | Semiannual Report | 215 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
8. Other Derivative Information (continued)
Amounts Not Offset in the Statements of Assets and Liabilities |
||||||||||||||||||||
Gross and Net Amounts of Liabilities Presented in the Statements of Assets and Liabilities |
Financial Instruments Available for Offset |
Financial Instruments Collateral Pledged |
Cash Collateral Pledged |
Net Amount (Not less than zero) |
||||||||||||||||
Franklin International | ||||||||||||||||||||
Aggregate Bond ETF | ||||||||||||||||||||
Counterparty | ||||||||||||||||||||
CITI |
$ | 860,231 | $ | (860,231 | ) | $ | — | $ | — | $ | — | |||||||||
|
|
|||||||||||||||||||
Franklin Systematic | ||||||||||||||||||||
Style Premia ETF | ||||||||||||||||||||
Counterparty | ||||||||||||||||||||
MSCO |
$ | 545,877 | $ | (29,219 | ) | $ | — | $ | — | $ | 516,658 | |||||||||
|
|
See Note 1(c) regarding derivative financial instruments.
9. Fair Value Measurements
The Funds follow a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Funds’ own market assumptions (unobservable inputs). These inputs are used in determining the value of the Funds’ financial instruments and are summarized in the following fair value hierarchy:
• |
Level 1 – quoted prices in active markets for identical financial instruments |
• |
Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.) |
• |
Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of financial instruments) |
The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.
A summary of inputs used as of September 30, 2023, in valuing the Funds’ assets and liabilities carried at fair value, is as follows:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Franklin Disruptive Commerce ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Equity Investmentsb |
$ | 9,675,102 | $ | — | $ | — | $ | 9,675,102 | ||||||||
|
|
|||||||||||||||
Franklin Dynamic Municipal Bond ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Senior Floating Rate Interest |
$ | — | $ | 506,700 | $ | — | $ | 506,700 | ||||||||
Municipal Bonds |
— | 128,678,424 | 10,000 | 128,688,424 | ||||||||||||
|
|
|||||||||||||||
Total Investments in Securities |
$ | — | $ | 129,185,124 | $ | 10,000 | $ | 129,195,124 | ||||||||
|
|
|||||||||||||||
Franklin Exponential Data ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Equity Investmentsb |
$ | 3,488,337 | $ | — | $ | — | $ | 3,488,337 | ||||||||
Short-Term Investments |
102,704 | — | — | 102,704 | ||||||||||||
|
|
|||||||||||||||
Total Investments in Securities |
$ | 3,591,041 | $ | — | $ | — | $ | 3,591,041 | ||||||||
|
|
216 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
9. Fair Value Measurements (continued)
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Franklin Genomic Advancements ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Equity Investmentsb |
$ | 8,266,236 | $ | — | $ | — | c | $ | 8,266,236 | |||||||
|
|
|||||||||||||||
Franklin High Yield Corporate ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Corporate Bonds & Notes |
$ | — | $ | 205,695,024 | $ | — | c | $ | 205,695,024 | |||||||
Senior Floating Rate Interests |
— | 8,194,591 | — | 8,194,591 | ||||||||||||
Equity Investmentsb |
1,641,751 | — | — | 1,641,751 | ||||||||||||
U.S. Government & Agency Securities |
— | 5,795,000 | — | 5,795,000 | ||||||||||||
|
|
|||||||||||||||
Total Investments in Securities |
$ | 1,641,751 | $ | 219,684,615 | $ | — | $ | 221,326,366 | ||||||||
|
|
|||||||||||||||
Franklin Income Focus ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Corporate Bonds & Notes |
$ | — | $ | 50,906,827 | $ | — | $ | 50,906,827 | ||||||||
Equity-Linked Securities |
— | 19,860,491 | — | 19,860,491 | ||||||||||||
Equity Investmentsb |
18,614,840 | — | — | 18,614,840 | ||||||||||||
U.S. Government & Agency Securities |
— | 6,337,111 | — | 6,337,111 | ||||||||||||
|
|
|||||||||||||||
Total Investments in Securities |
$ | 18,614,840 | $ | 77,104,429 | $ | — | $ | 95,719,269 | ||||||||
|
|
|||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: |
||||||||||||||||
Futures Contracts |
$ | 259,005 | $ | — | $ | — | $ | 259,005 | ||||||||
Put Options Written |
28,940 | — | — | 28,940 | ||||||||||||
Call Options Written |
14,481 | — | — | 14,481 | ||||||||||||
|
|
|||||||||||||||
Total Other Financial Instruments |
$ | 302,426 | $ | — | $ | — | $ | 302,426 | ||||||||
|
|
|||||||||||||||
Franklin Intelligent Machines ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Equity Investmentsb |
$ | 19,329,747 | $ | — | $ | — | c | $ | 19,329,747 | |||||||
|
|
|||||||||||||||
Franklin International Aggregate Bond ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Foreign Government and Agency Securities |
$ | — | $ | 253,901,012 | $ | — | $ | 253,901,012 | ||||||||
Corporate Bonds & Notes |
— | 17,636,803 | — | 17,636,803 | ||||||||||||
U.S. Government & Agency Securities |
— | 14,210,000 | — | 14,210,000 | ||||||||||||
|
|
|||||||||||||||
Total Investments in Securities |
$ | — | $ | 285,747,815 | $ | — | $ | 285,747,815 | ||||||||
|
|
|||||||||||||||
Other Financial Instruments: |
||||||||||||||||
Forward Exchange Contracts |
$ | — | $ | 17,522,908 | $ | — | $ | 17,522,908 | ||||||||
|
|
|||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: |
||||||||||||||||
Forward Exchange Contracts |
$ | — | $ | 860,231 | $ | — | $ | 860,231 | ||||||||
|
|
|||||||||||||||
Franklin Investment Grade Corporate ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Corporate Bonds & Notes |
$ | — | $ | 588,252,698 | $ | — | $ | 588,252,698 | ||||||||
U.S. Government & Agency Securities |
— | 21,775,448 | — | 21,775,448 | ||||||||||||
|
|
|||||||||||||||
Total Investments in Securities |
$ | — | $ | 610,028,146 | $ | — | $ | 610,028,146 | ||||||||
|
|
franklintempleton.com | Semiannual Report | 217 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
9. Fair Value Measurements (continued)
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Franklin Municipal Green Bond ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Municipal Bonds |
$ | — | $ | 104,193,146 | $ | — | $ | 104,193,146 | ||||||||
|
|
|||||||||||||||
Franklin Senior Loan ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Corporate Bonds & Notes |
$ | — | $ | 12,132,436 | $ | — | $ | 12,132,436 | ||||||||
Senior Floating Rate Interests |
— | 203,847,730 | — | 203,847,730 | ||||||||||||
Asset-Backed Securities |
— | 1,946,147 | — | 1,946,147 | ||||||||||||
U.S. Government & Agency Securities |
— | 19,405,000 | — | 19,405,000 | ||||||||||||
|
|
|||||||||||||||
Total Investments in Securities |
$ | — | $ | 237,331,313 | $ | — | $ | 237,331,313 | ||||||||
|
|
|||||||||||||||
Franklin Systematic Style Premia ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Equity Investmentsb |
$ | 57,571,657 | $ | — | $ | — | c | $ | 57,571,657 | |||||||
Short-Term Investments |
15,682,398 | — | — | 15,682,398 | ||||||||||||
|
|
|||||||||||||||
Total Investments in Securities |
$ | 73,254,055 | $ | — | $ | — | $ | 73,254,055 | ||||||||
|
|
|||||||||||||||
Other Financial Instruments: |
