SEMIANNUAL REPORT  

 

  
 

 

FRANKLIN TEMPLETON

ETF TRUST

 

September 30, 2023

 

       LOGO

 

LOGO     

 

Franklin FTSE Asia ex Japan ETF

 

Franklin FTSE Italy ETF

Franklin FTSE Australia ETF

 

Franklin FTSE Japan ETF

Franklin FTSE Brazil ETF

 

Franklin FTSE Japan Hedged ETF

Franklin FTSE Canada ETF

 

Franklin FTSE Latin America ETF

Franklin FTSE China ETF

 

Franklin FTSE Mexico ETF

Franklin FTSE Europe ETF

 

Franklin FTSE Saudi Arabia ETF

Franklin FTSE Eurozone ETF

 

Franklin FTSE South Africa ETF

Formerly, Franklin FTSE Europe Hedged ETF

 

 

Franklin FTSE South Korea ETF

Franklin FTSE France ETF

 

Franklin FTSE Switzerland ETF

Franklin FTSE Germany ETF

 

Franklin FTSE Taiwan ETF

Franklin FTSE Hong Kong ETF

 

Franklin FTSE United Kingdom ETF

Franklin FTSE India ETF

 


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

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

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


Contents        
Franklin FTSE Asia ex Japan ETF      2  
Franklin FTSE Australia ETF      7  
Franklin FTSE Brazil ETF      12  
Franklin FTSE Canada ETF      17  
Franklin FTSE China ETF      22  
Franklin FTSE Europe ETF      27  
Franklin FTSE Eurozone ETF      32  
Franklin FTSE France ETF      37  
Franklin FTSE Germany ETF      42  
Franklin FTSE Hong Kong ETF      47  
Franklin FTSE India ETF      52  
Franklin FTSE Italy ETF      57  
Franklin FTSE Japan ETF      62  

 

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

    

 

Franklin FTSE Japan Hedged ETF      67  
Franklin FTSE Latin America ETF      72  
Franklin FTSE Mexico ETF      77  
Franklin FTSE Saudi Arabia ETF      82  
Franklin FTSE South Africa ETF      87  
Franklin FTSE South Korea ETF      92  
Franklin FTSE Switzerland ETF      97  
Franklin FTSE Taiwan ETF      102  
Franklin FTSE United Kingdom ETF      107  
Financial Highlights and Schedules of Investments      112  
Financial Statements      274  
Notes to Financial Statements      297  
Shareholder Information      325  

 

         
Not FDIC Insured   |   May Lose Value   |   No Bank Guarantee  

 

           
franklintempleton.com  

Semiannual Report

             1


Franklin FTSE Asia ex Japan ETF

 

This semiannual report for Franklin FTSE Asia ex Japan ETF covers the period ended September 30, 2023.

Fund Overview

Your Fund’s Goal and Main Investments

The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Asia ex Japan RIC Capped Index (the FTSE Asia ex Japan Capped Index-NR or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Asia ex Japan Capped Index-NR and in depositary receipts representing such securities.

 

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

 

 

Banks

     12.7%  

 

 

Semiconductors & Semiconductor Equipment

     9.6%  

 

 

Technology Hardware, Storage & Peripherals

     6.5%  

 

 

Interactive Media & Services

     5.7%  

 

 

Broadline Retail

     4.9%  

 

 

Insurance

     4.2%  

 

 

Oil, Gas & Consumable Fuels

     3.9%  

 

 

Automobiles

     3.4%  

 

 

Hotels, Restaurants & Leisure

     3.2%  

 

 

Electronic Equipment, Instruments & Components

     2.9%  

 

 

Performance Overview

During the six-month period, the Fund posted cumulative total returns of -4.04% based on market price and -3.80% based on net asset value. In comparison, the FTSE Asia ex Japan Capped Index-NR posted a -3.43% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 4.

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

 

Top 10 Holdings       

9/30/23

 

      

Company

Sector/Industry, Country

   % of Total
Net Assets
 

 

 

Taiwan Semiconductor Manufacturing Co. Ltd.

     6.4%  

Semiconductors & Semiconductor Equipment, Taiwan

  

 

 

Samsung Electronics Co. Ltd.

     4.6%  
Technology Hardware, Storage & Peripherals, South Korea   

 

 

Tencent Holdings Ltd.

     4.0%  

Interactive Media & Services, China

  

 

 

Alibaba Group Holding Ltd., Class A

     3.1%  

Broadline Retail, China

  

 

 

Reliance Industries Ltd.

     1.6%  

Oil, Gas & Consumable Fuels, India

  

 

 

AIA Group Ltd.

     1.6%  

Insurance, Hong Kong

  

 

 

Meituan, Class B

     1.3%  

Hotels, Restaurants & Leisure, China

  

 

 

HDFC Bank Ltd.

     1.2%  

Banks, India

  

 

 

Infosys Ltd.

     1.0%  

IT Services, India

  

 

 

PDD Holdings, Inc., ADR

     1.0%  

Broadline Retail, China

  

 

 

1. The FTSE Asia ex Japan Capped Index-NR is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Asia ex Japan Capped Index-NR is based on the FTSE Asia ex Japan Index and is designed to measure the performance of large- and mid-capitalization stocks from developed and emerging Asian countries, excluding Japan. The Chinese constituents in the FTSE Asia ex Japan Capped Index-NR are represented by H-shares, B-shares, A-shares, N-shares, Red Chips, P-Chips and S-Chips.

2. Source: FactSet.

The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Return (NR) include income net of tax withholding when dividends are paid.

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 113.

 

           
2             

Semiannual Report

  franklintempleton.com


FRANKLIN FTSE ASIA EX JAPAN ETF

 

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

 

 

China

     32.8%  

 

 

India

     19.6%  

 

 

Taiwan

     16.3%  

 

 

South Korea

     13.4%  

 

 

Hong Kong

     6.2%  

 

 

Singapore

     3.5%  

 

 

Indonesia

     2.4%  

 

 

Thailand

     2.4%  

 

 

Malaysia

     1.8%  

 

 

Philippines

     0.8%  

 

 

Thank you for your participation in Franklin FTSE Asia ex Japan ETF. We look forward to serving your future investment needs.

Dina Ting, CFA

Hailey Harris

Joe Diederich

Basit Amin, CFA

Portfolio Management Team

CFA® is a trademark owned by CFA Institute.

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

    

 

           
franklintempleton.com  

Semiannual Report

             3


FRANKLIN FTSE ASIA EX JAPAN 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 (2/9/18), 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
NAV
 
3  
   
Based on
market price
 
4 
   
Based on
NAV
 
3  
   
Based on
market price
 
4 

6-Month

     -3.80%       -4.04%       -3.80%       -4.04%  

1-Year

     +11.31%       +12.19%       +11.31%       +12.19%  

3-Year

     -7.30%       -8.20%       -2.49%       -2.81%  

5-Year

     +4.76%       +4.34%       +0.93%       +0.85%  

Since Inception (2/6/18)

     -2.35%       -2.70%       -0.42%       -0.48%  

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

See page 5 for Performance Summary footnotes.

 

           
4             

Semiannual Report

  franklintempleton.com


FRANKLIN FTSE ASIA EX JAPAN ETF

PERFORMANCE SUMMARY

 

Distributions (4/1/23–9/30/23)

 

Net Investment
Income

$0.178631

Total Annual Operating Expenses5

 

 

0.19%

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

All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. The government’s participation in the economy is still high and, therefore, investments in China will be subject to larger regulatory risk levels compared to many other countries. To the extent the Fund invests in companies in a specific country or region, the Fund may experience greater volatility than a Fund that is more broadly diversified geographically. 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 FTSE ASIA EX JAPAN 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
4/1/23–9/30/23

 
 


1 

   


Ending

Account
Value 9/30/23

 


 

    


Expenses

Paid During

Period
4/1/23–9/30/23

 

 


1 

   
Net Annualized
Expense Ratio
 
 
$1,000.00      $962.00        $0.93       $1,024.05        $0.96       0.19

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

 

           
6             

Semiannual Report

  franklintempleton.com


Franklin FTSE Australia ETF

    

 

This semiannual report for Franklin FTSE Australia ETF covers the period ended September 30, 2023.