||||||||||||||||
Forward Exchange Contracts |
$ | — | $ | 29,219 | $ | — | $ | 29,219 | ||||||||
Futures Contracts |
1,494,866 | — | — | 1,494,866 | ||||||||||||
Swap Contracts |
— | 1,918,599 | — | 1,918,599 | ||||||||||||
|
|
|||||||||||||||
Total Other Financial Instruments |
$ | 1,494,866 | $ | 1,947,818 | $ | — | $ | 3,442,684 | ||||||||
|
|
|||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: |
||||||||||||||||
Forward Exchange Contracts |
$ | — | $ | 545,877 | $ | — | $ | 545,877 | ||||||||
Futures Contracts |
1,304,004 | — | — | 1,304,004 | ||||||||||||
|
|
|||||||||||||||
Total Other Financial Instruments |
$ | 1,304,004 | $ | 545,877 | $ | — | $ | 1,849,881 | ||||||||
|
|
|||||||||||||||
Franklin U.S. Core Bond ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Corporate Bonds & Notes |
$ | — | $ | 447,127,373 | $ | — | $ | 447,127,373 | ||||||||
Municipal Bonds |
— | 31,022,558 | — | 31,022,558 | ||||||||||||
Mortgage-Backed Securities |
— | 285,724,345 | — | 285,724,345 | ||||||||||||
Foreign Government and Agency Securities |
— | 15,535,915 | — | 15,535,915 | ||||||||||||
Asset-Backed Securities |
— | 37,167,619 | — | 37,167,619 | ||||||||||||
U.S. Government & Agency Securities |
— | 720,406,377 | — | 720,406,377 | ||||||||||||
Short-Term Investments |
14,340,724 | — | — | 14,340,724 | ||||||||||||
|
|
|||||||||||||||
Total Investments in Securities |
$ | 14,340,724 | $ | 1,536,984,187 | $ | — | $ | 1,551,324,911 | ||||||||
|
|
|||||||||||||||
Liabilities: | ||||||||||||||||
Other Financial Instruments: |
||||||||||||||||
Futures Contracts |
$ | 326,451 | $ | — | $ | — | $ | 326,451 | ||||||||
|
|
|||||||||||||||
Franklin U.S. Low Volatility ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Equity Investmentsb |
$ | 141,322,275 | $ | — | $ | — | $ | 141,322,275 | ||||||||
U.S. Government & Agency Securities |
— | 865,000 | — | 865,000 | ||||||||||||
|
|
|||||||||||||||
Total Investments in Securities |
$ | 141,322,275 | $ | 865,000 | $ | — | $ | 142,187,275 | ||||||||
|
|
218 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
9. Fair Value Measurements (continued)
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Franklin U.S. Treasury Bond ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
U.S. Government & Agency Securities |
$ | — | $ | 455,753,741 | $ | — | $ | 455,753,741 | ||||||||
Short-Term Investments |
595,240 | — | — | 595,240 | ||||||||||||
|
|
|||||||||||||||
Total Investments in Securities |
$ | 595,240 | $ | 455,753,741 | $ | — | $ | 456,348,981 | ||||||||
|
|
|||||||||||||||
Franklin Ultra Short Bond ETF | ||||||||||||||||
Assets: | ||||||||||||||||
Investments in Securities:a |
||||||||||||||||
Corporate Bonds & Notes |
$ | — | $ | 1,592,353 | $ | — | $ | 1,592,353 | ||||||||
Asset-Backed Securities |
— | 200,361 | — | 200,361 | ||||||||||||
Short-Term Investments |
667,662 | — | — | 667,662 | ||||||||||||
|
|
|||||||||||||||
Total Investments in Securities |
$ | 667,662 | $ | 1,792,714 | $ | — | $ | 2,460,376 | ||||||||
|
|
aFor detailed categories, see the accompanying Schedules of Investments.
bIncludes common and convertible preferred stocks.
cIncludes financial instruments determined to have no value.
10. Investments in FLSP Holdings Corporation
Franklin Systematic Style Premia ETF, (the “Fund”), invests in certain financial instruments and commodities/or commodity-linked derivative investments. The FLSP Holdings Corporation is a Cayman Islands exempted company with limited liability, is a wholly-owned subsidiary of the Fund, and is able to invest in certain financial instruments and/or commodity-linked derivative investments consistent with the investment objective of the Fund. At September 30, 2023, the Franklin Systematic Style Premia ETF investment(s) FLSP Holdings Corporation is reflected in the Fund’s Consolidated Schedule of Investments. At September 30, 2023, the net assets of the FLSP Holdings Corporation were $3,426,979, representing 3.20% of the Fund’s consolidated net assets. The Fund’s investment(s) in the FLSP Holdings Corporation is limited to 25% of consolidated assets.
11. New Accounting Pronouncements
In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In January 2021 and December 2022, the FASB issued ASU No. 2021-01 and ASU No. 2022-06, with further amendments to Topic 848. The amendments in the ASUs provide optional temporary accounting recognition and financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021 for certain LIBOR settings and 2023 for the remainder. The ASUs are effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2024. Management has reviewed the requirements and believes the adoption of these ASUs will not have a material impact on the financial statements.
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 believes that the adoption of the ASU will not have a material impact on the financial statements.
12. Subsequent Events
The Funds have evaluated subsequent events through the issuance of these Financial Statements and determined that no events have occurred that require disclosure.
franklintempleton.com | Semiannual Report | 219 |
FRANKLIN TEMPLETON ETF TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Abbreviations
Selected Portfolio | Currency | Counterparty | ||||||||
ADR | American Depositary Receipt | AUD | Australian Dollar | CITI | CITIBANK | |||||
CAC | Cotation Assistée en Continu | CAD | Canadian Dollar | MSCO | Morgan Stanley | |||||
CLO | Collateralized Loan Obligation | CNY | Chinese Yuan Renminbi | MSCS | Morgan Stanley Capital Services Inc. | |||||
CSCDA | California Statewide Communities | DKK | Danish Krone | |||||||
Development Authority | EUR | Euro | ||||||||
FRN | Floating Rate Note | GBP | United Kingdom Pound | |||||||
LIBOR | London Interbank Offered Rate | JPY | Japanese Yen | |||||||
OAT | Obligation Assumable by the Treasurer | MXN | Mexican Peso | |||||||
REIT | Real Estate Investment Trust | PLN | Polish Zloty | |||||||
SBA | Small Business Administration | SEK | Swedish Krona | |||||||
SPA | Standby Purchase Agreement | USD | United States Dollar | |||||||
ULSD | Ultra-Low Sulfur Diesel | |||||||||
USD | Unified/Union School District |
220 | Semiannual Report | franklintempleton.com |
FRANKLIN TEMPLETON ETF TRUST
Board Approval of Investment
Management Agreements
FRANKLIN TEMPLETON ETF TRUST
Franklin Disruptive Commerce ETF
Franklin Dynamic Municipal Bond ETF
(formerly Franklin Liberty Federal Intermediate Tax-Free Bond Opportunities ETF)
Franklin Exponential Data ETF
Franklin Genomic Advancements ETF
Franklin Intelligent Machines ETF
Franklin High Yield Corporate ETF*
Franklin International Aggregate Bond ETF*
Franklin Investment Grade Corporate ETF*
Franklin Senior Loan ETF*
Franklin Systematic Style Premia ETF*
Franklin Ultra Short Bond ETF*
Franklin U.S. Core Bond ETF*
Franklin U.S. Low Volatility ETF*
Franklin U.S. Treasury Bond ETF*
Franklin Municipal Green Bond ETF*
(formerly Franklin Liberty Federal Tax-Free Bond ETF)
(each a Fund)
*Effective August 1, 2022, “Liberty” was removed from the name of the Fund.
At a meeting held on May 25, 2022 (Meeting), the Board of Trustees (Board) of Franklin Templeton ETF Trust (Trust), including a majority of the trustees who are not “interested persons” as defined in the Investment Company Act of 1940 (Independent Trustees), reviewed and approved the continuance of (i) the investment management agreement between Franklin Advisers, Inc. (FAV) and the Trust, on behalf of each Fund (except the Franklin International Aggregate Bond ETF); (ii) an investment management agreement between Franklin Templeton Investment Management Limited (FTIML) and the Trust, on behalf of the Franklin International Aggregate Bond ETF; (iii) an investment sub-advisory agreement between FAV and Franklin Templeton Institutional, LLC (FT Institutional), an affiliate of FAV, on behalf of each of the Franklin Investment Grade Corporate ETF and Franklin U.S. Treasury Bond ETF; and (iv) an investment sub-advisory agreement between FTIML and FAV, an affiliate of FTIML, on behalf of the Franklin International Aggregate Bond ETF (each a Management Agreement) for an additional one-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the continuation of each Management Agreement. Although the Management Agreements for the
Funds were considered at the same Board meeting, the Board considered the information provided to it about the Funds together and with respect to each Fund separately as the Board deemed appropriate. FAV, FTIML and FT
Institutional are each referred to herein as a Manager. In considering the continuation 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 also reviewed and considered information provided in response to a detailed set of requests for information submitted to each Manager by Independent Trustee counsel on behalf of the Independent Trustees in connection with the annual contract renewal process. In addition, prior to the Meeting, the Independent Trustees held a virtual contract renewal meeting at which the Independent Trustees conferred amongst themselves and Independent Trustee counsel about contract renewal matters and subsequently, requested additional information from management that the Independent Trustees reviewed and considered at the Meeting. The Board reviewed and considered all of the factors it deemed relevant in approving the continuance of each Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services provided by each Manager; (ii) the investment performance of each Fund; (iii) the costs of the services provided and profits realized by each Manager and its affiliates from the relationship with each Fund; (iv) the extent to which economies of scale are realized as each Fund grows; and (v) whether fee levels reflect these economies of scale for the benefit of Fund investors.
In approving the continuance of each Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of each Management Agreement are fair and reasonable and that the continuance of such Management Agreement is in the best interests of the applicable Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.
Nature, Extent and Quality of Services
The Board reviewed and considered information regarding the nature, extent and quality of investment management services provided by each Manager and its affiliates to the Funds and their shareholders. This information included, among other things, the qualifications, background and experience of the senior management and investment personnel of each Manager; the structure of investment
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personnel compensation; oversight of third-party service providers; investment performance reports and related financial information for each Fund; reports on expenses; legal and compliance matters; risk controls; pricing and other services provided by each Manager and its affiliates; and management fees charged by each Manager and its affiliates to US funds and other accounts, including management’s explanation of differences among accounts where relevant. The Board acknowledged the ongoing integration of the Legg Mason family of funds into the Franklin Templeton (FT) family of funds and developing strategies to address areas of heightened concern in the registered fund industry, including various regulatory initiatives and recent geopolitical concerns. The Board also considered the investment management services that the Manager provides to the Cayman Islands-based company, which is wholly owned by the Franklin Systematic Style Premia ETF (Cayman Subsidiary).
The Board also reviewed and considered the benefits provided to Fund shareholders of investing in a fund that is part of the FT family of funds. The Board noted the financial position of Franklin Resources, Inc. (FRI), the Managers’ parent, and its commitment to the registered fund business as evidenced by its continued introduction of new funds, reassessment of the fund offerings in response to the market environment and project initiatives and capital investments relating to the services provided to the Funds by the FT organization. The Board specifically noted FT’s commitment to being a global leader in stewardship and sustainability and the recent addition of a senior executive focused on environmental, social and governance and climate control initiatives.
Following consideration of such information, the Board was satisfied with the nature, extent and quality of services provided by each Manager and its affiliates to the Funds and their shareholders.
Fund Performance
The Board reviewed and considered the performance results of each Fund for various time periods ended February 28, 2022. The Board considered the performance returns for each Fund in comparison to the performance returns of registered funds deemed comparable to the Fund included in a universe (Performance Universe) selected by Broadridge Financial Solutions, Inc. (Broadridge), an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the registered funds included in a Performance Universe. The Board also reviewed and considered Fund performance
reports provided and discussions that occurred with portfolio managers at Board meetings throughout the year. The Board noted its ongoing discussions with management about the performance of the Funds to date, particularly as compared to peers, the importance of performance to asset growth and growth of market share, and the performance of the Funds in periods of volatility. In addition, the Board acknowledged information provided regarding management’s strategy behind the overall product line up, the sources of asset growth, the nature of management’s research, potential use of innovative data and technology, and investments in marketing and distribution. Finally, the Board noted management’s high level of client engagement and the strength of its compliance program. A summary of each Fund’s performance results is below.
Franklin Disruptive Commerce ETF, Franklin Exponential Data ETF and Franklin Genomic Advancements ETF - The Performance Universe for the Franklin Disruptive Commerce ETF included the Fund and all retail and institutional consumer services funds and exchange-traded funds. The Performance Universe for the Franklin Exponential Data ETF included the Fund and all retail and institutional science and technology funds and exchange-traded funds. The Performance Universe for the Franklin Genomic Advancements ETF included the Fund and all retail and institutional health/biotechnology funds and exchange-traded funds. The Franklin Disruptive Commerce ETF and the Franklin Genomic Advancements ETF commenced operations on February 25, 2020, and the Franklin Exponential Data ETF commenced operations on January 12, 2021, and thus have been in operation for less than three years. The Board noted that the Funds’ annualized total returns for the one-year period were below the medians of their respective Performance Universes. The Board discussed this performance with management and management explained that the Performance Universe for each of the Franklin Disruptive Commerce ETF and the Franklin Genomic Advancements ETF was not directly comparable to the respective Fund. The Board concluded that, based on the foregoing and the short operating history of these two funds, each Fund’s Management Agreement should be continued for an additional one-year period and management’s efforts should continue to be closely monitored. The Board further concluded that, given the Franklin Exponential Data ETF’s short operating history, the Board would need more time to evaluate the performance of the Fund.
Franklin Dynamic Municipal Bond ETF and Franklin Senior Loan ETF - The Performance Universe for the Franklin
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Dynamic Municipal Bond ETF included the Fund and all retail and institutional intermediate municipal debt funds and exchange-traded funds. The Performance Universe for the Franklin Senior Loan ETF included the Fund and all retail and institutional loan participation funds and exchange-traded funds. The Franklin Dynamic Municipal Bond ETF commenced operations on August 31, 2017, and the Franklin Senior Loan ETF commenced operations on May 30, 2018, and thus have been in operation for less than five years. The Board noted that the Funds’ annualized total returns for the one- and three-year periods were above the medians of their respective Performance Universes. The Board concluded that the Funds’ performance was satisfactory.