Fund Overview

Your Fund’s Goal and Main Investments

The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Australia RIC Capped Index (the FTSE Australia Capped Index-NR or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Australia Capped Index-NR and in depositary receipts representing such securities.

 

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

Metals & Mining

   21.9%

Banks

   21.8%

Biotechnology

   6.3%

Oil, Gas & Consumable Fuels

   5.8%

Capital Markets

   4.1%

Consumer Staples Distribution & Retail

   4.0%

Insurance

   3.7%

Broadline Retail

   3.2%

Transportation Infrastructure

   2.7%

Hotels, Restaurants & Leisure

   2.5%

Performance Overview

During the six-month period, the Fund posted cumulative total returns of -4.09% based on market price and -2.93% based on net asset value. In comparison, the FTSE Australia Capped Index-NR posted a -2.91% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 9.

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

 

Top 10 Holdings       

9/30/23

 

      

Company

Sector/Industry, Country

   % of Total
Net Assets
 

BHP Group Ltd.

Metals & Mining, Australia

     11.6%  

Commonwealth Bank of Australia

Banks, Australia

     8.8%  

CSL Ltd.

Biotechnology, Australia

     6.3%  

National Australia Bank Ltd.

Banks, Australia

     4.7%  

ANZ Group Holdings Ltd.

Banks, Australia

     4.0%  

Westpac Banking Corp.

Banks, Australia

     3.8%  

Woodside Energy Group Ltd.

Oil, Gas & Consumable Fuels, Australia

     3.6%  

Macquarie Group Ltd.

Capital Markets, Australia

     3.2%  

Wesfarmers Ltd.

Broadline Retail, Australia

     3.1%  

Woolworths Group Ltd.

Consumer Staples Distribution & Retail, Australia

     2.4%  

 

1. The FTSE Australia Capped Index-NR is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Australia Capped Index-NR is based on the FTSE Australia Index and is designed to measure the performance of Australian large-and mid-capitalization stocks.

2. Source: FactSet.

The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Return (NR) include income net of tax withholding when dividends are paid.

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

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Schedule of Investments (SOI). The SOI begins on page 150.

 

           
franklintempleton.com  

Semiannual Report

             7


FRANKLIN FTSE AUSTRALIA ETF

 

Thank you for your participation in Franklin FTSE Australia ETF. We look forward to serving your future investment needs.

Dina Ting, CFA

Hailey Harris

Joe Diederich

Basit Amin, CFA

Portfolio Management Team

 

           
8             

Semiannual Report

  franklintempleton.com


FRANKLIN FTSE AUSTRALIA 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 (11/6/17), 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

 

     Cumulative Total Return2       Average Annual Total Return2  
      
Based on
NAV
 
3  
   
Based on
market price
 
4 
   
Based on
NAV
 
3  
   
Based on
market price
 
4 

6-Month

     -2.93%       -4.09%       -2.93%       -4.09%  

1-Year

     +14.14%       +13.35%       +14.14%       +13.35%  

3-Year

     +26.45%       +24.71%       +8.14%       +7.64%  

5-Year

     +26.14%       +26.06%       +4.75%       +4.74%  

Since Inception (11/2/17)

     +28.60%       +27.55%       +4.35%       +4.20%  

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 10 for Performance Summary footnotes.

 

           
franklintempleton.com  

Semiannual Report

             9


FRANKLIN FTSE AUSTRALIA ETF

PERFORMANCE SUMMARY

 

Distributions (4/1/23–9/30/23)

Net Investment

Income

$0.478848

Total Annual Operating Expenses5

 

 

  0.09%

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

All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. To the extent the Fund invests in companies in a specific country or region, the Fund may experience greater volatility than a Fund that is more broadly diversified geographically. 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. 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.

 

           
10             

Semiannual Report

  franklintempleton.com


FRANKLIN FTSE AUSTRALIA 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
4/1/23–9/30/23
 
 
 
1 
   

Ending
Account
Value 9/30/23
 
 
 
   


Expenses
Paid During
Period
4/1/23–9/30/23
 
 
 
1 
   
Net Annualized
Expense Ratio
 
 
  $1,000.00       $970.70       $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

             11


Franklin FTSE Brazil ETF

    

 

This semiannual report for Franklin FTSE Brazil ETF covers the period ended September 30, 2023.

Fund Overview

Your Fund’s Goal and Main Investments

The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Brazil RIC Capped Index (the FTSE Brazil Capped Index-NR or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Brazil Capped Index-NR and in depositary receipts representing such securities.

 

Top 10 Sectors/Industries     

9/30/23

 

    
      % of Total
Net Assets

Oil, Gas & Consumable Fuels

   19.6%

Banks

   16.2%

Metals & Mining

   15.1%

Electric Utilities

   8.1%

Capital Markets

   5.4%

Ground Transportation

   4.0%

Beverages

   2.8%

Consumer Staples Distribution & Retail

   2.7%

Electrical Equipment

   2.6%

Food Products

   2.4%

Performance Overview

During the six-month period, the Fund posted cumulative total returns of +15.76% based on market price and +16.15% based on net asset value. In comparison, the FTSE Brazil Capped Index-NR posted a +16.39% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 14.

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

 

Top 10 Holdings       

9/30/23

 

      

Company

Sector/Industry, Country

   % of Total
Net Assets
 

Petroleo Brasileiro SA, 9.792%, pfd.

Oil, Gas & Consumable Fuels, Brazil

     16.3%  

Vale SA

Metals & Mining, Brazil

     12.5%  

Itau Unibanco Holding SA, 4.671%, pfd.

Banks, Brazil

     6.9%  

Banco Bradesco SA, 5.993%, pfd.

Banks, Brazil

     4.5%  

B3 SA - Brasil Bolsa Balcao

Capital Markets, Brazil

     3.4%  

Ambev SA

Beverages, Brazil

     2.8%  

WEG SA

Electrical Equipment, Brazil

     2.6%  

Localiza Rent a Car SA

Ground Transportation, Brazil

     2.4%  

Centrais Eletricas Brasileiras SA

Electric Utilities, Brazil

     2.4%  

Itausa SA, 6.464%, pfd.

Banks, Brazil

     2.3%  

 

1. The FTSE Brazil Capped Index-NR is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Brazil Capped Index-NR is based on the FTSE Brazil Index and is designed to measure the performance of Brazilian large- and mid-capitalization stocks.

2. Source: FactSet.

The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Return (NR) include income net of tax withholding when dividends are paid.

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

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Schedule of Investments (SOI). The SOI begins on page 154.

 

           
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FRANKLIN FTSE BRAZIL ETF

 

Thank you for your participation in Franklin FTSE Brazil ETF. We look forward to serving your future investment needs.

Dina Ting, CFA

Hailey Harris

Joe Diederich

Basit Amin, CFA

Portfolio Management Team

 

           
franklintempleton.com  

Semiannual Report

             13


FRANKLIN FTSE BRAZIL 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 (11/7/17), 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

 

           Cumulative Total Return2       Average Annual Total Return2  
      
Based on
NAV
 
3  
   
Based on
market price
 
4 
   
Based on
NAV
 
3  
   
Based on
market price
 
4  

6-Month

     +16.15%       +15.76%       +16.15%       +15.76%  

1-Year

     +14.91%       +14.21%       +14.91%       +14.21%  

3-Year

     +41.63%       +40.32%       +12.30%       +11.95%  

5-Year

     +21.43%       +22.85%       +3.96%       +4.20%  

Since Inception (11/3/17)

     +8.53%       +8.44%       +1.40%       +1.38%  

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

 

See page 15 for Performance Summary footnotes.