Franklin Intelligent Machines ETF, Franklin Systematic Style Premia ETF and Franklin U.S. Treasury Bond ETF - The Performance Universe for the Franklin Intelligent Machines ETF included the Fund and all retail and institutional science and technology funds and exchange-traded funds. The Performance Universe for the Franklin Systematic Style Premia ETF included the Fund and all retail and institutional absolute-return funds and exchange-traded funds. The Performance Universe for the Franklin U.S. Treasury Bond ETF included the Fund and all retail and institutional general US Treasury funds and exchange-traded funds. The Franklin Intelligent Machines ETF commenced operations on February 25, 2020, the Franklin Systematic Style Premia ETF commenced operations on December 18, 2019 and the Franklin U.S. Treasury Bond ETF commenced operations on June 9, 2020, and thus have been in operation for less than three years. The Board noted that the Funds’ annualized total returns for the one-year period were above the medians of their respective Performance Universes. The Board concluded that the Funds’ performance was satisfactory.
Franklin Investment Grade Corporate ETF - The Performance Universe for the Fund included the Fund and all retail and institutional BBB-rated corporate debt funds and exchange-traded funds. The Fund commenced operations on October 3, 2016 and thus has been in operation for less than ten years. The Board noted that the Fund’s annualized total return for the one-, three- and five-year periods was below the median of its Performance Universe. The Board discussed this performance with management and management explained that the Fund’s relative underperformance in comparison to its Performance Universe was due, in part, to the Fund having less exposure to high yield securities than its peers, noting that high yield securities strongly outperformed investment grade bonds during the one-year period. Management further explained the steps
the portfolio management team is taking in an effort to improve the Fund’s peer rankings. Based on the foregoing, the Board concluded that the Fund’s Management Agreement should be continued for an additional one-year period, and that management’s efforts should continue to be closely monitored.
Franklin High Yield Corporate ETF and Franklin Municipal Green Bond ETF - The Performance Universe for the Franklin High Yield Corporate ETF included the Fund and all retail and institutional high yield funds and exchange-traded funds. The Performance Universe for the Franklin Municipal Green Bond ETF included the Fund and all retail and institutional general and insured municipal debt funds and exchange-traded funds. The Franklin High Yield Corporate ETF commenced operations on May 30, 2018, and the Franklin Municipal Green Bond ETF commenced operations on August 31, 2017, and thus have been in operation for less than five years. The Board noted that Funds’ annualized total returns for the for the one-year period were below the medians of their respective Performance Universes, but the Funds’ annualized total returns for the three-year period were above the medians and in the first (best) or second quintiles of their respective Performance Universes. The Board also noted the short operating history of each Fund and that each Fund had an annualized total return that exceeded 4.45% for the three-year period. The Board concluded that each Fund’s performance was acceptable.
Franklin International Aggregate Bond ETF - The Performance Universe for the Fund included the Fund and all retail and institutional international income funds and exchange-traded funds. The Fund commenced operations on May 30, 2018 and thus has been in operation for less than five years. The Board noted that the annualized total return the Fund for the one-year period was above the median of its Performance Universe, but its annualized total return for the three-year period was below its Performance Universe. The Board concluded that the Fund’s performance was satisfactory.
Franklin U.S. Low Volatility ETF - The Performance Universe for the Fund included the Fund and all retail and institutional large-cap core funds and exchange-traded funds. The Fund commenced operations on September 20, 2016 and thus has been in operation for less than ten years. The Board noted that the Fund’s annualized total return for the one-year period was above the median of its Performance Universe, but its annualized total return for the three- and five-year periods was below the median of its Performance Universe.
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The Board noted that, while the Fund’s annualized total return for the three- and five-year periods was below median, it was 14.55% and 13.77%, respectively. The Board concluded that the Fund’s performance was satisfactory.
Franklin U.S. Core Bond ETF and Franklin Ultra Short Bond ETF - The Performance Universe for the Franklin U.S. Core Bond ETF included the Fund and all retail and institutional core bond funds and exchange-traded funds. The Performance Universe for the Franklin Ultra Short Bond ETF included the Fund and all retail and institutional ultra-short obligation funds and exchange-traded funds. The Franklin U.S. Core Bond ETF Fund commenced operations on September 17, 2019 and the Franklin Ultra Short Bond ETF commenced operations on July 14, 2020, and thus have been in operation for less than three years. The Board noted that the Funds’ annualized total returns for the one-year period were below the medians of their respective Performance Universes. The Board concluded that, given each Fund’s short operating history, the Board would need additional time to evaluate the performance of the Fund.
Comparative Fees and Expenses
The Board reviewed and considered information regarding each Fund’s actual total expense ratio and its various components, including, as applicable, management fees; transfer agent expenses; underlying fund expenses; Rule 12b-1 and non-Rule 12b-1 service fees; and other non-management fees. The Board considered the actual total expense ratio and, separately, the contractual management fee rate, without the effect of fee waivers, if any (Management Rate) of each Fund in comparison to the median expense ratio and median Management Rate, respectively, of other exchange-traded funds deemed comparable to and with a similar expense structure to the Fund selected by Broadridge (Expense Group). Broadridge fee and expense data is based upon information taken from each fund’s most recent annual or semi-annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios and Management Rates generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Broadridge to be an appropriate measure of comparative fees and expenses. The Broadridge Management Rate includes administrative charges. The Board received a description of the methodology used by Broadridge to select the exchange-traded funds included in an Expense Group.
Franklin Disruptive Commerce ETF - The Expense Group for the Fund was comprised of actively managed exchange-traded funds, which included the Fund, two other consumer services funds, and one financial services fund. The Board noted that the Management Rate and the actual total expense ratio for the Fund were below the medians of its Expense Group. The Board also noted the small size of the Fund’s Expense Group. The Board further noted that effective October 1, 2021, the Fund implemented a unified management fee (Unified Fee). The Board also noted that pursuant to the Unified Fee arrangement the Manager reimburses the Fund for all of its acquired fund fees and expenses (if any) and pays 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, (iv) taxes, (v) interest (including borrowing costs and dividend expenses on securities sold short and overdraft charges), (vi) litigation expenses (including litigation to which the Trust or the Fund may be a party and indemnification of the Trustees and officers with respect thereto), and (vii) other non-routine or extraordinary expenses (Unified Fee Arrangement). The Board concluded that the Management Rate charged to the Fund is reasonable.
Franklin Exponential Data ETF, Franklin Genomic Advancements ETF, Franklin Intelligent Machines ETF, Franklin International Aggregate Bond ETF, Franklin Senior Loan ETF, Franklin Systematic Style Premia ETF, Franklin Ultra Short Bond ETF, Franklin U.S. Core Bond ETF and Franklin U.S. Treasury Bond ETF - The Expense Group for the Franklin Exponential Data ETF was comprised of actively managed exchange-traded funds, which included the Fund, four other science and technology funds, two global science/technology funds, and one financial services fund. The Expense Group for the Franklin Genomic Advancements ETF was comprised of actively managed exchange-traded funds, which included the Fund, one other health/biotechnology fund, and three science and technology funds. The Expense Group for the Franklin Intelligent Machines ETF was comprised of actively managed exchange-traded funds, which included the Fund and four other science and technology funds. The Expense Group for the Franklin International Aggregate Bond ETF was comprised of actively managed exchange-traded funds, which included the Fund, one other international income fund, and four emerging markets hard currency debt funds. The Expense Group for the Franklin Senior Loan ETF was comprised of actively managed exchange-traded funds, which included the Fund and six other loan participation
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funds. The Expense Group for the Franklin Systematic Style Premia ETF was comprised of actively managed exchange-traded funds, which included the Fund, two other absolute-return funds, four alternative long/short equity funds, and one alternative multi-strategy fund. The Expense Group for the Franklin Ultra Short Bond ETF was comprised of pure index exchange-traded funds, which included the Fund and nine other ultra-short obligation funds. The Expense Group for the Franklin U.S. Core Bond ETF was comprised of actively managed exchange-traded funds, which included the Fund, three other core bond funds, and five short investment-grade debt funds. The Expense Group for the Franklin U.S. Treasury Bond ETF was comprised of actively managed exchange-traded funds, which included the Fund and eight general US government funds. The Board noted that the Management Rates and actual total expense ratios for the Funds were below the medians of their respective Expense Groups. The Board also noted the small size of the Franklin Genomic Advancements ETF’s, the Franklin Intelligent Machines ETF’s, the Franklin International Aggregate Bond ETF’s, Franklin Senior Loan ETF’s and the Franklin Systematic Style Premia ETF’s Expense Groups. The Board further noted that effective October 1, 2021, the Funds implemented a Unified Fee. The Board also noted the terms of the Unified Fee Arrangement. The Board further noted that FAV is paid by FTIML out of the management fee FTIML receives from the Franklin International Aggregate Bond ETF and that the allocation of the fee between FTIML and FAV reflected the services provided by each to the Fund. The Board also noted that FT Institutional is paid by FAV out of the management fee FAV receives from the Franklin U.S. Treasury Bond ETF and that the allocation of the fee between FAV and FT Institutional reflected the services provided by each to the Fund. The Board concluded that the Management Rate charged to each Fund and the sub-advisory fee paid to each of FAV and FT Institutional are reasonable.
Franklin Dynamic Municipal Bond ETF and Franklin Municipal Green Bond ETF - The Expense Group for the Franklin Dynamic Municipal Bond ETF was comprised of actively managed exchange-traded funds, which included the Fund and five other intermediate municipal debt funds. The Expense Group for the Franklin Municipal Green Bond ETF was comprised of actively managed exchange-traded funds, which included the Fund and four other general and insured municipal debt funds. The Board noted that the Management Rate for the Funds was above the medians of their respective Expense Groups, but the actual total expense ratio was equal to the medians of their respective Expense
Groups. The Board also noted the small size of the Funds’ Expense Groups and that the Funds’ actual total expense ratio reflected an expense cap from management. The Board concluded that the Management Rates charged to the Funds are reasonable.
Franklin Investment Grade Corporate ETF - The Expense Group for the Fund was comprised of actively managed exchange-traded funds, which included the Fund and three other BBB-rated corporate debt funds. The Board noted that the Management Rate for the Fund was approximately 1.6 basis points above the median of its Expense Group, but its actual total expense ratio was below the median of its Expense Group. The Board also noted the small size of the Expense Group. The Board further noted that effective October 1, 2021, the Fund implemented a Unified Fee. The Board also noted the terms of the Unified Fee Arrangement. The Board also noted that FT Institutional is paid by FAV out of the management fee FAV receives from the Fund and that the allocation of the fee between FAV and FT Institutional reflected the services provided by each to the Fund. The Board concluded that the Management Rate charged to the Fund and the sub-advisory fee paid to FT Institutional are reasonable.
Franklin High Yield Corporate ETF - The Expense Group for the Fund was comprised of actively managed exchange-traded funds, which included the Fund and eight other high yield funds. The Board noted that the Management Rate for the Fund was equal to the median of its Expense Group, but its actual total expense ratio was below the median of its Expense Group. The Board further noted that effective October 1, 2021, the Fund implemented a Unified Fee. The Board also noted the terms of the Unified Fee Arrangement. The Board concluded that the Management Rate charged to the Fund is reasonable.
Franklin U.S. Low Volatility ETF - The Expense Group for the Fund was comprised of actively managed exchange-traded funds, which included the Fund, one other large-cap core fund, one large-cap value fund, and two multi-cap value funds. The Board noted that the Management Rate for the Fund was below the median of its Expense Group, but its actual expense ratio was equal to the median of its Expense Group. The Board also noted the small size of the Expense Group. The Board further noted that effective October 1, 2021, the Fund implemented a Unified Fee. The Board also noted the terms of the Unified Fee Arrangement. The Board concluded that the Management Rate charged to the Fund is reasonable.
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Profitability
The Board reviewed and considered information regarding the profits realized by each Manager and its affiliates in connection with the operation of each Fund. In this respect, the Board considered the Fund profitability analysis that addresses the overall profitability of FT’s US fund business, as well as its profits in providing investment management and other services to each of the individual funds during the 12-month period ended September 30, 2021, being the most recent fiscal year-end for FRI. The Board noted that although management continually makes refinements to its methodologies used in calculating profitability in response to organizational and product-related changes, the overall methodology has remained consistent with that used in the Funds’ profitability report presentations from prior years. The Board also noted that PricewaterhouseCoopers LLP, auditor to FRI and certain FT funds, has been engaged to periodically review and assess the allocation methodologies to be used solely by the Funds’ Board with respect to the profitability analysis.
The Board noted management’s belief that costs incurred in establishing the infrastructure necessary for the type of fund operations conducted by each Manager and its affiliates may not be fully reflected in the expenses allocated to each Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. As part of this evaluation, the Board considered management’s outsourcing of certain operations, which effort has required considerable up-front expenditures but, over the long run, is expected to result in greater efficiencies. The Board also noted management’s expenditures in improving shareholder services provided to the Funds, as well as the need to implement systems and meet additional regulatory and compliance requirements resulting from recent US Securities and Exchange Commission and other regulatory requirements.
The Board also considered the extent to which each Manager and its affiliates might derive ancillary benefits from fund operations, including potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with service providers and counterparties. Based upon its consideration of all these factors, the Board concluded that the level of profits realized by each Manager and its affiliates from providing services to each Fund was not excessive in view of the nature, extent and quality of services provided to each Fund.
Economies of Scale
The Board reviewed and considered the extent to which each Manager may realize economies of scale, if any, as each Fund grows larger and whether each Fund’s management fee structure reflects any economies of scale for the benefit of shareholders. With respect to possible economies of scale, the Board noted the existence of management fee breakpoints for certain of the Funds, which operate generally to share any economies of scale with a Fund’s shareholders by reducing the Fund’s effective management fees as the Fund grows in size. The Board considered that each Fund (except the Franklin Dynamic Municipal Bond ETF and Franklin Municipal Green Bond ETF) would likely experience benefits from the Unified Fee at the Fund’s projected asset levels because of the applicable Manager’s contractual requirement to bear most of the Fund’s ordinary operating expenses. The Board noted that, under the Unified Fee, it is not anticipated that any of the Funds will generate significant, if any, profit for the applicable Manager and/or its affiliates for some time. The Board considered management’s view that any analyses of potential economies of scale in managing a particular fund are inherently limited in light of the joint and common costs and investments the Managers incur across the FT family of funds as a whole. The Board also noted that, as of December 31, 2021, each Fund (except for the Franklin Investment Grade Corporate ETF and the Franklin U.S. Core Bond ETF) had net assets below $500 million (and in most cases much less). The Board also noted management’s representation that, while the Franklin Investment Grade Corporate ETF and the Franklin U.S. Core Bond ETF had net assets of $1.03 billion and $1.69 billion, respectively, as of December 31, 2021, the only Fund that experienced a profit for the fiscal year ended September 30, 2021 was the Franklin Investment Grade Corporate ETF. The Board recognized that there would not likely be any economies of scale for a Fund until the Fund’s assets grow.