 

           
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FRANKLIN FTSE BRAZIL ETF

PERFORMANCE SUMMARY

 

Distributions (4/1/23–9/30/23)

 

Net Investment
Income

$1.135066

Total Annual Operating Expenses5

 

 

  0.19%

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

All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. To the extent the Fund invests in companies in a specific country or region, the Fund may experience greater volatility than a Fund that is more broadly diversified geographically. 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. 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

             15


FRANKLIN FTSE BRAZIL 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

4/1/23–9/30/23



 

1 

   

Ending
Account
Value 9/30/23
 
 
 
   

Expenses
Paid During
Period

4/1/23–9/30/23



 

1 

   
Net Annualized
Expense Ratio
 
 
  $1,000.00       $1,161.50       $1.03       $1,024.05       $0.96       0.19

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

 

           
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Franklin FTSE Canada ETF

 

This semiannual report for Franklin FTSE Canada ETF covers the period ended September 30, 2023.

Fund Overview

Your Fund’s Goal and Main Investments

The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Canada RIC Capped Index (the FTSE Canada Capped Index-NR or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Canada Capped Index-NR and in depositary receipts representing such securities.

 

Top 10 Sectors/Industries     
9/30/23     
     

% of Total

Net Assets

Banks

   26.5%

Oil, Gas & Consumable Fuels

   19.2%

Ground Transportation

   8.7%

Insurance

   8.4%

Metals & Mining

   7.2%

IT Services

   5.5%

Consumer Staples Distribution & Retail

   4.7%

Capital Markets

   3.8%

Software

   2.6%

Commercial Services & Supplies

   2.3%

Performance Overview

During the six-month period, the Fund posted cumulative total returns of -1.20% based on market price and -0.77% based on net asset value. In comparison, the FTSE Canada Capped Index-NR posted a -0.94% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 19.

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

 

Top 10 Holdings       
9/30/23       

Company

Sector/Industry, Country

   % of Total
Net Assets
 

Royal Bank of Canada

Banks, Canada

     8.0%  

Toronto-Dominion Bank

Banks, Canada

     7.2%  

Enbridge, Inc.

Oil, Gas & Consumable Fuels, Canada

     4.6%  

Canadian Natural Resources Ltd.

Oil, Gas & Consumable Fuels, Canada

     4.6%  

Canadian Pacific Kansas City Ltd.

Ground Transportation, Canada

     4.6%  

Canadian National Railway Co.

Ground Transportation, Canada

     4.2%  

Shopify, Inc., Class A

IT Services, Canada

     4.1%  

Bank of Montreal

Banks, Canada

     4.0%  

Bank of Nova Scotia

Banks, Canada

     3.5%  

Brookfield Corp.

Capital Markets, Canada

     3.1%  

 

1. The FTSE Canada Capped Index-NR is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Canada Capped Index-NR is based on the FTSE Canada Index and is designed to measure the performance of Canadian large-and mid-capitalization stocks.

2. Source: FactSet.

The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Return (NR) include income net of tax withholding when dividends are paid.

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

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Schedule of Investments (SOI). The SOI begins on page 158.

 

           
franklintempleton.com  

Semiannual Report

             17


FRANKLIN FTSE CANADA ETF

 

Thank you for your participation in Franklin FTSE Canada ETF. We look forward to serving your future investment needs.

Dina Ting, CFA

Hailey Harris

Joe Diederich

Basit Amin, CFA

Portfolio Management Team

    

 

           
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FRANKLIN FTSE CANADA 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 (11/6/17), 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

 

           Cumulative Total Return2       Average Annual Total Return2  
      
Based on
NAV
 
3  
   
Based on
market price
 
4 
   
Based on
NAV
 
3  
   
Based on
market price
 
4 

6-Month

     -0.77%       -1.20%       -0.77%       -1.20%  

1-Year

     +10.69%       +10.41%       +10.69%       +10.41%  

3-Year

     +32.44%       +31.37%       +9.82%       +9.52%  

5-Year

     +37.01%       +36.28%       +6.50%       +6.39%  

Since Inception (11/2/17)

     +39.21%       +38.58%       +5.76%       +5.68%  

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

See page 20 for Performance Summary footnotes.

 

           
franklintempleton.com  

Semiannual Report

             19


FRANKLIN FTSE CANADA ETF

PERFORMANCE SUMMARY

 

Distributions (4/1/23–9/30/23)

 

Net Investment
Income

$0.302848

Total Annual Operating Expenses5

 

 

0.09%

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

All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. To the extent the Fund invests in companies in a specific country or region, the Fund may experience greater volatility than a Fund that is more broadly diversified geographically. 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. 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.

 

           
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FRANKLIN FTSE CANADA 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
4/1/23–9/30/23
 
 
 
1 
   

Ending
Account
Value 9/30/23
 
 
 
   


Expenses
Paid During
Period
4/1/23–9/30/23
 
 
 
1 
   
Net Annualized
Expense Ratio
 
 
  $1,000.00       $992.30       $0.45       $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.

 

           
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Semiannual Report

             21


Franklin FTSE China ETF

    

 

This semiannual report for Franklin FTSE China ETF covers the period ended September 30, 2023.

Fund Overview

Your Fund’s Goal and Main Investments

The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE China RIC Capped Index (the FTSE China Capped Index-NR or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE China Capped Index-NR and in depositary receipts representing such securities.

 

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

Interactive Media & Services

   15.4%

Broadline Retail

   14.2%

Banks

   9.9%

Hotels, Restaurants & Leisure

   6.9%

Automobiles

   4.6%

Insurance

   4.0%

Beverages

   3.3%

Oil, Gas & Consumable Fuels

   3.1%

Real Estate Management & Development

   2.9%

Entertainment

   2.7%

Performance Overview

During the six-month period, the Fund posted cumulative total returns of -12.16% based on market price and -11.92% based on net asset value. In comparison, the FTSE China Capped Index-NR posted a -11.82% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 24.

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

 

Top 10 Holdings       

9/30/23

 

      

Company

Sector/Industry, Country

   % of Total
Net Assets
 

Tencent Holdings Ltd.

Interactive Media & Services, China

     12.1%  

Alibaba Group Holding Ltd., Class A

Broadline Retail, China

     9.2%  

Meituan, Class B

Hotels, Restaurants & Leisure, China

     3.9%  

PDD Holdings, Inc., ADR

Broadline Retail, China

     2.9%  

China Construction Bank Corp., Class H

Banks, China

     2.6%  

Baidu, Inc., Class A

Interactive Media & Services, China

     1.9%  

Industrial & Commercial Bank of China Ltd., Class H

Banks, China

     1.9%  

NetEase, Inc.

Entertainment, China

     1.8%  

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

Insurance, China

     1.8%  

JD.com, Inc., Class A

Broadline Retail, China

     1.7%  

1. The FTSE China Capped Index-NR is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE China Capped Index-NR is based on the FTSE China Index and is designed to measure the performance of Chinese large- and mid-capitalization stocks, as represented by H-shares, B-shares, A-shares, N-shares, Red Chips, P-Chips and S-Chips.

2. Source: FactSet.

The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Return (NR) include income net of tax withholding when dividends are paid.

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

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Schedule of Investments (SOI). The SOI begins on page 161.

 

           
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FRANKLIN FTSE CHINA ETF

 

Thank you for your participation in Franklin FTSE China ETF. We look forward to serving your future investment needs.

Dina Ting, CFA

Hailey Harris

Joe Diederich

Basit Amin, CFA

Portfolio Management Team

    

 

           
franklintempleton.com  

Semiannual Report

             23


FRANKLIN FTSE CHINA 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 (11/6/17), 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

 

           Cumulative Total Return2       Average Annual Total Return2  
      
Based on
NAV
 
3  
   
Based on
market price
 
4 
   
Based on
NAV
 
3  
   
Based on
market price
 
4 

6-Month

     -11.92%       -12.16%       -11.92%       -12.16%  

1-Year

     +4.40%       +4.12%       +4.40%       +4.12%  

3-Year

     -36.84%       -37.74%       -14.20%       -14.61%  

5-Year

     -18.58%       -18.66%       -4.03%       -4.05%  

Since Inception (11/2/17)

     -24.03%       -24.40%       -4.54%       -4.62%  

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

See page 25 for Performance Summary footnotes.