Conclusion
Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved the continuation of each Management Agreement for an additional one-year period.
Board Approval of Investment
Management Agreements
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Franklin Liberty High Yield Corporate ETF
Franklin Liberty International Aggregate Bond ETF
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Franklin Liberty Senior Loan ETF
Franklin Liberty Systematic Style Premia ETF
(each a Fund)
At a meeting held on May 26, 2021 (Meeting), the Board of Trustees (Board) of Franklin Templeton ETF Trust (Trust), including a majority of the trustees who are not “interested persons” as defined in the Investment Company Act of 1940 (Independent Trustees), reviewed and approved the continuance of the investment management agreements between Franklin Advisers, Inc. (FAI) and the Trust, on behalf of the Franklin Liberty High Yield Corporate ETF, the Franklin Liberty Senior Loan ETF and the Franklin Liberty Systematic Style Premia ETF, an investment management agreement between Franklin Templeton Investment Management Limited (FTIML) and the Trust, on behalf of the Franklin Liberty International Aggregate Bond ETF and an investment sub-advisory agreement between FTIML and FAI, on behalf of the Franklin Liberty International Aggregate Bond ETF (each a Management Agreement) for an additional one-year period. The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the continuation of each Management Agreement. Although the Management Agreements for the Funds were considered at the same Board meeting, the Board considered the information provided to it about the Funds together and with respect to each Fund separately as the Board deemed appropriate. FAI and FTIML are each referred to herein as a Manager.
In considering the continuation 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, including a number of special meetings during the pandemic to enhance Board oversight of Fund-related matters during this period. The Board also reviewed and considered information provided in response to a detailed set of requests for information submitted to each Manager by Independent Trustee counsel on behalf of the Independent Trustees in connection with the annual contract renewal process. In addition, prior to the Meeting, the Independent Trustees held a telephonic contract renewal meeting at which the Independent Trustees conferred amongst themselves and Independent Trustee counsel about contract renewal matters and, in some cases, requested additional information from each Manager relating to the contract. The Board reviewed and considered all of the factors it deemed relevant in approving the continuance of each Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services provided by each Manager; (ii)
the investment performance of each Fund; (iii) the costs of the services provided and profits realized by the Manager and its affiliates from the relationship with each Fund; (iv) the extent to which economies of scale are realized as each Fund grows; and (v) whether fee levels reflect these economies of scale for the benefit of Fund investors.
In approving the continuance of each Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of each Management Agreement are fair and reasonable and that the continuance of such Management Agreement is in the best interests of the applicable Fund and its shareholders. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s determination.
Nature, Extent and Quality of Services
The Board reviewed and considered information regarding the nature, extent and quality of investment management services provided by each Manager and its affiliates to the Funds and their shareholders. This information included, among other things, the qualifications, background and experience of the senior management and investment personnel of each Manager; as well as information on succession planning where appropriate; the structure of investment personnel compensation; oversight of third-party service providers; investment performance reports and related financial information for each Fund; reports on expenses; legal and compliance matters; risk controls; pricing and other services provided by each Manager and its affiliates; and management fees charged by each Manager and its affiliates to US funds and other accounts, including management’s explanation of differences among accounts where relevant. The Board noted management’s continuing efforts and expenditures in establishing effective business continuity plans, including the effectiveness of those plans during the pandemic, and developing strategies to address areas of heightened concern in the registered fund industry, such as cybersecurity in the current work-from-home environment and liquidity risk management. The Board also considered the investment management services that the Manager provides to the Cayman Islands-based company, which is wholly owned by the Franklin Liberty Systematic Style Premia ETF (Cayman Subsidiary).
The Board also reviewed and considered the benefits provided to Fund shareholders of investing in a fund that is part of the Franklin Templeton (FT) family of funds. The Board noted the financial position of Franklin Resources, Inc. (FRI), the Managers’ parent, and its commitment to the
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registered fund business as evidenced by its continued introduction of new funds, reassessment of the fund offerings in response to the market environment and project initiatives and capital investments relating to the services provided to the Funds by the FT organization. The Board specifically noted FT’s commitment to enhancing services and controlling costs, as reflected in its outsourcing of certain administrative functions, and growth opportunities, as evidenced by its recent acquisition of the Legg Mason companies. The Board also noted FT’s attention focused on expanding the distribution opportunities for all funds in the FT family of funds.
Following consideration of such information, the Board was satisfied with the nature, extent and quality of services provided by each Manager and its affiliates to the Funds and their shareholders.
Fund Performance
The Board reviewed and considered the performance results of each Fund for the one-year period ended February 28, 2021. The Board considered the performance returns for each Fund in comparison to the performance returns of registered funds deemed comparable to the Fund included in a universe (Performance Universe) selected by Broadridge Financial Solutions, Inc. (Broadridge), an independent provider of investment company data. The Board received a description of the methodology used by Broadridge to select the registered funds included in a Performance Universe. The Board also reviewed and considered Fund performance reports provided and discussions that occurred with portfolio managers at Board meetings throughout the year. The Board noted its ongoing discussions with each Manager about the performance of the Funds to date, particularly as compared to peers, the importance of performance to asset growth and growth of market share, and the performance of the Funds in periods of volatility. In addition, the Board acknowledged information provided regarding each Manager’s strategy behind the overall product line-up, the sources of asset growth, the nature of each Manager’s research, potential use of innovative data and technology, and investments in marketing and distribution. Finally, the Board noted each Manager’s high level of client engagement and the strength of its compliance program. A summary of each Fund’s performance results is below.
The Performance Universe for the Franklin Liberty High Yield Corporate ETF included the Fund and all retail and institutional high yield funds and exchange-traded funds. The Performance Universe for the Franklin Liberty Senior Loan ETF included the Fund and all retail and institutional
loan participation funds and exchange-traded funds. The Funds commenced operations on May 30, 2018, and thus have been in operation for less than three years. The Board noted that the Funds’ annualized total returns for the one-year period were above the medians of their respective Performance Universes. The Board concluded that the Funds’ performance was satisfactory.
The Performance Universe for the Franklin Liberty International Aggregate Bond ETF included the Fund and all retail and institutional international income funds and exchange-traded funds. The Performance Universe for the Franklin Liberty Systematic Style Premia ETF included the Fund and all retail and institutional absolute-return funds and exchange-traded funds. The Franklin Liberty International Aggregate Bond ETF commenced operations on May 30, 2018 and the Franklin Liberty Systematic Style Premia ETF commenced operations on December 18, 2019, and thus have been in operation for less than three years. The Board noted that the Funds’ annualized total returns for the one-year period were below the medians of their respective Performance Universes. The Board concluded that the Funds’ performance was acceptable given their short periods of operation.