 

           
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FRANKLIN FTSE CHINA ETF

PERFORMANCE SUMMARY

 

Distributions (4/1/23–9/30/23)

 

Net Investment
Income

$0.187311

Total Annual Operating Expenses5

 

 

  0.19%

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

All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. The government’s participation in the economy is still high and, therefore, investments in China will be subject to larger regulatory risk levels compared to many other countries. To the extent the Fund invests in companies in a specific country or region, the Fund may experience greater volatility than a Fund that is more broadly diversified geographically. 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. 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  

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             25


FRANKLIN FTSE CHINA 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

4/1/23–9/30/23

 

 

 

1 

   

Ending

Account

Value 9/30/23

 

 

 

   

Expenses

Paid During

Period

4/1/23–9/30/23

 

 

 

1 

   
Net Annualized
Expense Ratio
 
 
  $1,000.00       $880.80       $0.89       $1,024.05       $0.96       0.19 %   

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

 

           
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Franklin FTSE Europe ETF

 

This semiannual report for Franklin FTSE Europe ETF covers the period ended September 30, 2023.

Fund Overview

Your Fund’s Goal and Main Investments

The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Developed Europe RIC Capped Index (the FTSE Developed Europe Capped Index-NR or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Developed Europe Capped Index-NR and in depositary receipts representing such securities.

 

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

Pharmaceuticals

     12.0%  

Banks

     8.5%  

Oil, Gas & Consumable Fuels

     6.1%  

Insurance

     5.4%  

Textiles, Apparel & Luxury Goods

     4.3%  

Food Products

     4.2%  

Semiconductors & Semiconductor Equipment

     3.4%  

Chemicals

     3.1%  

Machinery

     3.0%  

Capital Markets

     2.8%  

Performance Overview

During the six-month period, the Fund posted cumulative total returns of -2.28% based on market price and -2.01% based on net asset value. In comparison, the FTSE Developed Europe Capped Index-NR posted a -2.18% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 29.

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

 

Top 10 Holdings     

9/30/23

 

    

Company

Sector/Industry, Country

   % of Total
Net Assets

Nestle SA

Food Products, Switzerland

   3.1%

Novo Nordisk AS, Class B

Pharmaceuticals, Denmark

   2.9%

ASML Holding NV

Semiconductors & Semiconductor Equipment, Netherlands

   2.4%

Shell PLC

Oil, Gas & Consumable Fuels, Netherlands

   2.1%

Novartis AG

Pharmaceuticals, Switzerland

   2.1%

AstraZeneca PLC

Pharmaceuticals, United Kingdom

   2.0%

Roche Holding AG

Pharmaceuticals, Switzerland

   2.0%

LVMH Moet Hennessy Louis Vuitton SE

Textiles, Apparel & Luxury Goods, France

   1.9%

HSBC Holdings PLC Banks,

United Kingdom

   1.6%

TotalEnergies SE

Oil, Gas & Consumable Fuels, France

   1.5%

 

1. The FTSE Developed Europe Capped Index-NR is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Developed Europe Capped Index-NR is based on the FTSE Developed Europe Index and is designed to measure the performance of large- and mid-capitalization stocks from developed European countries.

2. Source: FactSet.

The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Return (NR) include income net of tax withholding when dividends are paid.

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

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Schedule of Investments (SOI). The SOI begins on page 185.

 

           
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FRANKLIN FTSE EUROPE ETF

 

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

United Kingdom

     19.5%  

France

     17.1%  

Switzerland

     14.9%  

Germany

     12.5%  

Netherlands

     8.8%  

Denmark

     4.7%  

Sweden

     4.6%  

Spain

     3.9%  

Italy

     3.7%  

Finland

     1.7%  

Thank you for your participation in Franklin FTSE Europe ETF. We look forward to serving your future investment needs.

Dina Ting, CFA

Hailey Harris

Joe Diederich

Basit Amin, CFA

Portfolio Management Team

    

 

           
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FRANKLIN FTSE EUROPE 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 (11/6/17), 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

 

     Cumulative Total Return2       Average Annual Total Return2  
      
Based on
NAV
 
3  
   
Based on
market price
 
4 
   
Based on
NAV
 
3  
   
Based on
market price
 
4 

6-Month

     -2.01%       -2.28%       -2.01%       -2.28%  

1-Year

     +29.89%       +30.87%       +29.89%       +30.87%  

3-Year

     +23.51%       +23.37%       +7.29%       +7.25%  

5-Year

     +22.56%       +22.49%       +4.15%       +4.14%  

Since Inception (11/2/17)

     +21.82%       +21.54%       +3.40%       +3.36%  

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

See page 30 for Performance Summary footnotes.

 

           
franklintempleton.com  

Semiannual Report

             29


FRANKLIN FTSE EUROPE ETF

PERFORMANCE SUMMARY

 

Distributions (4/1/23–9/30/23)

 

Net Investment
Income

$0.538169

Total Annual Operating Expenses5

 

 

0.09%

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

All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. To the extent the Fund invests in companies in a specific country or region, the Fund may experience greater volatility than a Fund that is more broadly diversified geographically. These and other risks are discussed in the Fund’s prospectus.

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

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

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

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

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

4. Assumes reinvestment of distributions based on market price.

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

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

 

           
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FRANKLIN FTSE EUROPE 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
4/1/23–9/30/23

 

1,2  
   

Ending
Account
Value 9/30/23


 
    


Expenses
Paid During
Period
4/1/23–9/30/23



1,2  
   
Net Annualized
Expense Ratio
 
2  
$1,000.00      $979.90        $1.09       $1,023.90        $1.11       0.22 %   

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

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

 

           
franklintempleton.com  

Semiannual Report

             31


Franklin FTSE Eurozone ETF

Formerly, Franklin FTSE Europe Hedged ETF

 

This semiannual report for Franklin FTSE Eurozone ETF covers the period ended September 30, 2023. Effective August 1, 2023, the Franklin FTSE Europe Hedged ETF changed its name to Franklin FTSE Eurozone ETF. The Fund also changed its ticker symbol; underlying index, including the designation of the primary benchmark index; investment goal, strategies and policies; and other related changes.

Fund Overview

Your Fund’s Goal and Main Investments

The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Developed Eurozone Index-NR (“the Underlying Index”).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the Underlying Index and in depositary receipts representing such securities. The Underlying Index is a free float-adjusted market capitalization weighted index maintained and calculated by FTSE Russell (“Index Provider”). The Underlying Index is designed to measure the performance of large- and mid-capitalization stocks from developed Eurozone countries. The Eurozone is a geographic and economic region that consists of all the European Union countries that have fully incorporated the euro as their national currency. The Underlying Index currently consists of securities from the following ten developed market countries: Austria, Belgium, Finland, France, Germany, Ireland, Italy, the Netherlands, Portugal and Spain.

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

 

 

Banks

     9.8%  

 

 

Semiconductors & Semiconductor Equipment

     6.9%  

 

 

Textiles, Apparel & Luxury Goods

     6.8%  

 

 

Insurance

     6.3%  

 

 

Oil, Gas & Consumable Fuels

     4.8%  

 

 

Automobiles

     4.3%  

 

 

Pharmaceuticals

     4.3%  

 

 

Chemicals

     4.3%  

 

 

Aerospace & Defense

     3.6%  

 

 

Software

     3.5%  

 

 

Performance Overview

During the six-month period, the Fund posted cumulative total returns of -5.86% based on market price and -5.85% based on net asset value. On August 1, 2023, the Fund’s underlying index was changed from the FTSE Developed Europe RIC Capped Hedged to USD Index (FTSE Developed Europe Capped Hedged Index)2 to the Underlying Index. For the six-month period, the Underlying Index posted a -9.28% total return, while the Linked FTSE Developed Eurozone Index-NR, which measures the performance of the Fund’s previous underlying index through July 31, 2023 followed by the performance of the Underlying Index thereafter, posted a -5.82% total return.3 The FTSE Developed Europe Capped Hedged Index posted a +1.05% total return for the same period.3 The Underlying Index replaced the FTSE Developed Europe Capped Hedged Index as the Fund’s primary benchmark to more accurately reflect the Fund’s new investment strategy. You can find more of the Fund’s performance data in the Performance Summary beginning on page 34.

 

1. The Underlying Index is one of a range of indices designed to help investors benchmark their Eurozone investments and is maintained and calculated by Index Provider. The index comprises large- and mid-capitalization stocks from developed Eurozone markets. The index is derived from the FTSE Global Equity Index Series (GEIS), which covers 98% of the world’s investable market capitalization.

2. The FTSE Developed Europe Capped Hedged Index is a free float-adjusted market capitalization-weighted index maintained and calculated by Index Provider with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Developed Europe Capped Hedged Index is based on the FTSE Developed Europe Hedged to USD Index and is designed to measure the performance of large- and mid-capitalization stocks from developed European countries. The FTSE Developed Europe Capped Hedged Index incorporates a hedge against non-U.S. currency fluctuations by reflecting the impact of rolling monthly currency forward contracts on the currencies represented in the FTSE Developed Europe Capped Hedged Index.

3. Source: FactSet.

The indexes are unmanaged and include reinvestment of any income or distributions (after the deduction of certain withholding taxes). They do not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Return (NR) include income net of tax withholding when dividends are paid.

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

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Schedule of Investments (SOI). The SOI begins on page 198.

 

           
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FRANKLIN FTSE EUROZONE ETF

 

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 Holdings     
9/30/23     

Company

Sector/Industry, Country

   % of Total
Net Assets

ASML Holding NV

Semiconductors & Semiconductor Equipment, Netherlands

   4.8%

LVMH Moet Hennessy Louis Vuitton SE

Textiles, Apparel & Luxury Goods, France

   3.8%

TotalEnergies SE

Oil, Gas & Consumable Fuels, France

   3.0%

SAP SE

Software, Germany

   2.9%

Sanofi

Pharmaceuticals, France

   2.4%

Siemens AG

Industrial Conglomerates, Germany

   2.2%

L’Oreal SA

Personal Care Products, France

   2.0%

Allianz SE

Insurance, Germany

   1.9%

Schneider Electric SE

Electrical Equipment, France

   1.8%

Air Liquide SA

Chemicals, France

   1.8%
Top 10 Countries       
9/30/23       
     % of Total
Net Assets
 

 

 

France

     34.8%  

 

 

Germany

     25.3%  

 

 

Netherlands

     13.5%  

 

 

Spain

     8.0%  

 

 

Italy

     7.4%  

 

 

Finland

     3.4%  

 

 

Belgium

     2.5%  

 

 

Ireland

     0.9%  

 

 

Switzerland

     0.9%  

 

 

United States

     0.9%  

 

 

Thank you for your participation in Franklin FTSE Eurozone ETF. We look forward to serving your future investment needs.

Dina Ting, CFA

Hailey Harris

Joe Diederich

Basit Amin, CFA

Portfolio Management Team

 

           
franklintempleton.com  

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             33


FRANKLIN FTSE EUROZONE 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 (11/6/17), 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

 

     Cumulative Total Return2       Average Annual Total Return2  
  

 

 

   

 

 

 
      
Based on
NAV

3  
   
Based on
market price

4 
   
Based on
NAV

3  
   
Based on
market price

4  

6-Month

     -5.85     -5.86     -5.85     -5.86

 

 

1-Year

     +14.83     +15.19     +14.83     +15.19

 

 

3-Year

     +31.29     +30.53     +9.50     +9.29

 

 

5-Year

     +35.23     +35.29     +6.22     +6.23

 

 

Since Inception (11/2/17)

     +37.43     +37.10     +5.53     +5.49

 

 

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 35 for Performance Summary footnotes.

 

           
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FRANKLIN FTSE EUROZONE ETF

PERFORMANCE SUMMARY

 

Distributions (4/1/23–9/30/23)

Net Investment Income

$0.351178

Total Annual Operating Expenses5

 

  0.09%

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

All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. To the extent the Fund invests in companies in a specific country or region, the Fund may experience greater volatility than a Fund that is more broadly diversified geographically. There is no guarantee that passive strategies will achieve a high degree of correlation to the Underlying Index and therefore achieve its investment goal. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance. These and other risks are discussed in the Fund’s prospectus.

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

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

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

2. 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

             35


FRANKLIN FTSE EUROZONE 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
4/1/23–9/30/23



1 
   

Ending
Account
Value 9/30/23


 
    


Expenses
Paid During
Period
4/1/23–9/30/23



1 
   
Net Annualized
Expense Ratio

 
$1,000.00    $ 941.50      $ 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.

 

           
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Franklin FTSE France ETF

 

This semiannual report for Franklin FTSE France ETF covers the period ended September 30, 2023. As previously communicated, on September 7, 2023, the Board of Trustees of Franklin Templeton ETF Trust, on behalf of the Fund, approved a proposal to liquidate and dissolve the Fund. The liquidation occurred on November 16, 2023. After the close of business on October 19, 2023, the Fund no longer accepted creation orders. Trading in the Fund on NYSE Arca, Inc. (NYSE Arca) was halted prior to market open on November 10, 2023. Proceeds of the liquidation were sent to shareholders on or about November 16, 2023. Refer to the Fund’s prospectus supplement dated September 11, 2023, for more information.

Fund Overview

Your Fund’s Goal and Main Investments

The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE France RIC Capped Index (the FTSE France Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE France Capped Index and in depositary receipts representing such securities.

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

 

 

Textiles, Apparel & Luxury Goods

     16.0%  

 

 

Aerospace & Defense

     8.5%  

 

 

Oil, Gas & Consumable Fuels

     8.4%  

 

 

Pharmaceuticals

     6.9%  

 

 

Electrical Equipment

     6.4%  

 

 

Banks

     5.6%  

 

 

Personal Care Products

     5.5%  

 

 

Chemicals

     5.2%  

 

 

Construction & Engineering

     3.9%  

 

 

Insurance

     3.3%  

 

 

Performance Overview

During the six-month period, the Fund posted cumulative total returns of -3.05% based on market price and -3.42% based on net asset value. In comparison, the FTSE France Capped Index posted a -3.68% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 39.

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

 

1. The FTSE France Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE France Capped Index is based on the FTSE France Index and is designed to mea-sure the performance of French large- and mid-capitalization stocks.

2. Source: FactSet.

The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Return (NR) include income net of tax withholding when dividends are paid.

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

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Schedule of Investments (SOI). The SOI begins on page 206.

 

           
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FRANKLIN FTSE FRANCE ETF

 

Top 10 Holdings       
9/30/23       
Company
Sector/Industry, Country
   % of Total
Net Assets
 
LVMH Moet Hennessy Louis Vuitton SE
Textiles, Apparel & Luxury Goods, France
     10.6%  
TotalEnergies SE
Oil, Gas & Consumable Fuels, France
     8.4%  
Sanofi
Pharmaceuticals, France
     6.6%  
L’Oreal SA
Personal Care Products, France
     5.5%  
Schneider Electric SE
Electrical Equipment, France
     5.0%  
Air Liquide SA
Chemicals, France
     4.9%  
Airbus SE
Aerospace & Defense, France
     4.5%  
BNP Paribas SA
Banks, France
     3.9%  
Hermes International SCA
Textiles, Apparel & Luxury Goods, France
     3.5%  
Vinci SA
Construction & Engineering, France
     3.1%  

Thank you for your participation in Franklin FTSE France ETF. It has been a pleasure serving your investment needs.