Comparative Fees and Expenses
The Board reviewed and considered information regarding each Fund’s actual total expense ratio and its various components, including, as applicable, management fees; transfer agent expenses; underlying fund expenses; Rule 12b-1 and non-Rule 12b-1 service fees; and other non-management fees. The Board considered the actual total expense ratio and, separately, the contractual management fee rate, without the effect of fee waivers, if any (Management Rate) of each Fund in comparison to the median expense ratio and median Management Rate, respectively, of other exchange-traded funds deemed comparable to and with a similar expense structure to the Fund selected by Broadridge (Expense Group). Broadridge fee and expense data is based upon information taken from each fund’s most recent annual report, which reflects historical asset levels that may be quite different from those currently existing, particularly in a period of market volatility. While recognizing such inherent limitation and the fact that expense ratios and Management Rates generally increase as assets decline and decrease as assets grow, the Board believed the independent analysis conducted by Broadridge to be an appropriate measure of comparative fees and expenses. The Broadridge Management Rate includes administrative charges. The Board received a description of
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the methodology used by Broadridge to select the exchange-traded funds included in an Expense Group.
Franklin Liberty High Yield Corporate ETF - The Expense Group for the Fund was comprised of actively managed exchange-traded funds, which included the Fund and five other high yield funds. The Board noted that the Management Rate for the Fund was approximately five basis points above the median of its Expense Group, but its actual total expense ratio was below the median of its Expense Group. The Board also noted that the Fund’s actual total expense ratio reflected a fee waiver from management. The Board concluded that the Management Rate charged to the Fund is reasonable.
Franklin Liberty International Aggregate Bond ETF and Franklin Liberty Senior Loan ETF - The Expense Group for the Franklin Liberty International Aggregate Bond ETF was comprised of actively managed exchange-traded funds, which included the Fund, one other international income fund, and three emerging markets hard currency debt funds. The Expense Group for the Franklin Liberty Senior Loan ETF was comprised of actively managed exchange-traded funds, which included the Fund and four other loan participation funds. The Board noted that the Management Rate and actual total expense ratio for each Fund were below the medians of its respective Expense Group. The Board also noted the small size of each Expense Group and that each Fund’s actual total expense ratio reflected a fee waiver from management. The Board further noted that FAI is paid by FTIML out of the management fee FTIML receives from the Franklin Liberty International Aggregate Bond ETF. The Board concluded that the Management Rates charged to the Funds are reasonable.
Franklin Liberty Systematic Style Premia ETF - The Expense Group for the Fund was comprised of actively managed exchange-traded funds, which included the Fund, one other absolute-return fund, one alternative long/short equity fund, and one alternative multi-strategy fund. The Board noted that the Management Rate for the Fund was equal to the median of its Expense Group, and its actual total expense ratio was below the median of its Expense Group. The Board also noted the small size of the Fund’s Expense Group and that the Fund’s actual total expense ratio reflected a fee waiver from management. The Board concluded that the Management Rate charged to the Fund is reasonable.
Profitability
The Board reviewed and considered information regarding the profits realized by each Manager and its affiliates in connection with the operation of each Fund. In this respect,
the Board considered the Fund profitability analysis that addresses the overall profitability of FT’s US fund business, as well as its profits in providing investment management and other services to each of the individual funds during the 12-month period ended September 30, 2020, being the most recent fiscal year-end for FRI. The Board noted that although management continually makes refinements to its methodologies used in calculating profitability in response to organizational and product-related changes, the overall methodology has remained consistent with that used in the Funds’ profitability report presentations from prior years. The Board further noted management’s representation that the profitability analysis excluded the impact of the recent acquisition of the Legg Mason companies and that management expects to incorporate the legacy Legg Mason companies into the profitability analysis beginning next year. The Board also noted that PricewaterhouseCoopers LLP, auditor to FRI and certain FT funds, has been engaged to periodically review and assess the allocation methodologies to be used solely by the Funds’ Board with respect to the profitability analysis.
The Board noted management’s belief that costs incurred in establishing the infrastructure necessary for the type of fund operations conducted by each Manager and its affiliates may not be fully reflected in the expenses allocated to each Fund in determining its profitability, as well as the fact that the level of profits, to a certain extent, reflected operational cost savings and efficiencies initiated by management. As part of this evaluation, the Board considered management’s outsourcing of certain operations, which effort has required considerable up-front expenditures by each Manager but, over the long run is expected to result in greater efficiencies. The Board also noted management’s expenditures in improving shareholder services provided to the Funds, as well as the need to implement systems and meet additional regulatory and compliance requirements resulting from recent US Securities and Exchange Commission and other regulatory requirements.
The Board also considered the extent to which each Manager and its affiliates might derive ancillary benefits from fund operations, including revenues generated from transfer agent services, potential benefits resulting from personnel and systems enhancements necessitated by fund growth, as well as increased leverage with service providers and counterparties. Based upon its consideration of all these factors, the Board concluded that the level of profits realized by each Manager and its affiliates from providing services to each Fund was not excessive in view of the nature, extent and quality of services provided to each Fund.
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Economies of Scale
The Board reviewed and considered the extent to which each Manager may realize economies of scale, if any, as each Fund grows larger and whether each Fund’s management fee structure reflects any economies of scale for the benefit of shareholders. With respect to possible economies of scale, the Board noted the existence of management fee breakpoints for each Fund (except the Franklin Liberty Systematic Style Premia ETF), which operate generally to share any economies of scale with the Fund’s shareholders by reducing the Fund’s effective management fees as the Fund grows in size. The Board considered management’s view that any analyses of potential economies of scale in managing a particular fund are inherently limited in light of the joint and common costs and investments the Managers incur across the FT family of funds as a whole. The Board concluded that to the extent economies of scale may be realized by a Manager and its affiliates, the management fee structure for each Fund (except the Franklin Liberty Systematic Style Premia ETF) provided a sharing of benefits with the Fund and its shareholders as the Fund grows. The Board noted that as of December 31, 2020, the net assets of each Fund were less than approximately $228 million. The Board recognized that there would not likely be any economies of scale for a Fund until the Fund’s assets grow.
Conclusion
Based on its review, consideration and evaluation of all factors it believed relevant, including the above-described factors and conclusions, the Board unanimously approved the continuation of each Management Agreement for an additional one-year period.
Board Approval of Investment
Management Agreements
FRANKLIN TEMPLETON ETF TRUST
Franklin Income Focus 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 an investment management agreement between Franklin Advisers, Inc. (Manager) and the Trust, on behalf of the Fund, for an initial two-year period (the Management Agreement). The Independent Trustees received advice from and met separately with Independent Trustee counsel in considering whether to approve the Management Agreement.
In considering the approval of the Management Agreement, the Board reviewed and considered information provided by the Manager at the Meeting and throughout the year at meetings of the Board and its committees. The Board reviewed and considered all of the factors it deemed relevant in approving the Management Agreement, including, but not limited to: (i) the nature, extent and quality of the services to be provided by the Manager; (ii) the costs of the services to be provided by the 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 the Manager would provide general investment management and administrative services and that the Fund would operate under a unified management fee structure whereby the Manager 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 the Management Agreement, the Board, including a majority of the Independent Trustees, determined that the terms of the proposed Management Agreement are fair and reasonable and that such Management Agreement is 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 Manager and its affiliates to the Fund and its shareholders. This information included, among other things, the Fund’s proposed investment strategies and the ability of the Manager 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; the 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; the Manager’s strength and reputation within the industry; the personnel, operations, financial condition, and investment management capabilities,
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methodologies and resources of the Manager; and the Manager’s compliance capabilities, as demonstrated by, among other things, its policies and procedures reasonably designed to prevent violations of the Federal Securities Laws (as defined in Rule 38a-1 of the Investment Company Act of 1940). Following consideration of such information, the Board was satisfied with the nature, extent and quality of services to be provided by the 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 the 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 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 and nine other flexible portfolio funds. The Board noted that the proposed Management Rate and estimated total expense ratio for the Fund were below the median of its Expense Group. The Board noted that pursuant to the
proposed Unified Fee arrangement the Manager 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. After consideration of the above, the Board concluded that the Management Rate to be charged to the Fund is reasonable.