Dina Ting, CFA

Hailey Harris

Joe Diederich

Basit Amin, CFA

Portfolio Management Team

 

           
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FRANKLIN FTSE FRANCE 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 (11/6/17), 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

 

     Cumulative Total Return2       Average Annual Total Return2  
      
Based on
NAV
 
3  
   
Based on
market price
 
4 
   
Based on
NAV
 
3  
   
Based on
market price
 
4 

6-Month

     -3.42%       -3.05%       -3.42%       -3.05%  

1-Year

     +36.64%       +38.12%       +36.64%       +38.12%  

3-Year

     +37.74%       +36.88%       +11.26%       +11.03%  

5-Year

     +29.03%       +28.45%       +5.23%       +5.13%  

Since Inception (11/2/17)

     +33.19%       +32.52%       +4.97%       +4.88%  

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 40 for Performance Summary footnotes.

 

           
franklintempleton.com  

Semiannual Report

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FRANKLIN FTSE FRANCE ETF

PERFORMANCE SUMMARY

 

Distributions (4/1/23–9/30/23)

Net Investment
Income

$0.474680

Total Annual Operating Expenses5

 

  0.09%

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

All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. To the extent the Fund invests in companies in a specific country or region, the Fund may experience greater volatility than a Fund that is more broadly diversified geographically. 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. 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.

 

           
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FRANKLIN FTSE FRANCE 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

4/1/23–9/30/23

 

 

 

1,2 

   

Ending

Account

Value 9/30/23

 

 

 

   

Expenses

Paid During

Period

4/1/23–9/30/23

 

 

 

1,2 

   
Net Annualized
Expense Ratio
 
2 
  $1,000.00       $965.80       $1.23       $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.

2. Included in the expense ratio are “Other fees” described in Note 1 under Income and Deferred Taxes which are not annualized. Without these expenses, the expense ratio would have been 0.09% and the actual and hypothetical expenses paid during the period would have been $0.44 and $0.46, respectively.

 

           
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Semiannual Report

             41


Franklin FTSE Germany ETF

 

This semiannual report for Franklin FTSE Germany ETF covers the period ended September 30, 2023.

Fund Overview

Your Fund’s Goal and Main Investments

The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Germany RIC Capped Index (the FTSE Germany Capped Index-NR or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Germany Capped Index-NR and in depositary receipts representing such securities.

 

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

 

 

Insurance

     13.3%  

 

 

Software

     11.7%  

 

 

Automobiles

     10.0%  

 

 

Industrial Conglomerates

     8.6%  

 

 

Chemicals

     5.9%  

 

 

Diversified Telecommunication Services

     5.8%  

 

 

Pharmaceuticals

     5.5%  

 

 

Capital Markets

     4.4%  

 

 

Semiconductors & Semiconductor Equipment

     3.5%  

 

 

Air Freight & Logistics

     3.1%  

 

 

Performance Overview

During the six-month period, the Fund posted cumulative total returns of -4.71% based on market price and -4.42% based on net asset value. In comparison, the FTSE Germany Capped Index-NR posted a -4.77% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 44.

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 Holdings     
9/30/23     
Company
Sector/Industry, Country
   % of Total
Net Assets

SAP SE

Software, Germany

   11.4%

Siemens AG

Industrial Conglomerates, Germany

   8.6%

Allianz SE

Insurance, Germany

   7.6%

Deutsche Telekom AG

Diversified Telecommunication Services, Germany

   5.7%

Mercedes-Benz Group AG

Automobiles, Germany

   4.8%

Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen

Insurance, Germany

   4.3%

Bayer AG

Pharmaceuticals, Germany

   3.8%

Infineon Technologies AG

Semiconductors & Semiconductor Equipment, Germany

   3.5%

BASF SE

Chemicals, Germany

   3.3%

Deutsche Post AG

Air Freight & Logistics, Germany

   3.1%

 

1. The FTSE Germany Capped Index-NR is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Germany Capped Index-NR is based on the FTSE Germany Index and is designed to measure the performance of German large- and mid-capitalization stocks.

2. Source: FactSet.

The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Return (NR) include income net of tax withholding when dividends are paid.

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

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Schedule of Investments (SOI). The SOI begins on page 209.

 

           
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FRANKLIN FTSE GERMANY ETF

 

Thank you for your participation in Franklin FTSE Germany ETF. We look forward to serving your future investment needs.

Dina Ting, CFA

Hailey Harris

Joe Diederich

Basit Amin, CFA

Portfolio Management Team

 

           
franklintempleton.com  

Semiannual Report

             43


FRANKLIN FTSE GERMANY 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 (11/6/17), 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

 

           Cumulative Total Return2       Average Annual Total Return2  
      
Based on
NAV
 
3  
   
Based on
market price
 
4 
   
Based on
NAV
 
3  
   
Based on
market price
 
4 

6-Month

     -4.42%       -4.71%       -4.42%       -4.71%  

1-Year

     +36.93%       +37.88%       +36.93%       +37.88%  

3-Year

     +0.37%       -0.18%       +0.12%       -0.06%  

5-Year

     +3.92%       +3.82%       +0.77%       +0.75%  

Since Inception (11/2/17)

     -4.75%       -5.10%       -0.82%       -0.88%  

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 45 for Performance Summary footnotes.

 

 

           
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FRANKLIN FTSE GERMANY ETF

PERFORMANCE SUMMARY

 

Distributions (4/1/23–9/30/23)

Net Investment
Income

$0.692375

Total Annual Operating Expenses5

 

  0.09%

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

All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. To the extent the Fund invests in companies in a specific country or region, the Fund may experience greater volatility than a Fund that is more broadly diversified geographically. 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. 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

             45


FRANKLIN FTSE GERMANY 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
4/1/23–9/30/23



1 
   

Ending
Account
Value 9/30/23
 
 
 
   


Expenses
Paid During
Period
4/1/23–9/30/23
 
 
 
1 
   
Net Annualized
Expense Ratio
 
 
  $1,000.00       $955.80       $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.

 

           
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Franklin FTSE Hong Kong ETF

 

This semiannual report for Franklin FTSE Hong Kong ETF covers the period ended September 30, 2023.

Fund Overview

Your Fund’s Goal and Main Investments

The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Hong Kong RIC Capped Index (the FTSE Hong Kong Capped Index-NR or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Hong Kong Capped Index-NR and in depositary receipts representing such securities.

 

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

 

 

Insurance

     19.3%  

 

 

Real Estate Management & Development

     16.9%  

 

 

Capital Markets

     12.8%  

 

 

Hotels, Restaurants & Leisure

     7.1%  

 

 

Industrial Conglomerates

     6.7%  

 

 

Electric Utilities

     5.7%  

 

 

Banks

     5.5%  

 

 

Machinery

     3.4%  

 

 

Retail REITs

     3.3%  

 

 

Textiles, Apparel & Luxury Goods

     2.2%  

 

 

Performance Overview

During the six-month period, the Fund posted cumulative total returns of -14.02% based on market price and -13.47% based on net asset value. In comparison, the FTSE Hong Kong Capped Index-NR posted a -13.73% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 49.

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 Holdings       
9/30/23       
Company
Sector/Industry, Country
   % of Total
Net Assets
 
AIA Group Ltd.
Insurance, Hong Kong
     19.3%  
Hong Kong Exchanges & Clearing Ltd.
Capital Markets, Hong Kong
     12.7%  
Sun Hung Kai Properties Ltd.
Real Estate Management & Development, Hong Kong
     4.1%  
CK Hutchison Holdings Ltd., Class A
Industrial Conglomerates, United Kingdom
     3.8%  
Galaxy Entertainment Group Ltd.
Hotels, Restaurants & Leisure, Macau
     3.5%  
Techtronic Industries Co. Ltd.
Machinery, Hong Kong
     3.4%  
Link REIT
Retail REITs, Hong Kong
     3.4%  
CLP Holdings Ltd.
Electric Utilities, Hong Kong
     3.2%  
CK Asset Holdings Ltd.
Real Estate Management & Development, Hong Kong
     2.7%  
BOC Hong Kong Holdings Ltd.
Banks, China
     2.6%  

 

1. The FTSE Hong Kong Capped Index-NR is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Hong Kong Capped Index-NR is based on the FTSE Hong Kong Index and is designed to measure the performance of Hong Kong large- and mid-capitalization stocks.

2. Source: FactSet.

The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Return (NR) include income net of tax withholding when dividends are paid.

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

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Schedule of Investments (SOI). The SOI begins on page 212.

 

           
franklintempleton.com  

Semiannual Report

             47


FRANKLIN FTSE HONG KONG ETF

 

Thank you for your participation in Franklin FTSE Hong Kong ETF. We look forward to serving your future investment needs.

Dina Ting, CFA

Hailey Harris

Joe Diederich

Basit Amin, CFA

Portfolio Management Team

 

           
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FRANKLIN FTSE HONG KONG 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 (11/6/17), 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

 

     Cumulative Total Return2       Average Annual Total Return2  
      
Based on
NAV
 
3  
   
Based on
market price
 
4 
   
Based on
NAV
 
3  
   
Based on
market price
 
4 

6-Month

     -13.47%       -14.02%       -13.47%       -14.02%  

1-Year

     +0.31%       -1.34%       +0.31%       -1.34%  

3-Year

     -11.76%       -12.92%       -4.09%       -4.51%  

5-Year

     -15.16%       -15.74%       -3.23%       -3.37%  

Since Inception (11/2/17)

     -14.84%       -15.26%       -2.68%       -2.76%  

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 50 for Performance Summary footnotes.

 

           
franklintempleton.com  

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FRANKLIN FTSE HONG KONG ETF

PERFORMANCE SUMMARY

 

Distributions (4/1/23–9/30/23)

Net Investment Income

$0.359966

Total Annual Operating Expenses5

 

  0.09%

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

All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. To the extent the Fund invests in companies in a specific country or region, the Fund may experience greater volatility than a Fund that is more broadly diversified geographically. 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. 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.

 

           
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FRANKLIN FTSE HONG KONG 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
4/1/23–9/30/23



1 
   

Ending
Account
Value 9/30/23
 
 
 
   


Expenses
Paid During
Period
4/1/23–9/30/23
 
 
 
1 
   
Net Annualized
Expense Ratio
 
 
  $1,000.00       $865.30       $0.42       $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.

 

           
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Semiannual Report

             51


Franklin FTSE India ETF

 

This semiannual report for Franklin FTSE India ETF covers the period ended September 30, 2023.

Fund Overview

Your Fund’s Goal and Main Investments

The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE India RIC Capped Index (the FTSE India Capped Index-NR or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE India Capped Index-NR and in depositary receipts representing such securities.

 

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

 

 

Banks

     13.3%  

 

 

IT Services

     12.6%  

 

 

Oil, Gas & Consumable Fuels

     10.5%  

 

 

Automobiles

     5.8%  

 

 

Chemicals

     4.1%  

 

 

Pharmaceuticals

     4.0%  

 

 

Metals & Mining

     3.7%  

 

 

Consumer Finance

     3.5%  

 

 

Personal Care Products

     3.3%  

 

 

Financial Services

     3.2%  

 

 

Performance Overview

During the six-month period, the Fund posted cumulative total returns of +14.25% based on market price and +15.42% based on net asset value. In comparison, the FTSE India Capped Index-NR posted a +18.53% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 54.

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 Holdings       
9/30/23       
Company
Sector/Industry, Country
   % of Total
Net Assets
 
Reliance Industries Ltd.
Oil, Gas & Consumable Fuels, India
     7.9%  
HDFC Bank Ltd.
Banks, India
     5.9%  
Infosys Ltd.
IT Services, India
     5.1%  
Tata Consultancy Services Ltd.
IT Services, India
     3.6%  
Axis Bank Ltd.
Banks, India
     2.4%  
Bharti Airtel Ltd.
Wireless Telecommunication Services, India
     2.3%  
Hindustan Unilever Ltd.
Personal Care Products, India
     2.2%  
Bajaj Finance Ltd.
Consumer Finance, India
     1.9%  
Larsen & Toubro Ltd.
Construction & Engineering, India
     1.9%  
ICICI Bank Ltd.
Banks, India
     1.5%  

 

1. The FTSE India Capped Index-NR is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE India Capped Index-NR is based on the FTSE India Index and is designed to measure the performance of Indian large- and mid-capitalization stocks.

2. Source: FactSet.

The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Return (NR) include income net of tax withholding when dividends are paid.

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

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Schedule of Investments (SOI). The SOI begins on page 216.

 

           
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FRANKLIN FTSE INDIA ETF

 

Thank you for your participation in Franklin FTSE India ETF. We look forward to serving your future investment needs.

Dina Ting, CFA

Hailey Harris

Joe Diederich

Basit Amin, CFA

Portfolio Management Team

 

           
franklintempleton.com  

Semiannual Report

             53


FRANKLIN FTSE INDIA 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 (2/9/18), 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
NAV
 
3  
   
Based on
market price
 
4 
   
Based on
NAV
 
3  
   
Based on
market price
 
4 

6-Month

     +15.42%       +14.25%       +15.42%       +14.25%  

1-Year

     +10.89%       +11.54%       +10.89%       +11.54%  

3-Year

     +48.49%       +46.76%       +14.08%       +13.64%  

5-Year

     +54.73%       +54.28%       +9.12%       +9.06%  

Since Inception (2/6/18)

     +41.58%       +41.30%       +6.35%       +6.31%  

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

 

See page 55 for Performance Summary footnotes.

 

           
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FRANKLIN FTSE INDIA ETF

PERFORMANCE SUMMARY

 

Total Annual Operating Expenses5

 

  0.19%

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

All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. To the extent the Fund invests in companies in a specific country or region, the Fund may experience greater volatility than a Fund that is more broadly diversified geographically. 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. 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

             55


FRANKLIN FTSE INDIA 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
4/1/23–9/30/23



1 
   

Ending
Account
Value 9/30/23
 
 
 
   


Expenses
Paid During
Period
4/1/23–9/30/23
 
 
 
1 
   
Net Annualized
Expense Ratio
 
 
  $1,000.00       $1,154.20       $1.02       $1,024.05       $0.96       0.19

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

 

           
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Franklin FTSE Italy ETF

 

This semiannual report for Franklin FTSE Italy ETF covers the period ended September 30, 2023. As previously communicated, on September 7, 2023, the Board of Trustees of Franklin Templeton ETF Trust, on behalf of the Fund, approved a proposal to liquidate and dissolve the Fund. The liquidation occurred on November 16, 2023. After the close of business on October 19, 2023, the Fund no longer accepted creation orders. Trading in the Fund on NYSE Arca, Inc. (NYSE Arca) was be halted prior to market open on November 10, 2023. Proceeds of the liquidation were sent to shareholders on or about November 16, 2023. Refer to the Fund’s prospectus supplement dated September 11, 2023, for more information.

Fund Overview

Your Fund’s Goal and Main Investments

The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Italy RIC Capped Index (the FTSE Italy Capped Index or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Italy Capped Index and in depositary receipts representing such securities.

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

 

 

Banks

     26.5%  

 

 

Automobiles

     18.2%  

 

 

Electric Utilities

     14.0%  

 

 

Insurance

     5.9%  

 

 

Oil, Gas & Consumable Fuels

     4.6%  

 

 

Machinery

     3.9%  

 

 

Gas Utilities

     3.5%  

 

 

Diversified Telecommunication Services

     2.9%  

 

 

Electrical Equipment

     2.9%  

 

 

Textiles, Apparel & Luxury Goods

     2.9%  

 

 

Performance Overview

During the six-month period, the Fund posted cumulative total returns of +4.65% based on market price and +5.06% based on net asset value. In comparison, the FTSE Italy Capped Index posted a +4.82% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 59.

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

 

1. The FTSE Italy Capped Index is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Italy Capped Index is based on the FTSE Italy Index and is designed to measure the performance of Italian large- and mid-capitalization stocks.