Profitability
The Board noted that the Manager (and its affiliates) could not report any financial results from their relationships with the Fund because the Fund has not yet commenced investment operations, and thus, the Board could not evaluate the Manager’s (or its affiliates’) profitability with respect to the Fund.
Economies of Scale
The Board reviewed and considered the extent to which the 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 Manager and/or its 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 the Management Agreement for the Fund for an initial two-year period.
Liquidity Risk Management Program
Franklin Templeton ETF Trust In Kind ETF
Franklin U.S. Low Volatility ETF
Each of the Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is
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defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. Each of the Funds is an exchange-traded fund (“ETF”) that is considered an “In-Kind ETF” under the Liquidity Rule, which means that the Fund satisfies requests for redemption through in-kind transfers of portfolio securities, positions, and other assets, except for a de minimis amount of cash, and publishes its portfolio holdings daily. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the SEC (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. As an In-Kind ETF, the Fund is not required to include in the LRMP policies and procedures relating to classification of portfolio holdings into four liquidity categories or establishing a highly liquid investment minimum (“HLIM”).
The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Legal, Investment Compliance, Investment Operations, Valuation Committee, Product Management and Global Product Strategy.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; its short and long-term cash flow projections; and its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit. Because the Funds are ETFs, the ILC also considers, as relevant, (1) the relationship between the Fund’s portfolio liquidity and the way in which, and the prices and spread at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants and (2) the effect of the composition of baskets on the overall liquidity of the Fund’s portfolio.
At meetings of the Funds’ Board of Trustees held in May 2023, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program for the year ended December 31, 2022. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP, including the Highly Liquid Investment Minimum (“HLIM”) where applicable, was implemented and operated effectively and achieved the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund.
Liquidity Risk Management Program
Franklin Templeton ETF Trust
Non In Kind ETF
Franklin Disruptive Commerce ETF
Franklin Dynamic Municipal Bond ETF
Franklin Exponential Data ETF
Franklin Genomic Advancements ETF
Franklin Intelligent Machines ETF
Franklin High Yield Corporate ETF
Franklin International Aggregate Bond ETF
Franklin Investment Grade Corporate ETF
Franklin Systematic Style Premia ETF
Franklin Ultra Short Bond ETF
Franklin U.S. Core Bond ETF
Franklin U.S. Treasury Bond ETF
Franklin Municipal Green Bond ETF
Each of the Franklin Templeton and Legg Mason Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for Funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid
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Investment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the Securities and Exchange Commission (“SEC”) (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
The Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) is the appointed Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for Franklin Templeton and Legg Mason products and portfolios. The ILC includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Legal, Investment Compliance, Investment Operations, Valuation Committee, Product Management and Global Product Strategy.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; its short and long-term cash flow projections; and its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit. Classification of the Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value.
Each Fund primarily holds liquid assets that are defined under the Liquidity Rule as “Highly Liquid Investments,” and therefore is not required to establish an HLIM. Highly Liquid Investments are defined as cash and any investment reasonably expected to be convertible to cash in current market conditions in three business days or less without the conversion to cash significantly changing the market value of the investment.
At meetings of the Funds’ Board of Trustees held in May 2023, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program for the year ended December 31, 2022. The
Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP, including the Highly Liquid Investment Minimum (“HLIM”) where applicable, was implemented and operated effectively to achieve the goal of assessing and managing each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund.
Liquidity Risk Management Program
Franklin Templeton ETF Trust
Franklin Senior Loan ETF
Each of the Funds has adopted and implemented a written Liquidity Risk Management Program (the “LRMP”) as required by Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”). The LRMP is designed to assess and manage each Fund’s liquidity risk, which is defined as the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund. In accordance with the Liquidity Rule, the LRMP includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for Funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments that would result in the Fund holding more than 15% of its net assets in Illiquid assets. The LRMP also requires reporting to the Securities and Exchange Commission (“SEC”) (on a non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
The Funds’ Board of Trustees approved the appointment of the Director of Liquidity Risk within the Investment Risk Management Group (the “IRMG”) as the Administrator of the LRMP. The IRMG maintains the Investment Liquidity Committee (the “ILC”) to provide oversight and administration of policies and procedures governing liquidity risk management for FT products and portfolios. The ILC
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includes representatives from Franklin Templeton’s Risk, Trading, Global Compliance, Investment Compliance, Investment Operations, Valuation Committee, Product Management and Global Product Strategy.
In assessing and managing each Fund’s liquidity risk, the ILC considers, as relevant, a variety of factors, including (i) the Fund’s investment strategy and the liquidity of its portfolio investments during both normal and reasonably foreseeable stressed conditions; (ii) its short and long-term cash flow projections; (iii) its cash holdings and access to other funding sources including the Funds’ interfund lending facility and line of credit; (iv) the relationship between the Fund’s portfolio liquidity and the way in which, and the prices and spread at which, Fund shares trade, including the efficiency of the arbitrage function and the level of active participation by market participants, including authorized participants and (v) the effect of the composition of baskets on the overall liquidity of the Fund’s portfolio. Classification of the Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value.
The Fund primarily holds investments where the time required to settle a sale of the investment may exceed 7 calendar days and are classified as “Less Liquid Investments”. Less liquid Investments are defined as any investment reasonably expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment, but where the sale or disposition is reasonably expected to settle in more than seven calendar days. The Fund established and maintained a HLIM. During the reporting period, the Fund maintained the necessary level of Highly Liquid Investments and did not experience any HLIM shortfalls.
At meetings of the Funds’ Board of Trustees held in May 2023, the Program Administrator provided a written report to the Board addressing the adequacy and effectiveness of the program for the year ended December 31, 2022. The Program Administrator report concluded that (i.) the LRMP, as adopted and implemented, remains reasonably designed to assess and manage each Fund’s liquidity risk; (ii.) the LRMP, including the Highly Liquid Investment Minimum (“HLIM”) where applicable, was implemented and operated effectively to achieve the goal of assessing and managing
each Fund’s liquidity risk; and (iii.) each Fund was able to meet requests for redemption without significant dilution of remaining investors’ interests in the Fund.
Proxy Voting Policies and Procedures
The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.
Quarterly Schedule of Investments
The Trust files a complete schedule of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year as an exhibit to its report on Form N-PORT. Shareholders may view the filed Form N-PORT by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.
Premium/Discount Information
Information about the differences between the daily market price on the secondary market for the shares of each Fund and each Fund’s net asset value may be found on each Fund’s website at franklintempleton.com
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Investment Managers
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Distributor | Investor Services | ||||
Franklin Advisers, Inc. Franklin Templeton Investment Management Limited |
Franklin Distributors, LLC (800) DIAL BEN®/342-5236 franklintempleton.com |
Transfer Agent State Street Bank and Trust Company 1 Heritage Drive Mail Stop OHD0100 North Quincy, MA 02171 | ||||
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