2. Source: FactSet.

The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Return (NR) include income net of tax withholding when dividends are paid.

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

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Schedule of Investments (SOI). The SOI begins on page 222.

 

           
franklintempleton.com  

Semiannual Report

             57


FRANKLIN FTSE ITALY ETF

 

Top 10 Holdings       
9/30/23       
Company
Sector/Industry, Country
   % of Total
Net Assets
 
Enel SpA
Electric Utilities, Italy
     11.3%  
UniCredit SpA
Banks, Italy
     10.0%  
Stellantis NV
Automobiles, United States
     9.9%  
Intesa Sanpaolo SpA
Banks, Italy
     9.5%  
Ferrari NV
Automobiles, Italy
     8.3%  
Eni SpA
Oil, Gas & Consumable Fuels, Italy
     4.6%  
Assicurazioni Generali SpA
Insurance, Italy
     4.1%  
Prysmian SpA
Electrical Equipment, Italy
     2.9%  
Moncler SpA
Textiles, Apparel & Luxury Goods, Italy
     2.9%  
CNH Industrial NV
Machinery, United Kingdom
     2.8%  

Thank you for your participation in Franklin FTSE Italy ETF. It has been a pleasure serving your investment needs.

Dina Ting, CFA

Hailey Harris

Joe Diederich

Basit Amin, CFA

Portfolio Management Team

 

           
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FRANKLIN FTSE ITALY 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 (11/6/17), 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

 

     Cumulative Total Return2       Average Annual Total Return2  
      
Based on
NAV
 
3  
   
Based on
market price
 
4 
   
Based on
NAV
 
3  
   
Based on
market price
 
4 

6-Month

     +5.06%       +4.65%       +5.06%       +4.65%  

1-Year

     +51.49%       +52.50%       +51.49%       +52.50%  

3-Year

     +41.20%       +40.69%       +12.19%       +12.05%  

5-Year

     +34.65%       +34.63%       +6.13%       +6.13%  

Since Inception (11/2/17)

     +24.81%       +24.53%       +3.82%       +3.78%  

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 60 for Performance Summary footnotes.

 

           
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FRANKLIN FTSE ITALY ETF

PERFORMANCE SUMMARY

 

Distributions (4/1/23–9/30/23)

Net Investment Income

$0.762932

Total Annual Operating Expenses5

 

  0.09%

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

All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. To the extent the Fund invests in companies in a specific country or region, the Fund may experience greater volatility than a Fund that is more broadly diversified geographically. 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. 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.

 

           
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FRANKLIN FTSE ITALY 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

4/1/23–9/30/23

 

 

 

1 

   

Ending

Account

Value 9/30/23

 

 

 

   

Expenses

Paid During

Period

4/1/23–9/30/23

 

 

 

1 

   
Net Annualized
Expense Ratio
 
 
  $1,000.00       $1,050.60       $0.46       $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.

 

           
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Franklin FTSE Japan ETF

 

This semiannual report for Franklin FTSE Japan ETF covers the period ended September 30, 2023.

Fund Overview

Your Fund’s Goal and Main Investments

The Fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Japan RIC Capped Index (the FTSE Japan Capped Index-NR or the Underlying Index).1 Under normal market conditions, the Fund invests at least 80% of its assets in the component securities of the FTSE Japan Capped Index-NR and in depositary receipts representing such securities.

 

Top 10 Sectors/Industries     

9/30/23

 

    
      % of Total
Net Assets

Automobiles

   8.4%

Banks

   7.1%

Trading Companies & Distributors

   5.7%

Pharmaceuticals

   5.4%

Machinery

   4.9%

Electronic Equipment, Instruments & Components

   4.7%

Household Durables

   4.1%

Chemicals

   4.0%

Semiconductors & Semiconductor Equipment

   3.9%

Wireless Telecommunication Services

   3.0%

Performance Overview

During the six-month period, the Fund posted cumulative total returns of +3.66% based on market price and +4.67% based on net asset value. In comparison, the FTSE Japan Capped Index-NR posted a +4.58% total return for the same period.2 You can find more of the Fund’s performance data in the Performance Summary beginning on page 64.

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 Holdings

9/30/23

 

Company

Sector/Industry, Country

   % of Total
Net Assets

Toyota Motor Corp.

Automobiles, Japan

   5.4%

Sony Group Corp.

Household Durables, Japan

   2.6%

Mitsubishi UFJ Financial Group, Inc.

Banks, Japan

   2.5%

Keyence Corp.

Electronic Equipment, Instruments & Components, Japan

   1.8%

Sumitomo Mitsui Financial Group, Inc.

Banks, Japan

   1.6%

Tokyo Electron Ltd.

Semiconductors & Semiconductor Equipment, Japan

   1.5%

Shin-Etsu Chemical Co. Ltd.

Chemicals, Japan

   1.4%

Hitachi Ltd.

Industrial Conglomerates, Japan

   1.4%

Honda Motor Co. Ltd.

Automobiles, Japan

   1.4%

Mitsubishi Corp.

Trading Companies & Distributors, Japan

   1.4%

 

1. The FTSE Japan Capped Index-NR is a free float-adjusted market capitalization-weighted index maintained and calculated by FTSE Russell with a capping methodology applied quarterly to issuer weights so that no single issuer of a component exceeds 25% of the index weight, and all issuers with weights above 5% do not cumulatively exceed 50% of the index’s weight. The FTSE Japan Capped Index-NR is based on the FTSE Japan Index and is designed to measure the performance of Japanese large-and mid-capitalization stocks.

2. Source: FactSet.

The index is unmanaged and includes reinvestment of any income or distributions (after the deduction of certain withholding taxes). It does not reflect any fees, expenses or sales charges. One cannot invest directly in an index. Net Return (NR) include income net of tax withholding when dividends are paid.

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

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Schedule of Investments (SOI). The SOI begins on page 224.

 

           
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FRANKLIN FTSE JAPAN ETF

 

Thank you for your participation in Franklin FTSE Japan ETF. We look forward to serving your future investment needs.

Dina Ting, CFA

Hailey Harris

Joe Diederich

Basit Amin, CFA

Portfolio Management Team

 

           
franklintempleton.com  

Semiannual Report

             63


FRANKLIN FTSE JAPAN 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 (11/6/17), 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

 

           Cumulative Total Return2       Average Annual Total Return2  
      
Based on
NAV
 
3  
   
Based on
market price
 
4  
   
Based on
NAV
 
3  
   
Based on
market price
 
4  

6-Month

     +4.67%       +3.66%       +4.67%       +3.66%  

1-Year

     +25.29%       +24.65%       +25.29%       +24.65%  

3-Year

     +8.58%       +7.75%       +2.78%       +2.52%  

5-Year

     +10.10%       +9.91%       +1.94%       +1.91%  

Since Inception (11/2/17)

     +14.30%       +14.11%       +2.29%       +2.26%  

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

 

See page 65 for Performance Summary footnotes.

 

 

           
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FRANKLIN FTSE JAPAN ETF

PERFORMANCE SUMMARY

 

Distributions (4/1/23–9/30/23)
Net Investment      
Income    

$0.360950

 

 

Total Annual Operating Expenses5
    

  0.09%

  

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

All investments involve risks, including possible loss of principal. Equity securities are subject to price fluctuation and possible loss of principal. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. To the extent the Fund invests in companies in a specific country or region, the Fund may experience greater volatility than a Fund that is more broadly diversified geographically. 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

             65


FRANKLIN FTSE JAPAN 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

4/1/23–9/30/23

 

 

 

1  

   

Ending

Account

Value 9/30/23

 

 

 

   

Expenses

Paid During

Period

4/1/23–9/30/23

 

 

 

1  

   

Net Annualized

Expense Ratio

 

 

  $1,000.00     $ 1,046.70     $ 0.46     $ 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.

 

           
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Franklin FTSE Japan Hedged ETF

 

This semiannual report for Frank